What Are Altcoins?
Although Bitcoin was the first peer-to-peer electronic currency, it was by no means the last. When people think of these currencies as rivals to Bitcoin, they're really wrong since they don't have the features that make Bitcoin work as digital currency and sound money. Rather, these currencies are just imitations.
Author:Stefano MclaughlinReviewer:Camilo WoodJan 30, 20249.1K Shares134.3K Views
Although Bitcoin was the first peer-to-peer electronic currency, it was by no means the last. When people think of these currencies as rivals to Bitcoin, they're really wrong since they don't have the features that make Bitcoin work as digital currency and sound money. Rather, these currencies are just imitations.
Any third-party interference in the operation of a digital system is not permitted in order for it to operate as digital currency; its operation must adhere to the user's wishes, and no third party is able to block these payments. The antagonistic standoff that occurs between Bitcoin stakeholders and prevents any one entity from dominating Bitcoin payments appears difficult to duplicate after years of watching altcoinsbecome established.
A Pseudonymous Computer Programmer Created Bitcoin
A pseudonymous coder, whose identity is still a mystery, came up with the idea for Bitcoin. A few months after posting the concept to an obscure email group for computer programmers interested in encryption, he established the network alongside the late programmer Hal Finney. A few days after Finney and others started using the network, additional people began to engage in the transactions and mining. In mid-2010, Nakamoto cited "moving to other tasks" as the reason for his disappearance, and he hasn't been heard from since. 9 In all probability, Nakamoto has roughly 1 million bitcoins in an account that he or she originally owned, but these coins have not been transferred in any way.
Nakamoto, on the other hand, used tremendous care to prevent his identity from being discovered, and no conclusive proof has emerged to yet to identify the actual Nakamoto. He would have stepped out if he wanted to be recognized. If he'd left anything that might be used to track out his whereabouts, it'd already been done. Investigators and journalists have sifted through all of his writings and conversations to no avail. All Bitcoin participants should cease worrying about the identity of Nakamoto and understand that it has nothing to do with the workings of the technology, in the same way that it has nothing to do with who invented the wheel.
Sovereign Code Is The Best Way To Describe Bitcoin
in that its actions are unaccountable to anybody or anything else. Only Bitcoin's rules regulate Bitcoin, and since the status quo bias continues to affect the incentives of everyone working in the project, altering these rules in any substantial manner has become highly unfeasible. It is the proof-of-work-backed sovereignty of the Bitcoin code that makes it a really effective solution to the double-spending issue and a viable digital currency. Unlike other digital currencies, Bitcoin does not rely on the confidence of its users.
In the face of a digital currency built after Bitcoin, there is a profound existential crisis: anyone looking to use digital cash will naturally prefer Bitcoin over smaller and less secure alternatives because Bitcoin already exists, with greater security, processing power and an established user base. Coins may be easily replicated, and imitations multiply, making it impossible for any one currency to gain any major momentum without an active staff devoted to nurturing, growing, developing, coding and protecting the coin. In spite of its obscurity and the fact that it was created by an anonymous programmer with almost no marketing funds, Bitcoin's ability to demonstrate its usefulness as digital currency and physical money was enough to assure rising demand for it.
This Is Why Virtually All Altcoins Have A Team In Charge
When they started the project, they advertised it, prepared the promotional materials, distributed the release to the media as if it were news, and had the benefit of mining a huge number of coins early on before anybody had heard of the currencies. To the extent that any other currencies claim to be a type of digital cash that cannot be modified or controlled by a third party, it is impossible for these teams, which include well-known persons, to legitimately show their lack of influence over the currency's direction.
As a result, anybody attempting to develop an alternative to Bitcoin will only be able to succeed if they invest considerably in the currency, thereby making them the owners of it. In other words, as long as a third party has control over a digital currency, it cannot be considered a kind of digital cash but rather an inefficient type of intermediary payment.
Summary
As long as we don't have government intervention in the digital currency market, a centralized digital currency is just OK. While this may seem like a good idea at first glance, there is something fundamentally wrong with a centralized currency that has an extremely burdensome and inefficient architecture.
Stefano Mclaughlin
Author
Camilo Wood
Reviewer
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