Existence is reasonable, an interpretation of the necessity of competing coins for the development of Bitcoin

I believe many Bitcoin enthusiasts will wonder why the world needs altcoins? They think that most altcoins are copies of Bitcoin, but with a few different changes, and most altcoin projects have no intrinsic value. Having said that, the existence of altcoins is reasonable, and they can help Bitcoin continue to improve. In addition, the following 5 reasons also provide the best explanation for their existence.

5. Cryptocurrency is impossible to destroy

In general, regulation is a good thing for Bitcoin, however, some people believe that regulation should be avoided at all costs. The existence of various altcoins is a headache for regulators. There are so many different cryptocurrencies in existence, and it is obvious that regulators cannot "eliminate" all digital currencies (even if they tried). This may not be part of the best use case for altcoins, but it is also an advantage.

4. Create a diversified cryptocurrency portfolio

All traders agree that it is pointless to put all your eggs in one basket. This principle also applies to cryptocurrency trading. For investors, while Bitcoin is very attractive, altcoins are also a good choice for diversifying their portfolio. Altcoins often rely on Bitcoin to gain market traction, and this approach does bring new investment opportunities to cryptocurrency traders.

Additionally, there will be fewer Bitcoins available to buy on the market, as investors convert a small portion of their portfolio into altcoins. Generally, the fewer Bitcoins there are on the market, the higher the price of the coin will go. A continued decrease in the amount of a scarce asset is never a bad thing.

3. Competitiveness

While some people would like to be content with the current state of Bitcoin development, this is usually not the case. Bitcoin, like all other financial assets, needs external competition to play its due advantages. The existence of altcoins can achieve this effect, although there is still no altcoin that poses a substantial threat to Bitcoin. Without altcoins, Bitcoin would not be the Bitcoin it is today.

2. Bringing new features to Bitcoin

While there is a lot of active R&D in the Bitcoin world, we are open to new features. We cannot always rely on the same group of developers to add new features to Bitcoin. Sometimes, some new ideas from altcoin developers are included in the Bitcoin source code. However, not all altcoin features can be used to enhance the Bitcoin source code.

1. Altcoins are testing environments

No matter how people look at it, altcoins can provide an excellent testing environment for potential features and improvements to Bitcoin. Although Bitcoin has its own testnet, some "controversial solutions" are better tested in a specific crypto environment in advance. Litecoin is currently testing Segwit. The results of Litecoin's test of Segwit are likely to affect the Bitcoin community's support for this expansion plan.