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Table of Contents

Is Bitcoin Perfect?

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Issues with Bitcoin

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Page 9


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Page 15
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Page 20

What are the odds that an

Altcoin surpasses Bitcoin

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One more issue with Altcoins

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2014, Evander Smart, Litecoin and The Altcoin Army

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Is Bitcoin perfect? Or is it just waiting to get passed

by newer, faster altcoins?
Many people worldwide see Bitcoin as a revolutionary, transformational, fiat
currency mega-disruptor that will, that has already, changed the world of
monetary policy and exchange forever. Granted, Bitcoin has won over millions
of early adopters already, and has spawned media hype, meetings in legislature
worldwide, and TV shows and movies to be made about it, but Bitcoin is not
perfect. No currency is. Bitcoin may be far less flawed than any fiat currency
ever created, but some clever software engineers don't think Bitcoin has gone
nearly far enough in changing the world of currency!
Is Bitcoin, "The Internet 2.0" staring at the prospect of being left behind by "The
Internet 3.0", and beyond, within the next year or two?
In this special eBook, we're going to go over the alternatives to the first and
largest digital currency, Bitcoin, by looking at the competition, and sort out the
strengths and weaknesses of "The Altcoins Market". Altcoins is the name for
Bitcoin alternatives, and the group as a whole.
Some are produced in the same numbers as Bitcoin. Some are built with better
security and consumer protections. Some are much easier to obtain. Some gain
value, at this point, much faster than a Bitcoin does. Some have different
variations of "The Blockchain" and it's transaction ledger.

Issues with Bitcoin some may want to avoid

Which one is right for you? Should you have Bitcoin and an "Altcoin"? Should
you choose one of these instead of Bitcoin? I'll give you the inside scoop so you
can make the right decision on what to trade your dollars for.
Bitcoin has some problems that some owners, or potential owners, may not want
to experience, depending on their wants and needs for the digital currency.
Some may want to move very large some of Bitcoin around, which would attract
attention on the Blockchain, Bitcoin public transaction ledger. If, in the future,
financial regulators monitor the Blockchain, large transactions of more than 100
BTC would attract attention, and may inhibit Bitcoin owners from making large
transactions, for fear of being followed or traced. In some ways, handing some
$1 Million cash by a suitcase may be much more private than doing the same
with $1 Million in Bitcoin on the Blockchain. But either way, you're probably
being watch, or at least tailed.
Now the Bitcoin address itself will not reveal your identity, but depending on the
amount moved, where, and how often, it can create a picture that can be solved,
like piecing together a puzzle. If any transaction links to a company or physical
address, privacy can be compromised, if enough due diligence is done by a 3rd
party. The point is Bitcoin transactions are secure, just not exactly private.
Encoded and encrypted doesn't mean private. So maximizing user privacy is a
niche that one "Altcoin" (Bitcoin alternative currency) targets the market with.
Some see Bitcoin as having problems with scalability and overall access to
Bitcoins as limiting, with only 21 Million Bitcoin to satisfy a world full of
demand (7.2 Billion inhabitants). So just the volume alone can be seen as a
Bitcoin weakness, so most competitors are looking to increase coin volume by at

least 4X. This, in turn, will hurt the Altcoins value vs. Bitcoin, as it's abundance
in the market will lower values of each coin, but in the long-term, it may help
mainstream acceptance and overall market access. So new competitors also
target higher volumes of coins, being mined in shorter intervals, or more often.
Also, Bitcoin may become a victim of it's own success, attracting a lot of scrutiny,
attention and regulators. Regulators who may look to attack Bitcoin's system to
thwart the masses from converting to a superior, incorruptible, decentralized
system that the government, banks, and influential private interests do not
control. Being a maverick, a rebel, and being just plain better creates a whole lot
of powerful enemies, who may work together in the future to bring down
Bitcoin. Maybe they can, maybe they cannot, but using an Altcoin will definitely
lower your financial profile from overzealous regulators, and that's not a bad
thing in any scenario.
So there are legitimate reasons to consider less expensive, less precious, less
famous Altcoins in this space, so I will help break down the advantages of using
the top four Altcoins available, as of Q1 2014, and maybe one is just right for
your financial situation.

