Topic: Factors That Make One Cryptocurrency Worth More Than Another - page 6. (Read 11343 times)

For example...

Litecoin:

1) issuance schedule --> [graph]
2) currency --> meager, but high relative to other altcoins
3) user base --> high
4) technical soundness/track record --> high
5) innovations --> low(?)
6) liquidity --> low, but high compared to other alts
7) strength of dev team --> high? and Charles Lee is well-connected, working at Coinbase and brother owns BTC China
8) market cap --> high

arbing: moderate, potentially, but not enough liquidity now

tumbling: somewhat helpful

hedging: moderate

testing: low

fallback: high, or low depending on reason for the posited Bitcoin failure

Rephrasing yours:

1) issuance schedule (incl. lack of premine)
2) currency (how much "currency" it has in the world - that is, how many people accept it)
3) user base
4) technical soundness (assuming bitcoin-based) and track record
5) innovations
6) liquidity

More:

8) strength of dev team (very important)
9) MARKET CAP! (high market cap creates higher market cap)

In terms of potential value, we should analyze bitcoin-like altcoins in terms of what value they bring to Bitcoin:

- arbitrage (if MtGox had litecoins you could buy BTC with LTC at BTC-e and sell them on Gox for LTC, then repeat...much faster and cheaper than fiat...but BTC price is often correlated with LTC price, so less correlation is a plus here)

- tumbling (making Bitcoin more anonymous by converting to another blockchain then back...more anonymous altcoins may be better)

- hedging (same as with arbitrage, you want an altcoin that is less correlated with the BTC price)

- testing new ideas (the more differentiated from Bitcoin, the better)

- fallback in case of Bitcoin failure (both similarity and difference are useful...LTC is good because close, but if BTC fails due to PoW issue, PPC may be better)

If they aren't Bitcoin-like, such as ProtoShares or MasterCoin, they perhaps should be evaluated on separate merits.

From an economic standpoint, which factors make one cryptocurrency worth more than another?

1) current number of coins
2) maximum number of coins
3) rate of growth in the supply of coins
4) how many people/businesses accept it as a form of payment
5) total number of users
6) technical aspects of the protocol
7) number of exchanges that allow conversion to other cryptos or fiat currencies

Discuss.