Topic: Does bitcoin need more sha-256 chains? (Read 761 times)

You are absolutely correct that creating "Legitimacy" of a new coin is very difficult. That is why i posted this thread here, to hopefully make a community effort.
No balancing mechanism will be necessary if the coin chains are legit on par with bitcoin. In other words they speculatory value of coins will be tracki9ng with bitcoin and other 4 chains, so all chains are just about equally profitable all the time.

One possibility would be to mimic the datacoin chain. Yes i know datacoin is not sha-256. How about making a cousin of datacoin, with 2 differences:
1. the chain is sha-256
2. The data stored in the block chain can be altered by original contributor. This means the block chain can be used as means of unregulated mass communication.

I think the idea, while interesting on the surface, lacks two critical things:

A) Coin legitimacy. As we've seen from all the CrapCoins, it's fairly difficult to get a coin to the point of critical mass where people want it such that it has value.
B) A balancing mechanism. Miners will mine whatever is most profitable. Today, that means Bitcoin. If all the miners chase whatever is the most profitable at the time, you will see all that hashpower constantly chasing whichever coin is hot at the moment. You can see this effect at multipool.us, as their entire pool is switched based on the relative exchange rates between Bitcoin and the various altcoins. Lacking any kind of formal balancing mechanism, that phenomenon will continue to exist.

I posted this thread in alt currencies subforum, but i don't think it received the deserved attention, so i am asking the same question here:

Do we need more, credible, legit sha-256 blockchains?

Let me explain why:
Return for any single block chain, say bitcoin, is fixed on per hour basis. This means as more asics pile on onto bitcoin network the only thing that makes mining still profitable is the expected rise in VALUE of bitcoin. At the same time any economist will tell you that value of a coin is determined by demand for it, not difficulty of obtaining it. This means that if hashrate keeps piling up on BTC network, the return in $/gh will keep going down. Yes it is possible that demand for BTC will temporarily drive its dollar value high enough to increase $/gh, but history shown it to not be so. If this was true, then i'd be making as much dollars mining on my GPU now as i did back in 2011.
So, this means we need more coin faucets. Yes there are a bunch of crappy alt coins that are marginally popular and can be mined; however the current alt currencies are not credible enough to really attract enough hash power to unload BTC network. I think we need 5 total very popular and credible coin chains based on sha256. This will reduce the rate of difficulty increase by a actor of 5 and will give 5x longer time for new miners to mine profitably and pay off their new hardware cost.

What do you all think?