<p>A lot of purists and developers won't like this analogy, but look at toothpaste (or any other product). People like different flavours or brands, small differences, no matter if they do basically the same thing. I think that's beginning to apply to crypto, with each coin appealing to different types of people/communities/niches (a lot of people like a number of coins). This doesn't really apply right now though as it's a casino and many aren't really established 'alternative products'.</p>

<p>From an economic/investment/trading perspective, first thing that comes to mind: diversification.</p>

CC BY-SA 3.0
2014-04-05T02:46:27.370Z
But do we _need_ diversification? Isn't the point of bitcoin to be the go-to-non-governmental choice for exchanging value or services? Doesn't diversification in this sense work against the theory of bitcoin?
KJ O
CC BY-SA 3.0
2014-04-05T02:50:32.410Z
I don't know if we need diversification, but I think a major point of BTC was to take away the power to create and control money from 'you know who'. The fact he made it open-source and easy to re-create makes me wonder if he cared about the price/'monopoly' of BTC alone. If everyone and their mother can create cryptocurrencies and agree to use them over fiat, well then it doesn't matter how many there are. Edit: In fact it's better, harder to control 10,000 with 100 made a day than just BTC alone.
Jason
CC BY-SA 3.0
2014-04-05T02:56:50.957Z
Point taken. Albeit a bit philosophical.
KJ O
CC BY-SA 3.0
2014-04-05T03:18:55.003Z
Obviously I won't deny I'd be biased as I support alts also (and 'run' my own - albeit quite low in cap) and don't own many BTC, but just something I thought worth considering when looking at it from a different perspective.
Jason
CC BY-SA 3.0
2014-04-05T02:41:05.307Z
2014-04-05T02:41:05.307Z
Jason
<p>You should look up Warren Buffet's reasons for not investing in Bitcoin.. something better could come along and take over and Bitcoin is still an infant.  Personally, I'm convinced that something better is Nxt.  It's written from the ground up, it's proof of stake which is something like 1000 times more energy efficient and 500 times as cost efficient and more secure, with almost instant transaction confirmations coming soon.  All of which is important.</p>

<p>There are other reasons, such as dogecoin having long term fixed inflation making it better for the long run.</p>

<p>And just in general, it's better to have a few alternative currencies, so that if say the Bitcoin miners decide to gang up, they can't take out the world's economy.  Also, seems very unlikely and Bitcoin has stood the test of time, but let's say a bug was found in the coin itself.. again, it's good to have alternatives.</p>

CC BY-SA 3.0
2014-04-07T03:13:20.263Z
"_...such as dogecoin having long term fixed inflation making it better for the long run._" A quick Google search would suggest that's an area of contingency.
KJ O
CC BY-SA 3.0
2014-04-07T03:46:55.987Z
It is indeed, but the people who like it, will stick with it.  Those who don't, will switch coins.  Point is there is a coin out there for those who feel that is important.
mczarnek
CC BY-SA 3.0
2014-04-06T22:20:11.843Z
2014-04-06T22:20:11.843Z
mczarnek
<p>Counterparty is not an alt-coin. It is an extension of Bitcoin functionality. Assets can be bought and traded using BTC in Counterwallet. The Counterparty currency XCP, is not mineable, limited to 2.6 mil forever, and is only an intermediate for many features such as escrow. </p>

<p>It's more like a market for Bitcoin than an altcoin, I wish people would take the time to understand this...</p>

CC BY-SA 3.0
2014-06-11T13:46:08.867Z
2014-06-11T13:46:08.867Z
Sandwich Taster
<p>It depends a lot on the specific altcoin you're talking about. For the most part, there aren't a lot of major differences between Bitcoin and the alts. Sadly many of them exist only as the leftovers of pump-and-dump schemes intended to make their creators rich, though there are a few that are interesting in important ways.</p>

<p>One of the primary benefits of a thriving altcoin economy is that they often represent the testing of a theory that may eventually benefit Bitcoin itself. Many altcoins, for example, use scrypt as their mining algorithm instead of SHA256. If SHA256 is discovered to be compromised some day, having a drop-in replacement for that subsystem available would be a major boon.</p>

