Coinmarketcap.com is one of my most visited sites these days. I can't help but marvel at the massive amount of value pumped into various altcoins. When we look back in 10 years, most of these will be long forgotten. Hashing power will have long moved on to something more useful, and the shitcoin creators will have long cashed out.
The difference between Bitcoin and most altcoins is the massive business layers that have been built on top of it over the past few years. When a new blockchain shows up that really, truly changes the game - like Ethereum - the speculation that similar massive business layers will be built on top of it over the next few years can be assumed, and thus the skyrocketing value doesn't shock me. The trouble is that this thinking has been repeated dozens, nay, hundreds of times, arguing that every new-chain-on-the-block will experience similar real-market growth, and that is simply not sustainable and borders on lunacy.
For every Ethereum, there are 100 shitcoins claiming to also be changing the game. Litecoin, which is basically a copy of Bitcoin but with "One simple trick!" (3 minute blocks & scrypt mining) now has dozens of derivative copies itself, each claiming to have made a huge technological breakthrough worthy of it's own blockchain. This, my friends, is simply bullshit, and I beg you not to fall for it, as this type of activity is detrimental to the long term health of cryptocurrency.
The waters are so muddy because within this sea of copycat shitcoins there actually is some innovation going on. Byteball made consensus without a centralized blockchain, which is super fucking cool, but still may fail in the long term. Think of the massive world-wide effort that was needed to build those business layers on top of Bitcoin. Think of all the VC pumped into the Bitcoin bellweathers we know and love today: Blockchain.info, Bitpay, Coinbase (although I hate them for restricting gambling, they are still a giant in the industry) Bitfinex, Bitstamp... the list goes on and on, and I haven't even started on the big mining hardware companies or the massive mining operations that gobble up the hardware they produce. The point is that a metric shit-ton of money and effort have built massive business layers on top of Bitcoin over the past few years. Will they do it all again for Byteball? For Stellar Lumens? For Potcoin? For the latest blockchain to be successful in the long term, a similar effort will have to be done, and there simply isn't enough money and effort to go around. In 10 years there will be a few winners and a huge pile of losers.
When thinking about what mix of cryptocurrencies to hold, I still think it is best to be primarily Bitcoin. If I am forced to put a percentage on it, I'd say 80% Bitcoin is where I'm most comfortable. Ethereum should have it's ~10% place in the mix, as the promise of a blockchain that does something mixed with the massive amount of support it has leads me to believe the business layers that makes it actually useful will be built over the coming years. The altcoins that underpin today's darknet drug markets already have their killer app, and their valuations, to me, almost seem justified. Dash, Monero, and Zcash all seem to be the truly anonymous coin that is needed to handle clandestine stigmatized substance trade. I don't think it's terrible to hold these coins today, but that game changes so very quickly, it is unclear to me who the winner or winners will be. A single digit % holding in this new age "Drug money" seems sane to me. Most of you know I'm a gambler, so when discussing ideal crypto portfolio management I have to give a shout to PEPECASH & the greater Counterparty chain. If those crazy kids in the Telegram group can really make a Pepe-based trading card game that is fun and balanced like Magic or Hearthstone, the value of the currency, the cards, and the chain that holds them is likely to skyrocket. That one has me chuckling as I write it. In the interest of full disclosure, I do own a few Pepe assets on the XCP chain. How could I not buy the Mt. Gox Pepe card?
When I see memes tokenized on a blockchain, I'm reminded it is an exciting time to be alive. Opportunity is everywhere, but you must keep your B.S. filter on point to capture it.