How Many Altcoins Will There Be?
The Explosion of Alt Coins
There has been an explosion in the alt-coin market this year. This should come as no surprise.
The marginal cost of producing an additional coin is incidental. The platforms for bringing new coins online are improving. Most importantly, there is significant developer talent focused on platforms that make the creation of coins even more arbitrary.
For example, Ethereum boasts that a user could use their architecture to create Namecoin in only five lines of code. There are also sites like coingen.io. This platform boasts the ability to create a new coin in minutes, simply by filling in a form.
Some in the digital currency community see this as a threat to Bitcoin and its position. Perhaps this is the wrong way to look at the issue.
A look at a pure cryptocurrency exchange, like MCXnow for example, is very revealing. We can see that Bitcoin is already the default reference currency against which all alts are measured. In cryptoccurrency land, with the addition of each new alt, we see Bitcoin cement its position as the ‘gold standard’ of cryptocurrency.
Andreas Antonopoulos of blockchain.info expressed an interesting position on this issue at the Bitcoin Expo in Canada recently. In his speech he suggested that the proliferation alt-coins was seen as a threat by those who are viewing currency through the existing statist paradigm.
He goes on to note that,
“Currency as we understand it is an artefact of the nation-state and it imposes on us certain constraints.”
“We are forced to use that currency in all of our interactions. We do not have a choice.”
“Now we live in a different world, but a lot of the old paradigms still persist in our thinking.”
Andreas goes on to describe this new paradigm, where currency can be thought of as more of a language. The choice of currency is purely individual and a personal means of expression. What a user chooses to express will vary, but currency will be one manifestation of that expression. This is an exciting an interesting way to think about the explosion of alt-coins.
This will take some getting used to. In a practical sense, if Bitcoin’s technology is open source and all the best developer talent is building systems that make the creation of alts even more arbitrary, then the explosion in alts can only be expected. It is a true paradigm shift. The magnitude of which will only dawn on us much later. What is interesting is that it is happening now, in front of our very eyes.