Litecoin - (
Origin: USA. October 7th, 2011
Market Cap Value:
$114 Million USD (As of September 2015)
Total Headed for Production:
84 Million (4X BTC)
Produced every 2.5 Minutes
Current price: $2.71 USD (As of September 2015)
Market Niche: Mainstream appeal

Fredo to Bitcoin's Michael Corleone

Litecoin is silver to Bitcoin's gold in the marketplace, and it's even played out in
their logo designs! Started in 2011 by a former Google employee, Litecoin has
seen decent marketplace acceptance, and has attained #2 status overall among
digital currencies, and stands only behind Bitcoin.
It is produced at 4X the rate of Bitcoin, to give it more elasticity in the long-term,
theoretically. The thought is people would rather own ten or twenty of a
currency, not one or two of a currency, and it will attract people trained over
many generations to collect money in bulk, not in small numbers.
It has generated considerable positive press from major media outlets as a
possible successor to Bitcoin, but that would be only if BTC falters, which doesn't
seem to be in the cards anytime soon.
Being that it is mined a four times the rate that bitcoin is, the system confirms
transactions four times as fast, in 2.5 minutes, instead of as long as 10 minutes
for Bitcoin (Usually much sooner). This means if you are a merchant accepting
Litecoin, the transactions you run are processed four times as fast a Bitcoin
transaction, creating value for merchants to accept it along with Bitcoin. Speed
and convenience mean a lot to the average merchant, and consumer.
What Litecoin also does effectively is gives an affordable option to Bitcoin. It
can play the support role very effectively. You don't have to pay hundreds of
dollars for one, less chance of governments and regulators coming down on you
in the future, and it can ride Bitcoin's wave to the market acceptance of
merchant's worldwide with little blowback.

The issue with Litecoin is "The Network effect" of Bitcoin casts a huge shadow
over Litecoin, as Litecoin is going after the same customer as BTC. There can be
only one leader, and Bitcoin has easily assumed that role, and the merchants,
investors, and miners have responded in kind. There hasn't been a great deal of
demand in history for the 2nd best currency available at any given time, and
Litecoin is definitely Fredo to BTC's Michael Corleone.
And it doesn't do anything a Bitcoin doesn't. It's main market advantage is it's
lower price point. It's not strong enough to compete with BTC, and not an
effective niche product like Darkcoin or Peercoin, which we'll go over soon.

Peercoin - (
(Also known as PPCoin)
Origin: August 12, 2012
Total Headed For Circulation:
Unlimited, but regulated for 1% annual inflation
Currently 22 Million in circulation
Peercoin White Paper
Market Cap Value: $7.5 Million (September 2015)
Current Price: $0.33 USD (September 2015)
Market Niche: Hybrid/Eco-friendly production

Welcome to Peercoin's Digital Currency Hybrid Drive!

The world's #3 most valuable Altcoin, Peercoin, takes a more unique approach
to blockchain maintenance and long-term sustainability. It combines the
already proven effective "Proof-of-work" algorithm from Bitcoin, then adds
"Proof-of-stake", which factors in the amount of time the currency is held, and
the amount of currency held.
Proof-of-stake is a strategy for securing a digital currency organized through
asking clients to show responsibility for certain measure of cash. It is not the
same as proof-of-work frameworks that run hashing calculations to approve
electronic transactions. It is most normally utilized as a supplement to proof-ofwork in Peercoin and a couple of other electronic coinage.
Peercoin's proof-of-stake framework is based around the idea of "coin age," a
measure of the result of the money sum held times the measure of time it has
been held for. At the point when creating a proof-of-stake square, the client
sends some cash to themselves, expending their coin age in return for a preset
prize. This printing transaction gets less averse to succeed until a substantial
piece is discovered, producing another square on the Blockchain and a payout
for the demonstrating client. This procedure secures the system and
continuously transforms new coins without expending huge computational
force, saving energy throughout the system.
Both proof-of-work and proof-of-stake pieces are utilized within Peercoin, in
spite of the fact that the primary Blockchain is dictated by the most noteworthy
aggregate expended coin age (from proof-of-stake era) rather than the aggregate
joined trouble of the chain (controlled by proof-of-work squares, as in Bitcoin).

