Cryptocurrencies have been steadily increasingly in popularity and more cryptocurrencies join the space each year. Some new coins provide value and could pose threat to some of the established cryptocurrencies. However, most are here today and gone tomorrow — let’s see why.
The Early Internet Argument
There are almost 2 billion websites live right now on the internet. How many of them do you use on a regular basis? I probably use less than 20 websites regularly and this is probably the case for a lot of the people.
Think of how many people visit Google, Youtube, Facebook, Wikipedia, Twitter, etc… These few websites are responsible for majority of the traffic on the internet. This doesn’t mean that other websites are not useful, if a website is getting any traffic then they must be serving a niche. For instance, not everyone is curious about Linux distributions and researches them everyday — some do and might visit forums like these regularly; so clearly websites like these still serve a purpose. But why am I talking about websites and web traffic? It is the closest thing in my mind to the decentralised world of cryptocurrencies. Cryptocurrency is a very new concept, with the oldest currency being Bitcoin, founded in 2008. As of writing this article, there are over 10,000 cryptocurrencies according to coinmarketcap.com, that doesn’t include all the ones they are unaware of simply because they are too small or too new.
Think about how many websites were founded in the early days of the internet and how many of them are still around. These websites can easily be counted on your hands but think of how many thousands of them failed. There are 2 billion live websites on the internet but what about the millions that already went live and died? I expect the same thing to happen with cryptocurrencies. There are thousands of cryptocurrencies and new ones being released everyday. Most new projects are nothing but altcoins with no real value or utility. While this doesn’t sound good, it shows that the cryptocurrency space still has room for new coins. As the market becomes mature and more and more smart money comes in, we will see these coins disappear.
Most coins currently being circulated are just copycats of each other. These coins leech on the current market trend and capitalise by being one of the first movers in that space. For example, the DeFi craze that started a couple of years ago, led to the development of so many different DeFi projects, many of them the exact same as the other. Not only do they lack creativity in what they do and provide, their names are nothing short of picking a random word and attaching ‘Finance’ in the end — Pickle Finance, Popsicle Finance, Nerve Finance, Alpaca Finance… you get the point.
Just like the DeFi craze, there was the NFT craze a few months ago with so many projects jumping on the bandwagon and providing nothing new to the market. There have been so many NFT trading card projects and more continue to enter the space, yet not a single NFT trading game has taken off so far. The lack of innovation in the current market and the insurgence of copycats points to one thing: greed. The market a few months ago was seeing phenomenal results on a daily basis. More projects kept joining the market offering the exact same thing as the other guy and because the market was so strong this just led to more projects offering the same things until eventually there was an over-saturation of DeFi and NFT projects.
Projects that 100000% on your investment
Retail investors come in and out every few years, bringing in a lot of money but unfortunately not a lot of expertise and knowledge. This is where projects like Shiba Inu, Safemoon, Bonfire, among many others thrive. They are nothing more than with no real value or utility that offer a get rich quick scheme. There are no fundamentals behind their projects – just a flashy website and good marketing to appeal to inexperienced investors. These projects, much like the retail investors will come and go.
While projects like these frustrate me, especially when I see people I know invest in them. The truth is that most of these people would lose money in schemes like these anyway whether it’s crypto or not, is irrelevant; scams have been around for years and there will always be scams in any market.
The bottom line is that cryptocurrencies are here to stay. While there is a lot of noise in the market, copycat DeFi and NFT projects and altcoins were unable to knock down legitimate projects like Bitcoin, Ethereum, PolkaDot, Chainlink, etc. Don’t get me wrong, I love DeFi and NFTs but I feel that right now there’s more copying and less innovation. With any new market that emerges there will be a lot of copying, scams, and projects that are simply not good enough. None of this scares me, instead it proves to me just how far crypto still has to go and that right now we are witnessing the early stages of cryptocurrencies.