Topic: Will Bitcoin be surpassed in value by an alternate cryptocurrency and when? (Read 3255 times)

I believe there is a firm place for alt-coins as a speculative tool, some maybe even as a real alternative to BTC (Supporting multiple cryptocurrencies in payment apps and infrastructure should be easy to manage)
In my opinion the less Bitcoin will swing in its value the more speculators will move to alts.

As for innovations in altcoins that may give them a large advantage over bitcoin: Bitcoin solves probabilistic agreement on the blockchain. That agreement can also be used to add changes. (say a majority of the last x blocks contain a new protocol revision so that serves as a confirmation that the new protocol is now the accepted standard). There still is a lot of potential for interesting upgrades and extensions. In principle Bitcoin could support multiple different proof of work algorithms concurrently. It may even make sense to introduce a hybrid proof of stake model (IMHO Proof of Stake requires some form of probabilistic timing constraint on block creation time). You don't need an inflationary cryptocurrency for proof of stake. The transaction fees may be incentive enough (maybe give out a percentage of the Transaction fees based on the stake and the rest is awarded to the next PoW block?)

Time will tell but the beauty about Bitcoin is that it is actually rather simple in its design but very effective.
People wanting faster block creation times do not realize that this actually adds a lot of stability and should NOT be changed.
Proof of Work is extremely elegant as it acts as a synchronizer and timer for a network with an unknown number of participants.

Any changes to these elements may introduce more headaches than advantages in the long run

Sorry for the side-track, I was obviously too tired and didn't read your post properly 

I was just thinking of the people in the US (can't find a link) with tiny amounts of gold and a laminating machine campaigning for using gold as a currency, but they are clearly irrelevant in how there came to be a use for silver in coinage back in the day.

Circa 1700?   Gold is no longer used as a circulating currency.  When it was used as "money", the technology needed to mint, authenticate, and transport sub gram gold coins simply didn't exist.

In 5-10 years something like Ripple IMHO.

Yes. In the next 5 years.

WOW, I see a lot of people in this thread of scared of the alt-coins so are bashing them. Just like they bash anyone negative about the bitcoin price. What do you expect being in a bitcoin only speculation thread.

Anyway, alt-coins may not reach bit-coin price levels but they all hold collector appeal. Most people who own bitcoin do so for the collector appeal. Therefore, alt-coins will rise a decent amount.

Alt-coins can easily be traded back and forth into bitcoins at very low cost. Better to spread your eggs around then have your bitcoin wallet hacked or stolen or some other thing and lose all your coins.

You can easily have the tiniest amount of gold in a plastic wrapper. Hence one could wrap infinitesimal amounts of gold safely and trade it without the need of a minted coin.

The constraints of physical coinage.  The smallest gold coin in the US was roughly the size of a dime and was worth more than a laborers daily wage.  Imagine Joe Smith got paid his dime sized gold coin (about 2 grams) and went into a bar for a drink which was 1/10th of a gram.  How exactly was he going to spend it?  Were people going to mint 1/10th gram coins which were about 1/20th the size of a dime? 

So there is a difference between gold and silver according to the BBC article. But let me add another, silver has been considered as a way of getting easy money during a panic. During the long depression silver was demonetized, thus exasperating the price of gold, which made the people who held loans worse off. Silver was always more plentiful, and in an alloy it would not decay easily. Thus it was easy money.

In the same sense, Bitcoin is supposed to be hard money when it is a means of wealth storage, and although it is easily used for transactions, it is not easy money because it is way too scarce. Bitcoin is hard money, so as a business owner you would be a fool not to accept it, but if you want a loan (or are a lender) you would be a fool to make it in Bitcoin.

Altcoins, on the other hand are easy money, so if you want to make a loan you are better off making it in an altcoin than in Bitcoin. If your venture is profitable you can cash in into Bitcoin.

Thanks for that, interesting read. So indeed, gold is better than silver as a form of money, and yet silver is still used in pretty much the same way...

Cross-posting this link from another thread specifically because it speaks to your question.

http://www.bbc.co.uk/news/magazine-25255957

This is a good post.

Here's a question: Gold as money 'evolved' from the barter system, as a better way for people to transact with one another. Silver also found its way into use as a means of transaction/store of value. There is arguably no difference between silver and gold in terms of fundamental properties which make for a sound form of money. Why do we therefore have these two 'precious' metals?

Bio-diversity is good.  In fact, it is also good in Bitcoin space and we should welcome attempts to write completely Bitcoin compatible clients/servers/miners from the ground up.

What an interesting thread.

I have extreme doubt that Bitcoin will succumb to an altcoin soon. As far as I can understand the blockchain has a very large potential for adaptability if needed.

But, like DeathAndTaxes says, Bitcoin is vulnerable because it has only one code. His evolutionary view is interesting, and probably similar to what happened in early evolution of life. How one life-form prospered and almost conquered everything, until a virus or a parasite came along.

