Let’s be clear, Bitcoin isn’t the only game in town when it comes to digital currencies. In fact, there are many new alt coins that have been released into the wild as technologists hope to launch something successful and have the advantage of being a very early miner (thus mining the coins when things are easy and creating their fortune).
Considering that Bitcoin was first created in January 2009, there have been a lot of competitors that have launched since then. At the time of writing (mid 2014) there are more than one hundred other crypto currencies.
It is my opinion that Bitcoin will eventually be the digital equivalent of gold. There seem to be too few coins created in the early algorithm for everyone to really be able to use it. To me, at least, this means that it will become a form of wealth to be stored and hoarded rather than spent.
Litecoin seems to be a more plausible crypto currency for the masses since there will be four times the number of them mined. Perhaps Litecoin will take the role of silver? Also an investment but much more usable (information here).
If that were to pass, which would then be the best Bitcoin alternative? In early 2014, Dogecoin made a splash in the new alt coin world and has become very popular, very quickly. It is helped because it became an instant hit on reddit.com1 which has more than 100 million visitors per month. That is how to gain traction!
What is amazing is that Dogecoin users have essentially created their own language to accompany the coin. Traders are called “shibes”, everyone is hoping for big price rises – they say “to the moon!” and they use generally odd sentences, “much money, wow currency” and the like.
Dogecoin is helped by the fact that there will be no maximum number in the algorithm. The number of coins that can be mined has a pre-set number and an annual limit. In 2014 around 100 billion coins will be mined with another 5.2 billion annually thereafter2. This sounds much more like a useable coin for everyday transactions. Or to put that another way, it sounds like government printed cash.
New national alt coins
In addition, there have been national digital currencies released3. Countries such as Israel, Iceland, Spain and Poland now have their own coins. Whether these will catch on nationally around the world, who can say. However, there seems to be opportunity for interesting local trading and transactions.
As the euro stuttered after the 2008 financial crisis, there were many small regional currencies created in the hope of stimulating local trade and insulating the economy from wider financial shocks. Perhaps there is a role for crypto currencies in this world?
Time will tell
The reality, of course, is that we do not yet know the best Bitcoin alternative. This space is still very young and there is much more evolution to come before things really settle down and trade is able to grow dramatically. When that happens, the world of alt coins and their exchanges will look very different to today. The challenge will be to roll with it and keep up so that when the dust settles, your holdings are valuable and have appreciated significantly.