An Altcoin is a Bitcoin derivative – not the financial term. As if Bitcoin terminology wasn’t hard enough already. The source code for Bitcoin is open source. Meaning anyone can make a few small changes and launch a Bitcoin clone.
Closed-minded Bitcoin proponents argue Altcoins are a waste of time, energy and resources. They detract from Bitcoin. When an Altcoin fails, the user experience damages the cryptocurrency “brand.” Developers are better off working on incorporating their ideas with Bitcoin.
In effect, Bitcoin 2.0 will be Bitcoin. That gets no argument from me.
Ripple Brings Out Bitcoin Insecurity
What about digital currencies that don’t share source code with Bitcoin?
Though Ripple began in 2004, it wasn’t until 2011 that Jeb McCaleb gave the payment protocol a reboot to compete against Bitcoin. Before focusing on the currency, McCaleb worked on eDonkey, a precursor to BitTorrent.
McCaleb was the founder of Mt. Gox and personally sold the exchange to the disgraced CEO Mark Karpeles. Karpeles famously lost over 800,000 of his customers bitcoins when his Bitcoin exchange was hacked. After selling Gox, McCaleb founded Ripple.
Also Read: Undercover Silk Road Agent Believed Dread Pirate Roberts (DPR) to Be Mark Karpeles of Mt. Gox
Parts of Ripple are open source though the majority holder of the currency is Ripple Labs – ‘core developers’. Approximately 32,000,000,000 XRP are in circulation. Over twice that amount is held by Ripple Labs.
Obviously, Ripple is not after the same thing as Bitcoin. A child of five would understand this. Send someone to fetch a child of five.
Ripple is a payment system; a trust-based, proprietary, payment system. Just because that doesn’t satisfy the crypto punk narrative doesn’t mean Ripple lacks value.
The SWIFT bank messaging system is a perfect example. Over 15 million banking transactions go through the SWIFT network every day. If Ripple is SWIFT 2.0 more power to Ripple. It just means greater adoption of digital currencies and easier access to trading fiat for bitcoins (fiat-crypto for bitcoins, perhaps?).
Does having more options for obtaining bitcoins detract from Bitcoin? Of course not. Ripple is not an enemy.
Remember when Feathercoin was 51% attacked, and Bitcoin users fled back to dollars? What about Aircoin? Apparently there were two of those. Trollcoin, UFOCoin, TakeOutCoin, MemeCoin, MillionaireCoin, one Altcoin is literally named Scamcoin. These things fail all the time. Bitcoin is unaffected.
Altcoins are like a self-sustaining sandbox. Developers are usually the largest holders of their coin; they do most of the early mining. The process is called Premining and considered an attribute of a failed cryptocurrency. Even though this is how Satoshi Nakamoto, Bitcoin’s founder, obtained so many coins.
Altcoins are one of Bitcoin’s greatest strengths. They aren’t competitors as much as they are requirements of the antifragile nature of cryptocurrency.
If dollar bills are a 0 on the spectrum of innovation and Bitcoin’s at 10, SWIFT is 2 and Ripple is a 5. Not everyone is ready to make the jump from 0 to 10. For some, the transition will need to be gentle. If you truly believe in Bitcoin, check the elitism. Stop letting perfection get in the way of doing good and see these competitors as stepping stones towards a better financial environment overall.
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