Topic: Why would there be just one cryptocurrency? - page 3. (Read 2867 times)

I don't think that it is good for bitcoin to be just the only one cryptocurrency in the market because we can't deny that the altcoins is one of the factor why other people come into bitcoin because they want to trade another kind of cryptocurrency and that is altcoin. So if there is no altcoins or back up coins other than bitcoin then the market users will be few because they can't just stick with bitcoin.

You are thinking from a pure Proof of Work viewpoint.  Maybe proof of work alone is not a good idea, because its security is limited by the financial power and incentive of its adversaries.  That is good enough to stop your local hacker from messing with it, but it won't stop the Chinese government, if one day it really gets pissed at bitcoin, from killing if it throws a few billion dollars at it.

On the other hand, small chains don't need big protection, because there's not much at stake ; and there are other cryptographical protections possible.  What is good with proof of work, is the initial distribution of the emitted coin, and the fact that seigniorage is burned.

My idea of many small crypto currencies in which people don't "invest" but just use to sell and buy goods and hence for which the market cap is low, and of which it is not a big drama if it dies, is exactly the fact that there's not much incentive to destroy it, because there's not much at stake.   The goal being to *pay* people, not to *store value*.   If a currency exists, I buy some coins (with another currency of course), with those coins, I buy what I want to buy, and that's it, I don't care much about the future of that coin: it did for me what it had to do.  If that coin gets destroyed by the Chinese government (why would they ?), I don't care.  Tomorrow, there's another coin, I buy some, I pay the stuff I want to obtain with it, and that's it, again.

That's how I use bitcoin.  Well, how I used bitcoin.  I bought some bitcoin when I wanted to buy stuff on the internet with it.  What happens with bitcoin after that, doesn't really matter.  If the merchants would accept monero, I'd pay in monero.  Or in Litecoin.  Or whatever.  The day they destroy bitcoin, I wouldn't care.  There are other coins.  And if those get destroyed too, no problem.  There are still other coins, and we can make new ones.

That's my idea of decentralized.  Not a single monopoly.

I don't think they are a waste of time and effort.  Like in all innovative tech, most of what you do, fails.  But without all the failures, the good ideas wouldn't emerge either.  Thinking that a monopoly works better than a free market, is somewhat strange for people that think "distributed, decentralized, trustless".  As of now, bitcoin is more or less holding a monopoly on crypto.  Its tech is getting old now.  There are many more sophisticated crypto ideas around, like ring signatures, zero knowledge proofs, smart contracts, proof of stake versions, directed graphs instead of chains, .... There are also experimentations with flexible block sizes...
Bitcoin starts looking like the state telephone company holding the monopoly over telephony, while mobile phones are being invented.

Most of them lack the hashing power that would be needed to withstand a sustained attack by a state level adversary wanting to re-write transaction history.

Mining power is extremely important. One of the drawbacks to promoting side-chains for the bulk of transactions is it removes the financial incentive to professionally mine, reducing the security provided by the hash power.

One Coin to rule them all, One Coin to find them,
One Coin to bring them all and in the darkness bind them

And that, my friend, is why bitcoin was created.



Joking aside.

Isn't the situation you are talking about is happening right now? We have over 6000 altcoins, at least judging by ANN topics from the Altcoin section.
700 or so is listed on coinmarketcap and 100 coins are over $1 million marketcap. Still, most of them offer nothing interesting and are waste of time and effort.

I don't see necessarily a problem with 5000 coins.  It depends on how they are linked together (through distributed exchanges).  The lightning network can abstractly be seen as "as many coins as there are payment channels" in a certain way, where the "coins" are virtual block chains you build with the successive instructions on the payment channel.  Coins that "start out" when the channel is set up, and "die" when the channel is settled.  They get their value by using a collateral (the bitcoins engaged).  They die when they release the collateral. 
In the LN, all the "new coins" are of the same type, defined in the same way with a uniform (centralized ?) protocol.  But you can see "small coins" as totally anarchistic versions of this, where every other coin has other principles, engages another collateral (another coin, maybe bitcoin, maybe something else) on some distributed exchanges, and can release to *other* coins on these exchanges.

To pay for something "far away in coin space", you'd have to hop over several exchanges, like in the LN, you hop over several payment channels to reach destination.  But at least, contrary to the LN, things wouldn't be frozen in, uniform, ... Yes, there would be a need for some "standards" linking them.  But like in the technology world, the standards serve to interface different systems, but at least, systems of different types, with different technology and features, and innovation is possible.  The internet has standards, but the things connected to internet are of different nature, and evolve.  Bitcoin's tech is getting old now.  It can still serve as a kind of backbone, reserve currency in a way.  But it will never be able to handle all commerce all over the world.  Its monetary model is also problematic and it will end up being totally centralized because of economies of scale. 

