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Insider Secrets to Building a Truly Great Altcoin

Thursday 08th, October 2015 / 22:46
Insider Secrets to Building a Truly Great Altcoin

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Altcoin is basically any other cyptocurrency other than Bitcoin. As bitcoin is an open-source project, most of these altcoins are actually a fork from bitcoin itself except for a few with the codes having written from scratch. Altcoins in the past were seen as a perfect opportunity to be used as a test platform for developers to refine and further improve bitcoin features. As this moves along, coins were then created with the ultimate aim and intention of providing a solution to bitcoin problems and to replace it as the leading cryptocurrency.

However, recently scams involving creation of new altcoin have become rampant (most of them projecting promising roadmap with the aim of soliciting funding and investment) which later did not develop into full-scale project, thus have seen people ditching the mentality and to quickly label altcoins as simply “untrustworthy”. However, it is obvious that this stereotyping does not do justice to the rest of the coins.

As of this writing on October 3, 2015, there are already 686 (excluding bitcoin) listed on coinmarketcap with a number not known for those that have been completely delisted and taken off the list.

Some of these coins are created much earlier not long right after bitcoin were introduced compared to a few which probably have just been introduced couple of weeks or months ago. So basically what makes some altcoins survive the test of time to become a success occupying the elite top spot on coinmarketcap while others will just end up a complete failure? How do we know if they are scams or whether they are legitimate? We do not have an answer for that. But however looking at these altcoins, those that managed to survive seem to have a distinguished or special feature that makes them stand out above the rest. Here I’ll try to group them according to these attributes.

The Early Starters’ Advantage

Litecoin, currently occupying the immediate spot just below bitcoin is also the second-largest in terms of market capitalization. It offers scrypt mining instead of bitcoin’s more complex resource hungry SHA-256 and it also has faster block confirmation time. Although these might not be the main selling point because right after that, a lot of Scrypt clone coins also having the same feature, if not better, were developed, litecoin managed to hold on to its position because of the early starter’s advantage. At the time of its creation back in 2011, there were probably a handful of altcoins and its main appeal was at attracting GPU miners (just as gpu mining for bitcoin became obsolete). As this polarization effect sets in, automatically people’s mind began to affix on the notion that litecoin is the “Number 2” most-important coin and this somehow remains until today.

Community Power

One particular altcoin stands out when it comes to community power and that nonetheless is Dogecoin. Originally started as a joke, it offers nothing exceptional in terms of coding, but the overwhelming support that it receives from the community has been tremendous. It was not known what causes this but primarily, the concept behind dogecoin is the image it was trying to built on, having something which is fun-filled, cute and attractive meme-coin, with no obligation attached that also revolves around the free-for-all tipping event that you can find almost everyday taking place at the dogecoin reddit. I don’t know how by doing these can make all the difference but somehow it did succeed and managed to gather its band of hardcore followers

Innovation and Technology

Dash (previously known as Darkcoin) and Monero are few of the examples. Dash with its claim of being able to provide complete anonymity with its Darksend technology while Monero (which is built completely from scratch without copying bitcoin’s code) is also staking on the same anonymity function. Other coins having unique technology and built around the innovation aspect is Goldcoin which presented its white paper on preventing the infamous 51% attack and later came up with a difficulty algorithm adjustment codenamed, “Golden River.” Obviously these features managed to convince investors and followers that these coins have something new to offer and will therefore become useful. We won’t go into details about how the anonymous technology or the 51% attack algorithms works as you can do your own read-up from their official websites.

Marketing and Branding

A coin does not need to be great or unique as evident from what we have seen with dogecoin but another way of making it a success is via “marketing and branding”. Digibyte is one example as after the huge investment funding, it tries to reestablish and change its image to attract followers with its completely redesigned website, introduction of mascot (Digi-Man), development of payment systems and infrastructure, offering incentive by doing free giveaways playing League of Legends (riding on the gaming popularity of course) and changing its strategy to promote DigiByte as a reliable payment platform for merchants. And yes, you need funding to make that happen.

Supporting Services

Clam is a good example. It is not just another POS coin, but a coin with a supporting gambling site (Just-Dice) which only accept clams as the sole payment method. I’m not sure if Clam will be as popular as it is today if not for that.

Note: The article here should not be seen as a form of endorsement or solicitation to get people to invest in any of the altcoins. It is not an investment guide nor does the site owner or writer affiliated to any of it. Readers are advised to exercise caution and to conduct their own research before arriving at conclusion. As explained earlier, the names of these altcoin were brought up simply because of their attributes and to point out the surviving traits that help them survive and climb the altcoin ranking.

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