The Crypto Great Filtering

in LeoFinance3 months ago

Hi Jesspeculators

Ever since the ICO boom of 2017 altcoins have been popped out at a frantic pace, 99% of them aren't worth much, and hundreds even thousands of tokens have gone the way of the Dodo.

Certain altcoins have risen to the top, built cult followings and have secured a reasonable market cap.

To me, I don't see any altcoin as invincible and unable to be taken down.

  • be it through government,
  • be it through self-sabotage of the core team,
  • be it through hackers
  • or through disruption by future projects

I think many altcoins have yet to be tested the same way Bitcoin has and while Bitcoin takes the brunt of the pain from regulation and governments, altcoins have been able to hide behind it.

BTC also provides capital inflow into altcoins, and when it goes on its bull run and settles at its new floor, it also helps fund and maintains the stability of these projects.

Absorbing ideas and liquidity

The way I see altcoins are as experiments of new ideas, the move fast and break things kind of thing. Some pretty cool ideas have come from it things like decentralised exchanges, DE-FI, Smart contracts, DAOs, dApps and more.

I am sure new ideas are in the works as we speak and we'll have new things to keep us busy with especially as cross-chain assets, atomic swaps and liquidity pools become more popular.

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Network effect

No altcoin is going to beat the network effect of Bitcoin; the gap is far too large. No altcoin has the penetration or attractive monetary policy that Bitcoin has and will continue to outpace others.

I see more companies willing to support BTC, hold BTC, accept BTC, build BTC products, BTC lawyer 2 solutions and integrating and accepting BTC. The network effect is a runaway effect; once it takes hold, it multiplies each year and far outstrips the competition.

We've seen this with tech companies like Facebook and so many other examples, but none will be on the scale of what BTC can achieve, with so many people willing to invest time, money, labour to grow the network.

Plenty of coins will be filtered out

Many projects rely on the bull market for survival; they are usually the first to go as the long crypto winter sets in. You only have to look at the top 10 coins each year since 2015 to realise every few stay the course.

As BTC layer 2 solutions improve, they can also start to absorb the ideas from the alt-coin market and look at alts as a benchmark for improvement. If an alt has a unique property, BTC cannot replicate it will survive, if not it will die.

As more companies start to build on Bitcoin, and focus less on the core chain and move to side-chain, cross-chain, and layered solutions, it's only going to filter out more coins.

Personally, I do enjoy bear markets more, where there is less noise, and you have time to see what these projects are about rather than now where its all about look at me, invest, number go up.

Bitcoin not only absorbs value from energy and the fiat world, but it will also take from the fintech and altcoin world too.

Have your say

What do you good people of HIVE think?

So have at it my Jessies! If you don't have something to comment "I am a Jessie."

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Well, I am not a bitcoin fanboy (said this a million times). Also, I don't see a competition between alts and bitcoin. They all exist in their own space, catering to different people. The market is segmented and so having just one coin wouldn't be ideal. Although I feel some alts will surpass bitcoin in terms of usage. A vast majority of the world's population to not have wealth to store. However, they have time to use, skills they can exhibit, people they want to interact with and other blockchains cater for these needs which, if they go mainstream, can bring a ton of value to billions. So I would still invest in alts, even more than bitcoin (still making it look like a competition).

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Yeah I concede there will always be altcoins and that there should always be altcoins tackling niche ideas, but ALOT of projects I see today don't even need a coin, they could legit do the same thing and just Bitcoin and be no worse or better off.

I personally can't see any alt network being used more than BTC indirectly or directly, what I think is alts are just a playground for ideas, BTC is the funding they work together.

Altcoins to me are just rehypothecated Bitcoin, it's taking a Bitcoin and wrapping a new name around it and putting it on an external database, wether you get the same/lower/higher sat value when you move back is a different story.

ALOT of projects I see today don't even need a coin, they could legit do the same thing and just Bitcoin and be no worse or better off.

Very true and j will attribute this to the fact that crypto is still very much in its infancy and people can get away with this sort of scheme because others aren't so knowledgeable.

I can't see any alt network being used more than BTC indirectly or directly, what I think is alts are just a playground for ideas, BTC is the funding they work together.

This is where I disagree.

Altcoins to me are just rehypothecated Bitcoin, it's taking a Bitcoin and wrapping a new name around it and putting it on an external database, whether you get the same/lower/higher sat value when you move back is a different story

Well, the same way social media platforms grow into different frontiers even though they perform the same activities. People love diversity, this is why I believe alts will continue to thrive

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I don’t compare Bitcoin to Alts, Bitcoin does it’s job and continues to do its job, Alts still need to validate their existence, having watched the market for years I’ve seen many come and go!