If we want a distributed system, we need constantly new tech, new coins, and competing systems.  Not a monopoly.

Not if there isn't room in the blockchain for the TX to confirm.

Now, really think deep about this.  Suppose that most adoption of bitcoin comes from people thinking like that (which is probably the case).  That means that Joe is only to go and buy bitcoin, if he expects it to rise in price.  By doing so, he made it rise in price: someone who bought it at a lower price is going to sell it to him, right ?  So Joe is counting, essentially, on finding Bill, who will also buy it from him at a higher price, right ?   (that's what it means "increasing in value": finding people willing to buy it at a higher price than the one you bought it at").  Etc....

In this game, people come to bitcoin, because they think they will end up finding someone who will buy it at a higher price.  It is called "a greater-fool game".  You are a greater fool than the one you're buying from, and you do this because you think you will find a still greater fool.

Now, this has a fundamental problem to it: there's only a finite number of fools on the planet.  What is going to happen when the last layer of fools sees that there's not a "layer after them" ?

If the main motive of acquiring an asset is that you think you will be able to sell it at a higher price than you buy it, and if there is no other value-generating mechanism, this is the very definition of a greater-fool game, a bubble.  These are the mechanisms behind speculative bubbles, pyramid games and Ponzi schemes.   Which doesn't mean that you cannot make a lot of money from it when you're in and especially out in time.  All gain in such a system is financed by the "last layer of fools".  So simply don't be part of the last layer.


At least, with lettucecoin, you will get groceries

In any case, a single block chain cannot scale to the level of all transactions for all vegetables in the world.  The idea that Sven, in Sweden, must acquire, and process, the buying of a salad by Joe in Australia 7 years ago in order for Sven to be able to process his monetary asset to be able to buy some petrol for his car, is simply crazy.

Why would it take 3 days to convert bitcoin to LettuceCoin? All of that can happen instantaneously as far as the user is concerned.

What makes Bitcoin worth it for my savings? That it increases in value.

Will it increase in value if there is no demand for it? No.

What gives it demans? Utility.

I don't mind buying my groceries using LettuceCoin but what if it takes me 3 days to convert bitcoin to LettuceCoin? Do you think I will keep very much in Bitcoin or do you think it would have lost its utility for me?

Each country has got its own traditional currency. Same way based upon the value transfer protocol financial institutions and developers come with different cryptocurrencies with difference in the features. So among the tons of coins that get existed very few sustain long and continue to serve the people around. Only one cryptocurrency won't make sense as the compatibility vary with respect to time, only the competence make things better.

just like fiat as there are different currencies for every country, in such way there will also be different online digital currencies but bitcoin will the main crypto currency ans most of the people will be depending on it for online as well as for online shopping.

What if a currency nails the $1-$1000 payment range? The "splitting the cost of an uber" use cases. Is it possible that this same currency could perfect the $10,000+ transactions?

I mean who knows, there's so many coins that it is possible if any of them have any real success then they might have their certain market.

For example people who need complete privacy, there's Monero(XMR).

And take something like Potcoin, sounds kinda dumb and I wouldn't expect it to have a real potential, but they said they have been contacted by shops in Canada to use it. So maybe Potcoin will become the cypto for all the weed shops or some shit.

There may be different currencies in the future, but there doesn't need to be if one currency can get them all. I guess you can say Bitcoin is gold in that it is expensive to transact, but if there are more efficient ways of transacting coins like LN, then why not use them?

If there will be only one cryptocurrency and bitcoin will be alone even how bitcoin is so popular and rich now it will not stand alone and will drop price.All for one and one for all motto at cryptocurrency.

What you are trying to say is not worth able as if leaving bitcoins and other crypto currencies do other works then the value of bitcoin will decrease because as all coins are valued in bitcoins and Bitcoins is the main coin for all. Why do you need other coins for each work which will make more complicated work to store. Even then their are so many other coins which are doing their project on their own work.

The average person shouldn't have to make a decision on which currencies to use and when. All of that can happen behind the scenes, can't it?

I personally agree with this, but the problem has to do with human nature, if you have a good product you want as much people using it and for that you need to attract more people, if bitcoin becomes a store of value then the average person is not going to use bitcoin and instead opt for a different altcoin which would mean bitcoin will not reach as high of a price.

Yes, I think you're right about 3-10. As for wallet software being able to manage a high number of currencies, that's true too, but there is another problem which is every single currency created can't have value! There is no limit to people creating currencies now with open-source cryptocurrency software.