The Current Role and Future of Alternative Digital Currencies

By Daniel Zo Cryptocurrencies, Altcoins, 2017

With the constant growth in popularity and value of Bitcoin, it is no surprise that a big part of the digital currency community has forgotten about alternative currencies, also known as altcoins, and their role in the fintech ecosystem. During the last year, only two-three alternative currencies have made their way to the spotlight, or have seen any form of growth, whereas the others simply waited for something to happen.

However, there is an abundance of reasons explaining why members of the digital currency community should pay more attention to the evolution, or better said, lack of evolution of altcoins, and perhaps attempt to do something about it. It is worth keeping in mind that like any tool, in the world of cryptocurrencies, one size cannot fit all, which means that digital currencies vary in use based on the scenarios that they are tested in.

Altcoins

To put things better into perspective, Bitcoin may be the currency of choice thanks to its decentralized, pseudoanonymity and value, yet there are altcoins that are completely anonymous, which are used for the signing of smart contracts, work as mainstream promotional tools, be used in situation where deflation is not ideal at all, can be used to tackle political issues, pay for in-game items and be rewarded for in-game accomplishments, and more.

While we are all big fans of Bitcoin, it is important to avoid the emergence of a monopolistic market, as this can potentially make Bitcoin become lazy, stop evolving and in the end, stop fulfilling our needs. With no other alternative currency with potential to turn to, this could mean going back to traditional currencies once and for all, which is definitely not wanted by most of the digital currency community. However, an overwhelming promotion of altcoins isn’t good either, as this can potentially lead to too much volatility, with investors continuously jumping from one altcoins to another. This will not only hurt bitcoin, but it will also hurt the altcoins that will be turned into successful ones.

Based on this, most economic analysts believe that we should continue to keep an eye on altcoins, and encourage their evolution, yet avoid putting on too much effort, as this can both destroy the position that bitcoin has finally received, but can also lead to crazy volatility, and an overwhelming market for all things crypto.

Judging by everything that has been outlined so far, what is your personal opinion on the evolution of alternative currencies, and what should be done to make sure they don’t die out, yet don’t destroy the current ecosystem? Let us know your thoughts in the comment section below.