<p>You specifically mention faster confirmation times as a potential benefit, but the most often overlooked part of that statement is that transaction finality is a result of computational cost, not of time. This means that if an altcoin has one tenth the confirmation time and an equal amount of hashpower relative to Bitcoin it will take ten times as many confirmations to reach the same level of transaction security. Faster confirmations are a psychological benefit, not a technical one.</p>

<p>The "silver to Bitcoin's gold" theory, largely pushed by Litecoin proponents, is also fallacious in that the entire reason gold requires a baser partner metal is that it is not adequately divisible. Paying for a candy bar with gold would be incredibly difficult for both parties involved since the amount of gold needed would be absurdly small. Bitcoin is not subject to such physical limitations and as such can be divided into such tiny portions relatively easily.</p>

<p>Taking all of the above into account, it should be clear that while a handful noteworthy exceptions do exist, the majority of altcoins are intellectual curiosities at best and scams at worst. A few make meaningful changes, but thus far none of those changes has really been a meaningfully large improvement over the base system.</p>

CC BY-SA 3.0
2014-04-05T01:11:09.087Z
And now I just need to wait for all the Litecoin and Dogecoin folks to come downvote me into oblivion.
David Perry
CC BY-SA 3.0
2014-04-05T01:15:16.790Z
You and me both ;) Good point about the possible future issues of SHA256, and the possible replacement of a hashing algorithm first introduced by an alt-coin--I hadn't thought of that.
KJ O
CC BY-SA 3.0
2014-04-05T01:09:39.937Z
2014-04-05T01:09:39.937Z
David Perry
<p>I'm struggling to see the importance of alt-coins. It seems to me that one of the major selling points of the various alt-coins is their quicker confirmation times. The common argument is: this is good for merchants and the like, because there is less time for them to worry that the customers' payments are legitimate.</p>

<p>But can bitcoin users not have the same "luxury?" Why can't a merchant run his own node? His node will process the transaction, and the rest of the network can play catch-up.</p>

<p>Another argument is that there are too few bitcoin, and that eventually bitcoin will be the gold of digital currency--what the big transactions happen in--and the alt-coins will be the silver, or the copper--for day-to-day use.</p>

<p>Is that really even good in theory though? The price of bitcoin would need to be in the millions for that to even be a decent worry. I can possibly see it being an issue, but do we really need to consider it now, when the exchange rate for bitcoin hasn't seen more than a few months in the 4-digits?</p>

<p>Am I overlooking a hyper-important advantage?</p>

CC BY-SA 3.0
2014-04-10T14:09:03.777Z
closely related: [Why do we need alternatives to Bitcoin?](http://bitcoin.stackexchange.com/q/8114/5406)
Murch
<altcoin><altcoin-development><key-selling-points>
What advantages do "alt-coins" have over bitcoin?
KJ O
# What advantages do "alt-coins" have over bitcoin?

(Asked by: username_0 on 2014-04-04)

I'm struggling to see the importance of alt-coins. It seems to me that one of the major selling points of the various alt-coins is their quicker confirmation times. The common argument is: this is good for merchants and the like, because there is less time for them to worry that the customers' payments are legitimate.

But can bitcoin users not have the same "luxury?" Why can't a merchant run his own node? His node will process the transaction, and the rest of the network can play catch-up.

Another argument is that there are too few bitcoin, and that eventually bitcoin will be the gold of digital currency--what the big transactions happen in--and the alt-coins will be the silver, or the copper--for day-to-day use.

Is that really even good in theory though? The price of bitcoin would need to be in the millions for that to even be a decent worry. I can possibly see it being an issue, but do we really need to consider it now, when the exchange rate for bitcoin hasn't seen more than a few months in the 4-digits?

Am I overlooking a hyper-important advantage?

**Tags:** altcoin, altcoin-development, key-selling-points

> **Comments:**
> **username_1**: closely related: [Why do we need alternatives to Bitcoin?](http://bitcoin.stackexchange.com/q/8114/5406)  

---

## 4 answers

### Answer by username_5 on 2014-04-05. Score: 14 | Accepted answer

It depends a lot on the specific altcoin you're talking about. For the most part, there aren't a lot of major differences between Bitcoin and the alts. Sadly many of them exist only as the leftovers of pump-and-dump schemes intended to make their creators rich, though there are a few that are interesting in important ways.

One of the primary benefits of a thriving altcoin economy is that they often represent the testing of a theory that may eventually benefit Bitcoin itself. Many altcoins, for example, use scrypt as their mining algorithm instead of SHA256. If SHA256 is discovered to be compromised some day, having a drop-in replacement for that subsystem available would be a major boon.

