Topic: What are BTC's Barriers to Entry (Read 750 times)
Let's say another blockchain based currency is introduced, couldn't a portion of Bitcoin's computing power suddenly decide to switch to the new currency and immediately obtain >50% of the hashing power, thus jeopardizing the integrity of the new currency? It seems to me that the bigger Bitcoin gets, the harder it would be for another currency to safely be introduced.
What is to stop anyone in the world from creating alternatives to Bitcoin? Clearly, it doesn't require asset-backing. So why is it special?
In order to bootstrap initial value, a Bitcoin alternative would have to attract investment from speculators who expect it to increase in value, and then attract usage as a medium of trade in order to meet the investors' expectations.
It's clear why one would want to invest in the first cryptocurrency (Bitcoin). It's the first "thing" that can be sent through the internet, but not freely duplicated, without having some form of central control.
It's not clear why one would want to invest in the second one, without some distinguishing feature (a la Namecoin). Who would bother to switch? The alternative would be less secure in terms of hashing power, fewer people would have faith in its value, fewer merchants would have their systems set up to accept it, etc.
The barrier to entry is convincing enough people that your chain is better. and you would have to start out with a lot of machines to help protect it from people wanting to double spend.
nothing. go for it. see how you do...
What is to stop anyone in the world from creating alternatives to Bitcoin? Clearly, it doesn't require asset-backing. So why is it special?
Personally, I think competition is coming, and it's coming hard. But I also think this is going to be great for the *concept* of BTC. The biggest threat to private currencies is government intervention. The more private currencies that compete globally, the more difficulty governments will have shutting them down. Once private currencies become established, governments will have to become competitive [sic].
So what would stop anyone from starting his own version of BTC?
Mack
Personally, I think competition is coming, and it's coming hard. But I also think this is going to be great for the *concept* of BTC. The biggest threat to private currencies is government intervention. The more private currencies that compete globally, the more difficulty governments will have shutting them down. Once private currencies become established, governments will have to become competitive [sic].
So what would stop anyone from starting his own version of BTC?
Mack
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