Bitcoin represents between fifty- and sixty-percent of the two-hundred billion dollar market cap of all cryptocurrencies. It is the first and remains the largest cryptocurrency, by far. However, rivals to Bitcoin like Ethereum, Litecoin, and Ripple are quickly coming into their own. If you’re thinking like an investor, any time you share a marketplace with competitors that can’t be good for business. If you’re considering the altcoin situation like that, you’d be wrong. Bitcoin benefits by the arrival of these additional tokens, as they benefit by Bitcoin’s acceptance.
The world is an enormous place. While Bitcoin is a good substitute for other currencies, money is not always the best trading medium. When money is the best trading medium, conditions of the trade may be unfavorable to Bitcoin. The trade might require vast sums, or high speed, or low bandwidth. For those situations, other tokens might perform better than Bitcoin ($7486). New cryptocurrencies, facilitating all sorts of interactions, appear every day. The underlying technology to Bitcoin, called blockchain, is the basis for all of these other altcoins. It is blockchain that causes the paradigm shift.
Suddenly, strangers can be trusted. A man comes up to you on the street and says, “That is a lovely hat you are wearing. I must have it. I will give you ten thousand dollars for that hat.” You might run as fast as you can to get away from the dude. Even though $10,000 is a handsome amount that you would gladly take, there is no way that the man could pay you in a way that could be trusted, even if he gave you what looked like real US dollar bills. But what if the man said, “I will give you 1.33 Bitcoin (that’s $10,000 at today’s Bitcoin rate) for that hat.” You could take out your Bitcoin wallet on your iPhone and flash the barcode his way. “Here’s my address,” you say in response, confident that you will either get paid or leave. Since you cannot compromise a Bitcoin transaction, this stranger can be trusted to give you the Bitcoin or be gone. That is the result of the blockchain distributed network. You will know if you receive Bitcoin from that man that the Bitcoin is authentic, that he owns it, and he that cannot use it more than once. Blockchain creates all sorts of trusted, distributed networks.
There are altcoins for contracts, real estate, signatures, diplomas, and scientific research. There is an altcoin to facilitate trademarks and copyrights. All of these cryptocurrencies may be useful and do well. All may service in a way Bitcoin is unable to perform. Blockchain makes it possible. In fact, the success of one improves the chances for success of the others.