Topic: How would a thousand or so alt coins affect Bitcoin? - page 2. (Read 5307 times)

Hi-
In that case, i'm not sure why why "uniqueness = 0" could not be simply written out of the equation.  If i'm reading this right, uniqueness of ECC = 0, while uniqueness of BTC = 0 also (by definition, ECC is a direct ripoff).  In other words, uniqueness value of *any two coins* is always equal.  Even if there's a qualifier for uniqueness, like "positive uniqueness" & "negative uniqueness," the obvious zero value in case of carbon copy (should have gone with that, CCC ) lets us cross it out as a variable?

Crumbcake, uniqueness of utility is compared to other coins, so for ECC it would be zero. The question is what does the new coin offer that Bitcoin doesn't. Litecoin has a little uniqueness since it uses scrypt and a tiny bit more uniqueness because of shorter confirmations and more coins. Namecoin might have quite a bit of uniqueness since it could work for anonymous domain registry, though I don't know if it works well in practice. The other altcoins seem to have either nothing very unique or their concept is unsound (centralized, not scarce, perishable, etc.).

Alt coin could open my computer up to viruses/trojans if I run it.
https://bitcointalksearch.org/topic/alternative-block-chains-be-safe-42465

I'm not sure how well the "fundamental value" argument works, or rather, if it works, does it work too well? I'll try to address each of the factors you chose to illustrate your point in the list below:

• 1 dev team
  See (2), and:  ECC, being an exact BTC copy, requires no dev. team to get off the ground, by simply reusing BTCs codebase.  Almost 100% parasitic.  This is a huge advantage for ECC.  If ECC gains traction, the dev situation should mirror BTC.
• 2 soundness of concept
  For the sake of simplicity, i'll argue for ExactCopyCoin (from here on ECC), so if the concept behind Bitcoin is sound, so is the concept of ECC.
• 3 uniqueness of utility
  I'm not sure if "uniqueness of utility" is established tech. jargon -- i'll assume it means exactly what it seems to mean.  If so, we can simply drop "uniqueness":  uniqueness of ECC == uniqueness of BTC.  Utility of of BTC is undeniably greater than that of ECC, but the ratio of utility to required investment is likely equal or better (I know "investment" here is vague & hard to quantify -- what i mean is investment in the general sense--time, money, everything one gambles on ECC).  At the outset, utility of BTC was also virtually nil, while initial investment needed to be much more substantial (if nothing else, there was no code base, no proof of concept,etc. -- a whole bunch of things needed to happen before a single BTC could be mined.  With ECC?  Download, build & you're good to go.
• 4 network effects

See (1), and:  Imagine if something like Google started ECC...  Talk about network...

• 5 hashing power
  See (1) and (3)
• 6 track record
  This one's the kicker.  Is BTC's track record enough to guarantee a win over alts?  Even in the long run, when RealBigMoney(tm) decides to jump in the game?  My guess is not if, but when.
  

I see a comparison with domain names

BTC is .com
LTC is .net or .org
All the other alt coins are the other new shitty extensions

Due to marketing and network effect, .com remains king despite the infinite number of new extensions

However if .com was the only domain extension, its value would be infinite (like some believe BTC will become)

But because of all the extensions, its value is capped

So to answer OP's question: 1000 altcoins is the same as 10 altcoins, crypto capitalization will be shared between the most popular altcoins depending on hype. Every new altcoin that brings technological innovation and hype will get a share of the crypto cake, but mostly they will get a share of the ALT cake as long as  Bitcoin developpers stay on top of their game.

Altcoins that only bring hype and no technological innovation (feathercoin, etc) will get dumped on the long term.

If you notice an altcoin with a good developping team, expect a quick change in value and possibly a transfer of capitalization from BTC.

Alt-coins are not new. Back in 2011 there was also hype about i0coin, ixcoin, and others I won't even try to remember. Only namecoin kind of survived, because it offers something else than a currency. Although merged mining kind of killed it (you get them "for free" while mining bitcoin so for 99.9% of people they are worthless).

Litecoin may have some value because it actually improves upon bitcoin. But I expect it to follow BTC at best, not overtake it.

