Topic: Is competition healthy for Bitcoin? - page 2. (Read 11351 times)

Competition is almost always a healthy thing.

Yes, I've been waiting for Mt.Gox to add Litecoin as it will move it into the mainstream (for cryptocurrency) I believe. I don't think people realize how much support there is for Litecoin. Many think it's only a speculative play fueled by speculators late to the Bitcoin party. However, I've often tried to point out why I think it has fundamental value and a big support role to play for cryptocurrency. The number of users with LTC is huge due to its 4x faster inflation rate and that only means lots of market pressure for adoption.

I think it's also worth pointing out point #5:


There are a lot of Gox bashers, but that company has been hugely key in Bitcoin's progress to date (core devs, often unpaid, of course are another story!).

From mt gox Facebook page - https://www.facebook.com/MtGox - point 6 of interest in relation to Litecoin.

Dear Mt. Gox Customers and Bitcoiners,

The reaction since yesterday’s statement regarding the temporary suspension of U.S. dollar withdrawals has had mixed reactions, and raised more than a few questions about why we had to take this step right now. Rather than be subject to inaccurate speculation we’d like to clarify some points here. Due to pending matters we are unable to get into everything in great detail, though we’d certainly love to and are looking forward to the opportunity.

1) The problem with the U.S. withdrawals (and even other currencies for that matter) is that our bank can no longer handle the volume of withdrawals. They struggled in the last two months, and the increase due to the Dwolla separation has made it increasingly more difficult. The pressure we brought onto the bank’s resources finally gave in, and we are now working with them to find an alternative method (hence the suspension). We would have preferred to give notice if we were able to, but it was sudden for us as well.

2) We are now working with new banks and alternative methods for transmitting money to our customers. This does not mean we are stopping entirely within the next two weeks, but it will be slower than we would like. We are literally going to use our manpower to process withdrawals ourselves, manually. This will take more time, but we are dedicated to doing as many per day as possible. We announced a suspension in order to manage expectations while we deliver at a temporary reduced rate. Our goal is to have a new system set up in the next weeks with clarity for both the banks and for our customers.

3) Our previous release was rather vague, but for a reason. Mainly, we don't want to upset our bank! They do great work, but our kind of business is completely new to the banking industry. Processing international wires does not just involve pushing a button. It requires real manpower processing everything individually, even in this modern computer age. While Bitcoin's power lies in its ability to transfer fast and securely through software, the rest of the financial world does not operate like that (contrary to popular opinion). Money is surprisingly analog in many ways, and scarily digital in others.

4) Every customer’s funds are safe, sound, and accounted for. In fact, in our dealings with the Japanese financial regulators we have been assured that we are not under local pressure or suspicion and can operate as usual within normal legal frameworks.

5) Mt. Gox is certainly not a martyr, but it would be hard to argue that we aren’t "taking one for the team" as far as Bitcoin is concerned. We are a big target, and are absorbing the frustrations of Bitcoiners, regulators, banks, and a media that still doesn't quite understand what Bitcoin is. This is a job we are happy to fill, and not just because we are compensated for it. Our hope is that, once Bitcoin finds its place, we will be able to say that we made a difference in sorting it all out in the early days. New exchanges, business models, merchants, traders, and consumers are rising up to innovate and create a whole new way of doing business. A lot of lawyers are getting new cars in the meantime too.

6) As risky as it is to invoke the name of Litecoin (LTC???), we must apologize for not keeping everyone up to date. The fact is that the current situation means a continued delay, but for good reasons. We’re looking at July right now, though that depends on a few things. Mainly, we want to do things correctly from the beginning.

7) The new trading engine is finished, is smokin’ fast, and is currently undergoing bench tests. We’re looking forward to deploying it very soon.

While not the most in-depth update we'd like to give, we hope that it has at least clarified a few things. In the next few weeks we are planning to do another AMA on Reddit when we’ll hopefully be able to answer many more questions and also shed some light on what’s been going on at Mt. Gox these past months. Thank you for your patience and support.

