Dead altcoins were more profitable than Bitcoin
Altcoin Obituaries is a funny website about failed cryptocurrencies like Dogecoin, Litecoin and Steem. It's simply a list of 19 charts with oneliners, in no particular order, following the warning: "Don't say you weren't warned when the next altcoins crash..." OK, it's funny in a way that probably wasn't intended, but some of the comments made made me exhale a little faster than usual.
Steem was a revolutionary new way to write articles on the internet and lose money at the same time.
Reddcoin - the "social currency" so social that no one uses it!
This site was announced on Reddit and Twitter on March 27, 2017 by Jordan Tuwiner, who also created a Bitcoin obituaries page, but ironically in that case. Tuwiner is a Bitcoin Core supporter, who seems to be obsessed with the size of the Bitcoin mempool (the queue of transactions waiting to be included in a block). Last December, he was complaining about spam transactions; these days, he's complaining about mining pools not mining transactions with a fee of only 1 satoshi per byte.
The altcoin graveyard is an essential argument in the damage-control narrative after Bitcoin, paralyzed by a civil war, lost ground to Ethereum and other coins and the Bitcoin dominance index dropped from around 90% to around 40%. The story is that altcoins will eventually go to zero, while Bitcoin has a kind of magic that will make it an eternal store of value. The most well-argued example of this narrative is the article Why the Bitcoin Dominance Index is Deceiving, written by Bitcoin developer Jimmy Song on May 8, 2017. I do agree with one of Song's arguments: market cap is a misleading, easily manipulated metric. I will ignore market cap data here and only measure prices.
When the Bitcoin dominance ratio reached a new low at the start of this year, Song's article was shared on Twitter again by two prominent Bitcoin maximalists: fortune-teller Tuur Demeester and 'meat maximalist' Michael Goldstein. That's why I'm taking this joke seriously. Now that we have the freedom to create private currency on the internet, I'm disgusted to see so many influential people use their freedom to browbeat everybody into using The One True Coin. That tells me they're more interested in property than in liberty. (I know that libertarians like to define freedom in terms of property rights. That's part of the problem.)
The publication date March 27, 2017 was just days before the price of Litecoin started rising again. So I thought: what would've happened if you'd bought all these altcoins when they were declared dead? It's a list of 19 failed coins, hand-picked by a critic, so you'd expect that investors in the Dead Altcoin Fund would have lost money, right?
Well, I did the math. In fact, I did it a number of times, because the figures were outdated before I found time to write this post. Then the market crashed on January 16, and again on February 5. Since altcoins were going down faster than Bitcoin, I wanted to include results from the end of both days. And as another generous assumption, when comparing these altcoins to Bitcoin, I added the current price of Bitcoin Cash and Bitcoin Gold to the current value of Bitcoin.
The results for Monday, February 5 are shown in the table below. Like the Altcoin Obituaries charts, all data are from CoinMarketCap. I calculated the current value of $100 invested and the profit as a percentage. In other words, the first number includes the principal investment and the second doesn't. It's remarkable that the difference is often relatively small.
Return on investment for the cryptocurrencies listed on altcoinobituaries.com
Close price on coinmarketcap.com from March 27, 2017 to February 5, 2018
| Coin | Obituary price | Current price | Index $100 | Profit |
|---|---|---|---|---|
| Auroracoin | $0.147908 | $1.270000 | $858.64 | 759% |
| Blackcoin | $0.049587 | $0.237415 | $478.78 | 379% |
| Dogecoin | $0.000254 | $0.003533 | $1,390.94 | 1291% |
| Feathercoin | $0.009415 | $0.124662 | $1,324.08 | 1224% |
| Goldcoin | $0.038239 | $0.122091 | $319.28 | 219% |
| Litecoin | $4.080000 | $125.330000 | $3,071.81 | 2972% |
| Maxcoin | $0.001473 | $0.009358 | $635.30 | 535% |
| NXT | $0.011805 | $0.155603 | $1,318.11 | 1218% |
| Namecoin | $0.563967 | $2.080000 | $368.82 | 269% |
| Novacoin | $2.150000 | $3.660000 | $170.23 | 70% |
| Paycoin | $0.003019 | $0.000000 | $0.00 | -100% |
| Peercoin | $0.537601 | $2.760000 | $513.39 | 413% |
| Primecoin | $0.063083 | $0.484591 | $768.18 | 668% |
| Quark | $0.001538 | $0.009087 | $590.83 | 491% |
| Reddcoin | $0.000031 | $0.005055 | $16,306.45 | 16206% |
| Steem | $0.155637 | $3.300000 | $2,120.32 | 2020% |
| Vericoin | $0.052040 | $0.671523 | $1,290.40 | 1190% |
| Vertcoin | $0.066384 | $2.300000 | $3,464.69 | 3365% |
| Worldcoin | $0.005210 | $0.013867 | $266.16 | 166% |
| Average | $1,855.60 | 1756% | ||
| Bitcoin | $1,045.770000 | $6,955.270000 | ||
| BTC+BCH+BTG | $1,045.770000 | $7,927.300000 | $758.03 | 658% |
| Altcoins/Bitcoin | 2.45 | 2.67 |
So the dead altcoins not only increased in value during this period, they were more than twice as profitable as Bitcoin. On various dates in January, they were even more than three times as profitable. The altcoin graveyard is full of gold!
