Love them or hate them, there are many altcoins in the crypto economy. In fact, in 2017, there were around 700 different cryptocurrencies. They all claim to offer something unique. However, many believe that there is nothing innovative about these altcoins due to the ease of their creation, the sketchy developers behind many such projects, and the important altcoin-related mines.
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Call them what you will: unrelated pump and dump plans, altcoins, appcoins and yes, even shitcoins. Altcoins have been controversial since the first bitcoin copycats were released. Alternative cryptocurrencies that initially came after bitcoin include Litecoin, Peercoin, and a few others. There are very few coins that don’t copy bitcoin’s codebase, but there are a few, such as Bytecoin or Monero.
Since the earliest days, altcoin creation has exploded and there seems to be a digital currency made for literally everything from marijuana to pornography. There are coins that claim to offer better anonymity, tokens that use the Proof-of-Stake consensus mechanism, and some that just make more altcoins.
Many are of the opinion that altcoins are worthless and are merely pump and sell schemes. Others believe, depending on the pocket they hold or maybe they are part of the altcoin community, that there is a lot of room for these tokens on the free market. Then there are those who believe that one day a particular altcoin will remove bitcoin from its current throne.
Create an Altcoin
Creating an altcoin or blockchain is now quite easy, and some cryptocurrencies like Ethereum or Counterparty can also generate tokens. If a person is interested in creating their own cryptocurrency, they can look for a developer and pay them bitcoins to create. Then there are specially designed platforms like Cryptolife Development or Wallet Builders. Both website services claim to offer genesis block generation with blockchain and various Windows, Mac and Linux wallet apps.
For example, details on the Wallet Generator on its website, a custom altcoin that can be created for 0.05 BTC. The altcoin design firm stated:
Create your own coins with custom coins, symbols and change the coin parameters to your liking. You get a single genesis block, source code and a compiled Linux & Windows client.
As many crypto community members will tell you, maintaining an altcoin is not as easy as it seems. The code and blockchain still have to be nourished by the program, and miners must contribute to the network. Back in 2014 at the North American Bitcoin Conference in Chicago, Litecoin creator Charlie Lee explained the 5 fundamentals needed to make a good altcoin: good name, brand, good logo, attraction Miner, reasonable launch and solid code. However, the majority of altcoins in existence have not followed this advice, especially regarding fair launches.
Premines, Scammers, Bugs and Shills
Pretty much every altcoin in existence started out as a sneaky “ninja launch” and was called ready money or instamine. This means that creators who have been mining the coins themselves for a period of time will reap a large percentage of the tokens generated. People find fiat money very controversial when developers claim that funds go towards marketing and development but are often dumped in the market. When a large holder sells their tokens on the market, the price often falls and these smaller markets are easily manipulated.
Furthermore, many altcoin creators are found to be very shady figures that often promise things that never come to fruition for the cryptocurrency’s roadmap. There is always some niche application on offer and most altcoins never do what they claim to provide. With bitcoin, everyone knows all the rules because it is the original cryptocurrency with the strongest blockchain in existence.
The bottom line is that bitcoin’s hash rate is a pretty big deal since it’s the most secure blockchain available today. It has more power every day. The number one cryptocurrency has provided real-world benefits as opposed to tokens being pumped and dumped on altcoin exchanges. Bitcoin has the largest community and most merchant adoption of all altcoins combined. This network effect is often dismissed by proponents of alternative crypto-assets, but it would take a hell of a lot to get past Bitcoin’s inception.
The fact that it is easy to earn an appcoin but not so easy to maintain an appcoin is not a guarantee. All of them even in the top 10 most valuable are subject to significant controversies such as versions, bugs in the code, shady actors and large groups of selling snake oil. Some of them may have maintained a legitimate existence to try to compete with or even complement the bitcoin network, but the majority of altcoins today are merely smoke and mirrors.
What do you think about how simple it is to create an altcoin these days? Do you think some altcoins will maintain a legitimate existence? Let us know in the comments below.
Image is provided by Crypto-graphics.com and Pixabay.
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