Peercoin's main engineer, Sunny King, says that this makes a malignant ambush
on the Peercoin Blockchain system more unlikely to succeed. (See White paper
reference guide link above.)
A research paper from Cornell University goes over a potential flaw in the
Bitcoin Blockchain that Peercoin's system eradicates through it's protocol.
If a group of miners can generate 51% of the total CPU power currently on the
Blockchain (A LOT of computing power!), then, in theory, they can "fork" the
Blockchain, and make their own more powerful Blockchain, where they can be
as selfish as they want. Not follow Bitcoin security protocols, double-spend
Bitcoins, and limiting use of others Bitcoins.
In other words, if let's say a government, hell-bent on destroying any
competition to their currency, wanted to "disrupt the disruptor", the Bitcoin
Blockchain, what they could do is generate at least 51% of the total computing
power of the Blockchain, assuming proxy control of it, for at least 10 minutes.
The Blockchain basically resets itself every 10 minutes, so how long a usurper
could control it without the Blockchain countering the attack may end up being
negligible. But, in theory, it could be overrun by a hacking 3rd party.
Considering the fact that Bitcoin's Blockchain uses over 250X the computing
power of the worlds Top 500 Supercomputers combined, and growing
thousands of percent a year, this scenario is becoming more and more a fairy
tale than any part of a future reality, but it is a legitimate selling point, non-theless.

So running a hybrid Blockchain program featuring BOTH "proof-of-work" and

"proof-of-stake" protocols adds a variable that would severely limit the ability to
corrupt or overpower the Blockchain. It would force the usurper to actually buy
up Peercoins instead to assume control, and then reduces the desire to destroy
the Blockchain because they would lose their own investment. And then the
Blockchain can always be rebuilt, or others would move into the space to replace
it, so it would turn futile over time.
Sharing the security and processing through "proof-of-stake" also reduces the
need for hardware-heavy "proof-of-work" hashes, consuming far less energy
than the Bitcoin mining competition produces.
And unlike other coins, as the hashing difficulty increases over time, users
continue to be rewarded with coins generated by the additional "Proof-of-stake"
algorithm. Anyone holding 1% of the currency will be compensated with 1% of all
"Proof-of-stake" coin blocks. Peercoins also have a standard value transaction
fee for every transaction of .01 Peercoins.
So Peercoin definitely has some novel approaches to Blockchain security that are
not available on Bitcoin. It would seem that Peercoin is looking to model the
dollar in it's production and value, with over 22 Million coins already in
production, inflation built into the program, and no production limits set.
Currently, supply has outstripped demand, as it's price is little different than the
newer, smaller, more niche Darkcoin, which has only about 4 Million coins in

Dogecoin - (
Pronounced: Doh-j-coin
Origin: December 8, 2013
Total number made for production:
75 Billion currently available
(100 Billion by the end of 2014, plus 5.2 Billion annually)
Market Cap Value: $12 Million USD (September 2015)
Current Price: $0.0001 USD (September 2015)
Market Niche: Online Tipping/Novelty

Dogecoin, let me give you a tip.

