Is it really good for the general virtual currency economy as a whole to have this?
I thought one of the fundamental characteristics of Bitcoin was the deflationary aspect, being a limited supply. If we just keep adding alternative currencies for no better purpose than having an alternative, doesn't it the same as printing more paper money?
The way I see it, miners will mine Currency A until it becomes too difficult, and due to the market size, there isn't enough transaction fees to sustain mining. So bulk of them then switch to Currency B. Now nobody can use Currency A because difficulty A is too high for blocks to get processed efficiently and time to next correction is 2 years down the road. Ditto Currency B and new Currency C, ad nauseum.
I thought one of the fundamental characteristics of Bitcoin was the deflationary aspect, being a limited supply. If we just keep adding alternative currencies for no better purpose than having an alternative, doesn't it the same as printing more paper money?
The way I see it, miners will mine Currency A until it becomes too difficult, and due to the market size, there isn't enough transaction fees to sustain mining. So bulk of them then switch to Currency B. Now nobody can use Currency A because difficulty A is too high for blocks to get processed efficiently and time to next correction is 2 years down the road. Ditto Currency B and new Currency C, ad nauseum.
Well it's happening, so that's our brave new world.
If a currency is weak in some way then people won't be interested in it.
Bitcoins difficulty can go down as well as up - if no one is mining bitcoin then it will become easier to mine bitcoin thus attracting miners, who will raise the difficulty again (that's exactly what happened this month - the next difficulty is less than the current difficulty).
Difficulty 1,890,362
Next Difficulty 1,868,794
http://www.bitcoinwatch.com/
