what happens when btc2 comes out?

[Steve]

So, let's supposed btc2 is introduced and is (for one reason or another) technically superior to btc...what would transpire?  Would btc collapse in value?  Would btc2 fail to gain a foothold because of the mind share that btc has already attained?

It would seem that any new crypto-cash would want to leverage the value of the existing btc economy (both the value of the money, the community of people using it, and the supporting tools and services) rather than bootstrap from scratch again.  A new superior, digital coinage could be brought into existence through some kind of exchange for bitcoins.  I'm interested to know if anyone has outlined how this might occur technically.  I would think that you would want a way of verifying that any bitcoins you turned in were permanently retired from the system (and of course you'd want a way to ensure the new coinage only came into existence through the exchange of bitcoins).  Having something like that planned for in advanced...and even having a guide to how someone could bootstrap a new digital coinage from bitcoins, might be a good idea to give people additional confidence in using bitcoins today.

When the backing of bitcoins is solely the community of people using and exchanging it, if something new and obviously better came along, it may cause the old coinage to rapidly lose value as people rushed to use the new coinage.  Though I suppose if the new coinage came into existence in a similar way to btc (which is part of what bootstraps btc's value), the new stuff would be scarce...it might be cheap initially, but you'd taking a risk that it wouldn't gain broad adoption.

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[no to the gold cult]

I think there's no need to future-proof bitcoin, as if a new cryptcoinage came out, people would decide if they want to buy it with their bitcoins like any other new commodity, or if they'd rather spend their bitcoins elswhere. The market would decide. Also it depends how advanced the use of bitcoins are by the time cryptcoin2 came out. Dollars are way inferior to bitcoins but there's a long way to go before people look to dump dollar for bitcoin.

Anyway in my opinion bitcoins are well enough designed that they wouldn't loose much value, probably would just appreciate less rapidly.

[davout]

I think there's no need to future-proof bitcoin, as if a new cryptcoinage came out, people would decide if they want to buy it with their bitcoins like any other new commodity, or if they'd rather spend their bitcoins elswhere. The market would decide. Also it depends how advanced the use of bitcoins are by the time cryptcoin2 came out. Dollars are way inferior to bitcoins but there's a long way to go before people look to dump dollar for bitcoin.

Anyway in my opinion bitcoins are well enough designed that they wouldn't loose much value, probably would just appreciate less rapidly.

+1

[kiba]

Well, doesn't the bitcoin codebase improve gradually through developers adding new features, writing competing clients, etc?

[dissipate]

Well, doesn't the bitcoin codebase improve gradually through developers adding new features, writing competing clients, etc?

My thoughts exactly. Keep the block chain and the bitcoins, upgrade the clients and the protocols.

[jgarzik]

If I were to rewrite bitcoin from scratch, I would

• use another algorithm than ECDSA
• drop the script engine entirely, and simply support one or more fixed-format data structures for transaction signing

[dissipate]

If I were to rewrite bitcoin from scratch, I would

• use another algorithm than ECDSA
• drop the script engine entirely, and simply support one or more fixed-format data structures for transaction signing

What's wrong with ECDSA?

[jgarzik]

If I were to rewrite bitcoin from scratch, I would

• use another algorithm than ECDSA
• drop the script engine entirely, and simply support one or more fixed-format data structures for transaction signing

What's wrong with ECDSA?

Patent issues lead it to be excluded from major distros like Fedora.

[TheHoboHarvester]

If that's the case, what other algorithms are you thinking of. ECDSA seems decent at what it does, that's too bad about distro restrictions though.

[genjix]

Who cares about patents once Bitcoin becomes illegal.

[ShadowOfHarbringer]

So, let's supposed btc2 is introduced and is (for one reason or another) technically superior to btc...what would transpire?  Would btc collapse in value?  Would btc2 fail to gain a foothold because of the mind share that btc has already attained?

The new bitcoin would have to be as technically superior to Bitcoin, as Bitcoin is to centralized currencies.
I mean it has to be level higher, waaaaaaaaaaaaay above everything that Bitcoin has now.

Not gonna happen, unless another Satoshi-like genius, but twice as smart as Satoshi comes along. I mean it has to be another revolution, on top of the existing revolution.