Dogecoin has quickly moved into the top five of all Altcoins on the market, but
it's seems to be more a matter of timing, and dog as the mascot over any
legitimate market value or innovation.
The coin is seriously overproduced, at over 75,000,000,000 made over just the
last 5 months, and billions more on the way. The value of each coin is down to
fractions of a penny, and with more coming, it's value can only drop. It does the
exact opposite of Bitcoin, by saturating the market fast.
The dog's face is a key marketing feature, and accounts for most of it's appeal. If
I showed you a Litecoin and a Dogecoin in my hand (they are not real physical
metallic coins, you understand, just digital representations), and asked you
which one you would want, you would grab the golden coin with the dog on kit,
over the silver coin with no animal mascot of it's own.
The most popular current use for the Dogecoin is as a means of exchange for
tipping those who provide quality content online. It is fully compatible with all
operating systems and HTML 5-ready. And it may be the most attractive coin
for the total novice to bond to, just as a total novelty. but it seems destined to
burn through that novelty phase as fast as it can.
When the first most-asked question is How do you pronounce it? (Doh-j-coin),
and the second question is What kind of dog is that? (The Japanese Shiba Inu),
you shouldn't expect to slay any financial dragons with this one.
This one seems destined to become digital currency's version of "The Pet Rock.

Namecoin (
Date of Origin: April 18, 2011
Total coins produced: 21 Million
(Same as Bitcoin, production will halve every
4 years, also the same as Bitcoin)

Market Cap Value: $5 Million (September 2015)

Price: $0.40 (September 2015)
Market niche: Online registry

Might Namecoin be the altcoin of the future? Little .bit

Namecoin is now just over 3 years old, and has actually been passed in value
and by newer coins like Dark coin. It is an exact replica of Bitcoin in virtually
every way, from production limits to how it uses Blockchains (It heralds itself as
the first fork in the original Blockchain from Bitcoin).

The unique value proposition it brings to market is an ability to decentralize the

DNS system, or Domain Name System, as well as decentralizing currency as we
know it.

This may come in handy down the road if you have a website, and a centralized
third party, like a government body, looks to co-op the Internet and occupy
centralized Internet servers and DNS systems like GoDaddy or Google Chrome.
It provides extra security from online piracy, government centralization and
hackers by creating an open-source DNS system that is just as tough against
infiltration as The Blockchain itself.

The overriding idea is if, and when, Bitcoin takes off, the next big thing will be
decentralized servers, DNS and website protection through open-source DNS,
versus corporate systems that can be attacked by 3rd parties. In effect, it is a
Bitcoin with its own domain, called .bit.
The .bit domain costs .02 of a Namecoin, and an also be purchased through
some providers who subscribe to the Namecoin blockchain. Namecoin is betting
on long-term upheaval of the current Internet DNS and the mainstream
adoption of Bitcoin to carry it into the future.

Dash (
(Previously Darkcoin)
Origin: USA, Phoenix, AZ - January 18, 2014
Whitepaper Link:

Total headed for circulation:

22 Million (Bitcoin will be 21 Million.
Produced every 2.5 Minutes)
Market Cap Value: $14 Million (September 2015)
Current price: $2.45 (September 2015)

Market Niche: Maximum Security

Seeing the market demand, and almost hitting the target
Besides a truly bad-ass name, Darkcoin has had many things going for it. It's
price shot up to over $15 early on, which is obviously affordable, yet shows
tremendous market interest & growth potential. It took Bitcoin almost 4 years
to reach that price level, and it had already passed most of the established
players to become the #3 digital currency overall by May 2014, after only a few
months on the market! (Granted, Bitcoin broke new ground, and Darkcoin is
essentially riding it's crypto-coattails in the marketplace)
It stays closest to the original ethos of what crypto-currency could and should
do. It's main objective is to protect the user's financial privacy, and Darkcoin
takes all the latest technology to accomplish it's mission.
This is the view of creator and developer Evan Duffield.
"When making payments with Bitcoin it's like leaving your checking account
open in your browser and everyone on the internet is able to see what you
bought. It's really a shame the original development didn't aim to prioritize the
user's privacy. This is where DarkSend comes in, we can use this technology to
enhance the personal privacy of users of the network."
The main advantage of using Darkcoin is their proprietary form of funds transfer
called Darksend. How Darksend works is if you want to send funds to someone
anonymously, your transaction is merged with another similar transaction, like
shuffling a deck of cards. The recipient gets the amount of Darkcoins promised,