The crypto trains getting a little crowded 

https://btc-e.com/exchange/ltc_btc

All in all litecoins rise from a couple of cents to over $1 over the last couple of weeks has been the most amazing ride, every bit as exciting as its big brother Bitcoin. Well done LTC  

Sure there could be some heart wrenching volatility as we saw in Bitcoin but hey what a ride
Ps. more litecoin Dev. Updates coming in may !!  

Long live crypto coins.

Competition is bad.

The reason being with something as copy and tweakable as open source software, its way too easy to make clones. In fact someone should programatically generate every possible combination of coin generation time, block size, hash size, coin limit, deflation, and inflation rate etc, just to prove the point.

If there were 10,000 different slightly varied bitcoins they would all be worthless. The only thing that gives bitcoin worth right now is that sufficient people are using just one version of it.

Maybe it's not so much competition as mutual support ... or it will become that way.

I keep thinking that there will presently be a whole spectrum of meme-coins: JesusCoin, AllahCoin, Marxistcoin. ArtCoin, GreenCoin, etc ... so that people will tend to use the coin that fits their belief systems, supposing that others who do the same are somewhat like themselves.

All these currencies will float against each other, reflect the real vitality of different aspects of society, and be offered also in mutual bundled coin products.

How could it NOT go that way?

This was my first thought when I found out about Bitcoin. What's to stop others just copying it and devaluing it?

Well, power and influence. Nobody is going to choose to use something that adds no extra utility over bitcoin's established value.

However if I was Amazon I'd be modifying the source code and uploading a new block chain to their cloud right now to create Amazon coins that I can give away free to normal customers to start with, allowing them to spend them later or offer them as gifts with a guaranteed minimum value. Just open an exchange where people can buy or sell them as gifts and voila, people will start pouring money into Amazon coins knowing that they will always be able to spend them on books and DVDs and with the possibility of them going up in value too. All at no risk to Amazon.

Repeat for eBay, Apple etc., and bitcoin starts to look like dirty money.

The only thing an alt coin could offer is the legitimacy of knowing who you are dealing with as oppose to bitcoin's anonymity. Trusting some mysterious stranger on the other side of the internet with no recourse if something goes wrong is not something ordinary consumers are going to accept.

I don't think so. The value of the initial distribution of a crypto-currency is very low relative to the value of the currency as a means of exchange (assuming the currency is successful). And the value of the currency as a means of exchange is dependent on broad adoption.

If the currency doesn't achieve broad adoption, the initial distribution doesn't matter much because the total real value of all currency of that type in existence will never be significant.

For example, the early adopters of Bitcoin mined about 2 million Bitcoins at a time when Bitcoin was worth, at most, $2 apiece. That puts the value of the initial distribution to the early adopters at $4 million. That's microscopic compared to the current total value of Bitcoin.

No, competing crypto currencies will rather split nations on demographics, politics and even religion, based on different solutions of the initial distribution problem. E.g. CatholicCoin, with initial distribution by the Roman Catholic Church to each of its members (maybe not the best example when I come to think of it, as they are very conservative....

True.  It'd split whatever one currency would've been worth with several different kinds.  Which isn't too bad, but considering the end user might have to wind up using several different wallets for several different crypto-currencies, it'd get a little annoying.  Some people might refuse a highly popular currency all together just because they don't want to be paid that way.  Because of this, I don't believe any two currencies will ever duel side by side, at least when there isn't a #1 currency already in place.

Then again, considering social barriers, it could be possible; one nation speaking language X would prefer XCoin, while another nation speaking language Y would prefer YCoin...

It's not quite necessarily so. You can have unusual cases where competition is actually bad, at least for short periods of time. One of those cases is a significant risk for crypto-currencies.

