I am a big fan of sidechain technologies and am eagerly awaiting first usable and reasonably decentralized implementations. And I agree that Bitcoin sidechains will cause a major market shakeout in the altcoin world. I also agree that cryptocurrencies are sociological phenomenons and thus their "ecosystem" determines their value and usefulness.
But I disagree that Bitcoin sidechains will kill all altcoins.
First, there are already altcoins with a relatively advanced user ecosystem and recognized branding, like Ethereum. These will suffer less from Bitcoin sidechains - even if these implement "killer features" that originally characterized them, like turing-complete smart contracts. Ethereum, of course, can still collapse - but I guess that would be more likely because of their own technological shortcomings.
Second, Bitcoin sidechains could not harm at all altcoins that offer a more efficient security mechanism (I don't call it consensus system for a reason). Maybe Proof of Stake is too insecure - I don't know a final answer - but there may be other candidates that could compete with Bitcoin's Proof of Work and require less energy. And Bitcoin won't change its security system fastly.
Third, and I think this is a major problem of your thesis: The human mind is able to recognize several major brands for many applications (about 5-7 as a maximum). If we compare cryptocurrencies with cellphones, maybe Bitcoin will stay Apple forever, but another coin could try to become Samsung. Being an early adopter of an altcoin - even without pre- or instamining - would then be still attractive. So the incentive to create - or support - a successful altcoin would still be there. It could "improve" on every perceived or real deficiency of Bitcoin, even minor ones like a deficient presence in certain countries or regions.
Fourth, also Bitcoiners should be happy that altcoins exist for experimentation, because possible security problems in pegged sidechains would impact in its reputation. Imagine Ethereum was created as a Bitcoin sidechain. What would have happened at the TheDAO fiasco? It would have been a catastrophic event, similar to the MtGox collapse, even if the Bitcoin main chain was not affected. In this case, the complete separation of ETH regarding BTC benefitted BTC, because it impacted only on ETH's reputation, and the alt-chain could decay in value with respect to it.
Fifth: If Bitcoin was a monopoly, I fear that early adopters would become a sort of "permanent nobility", and a Bitcoin-dominated economy would become an oligarchy. That is diametrally opposed to what I like on cryptocurrencies, and so if there is danger that this could occur, I would invest in competitors (altcoins) for "ideological" reasons. And I think I'm not the only one.
BTW: Why is there no "No" in the poll? I regard this as a "shadow" on a otherwise interesting topic.
Topic: Will Bitcoin sidechains kill all altcoins? (Read 295 times)
No altcoin can compete with Bitcoin in economic fundamentals. Bitcoin has the first-mover advantage, the network effect, the famous brand name, and most importantly: Large numbers of people, rich and poor, of a thousand opinions and religions, are each and all forcibly united by their common selfish interest in Bitcoin. Bitcoin isn’t only a technology: It is a sociological phenomenon. That is Bitcoin’s economic foundation, and a power no altcoin can hope to match.
we don't know what could happen in future. Maybe bitcoin will become goverments instrument and everything will be controlled on it. Like the Internet became. Of course, you could use Tor or VPN but then you must say "good bye" for movies, games, videos and others things which needs high speed internet connection.
So, if Bitcoin will move in such way, we need something else. Monero for example.
also, we need some system for commiting open source project without showing real identity. Because, i can't be sure that "bitcoin team" (or any other crypto team) are not corrupted by special services.
Bitcoin is still the most popular type of crypto in the web. So that means bitcoin can brush off all these miscellaneous currencies.
No altcoin can compete with Bitcoin in economic fundamentals. Bitcoin has the first-mover advantage, the network effect, the famous brand name, and most importantly: Large numbers of people, rich and poor, of a thousand opinions and religions, are each and all forcibly united by their common selfish interest in Bitcoin. Bitcoin isn’t only a technology: It is a sociological phenomenon. That is Bitcoin’s economic foundation, and a power no altcoin can hope to match.
