Crypto-Current (069)

§5.873 — The Bitcoin event is a monetary Cambrian Explosion.[1] Its signature, in certain regards, is diversity. The ‘coin’ – in its new sense – is a generic term, to reflect this. The multiplicity of ‘coins’ is less a matter of amounts than of types. The re-minting of the term responds to an extraordinary proliferation in the species of comparatively cash-like money.

§5.8731 — Two basic families of alt-coins are initially distinguishable. The first consists of schismatic products from the Bitcoin main chain, generated by hard forks, in cladistic order. Bitcoin Cash (BCH) and Bitcoin SV (BSV) are the relevant lineages. Both of these coins are among the top ten cryptocurrencies by market capitalization. The second family, unified only by its contrast to the first, is far larger and more variegated, consisting of coins without Bitcoin ancestry. A number of taxonomic approaches to the principled sub-division of this alt-coin family already exist.[2]

§5.8732 — Within cryptocurrency circles, alt-coins as such are profoundly controversial. Among Bitcoin maximalists they are considered a pestilence.[3] Their existence is interpreted as a pathological side-effect of Bitcoin’s emergence, and a distraction from its inevitable ascent to currency monopoly. On the other side of the ledger, strains of principled currency pluralism undoubtedly exist, even if heavily outnumbered by more opportunistic varieties of alt-coin promotion. Even if a plausible argument can be made for monetary natural monopoly, currency competition is not without a case.

§5.87321 — In respect to alt-coins, discursive controversy is not a tribunal of special importance. The market delivers a superior verdict on cryptocurrencies, with commentary – at most – as an annex. This verdict is currently mixed. The first point of note is that Bitcoin’s market capitalization considerably exceeds that of all other cryptocurrencies combined.[4] In mid-2019 it was almost eight times that of Ethereum (ETH, the second ranked) and well over thirteen times that of Ripple (XRP, the third). Bitcoin, then, is evidently not merely one cryptocurrency among others. On the other hand – if not quite equally – alt-coins are nowhere close to being nothing. The latter fact is quite possibly a leading clue. That is to say, there are reasons to suspect, in regard to alt-coins, that we haven’t seen anything yet.

[1] The analogy is close enough to function as a technical description rather than a figure of speech.

[2] The classification of alt-coins initiated by Wikipedia is almost certain to prove influential, and perhaps even decisive. It grounds the most fundamental level of taxonomic order in the variation between types of consensus mechanism. Proof of work cryptocurrencies, the largest phylum (including Bitcoin and its descendents, among many others), is then sub-divided by cost-function language (SHA-256, Ethash, Scrypt, Equihash, CryptoNote, X11, Lyra2, or other).

[3] A stance against alt-coins is implicit within the term Bitcoin Maximalism. Several essential ingredients of the monetary ideology make this claim uncontroversial. Bitcoin Maximalism includes at least the following commitments: (1) Any currency tends towards natural monopoly; (2) Bitcoin, as the best currency, is especially prone to exhibit this; (3) cluttering a currency with specialized traits or characteristics has no robust value, and; (4) inhibiting the ascent of Bitcoin to global monetary supremacy lacks strategic justification. Other than Bitcoin, there are only ‘shit-coins’ – in the argot of those most committed to the former’s absolute monetary sovereignty.

[4] Cryptocurrency price movements are not only notoriously volatile, they are also highly correlated. On empirical grounds, then, or by precedent, market capitalization ratios between coins can be expected to exhibit greater stability than their absolute values. Yet this hypothesis is not perfectly neutral. Bitcoin maximalists implicitly anticipate an era of price divergence, produced by a mix of ‘hyperbitcoinization’ and alt-coin extinction. Neither of these trends was yet evident in late 2019. While no truly reciprocal expectation is likely – based on assumptions of general alt-coin advance relative to Bitcoin – it would be surprising if specific alt-coins had no ‘maximalist’ advocates. The prediction of short-term price convergence – to eventual cross-over – built into such a position is, likewise, currently undemonstrated.

A list of the top hundred coins by market capitalization can be found here:

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