but the nature of the actual transfer prevents tracking of the funds from Point A
to Point B.
Picture a game of 3-card Monty and you'll have the basic idea. More than 2
transactions can be used. The larger the transaction, the less effective this
method of transfer will be in hiding the identities of those involved, as it will
become harder and harder to find a similar transaction at the time of transfer.
You can also adjust the setting to not be so private.
The premise behind Darkcoin is why not have any financial transaction online be
as secure as possible, and why have a Blockchain full of eyes on any transaction
you make, if you do not wish? You can have maximum security and ease of use.
The best of both worlds, except that virtually no merchants are accepting
Darkcoins currently
Obviously the main downside is lack of infrastructure that the popular Bitcoin
has built over 5 years. Darkcoin is 5 years behind the curve in real-world
usefulness of the actual currency.
There is just one issue with Darkcoin, and that is the Master nodes. The
Master nodes are the ones who help create the Darksend transactions, and
help mix the transactions together, so they can't be traced back to the sender of
origin. However, the issue here is who is preventing the Master nodes from
accessing the transaction information?
It would appear that Duffield has not successfully cracked that code, so Darkcoin
has suffered for it, dropping to $2.30 by August.

What are the odds that an Altcoin surpasses Bitcoin?

The answer is pretty slim. For one, they all used the Bitcoin block chain and
cryptography model that Bitcoin innovated, so they are all derivatives of Bitcoin,
if not exact copies. It would be like Michael Jordan having a kid, and then the
kid becomes a better basketball player than Jordan was. Dont bet on it.

What is more possible is that something befalls Bitcoin and damages its
reputation or brand. Mainstream media has already been pretty biased in their
approach to Bitcoin, not reporting the market acceptance and innovations, but
making sure to point out any issue in the market that pops up. Bitcoins biggest
threat is most likely not another Altcoin, but a private interest, well-funded
smear campaign, or government attack/takeover of some sort. Being the biggest
and most accepted crypto-currency has made Bitcoin a marked coin, if you will.
There are plenty of establishment factions that have a vested interest in taking
Bitcoin down.

Over the last 3 years, no Altcoin has shown themselves to be any type of
marketplace threat to Bitcoin, and Bitcoin has only gotten stronger through The
Network Effect, as its popularity only attracts more new businesses, venture
capitalists, and consumers to its brand. The competition has been relegated to
niche status, and have few true innovations to separate themselves from the
crowd. The only opportunity is if Bitcoin stumbles and falls, and another coin
assumes the top spot, by default.

One more weakness that could be exploited by the alt coin market, but has not,
is the fact that Bitcoin does not seem to have any substantial marketing
department, belying its decentralized nature. The Bitcoin Foundation does
some educational work in Washington, lobbying politicians , but there is no
mass-media marketing infrastructure for Bitcoin as a brand.

With the decentralized nature of this new coin market, no entity may want to
take the burden of promoting and aligning themselves with any digital money.
The creator of Bitcoins technology, Satoshi Nakamoto, has seen fit to avoid the
spotlight, and the target on his back, for good reason, if you followed the
Newsweek cover story scandal, when they said they found Mr. Nakamoto, and
actually just found someone who shared his name (Actual first name is Dorian).

The inept journalism, publication of his home address, and attention of the
authorities mad him a marked man of mistaken identity. The Bitcoin
community, of a very charitable nature as always, sent him more than $20k in
donations to help him with his legal troubles caused by the errors of Newsweek.

Over the next decade, youre sure to see plenty of Altcoins, maybe tens of
thousands, that will look to target every potential demographic. From kids
making their own Altcoins for their classmates, to gamblers and online gamers
looking to create sports-team related or video game-based coins to sell in their
online forums.

ANY currency only has true value if enough people believe in it, the same as any

paper currency we currently use. But paper currencies are losing value
worldwide, and economies are collapsing because of their mismanagement. This
will only strengthen the alternative currency market going forward.

