Why Altcoins Will Survive

Though it seems the magic is disappearing and many alternative currencies – or altcoins – are having a difficult time sailing through the bearish crypto market at this point, they may not all face ‘extinction‘ as it is being mulled in some sections of the ecosystem.

We could be in the midst of the extinction-level event for “cryptoassets” that many maximalists have predicted. 90%+ of @CoinMarketCap list will disappear eventually – might as well happen now. Meantime, lower BTC price means incredible opportunity to buy more #bitcoin

— Ted Rogers (@tedmrogers) August 14, 2018

Several questions have been asked and some doubtful concerns raised about how majority of crypto projects are likely to die off especially the vaporwares. The recent bear state of the market exposed how many altcoins’ prices are seemingly inflated or overvalued hence their high risk to investors. The situation seems to have brought many people back into Bitcoin not necessarily because they believe in it but for its position and function in the market.

With its rising market dominance (at about 52% as at this writing), Bitcoin has what it takes to swallow up a larger market share – it has a larger ecosystem, network and technical robustness that is overwhelming for all its immediate challengers. It can also widen its usefulness in the future if it incorporates more capabilities from certain altcoins which could make its network congested and abusive of its dominant position. However, despite the edge, several factors as well as the set of benefits other alternative projects bring with them show they can be around for a very long time. Some of these factors include:

What Bitcoin Can’t or Won’t Do
There are problems which Bitcoin cannot solve. This could be because the core team does not want it to solve them or that it may not be good for Bitcoin to solve. Since several alternative projects are birthed based on solving some of these problems and for differing use cases, they would be valuable to the market and worthy of investors’ support.

Bitcoin Price
Many people missed out on Bitcoin in the early stages of its release. Some joined later while others only got in after the second half of 2017. They had wanted to catch up with the crypto boom but the price of Bitcoin has risen beyond a reasonable level of affordability for many. It leaves them with hopping on promising altcoins that are worthy of investment – albeit on a low basis – with the hope of making similar returns with time.

General Belief
There is a general belief that as long as blockchain projects exist, there will always be users and promoters to support them. Going by this notion, money will always move from one project to another as long as altcoins come and go. Like most traditional businesses which operate in regulated environments, the belief is that it is normal for most startups to fail hence the failure rate of crypto projects should not be surprising.

Viable Projects Will Stay
It is widely believed that many altcoins are scams and/or clones of legitimate projects. In fact, a high proportion of altcoins and ICOs are considered bad investments which has rubbed on the market for a while. It could be true that many of them will likely die out even as the concept of ICOs fade gradually especially with increasing calls for regulation. However, those that solve a specific problem and do it well are going to stay.

In another consideration, the value of the Ethereum platform with its huge backing both in terms of investment and technology development could still remain low for a while or less. Most ICOs launched so far have been ERC-20 tokens on the Ethereum platform. However, with reports of some of these projects selling the ETH raised from ICOs to pay for development purposes and other smart contract altcoins now competing with Ethereum (e.g. Cardano, EOS), there is a likelihood they eat deeper into Ethereum’s market share if the trend continues.

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