The alternative currency sector is nascent but it provides a formidable opportunity for investors who are bullish on the concept of decentralized block chain systems with similar characteristics to bitcoin. A few experts in this area took the stage at CoinSummit San Francisco on Wednesday 26th March in a talk that included litecoin creator Charlie Lee, dogecoin founder Jackson Palmer and Paul Vernon of the altcoin exchange Cryptsy.
The session was moderated by Social Radius CEO Michael Terpin.
In the near future, will we be tipping with dogecoin, spending 'loose change' with litecoin and making big payments with bitcoin? Instead of competing with each other, could cryptocurrencies work in harmony to each play a very specific role in the digital economy's future?
These and other questions for the potential of thousands of alternative cryptocurrencies formed the thrust of the CoinSummit panel titled, 'Altcoins - a fad or here to stay?'
The timing of CoinSummit gave the panel a great opportunity to discuss auroracoin, the experimental altcoin aimed at providing the people of Iceland a digital option over the country's fiat denomination. Auroracoin starting distributing coins in its 'Airdrop' initiative just this week.
Michael Terpin, the panel's moderator, remarked: "Auroracoin is fascinating. This week we had the Airdrop. And yet, they are down 30% today."
Litecoin creator Charlie Lee added that while auroracoin has good intentions, it has probably not been able to capture the attention of the Icelandic public as a whole:
Auroracoin's market performance over the last few days indicates that people are taking the coins and selling them on. Said Paul Vernon, CEO of Cryptsy: "It’s just market driven. The fact that there is a drop is because people are getting rid of the coins."
Vernon added that the fact there has been a major selloff means that many probably don't understand the intended impact or aim of auroracoin. "I’m not sure the people who have received theses coins got any education other than ‘okay, here’s your coins’," he said.
A coin for everything
The idea that every cryptocurrency has a place in the ecosystem is a bullish view. Of late there has been much speculation that fragmentation could become a big problem. However, on the flipside many altcoins each specializing in one specific form or function may present a huge opportunity for the industry.
Lee says people see litecoin, for example, as the auxiliary currency for bitcoin: "People view litecoin kind of as a backup to bitcoin. If bitcoin dies, there’s litecoin," he said.
Dogecoin creator Jackson Palmer says that transactions are most important for his altcoin. In his opinion, the number of people using his currency is the most important measuring stick for its success:
Altcoins, at least for now, are very speculative by nature, even more so than bitcoin. Those looking for wild swings and extraordinary promise should think about altcoin investments:
"Bitcoin is already speculative enough. But if you want something more speculative invest in altcoins," said Lee.
Image by CoinDesk
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.