Topic: How would a thousand or so alt coins affect Bitcoin? (Read 5307 times)

This is a battle for mind share and ideas ... the best currency will dominate the competition until the next best use of computing power and monetary properties comes along.

Get your thinking caps on chaps there is a vast panorama of greenfields research and applications in maths, science, engineering, finance and commerce opening up before us ... we are just scratching the surface.

FTFY

While you're wasting electricity with Bitcoin, I'll be dealing with more energy efficient coins such as those that deal with PoS, or those that create a new and innovative PoW system such as eMunie.

I own BTC, LTC, PPC, and NMC and am looking into XPM.  The rest have very little to offer.  Anything other than BTC is just for diversification anyway for me.

For anyone interested, I've posted some fleshed-out thoughts on the "transmute" operation in a fresh thread: https://bitcointalksearch.org/topic/ways-we-can-allow-alt-coins-or-btc-versions-wo-dilution-256544

I'm researching mechanisms that would let you "transmute" one cryptocurrency into another, so that bringing (say) one "XTC" into circulation involves taking one BTC out of circulation, and perhaps vice versa.

This "transmute" operation would differ from a normal currency trade, in which both exchanged coins remain spendable.  Ideally, I'd envision a consensus that new alt-coins will only be taken seriously if seeded by such an operation from an existing respected coin, like BTC.

Potential advantages of such a consensus:

1. Removes the incentive to create pure pump-and-dump alt-coins by slightly tweaking the Bitcoin protocol, marketing your coin to drive up the price, and selling your initial hoard (as xorglub said).
2. Prevents dilution of bitcoins by these variations.  Right now each new alt-coin dilutes the cryptocurrency pool, as some BTC owners feel obliged to hedge themselves by shifting some of their stake into the latest CoinOfTheDay.
3. Opens the door to legitimately innovative alt-coins, say one that bakes in a fixed inflation rate, or that prevents the total float from shrinking by reallocating fractions of long-unspent coins to miners.  Right now these honest experiments can get lumped in with the pump-and-dumps.
4. Enables rolling out improvements to Bitcoin that require a new blockchain.  Fanciful example: a mining algorithm whose calculations help cancer research.  This could be rolled out as a "BTC v2", with users migrating gradually without diluting the BTC v1 pool.

There 'd be a lot of details to work out about pros and cons and how to implement the transmute, but first, has anyone seen any past discussion of an operation like this?  Links appreciated!  So far I've found these:

https://en.bitcoin.it/wiki/Contracts#Example_5:_Trading_across_chains
https://en.bitcoin.it/wiki/Atomic_cross-chain_trading
https://bitcointalksearch.org/topic/p2ptradex-p2p-trading-between-cryptocurrencies-91843
https://bitcointalksearch.org/topic/bitcoin-dilution-and-inflation-39777

Thanks.

Neil

I think all we can do is wait and see.

You can of course be like Don Quixote and try to educate the miners why mining the new scamcoins is bad.

Fixed that for you

No, i agree with you, all i'm saying two or two hundred -- doesn't matter.  just read that thread to the end, and a similar point was already made https://bitcointalksearch.org/topic/m.238001 (the guy wrote it out as *one* line), so i get to feel foolish for bringing it up.
OTOH, it's not the fear of trojans/viruses that keeps me away from alts.  And there's not much keeping anyone from altering a Bitcoin client?

Only example how to easy clone Bitcoin then add 2 lines of code (somewhere), and you have new ShitCoins.

Are you saying "it's possible to write a trojan"?   Of course it is   "Only 2 lines of code"?  Well, if wallet.dat is in it's default dir && you're on a *nix box (Hint: /.bitcoin/wallet.dat), && ?, then sure, those 2 lines work (maybe not, just what I've noticed offhand).  Besides, who cares if it's 2 lines or 2000000? 

One example:
https://bitcointalksearch.org/topic/wallet-stealer-so-simple-can-it-be-18514

True.  A nice scare tactic, though I mean, i have a few *nix boxen, and i've never even considered reading all the source code...

I wouldn't say "dreaming," i'm not a fan of alt coins.  If they succeed at anything, they succeed at highlighting Bitcoin's fundamental flaws -- flaws that must be downplayed & glossed over if Bitcoin is to survive (on the other hand, these flaws are a non-issue for speculators: there's money to be made in everything, including pyramid schemes -- as long as the timing's right).

Here are a just a few worrisome scenarios:

• Amazon/Google get into crypto currency.  Their size & stability reassure the users & vehicles for increasing userbase are already in place.  Amazon/Google's sheer size is enough to influence gov. regulations, perhaps even creating a new subclass of pseudo-currencies to make Amazon/Google's crypto exempt.
• Bitcoin (rather than all digital currencies) becomes illegal in US/EU.  Other alt coins remain legal.  All hash power is diverted to alt coins.  Nobrainer.

That's BS, so far not a single alt coin contained virus/trojans, because it's all open source. A closed source altcoin would face nearly zero adoption.

Hashing power is proportional to miners not users. Well actually to combined capacity of all miners not the number. Bitcoin has the most, other alt coins combined can't touch it.

And yes Bitcoin also has the most users. If you think that some other coin can muster the amount of users or mining resources than Bitcoin you are dreaming.

Agree, so, what to do

mining shifts to alt

bitcoin looks scammy by having another thousand clones

noise in exchanges

businesses lose focus on one coin

it is just wtf

THE MOAR YOU KNOW
==============

"The cat that got the cream" is an idiomatic expression equivalent to "early mover advantage". It means the first person to do something has the benefit of being the first.

You're reply makes no sense, unless I had posted:

'Just like "Million Dollar Homepage", bitcoin is a great idea'

...but I didn't.

But hashing power isn't proportional to user base, is it?  Wouldn't the number of users be more important than the number of miners?  Otherwise, putting more hash power online would assure the rising value of BTC?

It comes down to mining power. Something akin to the "real" financial world is going on. Dollar is on top because US got the biggest share of military power. Bitcoin  is number one because of the hashing power it got and will continue building. Other currencies are irrelevant considering what they got backing them up especially the new ones where its just hype.