Cryptocurrency war: Bitcoin vs altcoins
Bitcoin's greatest long-standing danger is not central banks or government bodies, it is Bitcoin's technological know-how that anyone can use to launch new cryptocurrencies.
This is proved by the quick development in the supply of other digital currencies that are challenging Bitcoin. An increased volume of new cryptocurrencies carries the possibility of ultimately crushing or at least greatly influencing Bitcoin prices and adoption.
ALTCOINS’ POTENTIAL
Earlier in 2016 we witnessed an interesting situation. A bunch of Bitcoin Cash big whales was in early stages holding significant amounts of Bitcoin and was nervous to see what would come happen with Segwit2x. BTC quickly rose to new highs but the hard fork was canceled. Those folks began to take their profit and move it to Bitcoin Cash.
This resulted in a 29% drop in BTC to USD ratio which was approximately $2000 USD. It could have been a market manipulation or simply the mass madness of big players but these whales may do the same thing again. Ethereum and Bitcoin Cash have increased their weight in terms of market capitalization and user base and are liquid enough now to cause significant turbulence around BTC prices.
Apart from trading issues, Bitcoin risks pushing businesses to look at Ethereum and Bitcoin Cash since they offer cheaper transactions and bigger blockchains that can cope with a larger volume of transactions. At the moment, the Ethereum blockchain processes two times more than that of Bitcoin. More and more people are worried about Bitcoin transactions getting slower while transaction fees get higher.
In addition, some altcoins may be able to offer something else that Bitcoin does not. In other words, altcoins possess much of the same applicability of Bitcoin but many offer something else as well. Some of them are faster, some are more anonymous, some provide better investment options, some are more volatile and thus are more advantageous in terms of trading.
Altcoins are beneficial in that they give investors the diversification of risks, especially the biggest altcoins in terms of market capitalization and adoption.
Another problem of Bitcoin is ecological issues resulted from mining, More and more electricity is needed for BTC mining and functioning, which has some people concerned.
The shift in network and software model is a key to Bitcoin’s future. Any mistakes or delays may change the balances and some altcoins may climb closer to Bitcoin or even take the lead.
Part 2 : Why Bitcoin Always Wins
