This is my first post here, so hello everyone. I'm supposed to write five newbie posts to be able to participate in the forums, so I thought I'll use that to share some thoughts, instead of simply writing five quick and meaningless replies to some threads just to hit the limit.
I believe Bitcoin isn't in a bubble. It's during its long period of growth as it's getting acknowledged by more and more businesses and individuals, transforming it into widespread and recognized currency.
Most of other cryptocurrencies though, that's a real bubble. People are getting crazy about any new cryptocurrency someone introduces. They spend their dollars, bitcoins and computing power on new ecosystems which don't provide any other value than, well, being new. I kinda understand it. I jumped the Bitcoin bandwagon pretty late too and I understand the urge to participate in the next thing that costs $0.001 today but can grow to hundreds of dollars one day. Except it's not going to happen.
Now, some alternate cryptocurrencies have that potential. I am not that blind Bitcoin believer, so I expect one day it might be replaced with some other cryptocurrency that will evolve from it. That is entirely possible and it would be naive to think that Bitcoin is not only the first, but also the last popular cryptocurrency the world will use. Things that are first, rarely turn out being the last in this world.
But I can't see any reason why that should happen to a currency that is nothing but a clone of some other currency.
Now, I like and support all the currencies that are evolving from Bitcoin and are changing something significant in the protocol. It's in the benefit of the entire cryptocurrency ecosystem to evolve. I like Litecoin as the use of scrypt makes it a bit impractical to mine by ASIC, what might lead to better decentralization. I like PPCoin for its hybrid proof-of-stake/proof-of-work system. These are useful experiments and that kind of experiments might lead eventually to a new currency which will compete with Bitcoin. And that's really healthy.
But most of alternate currencies are like “we are like [somecoin] except that we will create two times more of [ourcoins] in total. Ha!”. There's no value in that. If there's not even a slightest innovation involved, there's no way that this new [ourcoin] will succeed and exceed the network effect which existing [somecoin] already has.
But these currencies attract people and there are already thousands of dollars invested in them. Like Feathercoin, which is only one week old, provides no innovation at all, and to my understanding it already has 4.254M coins created (21268 blocks as of now * 200 coins), which people are trading at 15 LTC ~ 1k FC. That makes FC capitalization at around $165,000.00 and growing rather exponentially every day.
This is the real bubble and all these cloned currencies are in my opinion pump and dump schemes. Now, there's nothing wrong to get involved now and sell with some profit before these currencies die - if that's what you're interested. But please be aware of that scheme and don't expect them to be the next big thing.
Or is there someone who truly believes in cloned currencies and wants to convince me I'm wrong? Discuss. Thanks.
