The Long Tail Of Cryptocurrency

in LeoFinance10 months ago

Most of us are aware that money is a tool for collaboration. It allows us to interact in ways that simply are not possible with a barter system.

Over the past centuries, the monetary system was controlled by governments and, of late, central banks. Our banking system is lined with mediators who are willing to facilitate transactions. They do this, of course, for a fee.

Cryptocurrency is starting to change that. It allows any group to get together and exchange value without the use of a third party. This is a revolutionary idea when compared to what we operated under for the past 100 years.


In business, the "Long Tail" are those products that sell few in number. They fall outside the top ranks yet can be massive in numbers. This was an overlook concept for decades. Amazon was one company that came along and took advantage of it.

Ultimately, it is the long tail where we find the niches. Here we see small groups of people interested in something that few ever consider. They are loyal, passionate, and dedicated. Yet, because of the size, few are willing to cater to it.

Amazon started as an online bookstore. It was a major paradigm shift and one that instilled the long tail philosophy. Before that, bookstores chose titles based upon available space. A Barnes & Noble, as an example, could carry around 50,000 titles. This meant the titles selected needed to have as much appeal as possible.

The online world did not have any such constraints. Amazon could carry millions of titles since the marginal cost was almost zero. Once the title was placed there, there was no carrying cost. This provided Amazon a huge opportunity over the brick and mortar stores.

It also gave life to millions of authors who otherwise had few places to carry their books. So, while a niche topic such as pine cones of northern Maine was probably passed by the main bookstores, Amazon easily could pick it up.

The Internet provided many opportunities for long tail exploration. For example, YouTube offers a platform for previously overlooked works. While the monetization is difficult, it does allow for a reaching of a larger audience.

Here is a work that probably did not make it into the record stores when they were around. Mayan and Aztec music never made it into the top 40 but it can be found on YouTube.

The long tail concept has a great deal of utility. A company like Amazon quickly found out there was a lot of money to be made from this. Those works that were outside the upper portion provided large revenues with inflated profits. Since there was little competition as well as a dedicated market, the per unit price could exceed what was received on the popular items.

At the same time, companies quickly learned that, oftentimes, the collective revenue of the long tail exceeded the more popular products.


This concept is applicable to cryptocurrency. In fact, we tend to be like the shoppers in a Barnes & Noble as opposed to Amazon.

Looking at the chart above, we can see how this concept works. Everyone is focused upon the left side, where the popular products are. After that, there is a fairly decent population in the middle section yet the right hand side is overlooked.

Applying this to crypto, we can put the top 100 tokens in the category on the left. These are the ones that are popular with people and get all the publicity.

After that, we see the second tier which have a moderate following yet are not newsworthy. Finally, we get the last batch which few are even aware of.

These last two categories are what most call "sh*tcoins".

That said, cryptocurrency has the opportunity to create the greatest "long tail" in the history of the Internet. It also has the ability to create a completely new distribution curve across the world.

Over time, it is likely we will see millions of cryptocurrencies. Most of these will not have the usage that the major ones such as Bitcoin have. Collectively, there will be huge wealth as measured by the transfer of goods and services within networks, free of intermediaries.

When we look at the totality of the market caps and velocity of money in the long tail, we can easily see how it will rival the top currencies. While no one or two will make much noise, the millions of tokens outside the Top 100 will handle trillions in transactions.


We already see something like this forming on Hive. While the Hive-Engine tokens do not rival the value of HIVE ($90 million), it is a significant number nevertheless. Doing a quick run through, excluding the first few listing that have no volume and were "painted" transactions, I come up with $6-$7 million in market cap.

This would land around number 300 on Coingecko if it were a single token.

It is a concept that is being duplicated on Ethereum, EOS, and a few other blockchains.

Now picture this idea multiplied by a few hundred thousand currencies. When we do that, we can see how the opportunity for wealth is available to anyone with an internet connection.

Down the road, billions might not be holding Bitcoin but they will be holding millions of different tokens, all which, collectively, have tremendous value.

That is how the long tail concept is going to apply to cryptocurrency.

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Solid read. That was just the first time I heard the word "Long tail" in business and finance. I think its worth a deeper research. One thing with the long tail i Crypto as it applies to the Hive blockchain is that if the right utility is leveraged and sufficient energy put into the build, those tokens would certainly shift side to the relevance and popularity flange of the left side of the curve.

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Investopedia has decent write up about it. It become popular with the growth of the internet. It really allows companies to focus upon the range outside the top products.

It is like Amazon. Everyone knows it is the online champ yet it "only" has 35% of the online sales. That means 65% is done elsewhere.

The long tail here is all the Etsy shops and goods sold on individual websites. That is where a lot of the transactions come from.

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Bancor has put out a lot of videos and posts about the long tail of crypto. See eg
The founder had a site competing with Youtube but failed to focus on the long tail.
He has learnt the importance of the long tail the hard way.

I did not know that about the founder of Bancor. That is very interesting to know that the experience was the reason for the focus upon that. It is amazing how we can learn lessons from the failings that take place.

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Very nice text, @taskmaster4450.

Most of us are aware that money is a tool for collaboration.

I really wish that many other people could understand this.

We just have to keep preaching the message @wiseagent.

Over time it will penetrate. The challenge is that we are all reared in a monetary system based upon scarcity so most look at the value in it as opposed to the collaborative nature. This leads to many of the problems that we see.

Hopefully, cryptocurrency will teach people another lesson with the tokens being abundant. When rewards are out there for doing most anything, we will see the day when we are able to use it as a tool instead of the end.

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Thank you I enjoy posts like yours where I learn something. The long tail may indeed become a long tale. Systems are changing rapidly across the board at this time in history. The great rewrite of the long tale is upon us.

I really enjoyed reading your post. It was very insightful.

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project node collaboration earn ETC read me profile

Very interesting!

But I prefer to hold top ones )

 10 months ago Reveal Comment