Cryptocurrencies have evolved since their conception. With over 11,000 active cryptocurrencies today, the market is becoming extremely competitive.
That leads us to two questions:
What was the first generation of cryptocurrencies?
…and how have they evolved to meet the standards of today’s market?
First generation cryptocurrencies
Headed by Bitcoin, the first gen cryptocurrencies were like the flagship token in many ways.
This is due to Bitcoin being created through a fusion of ingenious technologies, which could be replicated via an open-source code; a blueprint for blockchain and cryptocurrency. Soon enough, various hardforks* of Bitcoin were created.
*definition – /Hardfork/ A radical change or separation in a blockchain’s protocol that differentiates the fundamentals of the previous network and forces an update in all nodes & blocks. A hardfork usually remains somewhat associated with the old network but yields a new tool or benefit such as fast transaction speeds or a well secured network.
Each blueprint and/or hardfork of Bitcoin is considered as “First gen cryptocurrencies.”
However, that isn’t the only binding factor.
Essentially, a first generation cryptocurrency may be categorized by its singular-dimension utility to facilitate payments and digital transactions. This is not bound to only the first cryptocurrencies but can also account for newer tokens that share the same one-dimensional core attribute.
The most popular first gen cryptocurrencies:
Bitcoin (2009) – the true first decentralized cryptocurrency.
Litecoin (2011) – One of the first alt. coins created using a modified code copied from the Bitcoin blueprint.
Ripple XRP (2012) – Very similar to Bitcoin when it was launched originally, although XRP was ideally set up as a payment option to transfer specifically between banks, financial intermediaries, fulfil asset exchanges, remittance systems, and settlements.
DOGE (2013) – The first meme coin was created to mock cryptocurrencies. The simple payment token is a fork of a fork of Bitcoin and was created in under 3 hours.
Monero (2014) – Monero differs from Bitcoin, as all data is private and anonymous, whereas Bitcoin is open source (data is available to anyone).
Dash (2014) – Direct Bitcoin fork, and one of the original crypto DAOs.
NEM (2015) – Another copy that was created to manage assets and data at a low cost.
IOTA (2016) – Bitcoin replication.
Bitcoin Cash (2017) – Bitcoin hardfork created to fulfil the need for rapid Bitcoin transactions.
Bitcoin Gold (2017) – A hardfork of Bitcoin focused on reestablishing decentralization after Bitcoin mining became partly centralized due to several miners holding a monopoly on most of the expensive mining computation power.
Here’s what has changed
In the current market of today, there are many cryptocurrencies that come with a wide range of utilities. Smart contracts, staking rewards, lending tokens, community DAOs, Oracles, and so on.
Almost every token can already be used as a payment token assuming it is either deflationary or has a fairly low inflation rate.
So how will the one-dimensional first generation (or payment tokens) fight in the ever-moving market?
Will the original cryptocurrencies stand the test of time?
First gens such as Bitcoin XT have failed during the adoption phase because the project wasn’t recognized as any different in service or capability from Bitcoin.
In order to maintain relevance and excel in the crypto industry, these first generation coins must have some unique quality, or adapt to bring more utility to their network.
Bitcoin – while copied numerous times – has the reputation as the first cryptocurrency along with market dominance, the most holders, and the publicity.
Ripple has added smart contracts, and Litecoin has integrated stronger privacy features. Even Ethereum has seen massive structural changes with the addition of smart contracts and the recent move from PoW to PoS.
For these first generation cryptocurrencies to survive in an ever-competitive future-tech based industry, a one-dimensional value proposition is simply not enough unless its Bitcoin.
They need to find a way to add value to their users and create a more capable cryptocurrency.