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Bitcoin Fading Away

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Ask yourself, how is TacoCoin better than AppleByte? The market says one AppleByte is nearly ten times as valuable as a TacoCoin. Why? What makes it better? How are they different?

An AppleCoin is one hundred times as valuable as an AppleByte, on the other hand.

How about NewYorkCoin, which has increased in value 2500% in the past 24 hours, or FlappyCoin, down 93%?

Then there is ByteCoin (BCN) and, yes, ByteCoin (BTE). One is the #16 cryptocurrency by market cap. The other's value isn't calculable since no one knows how many there are. How can you know the difference?

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With 103 currencies with more than $100,000 in market cap, how any anyone presume that any one currency will last, or maintain its value? How can Bitcoin remain top dog, with Bitcoin, Bitcoin Plus, Bitcoin Dark, Bitcoin Scrypt and Qubitcoin, if they are all exchangeable, fungible and tradeable? Why buy one Bitcoin when you can buy 90 Litecoins?

While Bitcoin accounts for over 90% of market cap, it only accounts for two-thirds of all trade. That is to say, for every three dollars worth of "coin" transactions, one of them is taking place in some cryptocurrency other than Bitcoin.

With such great incentive to create one's own currency, the assault on Bitcoin's market share will only continue, as there are now 433 cryptocurrencies tracked on coinmarketcap.com at the time of posting. The barrier to entry is lower every day as more merchants gear themselves to accept the many new cryptocurrencies.

Ultimately, a galaxy of cryptocurrencies will exist (far moreso than today), and the market cap will become increasingly stretched across the limitless sea of ones and zeroes. As time goes by, and the emotional tie to Bitcoin fades in the minds of people, its particular strings of 0's and 1's, no different than any other, will hold no more value than any other. This has yet to pass, but there is no theoretical reason for the market to remain out of equilibrium forever.

 

 

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Richard is an engineer by day, and a political activist by night, fighting would-be totalitarians and government busybodies everywhere.

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