Alternative Cryptocurrencies

If the designers of your blockchain talk about “saving the planet”, “increasing throughput”, “compliance”, “governance”, “democracy”, or any other topic more than they both talk & actually care about securing your financial property,  run! do not walk away from that chain.  —  Nick Szabo

Money has a strong network effect when acting as a medium of exchange because as social adoption widens, money gains in quality.


Nevertheless, different mediums of exchange may coexist, specially when the soundest money lacks a monetary property that is specially important in certain scenarios.
For example, the monetary metals (gold, silver, copper) have been working as medium of exchange until the 19th century. It was then that receipts of stored metals gained adoption, and the better divisibility of silver and copper became irrelevant, so gold became the only money backing those claims. 


Bitcoin Copies:

It has been argued that Bitcoin can’t be scarce because blockchain code is easy to copy.

But,  getting people to appreciate a copy is the tricky part.

It is not possible to replicate 1) scarcity nor 2) social adoption:


1) Bitcoin scarcity comes from its immaculate creation, from being the original cryptocurrency, the one with longest established history and highest reputation.

Arguing that Bitcoin can not be scarce because its code can be copied is like arguing that a Van Gogh can not be valuable because it can be copied.


Elvis Presley was unique despite others copy him

2) Bitcoin attracts the best cryptographers.

Gifted people tend to want to work with other top people and work on something that matters, that they believe in. Motivation matters. Protocol design and coding is partly an artistic, aesthetic endeavour; people do their best work on a mission: uncensorable global internet money. —  Adam Back.


Hodlers defend it with passion:

The code of a Bitcoin copy is probably structurally unsound, poorly reviewed built by a few inexperienced developers.

If Bitcoin is imagined like world’s gold being stored in the ultra secure Fort Knox under heavy armed guard, then forking Bitcoin is like painting some rocks on a gold color and storing them in recently built, small poorly engineered shack called Fort Knox Lite that is secured with someone disguised as a policeman. 

Because Bitcoin is the meeting point for cryptocurrency enthusiasts, the rest of cryptocurrencies are usually called “alts”.

Insecure alternative “Cryptocurrencies”:

Some alternative “cryptocurrencies" sacrifice permanent security to temporarily gain some extra functionalities (for example, low transaction fees).

Security risks are promoted as innovations by the team in charge, who also usually introduces some element of centralization, creating the “ability” to intervene the protocol layer.

Centralized Digital Currencies (CDC) & Central Bank Digital Currencies (CBDC):

Examples would be Facebook's Libra or a hypothetical "Digital Euro".

They are cryptocurrencies in the same way that a doll is a baby. They lack the predominant source of value that distinguishes cryptocurrencies from fiat money: the reduction in vulnerability to third parties behaviour, for which governance minimization (aka decentralization) is required.                                    



Network effect: the phenomenon whereby the benefit to the user increases as the user base of the network grows.