Bitcoin Core Developer and the Blockstream co-founder Gregory Maxwell explained how altcoins are distracting resources that could have been utilized to improve Bitcoin.
The celebrated techie, who was attending the launch of their pet project, the Sidechain Elements, criticized altcoins muddling the Bitcoin sector by creating an inessential competition. “I think the 2.0 space has, frankly, screwed up the 1.0 space by distracting talent, diverting money, misallocating infrastructure,” he explained. “And most of all, [it has confused] our message to the public (regarding bitcoin’s ability to store value, as the unique Internet money).”
Less Development, More Speculation
Maxwell noted that that a majority of the altcoin projects we come across nowadays are scams — some projects that sell infeasible ideas to lure investments, only to disappear with money in the end. And even if these projects appear to be genuine, investing into them doesn’t sound like a good idea. As per Maxwell, if a developer has a useful idea, he/she should simply try to have it add into the existing Bitcoin code.
He then blamed financial incentives the most, saying that a majority of altcoins work with a P&D mindset. Extracts from the presentation:
“Over time as people saw the potential value, they [people] started trading bitcoins for larger and larger amounts of money. So this creates the potential for a speculative race where people want to get in and hope that it becomes valuable in the future. And this has incentivized the creation of many altcoins, even ones that have no other reason for existing other than creating problematic pump and dumps.”
No Need for Another Bitcoin
There seems no point of adding more altcoins to the table, the opinion has been shared widely before Maxwell demonstrated his own. However, there are still many who are actually working towards the overall development of the cryptocurrency sector. For instance: Dash, aka Darkcoin, has literally improved privacy quo by introducing transaction obfuscation features, a thing that Maxwell himself discussed during his Sidechain Elements presentation.
With Bitcoin gaining mainstream adoption, the popularity of both good and bad altcoins have dried up anyways. Maxwell’s latest comments simply remind us of that.