Thus, altcoins compete with either scam glitzy marketing, or features and technical advances. I will here focus on the latter.
As an economic giant, Bitcoin needs to be technologically conservative. People rely on Bitcoin to safekeep their life’s savings! Many have considerable fortunes held in Bitcoin. So Bitcoin can’t take risks on unproved ideas, however promising they may seem. It also can’t hardfork on demand, if needed to implement features which could not otherwise be added. Thus if you want a cryptocurrency which implements radical new ideas and experimental features, you can only get that with an alt.
This whole situation will change with sidechains (whether Drivechains or otherwise). A sidechain allows implementation of almost any imaginable feature, backed by genuine Bitcoin. Turing-complete smart contracts? Unlinkable transactions secured with zero-knowledge proofs? A coin which sings like a bird each morn at dawn, and changes hues with the days of the week? Do it with pegged Bitcoin, on a sidechain.
If and when that becomes a reality, no one of sound mind will buy into an altcoin—and no one with sound motives will build a new altcoin. People with new ideas will simply create a sidechain. People who want new features will simply use a sidechain.
Absent the only legitimate means for an alt to compete against Bitcoin—features—the only people left in alts will be speculators, scammers pushing hot ICOs, and fools buying into hot ICOs.
When that happens, will all altcoins crash and burn?
Corollary question: How much higher will the value of Bitcoin rise, when the capital currently in alts starts flowing into Bitcoin sidechains?
Note: For technical reasons, I am not thrilled by the proposed implementation of Drivechains. But the technical discussion is not here relevant, if Drivechains become Bitcoin’s substantial implementation of sidechains. Any which way, sidechains are coming.
Disclosure: I currently hold a substantial position in an altcoin. I bought into it for ideological reasons (privacy), not for speculation. I paid bitcoin for it. At present, I am watching it slowly slide away into oblivion against Bitcoin. I will not say which one, because my purpose here is not to bash any particular coin—especially not one in which I myself am invested! Rather, I am questioning the future viability of altcoins altogether.
Thus, altcoins compete with either scam glitzy marketing, or features and technical advances. I will here focus on the latter.
As an economic giant, Bitcoin needs to be technologically conservative. People rely on Bitcoin to safekeep their life’s savings! Many have considerable fortunes held in Bitcoin. So Bitcoin can’t take risks on unproved ideas, however promising they may seem. It also can’t hardfork on demand, if needed to implement features which could not otherwise be added. Thus if you want a cryptocurrency which implements radical new ideas and experimental features, you can only get that with an alt.
This whole situation will change with sidechains (whether Drivechains or otherwise). A sidechain allows implementation of almost any imaginable feature, backed by genuine Bitcoin. Turing-complete smart contracts? Unlinkable transactions secured with zero-knowledge proofs? A coin which sings like a bird each morn at dawn, and changes hues with the days of the week? Do it with pegged Bitcoin, on a sidechain.
If and when that becomes a reality, no one of sound mind will buy into an altcoin—and no one with sound motives will build a new altcoin. People with new ideas will simply create a sidechain. People who want new features will simply use a sidechain.
Absent the only legitimate means for an alt to compete against Bitcoin—features—the only people left in alts will be speculators, scammers pushing hot ICOs, and fools buying into hot ICOs.
When that happens, will all altcoins crash and burn?
Corollary question: How much higher will the value of Bitcoin rise, when the capital currently in alts starts flowing into Bitcoin sidechains?
Note: For technical reasons, I am not thrilled by the proposed implementation of Drivechains. But the technical discussion is not here relevant, if Drivechains become Bitcoin’s substantial implementation of sidechains. Any which way, sidechains are coming.
Disclosure: I currently hold a substantial position in an altcoin. I bought into it for ideological reasons (privacy), not for speculation. I paid bitcoin for it. At present, I am watching it slowly slide away into oblivion against Bitcoin. I will not say which one, because my purpose here is not to bash any particular coin—especially not one in which I myself am invested! Rather, I am questioning the future viability of altcoins altogether.
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