Figure I'll repost my analysis of DGC that got locked a few months ago, original thread here:
https://bitcointalksearch.org/topic/digitalcoindgc-discussion-info-thread-organic-growth-since-may-2013-800481
What makes DGC so special?(Note, this is the opinion of cosmoo only, please criticize me if you disagree)
To put it bluntly, DGC has only ever experienced honest, organic growth in network, userbase, and market. There has never been any behind-the-scenes manipulation by the creators or even (apparently, to me) 3rd party whales; at this point coins are distributed enough that anyone looking to control DGC (as most instamined Proof-of-Stake coins are) would have to invest significant time and money, with a poor chance at succeeding. This is sloppy analyzing but take a look at the data provided by the CryptoID block parser (the ! breaks the link, copy+paste it into your browser):
https://chainz.cryptoid.info/dgc/#!rich
Look at the green portion of the pie chart, that represents the amount of DGC in circulation that belong to all addresses under the top 1,000. This is effectively how 'healthy' the distribution of the coin is; more coins in more hands = fairer distribution = more accurate market price. Also note that there are 50k addresses with DGC in them, which shows how far DGC has spread among people. Now, lets take a look at an ongoing pump-n-dump coin, VeriCoin:
https://chainz.cryptoid.info/vrc/#!rich
You'll see that the green portion of their chart accounts for only 0.6% of the coins in circulation, with only around 6k addresses created. With so many coins in so few hands it's easy for whales to dominate the market. As long as they can hold a solid majority of the coins they can buy the price up along with hype (ie the coin gets a new 'feature' or whatever) and sell into it, then pick off large buy orders as they appear at the inflated price. This isn't investing, it's gambling, there are no solid fundamentals here and unless you're the whale behind the coin you will be left in the dark as to what's really happening with the market.
Next, lets take a look at what I think to be a dying pump-n-dump, DarkCoin.
https://chainz.cryptoid.info/drk/#!rich
The green portion of their pie chart is much bigger, why? Because it's already 'spent' as far as the pump-n-dump process goes. DRK has been at an inflated price for so long the original, consolidated coin supply has leaked beyond whale's abilities to reclaim it. 21.5% of the current supply, in 30,000 different addresses. If a market manipulator is interested in pushing the price up, they'll have to recollect the DRK in all those addresses. Without the rampant manipulation that pumped the price up so high in the first place, DRK is doomed to deflate over the next few years. Perhaps if those 30k people abandon it the chance of getting re-pumped increases, however it seems to me whales have already taken their profit and moved on to another coin.
The final point that reveals this whole scheme is the relation between the number of coins in circulation and the market capitalization. Check it out:
(as of 9/28/14)
VeriCoin:
Coins Outstanding: 26,865,297
Market Cap: $1,397,839
Total # of addresses: 5618
DarkCoin:
Coins Outstanding: 4,688,976
Market Cap: $13,505,041
(
compared to other altcoins this is ridiculous, do you seriously believe there's $13m backing DRK?)
Total # of addresses: 30819
digitalcoin:
Coins Oustanding: 17,224,561
Market Cap:
$208,553Total # of addresses:
50304Now which coin do you think will be a better investment in the long run? It's plain ludicrous for a coin that experiences instant volatility to be lauded as a trustworthy alternative to Bitcoin, unless losing money is your thing. DGC recently floored at 1500 satoshis. Nowhere to go but up from here
For anyone interested in learning more about how coins and their markets are manipulated, this article does a great job explaining it:
http://www.devtome.com/doku.php?id=a_massive_investigation_of_instamines_and_fastmines_for_the_top_alt_coins#the_difference_between_the_early_adopters_of_bitcoin_and_the_new_alts