With crypto-currencies like Bitcoin and the various alt coins, the usefulness of the currency as a means of exchange is dependent on how many people accept that currency. If you have lots of competition, it may result in each currency being better, however, it can also result in no currency ever getting significant adoption because that adoption is spread over more currencies.

So competition can lead to a case where no currency reaches critical mass, which can be worse for almost everyone.

This is one of the reasons Bitcoiners are hostile to alternative currencies. If they reduce Bitcoin adoption, they can reduce the chances or delay the time when any currency make a major impact. The tradeoff is that when a currency does make a major impact, it will likely be a better currency. If alternative currencies push Bitcoin to be better, that's a pure win.

competition is always a good thing unless you have a monopoly.

A better analogy is Solidcoin is Apple to Bitcoin's Android.

PS: If it were not for Bitcoin, I would seriously consider taking a short position on Apple stock.

Yes it is healthy.

In fact Bitcoin must set a trend: The break of the proprietary money system.

New networks can span and it will all depend on marketing principals. You gamble you lose.

Imagine new networks created on these peer to peer principles . Much better democracy in the new monetary system. Break from the slavery.

No, one confirmation would not be sufficient because there's a potential for two blocks to be found at the same time. The first confirmation is "special" because that indicates your transaction was chosen over any conflicting transactions and all that's needed is for that block to win for your transaction to win.

However, with faster confirmations, the probability of two blocks being found at very close to the same time (within the network's propagation time and miners 'switch over' time) is higher. So the faster confirmations are, the less "special" the first one is. With your SlowCoin, getting one confirmation would worth much more than it is in Bitcoin because the probability of two blocks being found close in time is much lower.

If you assume six Bitcoin confirmations is the confidence level you want, you're looking at 60 minutes on average to get it. If you imagine an alt coin with faster confirmations, you could have your first confirmation sooner, reducing the time to reach the same security level if you assume the same hash rate. It's only the time to first confirmation you can improve, and your cost of doing so is that the first confirmation is less valuable.

If you do the math, you get that's it's possible to reduce the time to "full confirmation" (with the above assumptions) by about 8-12%. 55 minutes average instead of an hour doesn't seem like much to celebrate.

"Sufficient confirmations" means the resources needed to successfully orphan the branch containing a given transaction are more expensive than the transaction itself.

6 confirmations is a number that somebody pulled out of their nether regions back when the network was small and people were still CPU mining, and nobody has since then come up with a better answer to the question.

If I have a "SlowCoin", which generates a block per 60 minutes, does that mean 1 confirmation will be sufficient? It seems 51% attack would be much easier that way. I have to say your conclusion is counter intuitive.

The fact that each block is based on previous hash and a nonce has nothing to do with securing the block chain?

I'm not offering any opinion about how much time it takes to secure a transaction sufficiently. I'm only explaining what units it has to be measured in -- how much effort it takes to undo it.

Huh?

If all else fails, change the subject. And, of course, do so as hysterically as possible. I'm not even trying to compare Litecoin to Ripple as I don't think that makes any sense.

I'm comparing Litecoin to Bitcoin and pointing out that a claim of "faster transactions" is simply bogus and is based on the misconception that 6 is some magic number of confirmations. People use 6 confirmations as a "magic number" with Bitcoin because they believe 6 confirmations provides sufficient *hashing power* on top of the transaction. Someone who believes 6 confirmations is necessary for Bitcoin would, assuming they understand the issues involved, likely not find 6 confirmations sufficient in Litecoin for transactions of comparable value.

Who is to say how much time to "secure" a transaction is SUFFICIENT? You? I think not.

So my coins getting transferred to and from the exchange is a myth? No buddy, I disagree, it is reality.

I would rather put my faith in a less secure (lower hash rate) network that is decentralized as opposed to something that is centralized in currency creation like RIPPLE.

Litecoin > Ripple

I refuse to trust one single entity in the currency creation process. I may as well just use the Federal Reserve system if I wanted that.

READ MORE: Why Ripple is a scam -----> https://bitcointalksearch.org/topic/m.1574024