Here's a link to an Excel file with tabs for different dates (Dropbox shows a preview). And here's the table for February 5 as picture, which may be easier to share or to view on mobile:
Now I wouldn't recommend buying all these coins at this moment. Auroracoin really failed to be accepted as a popular payment method in Iceland. I don't see Reddcoin being used on social media, although it does have an active forum and subreddit. It's the most profitable coin in this list because the price was extremely low when the obituary was published. Paycoin created by GAW Miners (PYC, not to be confused with Paycoin (XPY) from Asia) really was a scam. To my surprise, it's the only coin from the graveyard that went to zero, in the sense that it wasn't listed anymore on CoinMarketCap after January 3, when it was traded on low volumes at a profit of 1609%. I'd expected to see more coins disappear. A more literal list of dead altcoins is http://deadcoins.com/ - although I did see a handful there that still exist.
But I would recommend two things:
Don't put all your eggs in one basket. Note that the average returns were driven by a small number of top performers: only Reddcoin, Vertcoin, Litecoin and Steem were above average. That's how venture capital works. And you'd have been lucky to pick the right coins. On March 30, 2017, I owned Steem, Blackcoin, NXT and Litecoin, in that order. I didn't know that Steem and Litecoin would outperform Blackcoin and NXT. The median altcoin from the 19, which is probably the best indication for picking one coin, got more or less the same returns as Bitcoin.
Don't follow the investment strategy of Bitcoin maximalists. They're religious fanatics who will bend the facts to their prejudice. Listen to them, and do the opposite of what they say. Others have already shown that you'd have made huge profits if you'd have bought the coins that Tone Vays made a CryptoScam video about.
More fundamentally, the fact that some coins will disappear or lose value doesn't mean they were useless. Cryptocurrencies are temporary autonomous zones, not 'honey badgers' immune to the power of the state and vested interests. Let's enjoy them while we can. For example, trading Munne and Zeitcoin was great practice for me: on Bittrex, I executed more trades in days than I'd done in years on the stock market. Dogecoin showed me how giving away money can be fun. Ethereum showed me how you can disagree respectfully on basic principles. On crypto Twitter, I had fun disagreeing disrespectfully. Bitcoin, Monero and Steem motivated me to meet wonderful people. And I even exchanged magic internet money for goods and services. All of that was valuable regardless of the future value of these coins.
Disclaimer: Don't take financial advice from a blog post. Do your own research. Results achieved in the past are no guarantee for the future. Buying cryptocurrencies is gambling; don't invest more than you can afford to lose. Don't sneeze into your hands; use your elbow instead. Maybe the real treasure is not the dollar price, but the friends we made along the way.
Top photo: Highweek churchyard
Bottom photo: Edwin den Boer, Norwich city center, 2013
Data and charts from CoinMarketCap
Way to dig! It is funny that "Altcoin Obituaries" proved to be a contrarian buy signal.
Blockchain is a lot about math. But around cryptocurrencies there is a lot of talk based on emotions, opinions and interests. Here come some stats to dismantle a classification based on what exactly?
Update: one year after the Altcoin Obituaries were published, altcoins were still twice as profitable as Bitcoin.
This post has received a 0.78 % upvote from @booster thanks to: @edb.
Update: I added data for yesterday, February 12, to the spreadsheet. The average profit increased to 2435%, but the difference with Bitcoin didn't change much.
post again man
post again!!!
see you again .. I hope ;D
Don't worry, I'll be back. It was nice to meet you!