Cryptocurrencies as Distributed Community Experiments

This paper outlines the major criticism cryptocurrencies faced since Bitcoin’s introduction in 2009 that resulted in the iterative development of various 'altcoins'. These alternative cryptocurrencies, which can be seen as 'distributed community experiments', introduced new algorithms while also tackling social and other evolving problems that emerged throughout the various phases of adaptation and collective learning processes. Often introduced through self-published white papers or online announcements, these alternative coins represent hypotheses by the respective creators until they can show a significant user-base and ultimately are accepted in online cryptocurrency exchanges. We examine the important experiments and alternative approaches to specific issues of the Bitcoin design and describe differences in coins that have been launched. We not only discuss successful experiments, but also show attempts that failed in the relatively short but eventful past five years of cryptocurrencies. We demonstrate how the initial design of Bitcoin has been extended and improved by 'next generation cryptocurrencies', while the two main aspects - the blockchain ledger as well as strong cryptography - remain key elements to all of these new systems. Finally we outline possible future problems and developments around the blockchain, which not only is the invention that started cryptocurrencies, but remains the most experimental and challenging part with no long-term strategy yet.