Altcoins have a long tradition in the Bitcoin community, but they tend to cause a contentious divide among those who think they’re useful and those who think they’re all scams. One side of the argument, articulated by the Satoshi Nakamoto Institute ’s Daniel Krawisz , is that altcoins have no chance of success and distract possible users from Bitcoin, while the other side, articulated by many Ethereum supporters, believe platforms such as Bitcoin and Ethereum can work together .
Johnny Dilley , who runs strategy at Blockstream , was recently asked for his thoughts on altcoins during an interview on The Crypto Show . Dilley believes the vast majority of altcoins are scams, and he also thinks Bitcoin developers are not threatened by the existence of these alternative cryptocurrencies. The incentive for altcoin speculators to promote uncertainty in the Bitcoin community was also discussed.
The Vast Majority of Altcoins Are Scams
When first asked about altcoins, Dilley echoed recent statements made by Monero developer Riccardo Spagni and stated, “I continue to believe that the vast majority of altcoins are scams. They provide no functionality whatsoever, or the functionality they could provide could very easily be implemented via a sidechain .”
A sidechain is an alternative blockchain to Bitcoin that uses the same Bitcoin currency through a pegging mechanism. The idea is to allow developers to experiment with completely new blockchains without having to bootstrap a new currency network (altcoin). Bitcoin Hivemind and Rootstock are two examples of sidechains currently in development. Blockstream has handled the vast majority of the development work for sidechains up to this point.
Dilley went on to discuss the security concerns associated with altcoins. Critics often point to low network hashrates and alternative consensus models as potential risks of these alternatives to Bitcoin. Dilley added, “If you’re […]
