Hi Guys,
I was participating in a discussion in the altcoin section about: Why we are not seeing new altcoin projects in the top coins by market cap?
And I wanted to share this here too.
I think is because you are applying a very short time frame, if you think about the top 20 in general with some exceptions, the whole altcoin world is like an incubator for many ideas and some of these are the ideas that showed substance and actually gained traction. You can't expect substantial innovations to sprout everyday, so I believe from within that list you are presenting, we will have some successful projects that still have a lot of upside potential.
It is also about timing, timing has been identified as the number one factor why start-ups succeed, also the team behind a project is important. Check out this short Ted Talk (6mins) on why start-ups succeed, I think we should apply a similar analysis to altcoins to identify true potential for success.
The factors they found were important for a project success were:
1. Timing
2. Team/Execution
3. Idea
4. Business Model
5. Funding
Bill Gross: The single biggest reason why startups succeed
https://www.youtube.com/watch?v=bNpx7gpSqbYThere are some parallels with cryptocurrency, but I would say in altcoins funding is much more important, as when you are a company you can get funding by looking for investors, when you are a decentralized currency you don't have that option. The reason why you are not seeing tons of new altcoins is because having a combination of those 5 factors in a way that creates value and specially that you can time correctly is rare.
I would look for altcoins that have the best combination of all those things and invest in that, I think you see the same projects in the top spots for two reasons. You have a first generation of altcoins like LTC and Doge that had the best possible timing with no added value. And then you have a second generation of altcoins like NXT and Dash that actually bring value and innovation.
I believe that the projects that will be successful are those that can have the best combination of the factors described above. I also feel these projects will come from existing projects with a certain seniority and not from brand new ones, mainly because the timing is not right for brand new projects, and because the current generation of altcoin projects still has a lot to bring to the table and potential upside, we are not done with this generation yet.
Specially the Ted Talk, which I really enjoyed and I think it could be extrapolated to altcoins, with some differences. Do you also feel those factors are relevant for coins too?
Yes, whoever wrote that hit it on the nose.
The factors they found were important for a project success were:
1.
Timing : For Dash, we were a little on the later side. You could say we got in just as the door was closing.
2.
Team/Execution : For Dash, I think we've had and continue to have some of the best. Not just in talent but in cohesion of the team.
3.
Idea : I wasn't one of the people who understood the importance of doing one thing well, but stepped in line behind Evan (I wanted us to do everything, because we could!) Doing one thing (making true fungible digital cash) hasn't been the easiest thing in the world, and Evan was 100% correct in focusing on doing that one thing well. The things some of us wanted to do may not even be important in the end after all as there are things happening now that I didn't foresee (though toknormal did! LOL)
4.
Business Model : Again, that doing one thing, and doing it well - great move!
5.
Funding : What can be said? Evan et al, WOW! And now our project is funded by the blockchain. Damn that's good!