Also, simple change of algorithms/protocol upgrade is not going to convince majority of people to switch (at least it is not going to convince me for sure).
There are some psychological/market effects that are in play here, such as network effect: http://en.wikipedia.org/wiki/Network_effect

Because of the network effect, even if the new Bitcoin-2 with fairly superior protocol arrives, people won't switch. "The good is enemy of the better" or something like this.

[jkminkov]

what happened with US Dollar when Canadian Dollar came out?

one more option for profit exchanging them

[gigabytecoin]

I think that there will be space for a second crypto-currency, probably one with superior/stronger protocols but using generally the same principles. This btc2 will be to bitcoin as silver is to gold.

Hrmmm.. not so sure about that one.

If it is determined that btc2 has absolutely no flaws (probably by the bitcoin community) then bitcoin would quickly deplete to 0 dollars value. People would forget about it, and move on to btc2.

I know I would. It's business, not personal. I'm not going to stick around and keep any amount of real value in a system that is sub par.

You can still keep your life savings in a paper bag under your mattress... you'd even save on so many banking fees... but do you? No. Not if you are worth any serious amount of money. (And are legally sane.)

[ShadowOfHarbringer]

I think that there will be space for a second crypto-currency, probably one with superior/stronger protocols but using generally the same principles. This btc2 will be to bitcoin as silver is to gold.

Hrmmm.. not so sure about that one.

If it is determined that btc2 has absolutely no flaws (probably by the bitcoin community) then bitcoin would quickly deplete to 0 dollars value. People would forget about it, and move on to btc2.

I think there is no need for that. You are forgetting the power of Open Source. Because everything is open, all things can be joined & connected so that they cooperate together. A synergy.
IMHO it is possible to seamlessly move on to the new "Bitcoin 2.0", using a patched software, modified protocol & block chain that are backwards compatibile with the old chain.

Let's say that we implement something that changes the rules and the protocol from block 300.000. The old bitcoins would simply be converted to the new chain, and the beginning of the new chain would be "hooked" to the end of the old chain for security. So the new version would support both the old chain and new chain, but only new chain since block 300.000.

EDIT:
The beauty of open source is that you don't have to compete. You _always_ have the option of cooperation.

[bitcoinBull]

There might be the possibility of a bitcoin analogue, but instead of minting with CPU power it is done with bandwidth.  With this method, whoever provides more bandwidth to the network earns more coin.

[Bimmerhead]

So, let's supposed btc2 is introduced and is (for one reason or another) technically superior to btc...what would transpire?  Would btc collapse in value?  Would btc2 fail to gain a foothold because of the mind share that btc has already attained?

This is a really interesting question, because what makes bitcoin appealling versus regular old paper money, also makes it vulnerable to obsolescence.

Because everyone using Bitcoin is using them on a computer, connected to the internet, a competitive P2P currency can be downloaded by everyone very quickly.  The barriers to entry are very low.

I don't think the primary threat to btc1 comes from a technically superior btc2 though.  I think the threat comes from a more widely-accepted btc2.  If Google, Facebook, Zynga, eBay or some other middling to large internet player comes out with their own fork, it could instantly become the defacto standard.

People won't adopt btc2 because they see the brilliance of a p2p cryptocurrency, they will adopt btc2 because they want to buy a tractor on FarmVille or some cookware on eBay.  FarmVille has 50 million users.  How many people are members of the btc1 universe?  Twenty thousand?  Even if btc2 is technically identical to btc1, the miniscule btc1 economy will not be even a speedbump in the way of btc2.

[Grinder]

There might be the possibility of a bitcoin analogue, but instead of minting with CPU power it is done with bandwidth.  With this method, whoever provides more bandwidth to the network earns more coin.

ISPs would kill it in days, if not hours.

[bitcoinBull]

There might be the possibility of a bitcoin analogue, but instead of minting with CPU power it is done with bandwidth.  With this method, whoever provides more bandwidth to the network earns more coin.

ISPs would kill it in days, if not hours.

Just like they did torrents?

[Grinder]

Many ISPs throttle torrents, and if people actually got paid to find available bandwidth and fill it it would get much worse than torrents.

[bitcoinBull]

The techniques to hide/disguise the traffic would also get more crafty.  Besides that, peers on neutral ISPs with wide uplinks would have the advantage.

It makes sense, why shouldn't an ISP customer be allowed to resell bandwidth?

I'm thinking of a version of Tor that mints credits proportional to contribution.  Torcoin.