I mine, (and hold), the alt coins with the highest total network hashrate, I try to focus on the top 5 in total network hash rate and select the ones I determine have the most potential upside over the next year to two years.
The speed of a coin's transaction confirmation is important, very important. Worldcoin and Fastcoin are faster coins, so they should be examined. However, when a coin's transaction times are too fast this promotes stales and orphans in the mining community. Fastcoin mining produces many, many more stales and orphans than Worldcoin, and that is a problem. Fastcoin is too fast and pushes the litecoin Scrypt model much too far, but this has always been known, and Fastcoin is still increasing its total network hashrate at a very competitive rate, there remains interest in mining Fastcoin. But the price, the value of Fastcoin in BTC is very poor and that is of concern. The more a coin's value is against BTC, no matter the logic, the more attractive it is to investors and miners, even if the other factors about the coin make it less valuable overall.
Also, those coins with the highest total network hash rates have the largest mining communities, thus, they have the greatest number of nodes, (miners/GPU), mining them. This is less true of bitcoin with the spreading of ASIC. Bitcoin retains a gigantic hash rate, i.e., a healthy transaction processing network, but the number of mining nodes, (physical nodes mining and entities), has decreased and will continue to decrease. I expect to see this happen to some degree with the release of Scrypt ASIC, but I also expect to see the same set of problems that bitcoin ASIC experienced in its release. The release of first gen Scrypt ASIC is not going to be pretty. The 2nd Gen Scyrpt ASIC retail releases will probably be much better, we'll probably see that by Q2 of 2015 in some real numbers, and then network hash rates for those alt coins that are currently the most popular will explode, and GPU miners will fall off of them, and retreat to the other, less popular Scrypt coins, and look more closely for new coin releases with promise. It's a cycle, wash, rinse repeat, this "ASIC" cycle.
The health and size of a coin's total network hash rate, its "network effect" is crucial to its long term value. Applications that build upon the blockchain of a coin are dependent on a healthy transaction network, i.e., high network hash rate. I think this is the single most important factor when attempting to speculate on the potential value of any coin, including bitcoin and litecoin.
Currently, I favor Worldcoin as its reputation compared to Feathercoin is less exploited. FTC has seen a lot of pump and dump and was a part of UNOCS which failed. Worldcoin was also a part of UNOCS however that is less widely known. Feathercoin was the poster child in many ways for UNOCS and so its public relations has suffered most. Scharmbeck and the development team supporting Worldcoin at this time is strong and the pool operators for Worldcoin, like NUT2, are upgrading and working hard. There is very little bad press, or rumor about Worldcoin pools. Worldcoin is like the third swing of the bat in many ways and is connecting well.
So, the total network hashrate is one of the best indicators of the interest in any coin. If more people and entities are willing to mine a coin, that shows more interest in the coin and people tell others what they like and what they do, so that's a word of mouth factor that increases the visibility of a coin.
The ability of a coin due to it difficulty re-targeting to maintain itself consistently in the upper 1/4 to upper 1/3 of most profitable coins compared to BTC is another big factor in the potential popularity of and future mining community interest in a coin. Just like a YouTube video which appears in the top ten, it goes viral even more because it is visible to so many in that list, a coin that maintains consistent top ranks in the most profitable listing is simply more visible and more attractive to miners. PHS, Philosopher Stone coin is a great example of a very dynamic difficulty retargeting which will often vault the coin suddenly, and unexpectedly to the most profitable coin of BTC value to mine, and many miners will jump on that, knee jerk most profitable mining, and that dynamic difficulty re-targeting serves many complex purposes for PHS.
Total Network Hash Rate
Most Profitable of BTC
And third is the coin's reward per block compared to its difficulty. We can derive a strength metric in this category to compare the alt coins on that basis. How many coins a miner can obtain for a given amount of hashing power for a set amount of time that miner mines that coin is important. And the more value that coin has in BTC, the more important this reward/difficulty metric becomes. Again, clever difficulty retargeting schemes increase a coin's appeal when this metric is examined long term.
Dogecoin's wild popularity recently is due in large part to its gigantic reward per block, and relatively low difficulty compared to that gigantic reward. And Dogecoin has some marketing appeal as well. If Dogecoin can maintain the growth of its total network hashrate it has a fighting chance, but the reporting of that total network hash rate due to miners coming and going as its profitability against BTC changes rapidly is difficult to report, therefore, it is not as visible as some other coins which makes it more risky in the long term. If I cannot see the total network hash rate of a coin consistently, then I cannot assess its potential to provide for a healthy network in the future, which is critical for the development of services and adoption using that coin.
I own and trade litecoin because Charles Lee, the lead developer, the creator of litecoin works for coinbase, one of the largest bitcoin processors and service developers in the world, and Bobby Lee, his brother, is the CEO of one of the largest bitcoin exchanges in the world based in China, btcChina. okCoin currently lists litecoin for trade and the volume of litecoin on the okCoin exchange is a lot, and is increasing each week. The Chinese love litecoin, this is clear. The Chinese understand the potential of litecoin because of its relationship to Charles Lee and Bobby Lee and the places they occupy in the CryptoCurrency money industry.
