Why would there be just one cryptocurrency? - page 4.

johnny_day

newbie

Activity: 23

Merit: 1

Quote from: Coinster on March 10, 2017, 01:29:57 PM

It's a good question. The answer has to do with the properties of currency itself. Try a thought experiment: Say you go to the grocery store and the cashier tells you your total is 565 Goblats. You look in your wallet or on your phone and see that of the 1,000 currencies you have, including Bitcoin, Litecoin, Ether etc. you don't have any Goblats. What do you do? Try to find somebody to make an exchange? All you want to do is pay and leave.

On the other hand say the merchant doesn't want to miss any sales so he accepts 5,000 currencies. How does he manage the exchange rate? Some coins may lose 40% in one day or even one hour!

See the problem? For currency, people (average people, not traders) only want very few choices, not many as it makes things too complicated.

I see the problem with there being 5,000 currencies. I don't see the problem with there being 3-10. Bitcoin for your savings, an altcoin for your every day purchases, an altcoin for investing with, etc... Also with proper wallet software the user wouldn't have to think twice about how to pay. Even if there were 5,000 options.

Coinster

full member

Activity: 222

Merit: 101

Quote from: johnny_day on March 10, 2017, 01:06:51 PM

Please don't let that distract you from the main message: Why try and make Bitcoin do everything instead of having an ecosystem of specialized currencies?

It's a good question. The answer has to do with the properties of currency itself. Try a thought experiment: Say you go to the grocery store and the cashier tells you your total is 565 Goblats. You look in your wallet or on your phone and see that of the 1,000 currencies you have, including Bitcoin, Litecoin, Ether etc. you don't have any Goblats. What do you do? Try to find somebody to make an exchange? All you want to do is pay and leave.

On the other hand say the merchant doesn't want to miss any sales so he accepts 5,000 currencies. How does he manage the exchange rate? Some coins may lose 40% in one day or even one hour!

See the problem? For currency, people (average people, not traders) only want very few choices, not many as it makes things too complicated.

Senor.Bla

sr. member

Activity: 280

Merit: 253

You have to take two things into account.
Specialization is maximizing effectiveness, but people with low knowledge don't want to waste much time and prefer an all in one solution.
We could all drive the same car, but it makes sense that we have special cars for different purposes, like big and small cars, trucks, buses and so on. The same goes for cryptos. Specialization is good, since you have always trad offs. Altcoins can play an important role and don't have to compete with Bitcoin.
But we sell cryptos to the people as the future of money, so when it comes to payment they want one coin that can it all. We should pay less attention to the monetary value of altcoins and have in focus what they can do best and utilize this.

target

legendary

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Merit: 1041

There are hundreds of altcoins already which each has some features of their own which is why its going to be best to also make it grow unlike concentrating everything on bitcoin when all who benifits are just the few who has stash of more than a thousand of it. We are only making these whales richer every time we get to buy btc when the purpose why I buy btc is to also buy the token I'm supporting.

This is definitely one of the discussion I'm going to watch.

Memento

newbie

Activity: 56

Merit: 0

There are 2.

Bitcoin - Digital Gold.
Dash - Digital Cash.

johnny_day

newbie

Activity: 23

Merit: 1

Quote from: hatshepsut93 on March 10, 2017, 01:02:09 PM

You can use any other cryptocurrency as a transfer for value, it will just come with increased fees due to a need to exchange it to btc and than to fiat, if it's not possible to convert it to fiat directly (right now you can only do this for top altcoins, like Ethereum or Dash). What makes Bitcoin special is the number of nodes and mining power behind it's network, it serves as insurance that your transfer won't get hijacked, or someone will manipulate the blockchain.

Right, I figured at least one of my statements was incorrect. Please don't let that distract you from the main message: Why try and make Bitcoin do everything instead of having an ecosystem of specialized currencies?

dinofelis

hero member

Activity: 770

Merit: 629

Quote from: johnny_day on March 10, 2017, 12:44:46 PM

Correct me if I'm wrong, and move me if this is the wrong board, but in my opinion we should not focus on how to make Bitcoin do everything. Right now Bitcoin works well as a store of value, digital gold if you will. A $1 transaction fee means nothing to a $1,000,000 transaction. It does however severely cripple smaller payments, something that a cryptocurrency could be very good at.

Now it is my understanding that the point of SegWit/BU is to allow Bitcoin to be used for smaller payments by bringing that transaction fee down. Instead of making Bitcoin the jack of all trades, why not have multiple cryptocurrencies that each excel in their own areas? Leave Bitcoin exactly as is, and invest money and time into establishing a micropayment currency, a smart contract currency, etc...

Just some food for though.
Johnny

I agree perfectly with that. But for the moment, bitcoin is dominant because its first mover advantage is still very high ; its first mover advantage also gives it the biggest network, the strongest chain and so on. When you look at the major alt coins, they are only 2 - 4 years old. That was when bitcoin was in 2011 - 2013 to compare - although it would be incorrect to think that they will "repeat bitcoin".

hatshepsut93

legendary

Activity: 3024

Merit: 2148

Quote from: johnny_day on March 10, 2017, 12:44:46 PM

Correct me if I'm wrong, and move me if this is the wrong board, but in my opinion we should not focus on how to make Bitcoin do everything. Right now Bitcoin works well as a store of value, digital gold if you will. A $1 transaction fee means nothing to a $1,000,000 transaction. It does however severely cripple smaller payments, something that a cryptocurrency could be very good at.

Now it is my understanding that the point of SegWit/BU is to allow Bitcoin to be used for smaller payments by bringing that transaction fee down. Instead of making Bitcoin the jack of all trades, why not have multiple cryptocurrencies that each excel in their own areas? Leave Bitcoin exactly as is, and invest money and time into establishing a micropayment currency, a smart contract currency, etc...

Just some food for though.
Johnny

You can use any other cryptocurrency as a transfer for value, it will just come with increased fees due to a need to exchange it to btc and than to fiat, if it's not possible to convert it to fiat directly (right now you can only do this for top altcoins, like Ethereum or Dash). What makes Bitcoin special is the number of nodes and mining power behind it's network, it serves as insurance that your transfer won't get hijacked, or someone will manipulate the blockchain.

ebliever

legendary

Activity: 1708

Merit: 1036

This has always been my opinion - that there are many different financial niches, and there will ultimately be highly optimized cryptocurrencies for each one. I used to think there would be 4 or 5 major cryptos, now I think the number of "successful" ones will ultimately range into the hundreds. Which is to say, there are still a ton more on Coinmarketcap than we really need.... but the competition is good in the long run. :-)

johnny_day

newbie

Activity: 23

Merit: 1

Correct me if I'm wrong, and move me if this is the wrong board, but in my opinion we should not focus on how to make Bitcoin do everything. Right now Bitcoin works well as a store of value, digital gold if you will. A $1 transaction fee means nothing to a $1,000,000 transaction. It does however severely cripple smaller payments, something that a cryptocurrency could be very good at.

Now it is my understanding that the point of SegWit/BU is to allow Bitcoin to be used for smaller payments by bringing that transaction fee down. Instead of making Bitcoin the jack of all trades, why not have multiple cryptocurrencies that each excel in their own areas? Leave Bitcoin exactly as is, and invest money and time into establishing a micropayment currency, a smart contract currency, etc...

Just some food for though.
Johnny

tl;dr
Why try and make Bitcoin do everything instead of having an ecosystem of specialized currencies?

Topic: Why would there be just one cryptocurrency? - page 4. (Read 2867 times)