Bitcoin: Why altcoins are important

The alternative cryptocurrencies, the altcoins, fulfil an important role in the bitcoin ecosystem.

For a starters, swarmification is always a good defense strategy. if attackers want to shut down the entire concept of cryptocurrency, it multiplies the number of attack targets that attackers would have to shut down. Bitcoin is continuously under attack. It is not unthinkable that one or more of the fiat governments would plan an assault on the bitcoin ecosystem. They would most likely not be able to use the same vulnerability across different cryptocurrency implementations to achieve that goal. If they do not shut down all of the variants, there is no point in shutting down just one.

Secondly, we need more than one team working on improvements. A monopoly would not be good in that respect. Bitcoin is already quite a good idea, but nobody says that it cannot be further improved. Since real improvements will usually make their way into the other cryptocurrencies too, having alternative cryptocurrencies will benefit too.

Next, every software project always ends up running into massive governance issues. When it gets so far, we need the ability to fork a project in order to get rid of leadership that we no longer accept. That is how we collectively abandoned xfree86 and moved on to xorg. Another example is how distros and users abandoned openoffice and moved over to libreoffice, expelling Oracle from the realm in the process. Leadership does not exist. Followership does. Unlike in the real world (ITR), forced followership does not exist in the realm of software or the internet. We are free to follow whoever we like. Altcoins substantially reduce the cost and the delay for followers to move on to another leadership.

The existence of altcoins and bitcoin to altcoin exchange markets also naturally solve a very practical problem. For privacy reasons, it is often a requirement to wipe out traces of what transactions precisely the coins come from. Otherwise, an employer could for example figure out where exactly his employees spend their money. There exists a very legitimate need for privacy. So, you may want to replace your bitcoins with other ones. The absolutely simplest way is to buy altcoins with bitcoins and then immediately sell these altcoins again for bitcoins. If you do that on a sufficiently liquid exchange market, you will always end up with other bitcoins. Since the bitcoin/altcoin markets do not involve fiat money, they are not and cannot be regulated. Therefore you can do that entirely anonymously. Even the market operators tend to be anonymous.

Just like the free software movement has always insisted on its libertarian goal of preventing corporate control from enslaving the software user, the cryptocurrency movement must continue to insist on preventing the fiat regulators from putting shackles around the cryptocurrency user’ legs. We shall make the libertarian principles prevail: No matter what justifications he may invent for claiming otherwise, and no matter how good these justifications sound, the fiat regulator has no right whatsoever to know where the user’s money comes from or what he does with it. There shall be no surveillance.

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Published by

eriksank

I mostly work on an alternative bitcoin marketplace -and exchange applications. I am sometimes available for new commercial projects but rather unlikely right now.

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