It seems to me that as of yet no argument can be made of how Bitcoin can become permanent. Yes it can last for long, but not necessarily forever.

The simile is fiat. It started during the Song dynasty in China and has developed into new forms until this day. I think that Bitcoin is simply an evolution of fiat as fiat was an evolution of 'gold-or-other-precious-things' (or as gold was of barter).

So at some point the revision of the code needed to Bitcoin is going to become too great, but by that time, as always, intelligent and forward thinking people will have enough time to transition.

Hence we will either be not intelligent enough or not forward thinking enough and hence we will not deserve the new found wealth. But the altcoins that are currently in existence are no more than monopoly money.

lol no, no such thing yet

Just some recognition for some very good posts that have at least for me shed some light on the alt-coin universe.

I'm right there with you for most of that.  But I still feel safer having Litecoin around and indeed encouraging the existence of alt coins - especially if they'll innovate further and especially if they'll improve/increase resilience.  

I guess I'm just trying to dispel the notion that "alt coins should go away and stop stealing Bitcoin's market share."  

I don't think that's something you've been saying in any way but it is an argument I see put out there and am keen to counter it with the simple notion that competition is healthy.  

edit:
I completely agree with your 'bio-diversity' concerns and think you've made the point here very well.  But Bitcoin can't really experiment with its architecture any more as too much value is vested in both the coins and the network.  Litecoin et al can still do that and could very well end up introducing the kind of 'bio-diversity' that we'd both welcome with open arms.

Well no they wouldn't need LTC to be around that was just an example.  They wouldn't need any coin to be around (although I don't think alt-coins will die off completely).  Bitcoin could be hard forked to any proof of work, even one which doesn't even exist today.  Note this won't be trivial, it pretty much would only occur in a "if we don't change then Bitcoin is worth exact $0 anyways so there is nothing to lose by halting the blockchain and forking from some block prior to when the attacks started" scenario. If people didn't have sufficient numbers of GPUs to mine they would go out and buy them.  There was nothing around when Bitcoin started and the network grew organically.

The point is there is no redundant engine with alt-coins.  The most vulnerable element is the public key cryptography and they all copied it line for line.   Symmetric cryptography and hashing algorithms have generally stood the test of time especially those which have the length of time "in the field" that SHA-256 does.  It is public key cryptography which has been a challenge to keep secure on any lifetime long scale.   Generally speaking key sizes have had to increase over time to remain secure from improved cryptanalysis and Moore's law.   As all altcoins (to date although that may change in the future) copy the same ECDSA code (and curve), they share the same latent flaws.  Your redundant engine scenario is more like, every engine in the world is identical and all of them on every type of plane explode simultaneously.  It doesn't really matter if you have two engines or twenty thousand engines if they all are destroyed simultaneously there is no redundancy.

In nature this monoculture threat is avoided by bio diversity.  Species evolve independently and thus there are very few scenarios that would wipe out all life on the planet.  Something someday may wipe out all humans but it is unlikely a single biological threat would kill all life.  Sometimes diseases will jump species but I don't think there is a single pathogen which can affect all lifeforms.  Even genetic evolution within the human species means a scenario which kills "most" humans is far more likely than one which exterminates the entire species.  Alt-coins (to date) are like a scenario where all lifeforms share 99.9999999% of the same DNA.  There is no bio diversity in a scenario like that.

Right.  But they'd need Litecoin, or another scrypt-based alt coin, to be around for them to be able to do that.  I think we're agreeing.

To reuse my analogy from above, taking parts from the redundant backup engine can only be done if you actually have one.

IF SHA-256 is partially compromises (i.e. faster but not many thousands of magnitudes faster) then people will simply design new ASICs which are more efficient that take advantage of that flaw.  On the other hand if the flaw is large enough that GPU becomes competitive then in the mean time people will use GPU on the Bitcoin chain.

In the highly dubious scenario that SHA-256 is eventually blown wide open where a single cpu core can generate thousands of blocks per second then the network (any network) is going to need to be hard forked to new a new hashing algorithm.  When it is hard forked it is trivial to reset difficulty to something more manageable at the same time.  For example (and I reallly doubt this will happen) but say Bitcoin in the future was forked to use Scrypt.  The developers could look at the difficulty of LTC for example and make Bitcoin's starting difficulty 10% of that.  Many LTC miners would switch over to BTC and the network would operate just fine from that hard fork point.

The far more likely failure is a failure of the public key cryptography and there is no biodiversity in crypto land.  They all use the exact same algorithm with the exact same elliptical curve so any flaw would be like a biological virus which kills not one species but all life on a planet.  There is no need for all alt-coins to use the same public key cryptography but then again if you are just making a pump and dump why waste time actually engineering some diversity.