Topic: Whats the point of the alternative cryptocoins? (Read 745 times)

Paper money has to be enforced by governments and managed by central banks. Now, unfortunately these institutes suffered from regulatory capture on a massive scale. I don't know how that will play out in the long run.
If it were up to the people, they probably would trade in commodities, or commodity backed currencies, instead of paper money. Chris Cook makes an interesting argument about this in the Keiser Report (E408) with his proposal of a energy-backed currency.

There may be new concepts and solutions born in these systems. But as you said - if they stand the test of time, the bitcoin community may be able to consider adoption. But that's a slow process.

I see. I wonder what will win, popularity or flexibility? I bet popularity has more chances of absorbing features from their smaller copycat currencies, than the other way around. In the end, the flexibility of the copycat projects may unawarely act, in practice, as little sandboxes for experimentation, which BTC developers can just sit and watch their evolution and then implement it in BTC itself.


The comparison with papermoney is unfair, because even though people don't understand how it works it is already widely accepted for a millenia AND there weren't other better alternatives out there.
Bitcoins still need to earn the trust of these people. It is still struggling to get adopted, and in practice... well it isn't that practical to use it anyway. Also pragmatically, from an UX perspective, it will not be that different from using the paypal/dwolla apps in smartphones (right now it is way worse, but that's what we can aspire).
We have to be honest, right now the only attractive for mere mortals (non-geeks) is speculating with the rally of btc prices.

Unfortunately, most people don't give a crap about anonymity, transparency, freedom, decentralization, deregulation, etc... It is like what Morpheus said in the Matrix, some people have been living in the matrix for too long and they can't get unplugged.


The question is, how do you know what you want if you have too many choices?
And this is not a question of how knowledgeable or ignorant is a person, in fact, that's irrelevant as it affects everyone.


Just to be clear, I really welcome projects like Ripple because they genuinely introduce new paradigms... but the others like litecoin, ppcoin, whatever-coins, I wonder if they really are worth as standalone currencies.

It's the other way around. The more people are involved in a cryptocurrency, the larger the drag - because there has to be consensus BEFORE anything changes in the rule set. Small cryptos have the advantage that the developers have more freedom to change stuff as the blockchain grows. Also some stuff is either/or, like monetary policy and the likes.

Most people don't even know how paper money works. Still people consider it useful, b/c they buy stuff with it. Same will happen with bitcoin once the merchant accepts it.

This is a characteristic for people who do not know what they want. If you know what you want and what you need you select on the spot.

Don't be afraid. The focus will always be bitcoin. Copycats exist b/c people want to play around with the parameter set for bitcoin or pump&dump. Others innovate on various aspects of the cryptoprotocol - which has to stand the test of time before it becomes popular.

And whats the use of the other cryptocoins? How does it differentiate itself in its usefulness to bitcoins?
Or better, how can they survive when Bitcoins implements some of the ideas they are testing out?
Because most of them are simple tweaks on what already exists, it definitely feels that BTCs can absorb their implementations at no time.


Heh, I wonder about that. In theory, yes.
In practice, humans hate change. In fact, there have been studies that show that the mere thought of change is perceived as painful, and there is a natural avoidace to new things.

Most people do not take rational decisions, in fact, most people make the wrong decision based on flawed reasoning (cognitive biases, memory biases, logical fallacies, etc...), and there are phenomenons that we simply can't control because we can't be subjectively aware of doing them (illusions, apophenia, pareidolia, irrationality, etc...)
And if you want to sell bitcoins as useful, it is better to avoid confusion altogether.

The phenomenon of Analysis Paralysis is empirically very well known by salesmen and people in marketing. If I show 20 different cellphones to my customers, the likelihood of making a sale drops to zero. They always excuse themselves saying that they are just looking, and will come back later.
If I show them only two, I increase the chances of making a sale, in fact, I can sell them on the spot.

So my fears on having too many choices are based on that. Hopefully none of the copycats will get enough spotlight in the media BEFORE BTC has gained some mainstream acceptance, otherwise it might be counterproductive for all cryptocurrencies out there.

If they find use for it they'll use it. Simple as that. Humans are adaptable. More than governments these days..
(Chances are they get introduced to the currency by someone - so that someone is their guide)

After reading this thread I should look into PPCs.  I am curious what your thoughts are about litecoin.  I am interested in it purely from the CPU mining side of it.  I am also curious to see if the GPU and FPGA miners start moving to that when ASIC miners become more common.

Uhm, yes diversity is certainly good, but I wonder if it is good for widespread adoption. In psychology there is something called "Analysis Paralysis", for further info you can see a nice ted talk here: http://www.ted.com/talks/barry_schwartz_on_the_paradox_of_choice.html
My worry is the following: there is still a LOT of ignorance regarding to BTCs out there, and as it is, it's very hard to make non-techies understand the monetary principles (even college graduates have a very hard time grasping the nature of money) and it becomes essentially impossible to explain about the crypto behind its design.

Now if they suddenly face not one, but a dozen cryptocoins it basically would buffer overflow their brains...

An analogous way of looking at bitcoin/cryptocurrency is to compare it to the rise of the open source operating systems. There are plenty of different distributions built around a similar core architecture. Every distribution does things a little bit differently.

The existence of alternate cryptocurrencies hardly damages bitcoin, it rather reaffirms it. However, people will likely learn it the hard way that there's more to a currency system, than just a blockchain.

Well I am not talking about mediocrity, but copycats are hardly innovation.


I heard about ppcoin, in fact I just installed their client.
Thanks for mentioning freicoin, I never heard of freicoin, I'll look it up later.

But I wonder if the proliferation of the newer currencies, when the BTC itself is still quite experimental and controversial, would actually weaken or even damage the legitimacy of BTC before the eyes of the public.

If we were in the habit of accepting the status quo as "good enough", Bitcoin wouldn't exist in the first place.

They aren't. Some are innovators with respect to network security (ppcoin) or monetary theory (freicoin). However, the rest is essentially copycats.

Whats the point of all the new "alternative" cryptocurrencies?
What can be the advantage of adopting one cryptocoin over another, when they are essentially the same.

A cryptonerd can argue about some little tweaks over BTCs, but essentially they are all the same tweaks reusing p2p and some different algorithms. How can that make a difference to the general public? What advantages can we pitch to the merchants who will soon overwhelmed with dozens of cryptos that are just-like-bitcoins-but-better.

All I see is an opportunistic attempt to become an "early adopter", frustrated that they couldn't be on the BTC rally from the beginning.
Am I wrong? what am I missing?