One more issue with Altcoins..

Generally speaking, to purchase an Altcoin, you will need to go to a currency
exchange for Bitcoin (see BTC-e or Cryptsy), set up an account to purchase
Bitcoin, buy Bitcoin, THEN TRADE your Bitcoins in said exchange for the
Altcoin of your dreams. There hasnt proven to be a secondary market for
Altcoins independent of Bitcoin yet, so this also hurts the appeal of Altcoins,
being actually dependent on the biggest digital currency in the land just to get
acquired in the first place. Hopefully, these exchanges will add a direct purchase
option in the near future.

The best alternative is to use Ripple, which is a decentralized online exchange

that will let you exchange everything from dollars and yen, to Bitcoins, Litecoin,
and any digital currency, to frequent flyer miles and mobile minutes, all without
chargebacks, and with consensus from their ledger within 5 seconds! Think of it
as a PayPal that accepts any currency on Earth for exchange. They also use their
own form of digital currency, Ripples, as an altcoin as well.

What do I think will be the future of Altcoins?

Well, number one, digital currency, or crypto-currency, is here to stay, and its
not going anywhere! There are enough smartphones to arm every man, woman,
and child on Earth, much less all the laptops, desktops and tablets, so there will
always be Internet, which the digital currency uses as a mode of transport.

Bitcoin, or BTC as it's legal abbreviation, will always be the King of Coins. It's
Network Effect and established ground-breaking design, which many of the
altcoins either emulate or build from themselves, plus it's funding and
leadership behind it will stand the test of time. But altcoins will definitely have a
nice place in the future of digital currency. Think of the future relationship in
dollars and cents. Bitcoins would be dollars, but there is plenty of quarter,
dimes, nickels and pennies around that have usefulness, under certain

Bitcoin currently has around 80% of the overall digital currency market. But
there will be a couple of currencies that will take 10-15% for themselves over
time, and may even eat away an extra 5% from BTC over time, and I believe
those will be Litecoin and Darkcoin.

Litecoin is already accepted in many commercial venues, and merchants like it's
quick transaction-friendly pace (4X faster overall than BTC). And it is a fraction
of the price. People have been trained over thousands of years to want to hold
onto a unit bias when it comes to money or currency. Unit bias meaning
would you rather hold 20 fractional units of a Bitcoin, pennies on the coin, as
BTC may become worth well over 10,000 USD per coin, as I go over in my
Bitcoin eBook Bitcoin Bonanza, or hold 20 full Litecoins for the same
amount? Many people would rather have whole units of currency. Somethin
analogous to holding twenty dollars in your hand over 20 nickels in your hand,
even if they have the same actual value in relation to each other. So that is the
value Litecoin brings to the table.

Darkcoin works differently, in that it's primary function is user security,w hich is
attractive to many different user and demographics. It holds the original idea
behind crypto-currency most fervently among all altcoins. It may have less
commercial appeal, and more of a negative stigma from media and
governments, but it's similar price point to Litecoin will help it be a better
transactional currency that BTC. It will just be less mainstream than LTC.

But the most secure of any genre will always have appeal, especially when it
comes to a person's financial well-being, so only expect continued interest in
Darkcoin in the long run. Plus, it's X11 mining algorithm also makes it about
30% more energy efficient that BTC's proof-of-work, allowing new miners to
join easier, and environmentalist to have an attractive alternative, without
sacrificing a strong appreciation in value, like Peercoin forces users to.

So I hope this introduction to the Altcoin market has been of service to you.
It should give you a foundation to work from when deciding how to enter the
digital currency markets.

Feel free to contact me on Twitter or

LinkedIn or my website below for more
information on me, Bitcoin, and digital currency in general (I am a Bitcoin
owner, and have not entered the Altcoin market).
If I can help you in any way, let me know. Happy trading!

Evander Smart
@Evandersmart (Twitter) (My Daily Bitcoin articles)