Since Bitcoin’s 2009 launch, the number of cryptocurrencies has grown from one to many thousands — a proliferation that can look chaotic or redundant from the outside, but reflects a genuinely low barrier to launching a new token combined with real diversity in what different projects are trying to accomplish.
Key Takeaways
- Launching a new token on an existing blockchain (like Ethereum) is technically easy and cheap, which is the main structural reason so many exist.
- Different cryptocurrencies pursue genuinely different goals — payments, smart contract platforms, privacy, governance, gaming — rather than all competing for the exact same use case.
- Competition between similar projects can drive genuine innovation, similar to how competition works in any other market.
- The flip side of low barriers to entry is a high volume of low-effort, purely speculative, or outright fraudulent projects mixed in with genuinely useful ones.
- Most individual cryptocurrencies fail to gain lasting relevance or value — a large token count doesn’t mean a large number of successful, enduring projects.
Our Take
The sheer number of cryptocurrencies is best understood as a natural consequence of low barriers to experimentation, not evidence that the space needs thousands of genuinely necessary, differentiated assets. It’s closer to how anyone can start a company, and most companies fail or stay small, while a small number become genuinely important — the volume of attempts isn’t itself a meaningful signal, but it does mean genuine innovation gets to happen at the edges without needing centralized permission.
The practical skill worth developing, given this volume, is filtering rather than trying to evaluate everything: focusing on a small number of established, well-understood assets for most purposes, and applying real scrutiny before considering anything further down the list. Treating ‘there are so many options’ as a reason to spread attention thin across dozens of speculative bets, rather than as a reason to filter more aggressively, is a common and costly mistake.
FAQs
Do we actually need thousands of different cryptocurrencies?
Most individual cryptocurrencies don’t achieve lasting relevance or use — the large total count reflects low barriers to launching a new token more than genuine demand for that many distinct assets.
Why is it so easy to create a new cryptocurrency?
Established blockchains like Ethereum provide standardized templates (like the ERC-20 standard) that let anyone deploy a new token with relatively little technical effort or cost, compared to building an entirely new blockchain.
📎 Source: Coinbase Learn — Why are there so many cryptocurrencies and why do we need them?