I have no issue with diversity I am an advocate for choice. Personally I don't care what Alts people invest in, when they fail all that value comes flooding back into Sats anyway..

one bad thing about bull market is that it attract a lot of attention from all sort of people - normal investors, govts, spammers, scammers etc. As price of a coins goes up there is an increase in number of scam's/frauds.
We need to understand that this is not magic, there is a vision on the back of it and not all alt coins have the same vision.

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Oh man, I am pretty sure theres going to TONNES of fraud once this market cycle is complete happened in 2013 and 17 so I don't expect this one to be any different and I am sure the numbers in losses will be even bigger

Interesting post - thank you

Glad it got your attention

Well btc is king in more ways than one, many facts from here, no alt had the same first mover advantage and time difference, for this, alts will def only try to catch up.

Those alts that were birthed in the bear and still kept their noses up, those are gems, leo is one of such.

Even if any of the alts we have today had first mover advantage I don't think it would have made much of a difference, yes Bitcoin benefits from it and the branding but its set, slow, boring, mechanical monetary policy that requires more and more energy to secure is really what sets it apart for me and why it can hold value and anchor this entire crypto market

Yeah 100%

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We have a different kind of noise now in the bull market! It's getting back to everyone and his doge thinking they're a genius investor but I agree, as soon as those layer 2 solutions come along, BTC will absorb a lot of those alts - a lot of cultists on twitter these days though and they may not go quietly!

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Yeah I don't see any alt going down quitely, even Bitconnect people still said HODL your BCC even after the lawsuit, lol theres no rationality in this game. I just think that sats are wildly undervalued and chasing a coin because of its price seems like you just making life more complicated than it needs to be.

I get defi and staking if you going to go try and earn a yield but if you want price action, Sats do it just as well as any alt

Yeah definitely and the lending platforms that are out there already to earn yield on sats, why would you look anywhere else?

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Lol because you still have a fiat mindset, so many crypto holders still think in fiat but think because they hold crypto they fine! If you make fiat decisions in a Cryptos space you will get burned

Lol, I think making any decisions in crypto gets you burned!

If you don't get burned, how do you expect to learn? If you don't learn, how will you earn? All part of the circle of crypto Simba

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Thank you sensei. I've got 1st degree crypto burns 🔥

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You're definitely right, I also do enjoy the bear market. It's a right time to look at projects that are solid build with them, personally that's one advantage of the bear market. Weeding out coins that one wouldn't really know how far it'll go.

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Ain't that the truth, no everything is mooning and people can't tell the difference they just chasing the price up thats all that matters. It eventually all consolidates again, so for me its just easier to keep stacking BTC, they'll want sats to get in and out of positions anyway so i might as well own those sats and set the price lol

No telegraph system is going to beat the network effect of the postal service... no telephone system is going to beat the network effect of the telegram... no digital system is going to beat the network effect of the telecomm system... no blockchain system is going to beat the network effect of the TCP/IP system...

I think your arguments against altcoins, as alt-coins, are sound.

I think your argument for Bitcoin as a permanent player isn't.

Naturally, any line in the sand looks daft with time, time beats everything in 100 years with the change in mindset, generations and optimal use of capital from Bitcoin, Bitcoin will make itself irrelevant. Same way governments and personal banking was a huge liberation movement when it first launched.

I am not blind to that, but why would I care about speaking about time frames where I won't exist?

I think we might have a very different perspective on this - I don't view governments or banking has having been liberatory, and I don't think there's much point in planning on any less than a generational timespan. Why care about participating in what is when you can cultivate the environment for our future, y'know?

I think its all relative, I mean from serfs to governments, there are more freedoms for the individual, from only royalty having banking services, to the individual, has also unlocked loads of additional freedoms for people.

So if you compare those generations to future generations, they're far more free in one sense like being able to store value now, access to credit and then gave up freedoms in another sense like living on credit, it's weird lol I don't fully get it, I just sort of try to learn and watch how it unfolds.

I get it, but I'll leave those worries to better men and women, I can only speak for me and growing up in South Africa, I've eaten enough shit, so let me at least try to sort myself out before I look at anything else

Agreed. At this point it is difficult to see any alt-coin overtaking bitcoin. A lot of the alts from 2016 have become dead projects and I think that will be the same for many of the alts from 2020/2021.

I love how cocky alt coiners are in the bull market, going to be fun watching them squirm once their shitcoin capitulates and ill be sitting with my sats. I have zero problems with people investing in alts, makes it easier for me to get sats and everytime one of them goes poopy that money comes back to bitcoin looking for sats lol