You specifically mention faster confirmation times as a potential benefit, but the most often overlooked part of that statement is that transaction finality is a result of computational cost, not of time. This means that if an altcoin has one tenth the confirmation time and an equal amount of hashpower relative to Bitcoin it will take ten times as many confirmations to reach the same level of transaction security. Faster confirmations are a psychological benefit, not a technical one.

The "silver to Bitcoin's gold" theory, largely pushed by Litecoin proponents, is also fallacious in that the entire reason gold requires a baser partner metal is that it is not adequately divisible. Paying for a candy bar with gold would be incredibly difficult for both parties involved since the amount of gold needed would be absurdly small. Bitcoin is not subject to such physical limitations and as such can be divided into such tiny portions relatively easily.

Taking all of the above into account, it should be clear that while a handful noteworthy exceptions do exist, the majority of altcoins are intellectual curiosities at best and scams at worst. A few make meaningful changes, but thus far none of those changes has really been a meaningfully large improvement over the base system.

> **Comments:**
> **username_5**: And now I just need to wait for all the Litecoin and Dogecoin folks to come downvote me into oblivion.  
> **username_0**: You and me both ;) Good point about the possible future issues of SHA256, and the possible replacement of a hashing algorithm first introduced by an alt-coin--I hadn't thought of that.  

---

### Answer by username_2 on 2014-04-05. Score: 0

A lot of purists and developers won't like this analogy, but look at toothpaste (or any other product). People like different flavours or brands, small differences, no matter if they do basically the same thing. I think that's beginning to apply to crypto, with each coin appealing to different types of people/communities/niches (a lot of people like a number of coins). This doesn't really apply right now though as it's a casino and many aren't really established 'alternative products'.

From an economic/investment/trading perspective, first thing that comes to mind: diversification.

> **Comments:**
> **username_0**: But do we _need_ diversification? Isn't the point of bitcoin to be the go-to-non-governmental choice for exchanging value or services? Doesn't diversification in this sense work against the theory of bitcoin?  
> **username_2**: I don't know if we need diversification, but I think a major point of BTC was to take away the power to create and control money from 'you know who'. The fact he made it open-source and easy to re-create makes me wonder if he cared about the price/'monopoly' of BTC alone. If everyone and their mother can create cryptocurrencies and agree to use them over fiat, well then it doesn't matter how many there are. Edit: In fact it's better, harder to control 10,000 with 100 made a day than just BTC alone.  
> **username_0**: Point taken. Albeit a bit philosophical.  
> **username_2**: Obviously I won't deny I'd be biased as I support alts also (and 'run' my own - albeit quite low in cap) and don't own many BTC, but just something I thought worth considering when looking at it from a different perspective.  

---

### Answer by username_3 on 2014-04-06. Score: 0

You should look up Warren Buffet's reasons for not investing in Bitcoin.. something better could come along and take over and Bitcoin is still an infant. Personally, I'm convinced that something better is Nxt. It's written from the ground up, it's proof of stake which is something like 1000 times more energy efficient and 500 times as cost efficient and more secure, with almost instant transaction confirmations coming soon. All of which is important.

There are other reasons, such as dogecoin having long term fixed inflation making it better for the long run.

And just in general, it's better to have a few alternative currencies, so that if say the Bitcoin miners decide to gang up, they can't take out the world's economy. Also, seems very unlikely and Bitcoin has stood the test of time, but let's say a bug was found in the coin itself.. again, it's good to have alternatives.

> **Comments:**
> **username_0**: "_...such as dogecoin having long term fixed inflation making it better for the long run._" A quick Google search would suggest that's an area of contingency.  
> **username_3**: It is indeed, but the people who like it, will stick with it.  Those who don't, will switch coins.  Point is there is a coin out there for those who feel that is important.  

---

### Answer by username_4 on 2014-06-11. Score: 0

Counterparty is not an alt-coin. It is an extension of Bitcoin functionality. Assets can be bought and traded using BTC in Counterwallet. The Counterparty currency XCP, is not mineable, limited to 2.6 mil forever, and is only an intermediate for many features such as escrow.

It's more like a market for Bitcoin than an altcoin, I wish people would take the time to understand this...


---