All the other clones are useless and their only purpose IMHO is to be an early adopter, mine tens of thousands of them, hype them, pump the price, then dump for profit.

Alt coins also represent the bitcoin need for improvement/innovation.Many alts are to be developed yet and -learning from bitcoin/other alts mistakes-  eventually we will see one rising above bitcoin.

I don't see it as a big deal. A thousand is a bit too many undoubtedly.. But a few are good for people who don't wanna deal with fiat lol

I think the more alt-coins there are, the less of an effect they will have on Bitcoin. If you look at the current situation it's a joke and indeed it makes even established alt-coins look bad.

There probably is a need for 1-3 strong alt-coins, utilizing different hashing algos on top of other differentiating features. There is some value in having redundant crypto-currency networks that will survive an attack/bug/unintended feature affecting another. However, there is no value in a scenario where pure copies, like Litecoin & Feathercoin, both survive, since they are for all intents and purposes have near-identical vulnerabilities. In addition, I doubt even with 1-3 strong alt-coins, we will see significant dilution of BTC. For example, I don't foresee LTC ever reaching effective market cap parity with BTC (where 1 BTC = 4 LTC).

Litecoin may become a candidate for one strong alt-coin, but I'm fairly certain the rest of the current lot will fade away.

Pretty much, this. The market will decide. Not much we can do anyways, right?

I agree with the poster who said that it will make people begin to actually look at the merits of each altcoin.

I have a position in a few alts and have made some SERIOUS profit off of them but I'm waiting for the coin that actually isn't a copy-pasta of the Satoshi client except replace SHA256 with scrypt. That was a great idea, and there have been a few other decent ideas, but now the market is just flooded with coins that are ALL copy-pastas of bitcoin-qt with a few minor changes. For added amateur impression, they even forget to do a simple search-replace "bitcoin" with "copypastacoin" in the TXT files included in the download package and in the dialogue boxes in the GUI.
You know, something with a protocol specification. No magic numbers, and a strong predisposition against external dependencies. Something with a little innovation. Something with coin control and MofN and other features included that people have been whining for in Bitcoin for a while.

Alt-coin devs need to look at what Bitcoin got wrong, and write a new client with that in mind. Instead what they're doing is coming up with some nice concept, then taking bitcoin-qt and fiddling with it, releasing it as soon as possible to get rich before the next guy comes up with the idea. Again, the fact that some of them even forget to do a search-and-replace is a great indicator of the fail which entails such an operation.

Having a couple of strong alt-coins might have taken some market share from Bitcoin.

But when there is a new alt-coin coming out every week, where someone has just forked bitcoin-qt, tweaked a couple of settings, changed the name, added a different logo; it shows how foolish most of the alt-coin market is.  And only serves to show why Bitcoin is much more valuable than any "alt-coin".

The network effect would determine if it survives or not. Basically if the free-market decides they are worth securing then it will last and live on.

Does it detract from bitcoin, yes somewhat. But those who are hardcore supporters of bitcoin will just stick with bitcoin.

So ultimately no. Temporarily maybe.

Altcoins that are not 51%ed will definitely be good for Bitcoin.

Yeah sort of. Except MD Homepage is pointless. Bitcoin isn't.

Just like "Million Dollar Homepage", bitcoin is the cat the got the cream.

A proliferation of altcoins - like we're experiencing now - would just make people actually look at the fundamental value proposition of each altcoin (dev team, soundness of concept, uniqueness of utility, network effects, hashing power, and track record), causing most of them to die as they are sorely deficient in most or all of these. We're in an altcoin bubble right now, where even some random piece of code dropped into the forum anonymously gets investment. That doesn't mean all altcoins will fall, but the vast majority will.

Bitcoin will be unaffected, or maybe helped by the influx of new ideas. Looking at the fundamentals, it is simply undeniable that almost all the altcoins are a joke compared to Bitcoin.

hierarchical merged mining

Not enough mining power for thousands. They'd be 51%'d in a day.

Would it be better for Bitcoin if the alt coin world were saturated with thousands of alt coins or would it hurt it?

Does that solidify Bitcoin more as the main coin or does it dillute it?

It would seem to me that having one or two competing coins would create some competition, but with thousands, alt coins would become something nobody would want to invest in.