You aren't agreeing with me. I was arguing against faster confirmations, because even if they are 10 times quicker they still won't be quick enough. They'd have to be 50 times quicker; but then the cost of orphaned blocks (as described in the post before mine) would be prohibitive.

The way to get fast enough for the supermarket scenario is to accept transactions with zero confirmations. Then you only have to wait a few seconds. With that in place, the block time becomes almost irrelevant.

This is why adding the ability to blacklist bitcoins would be a mistake.

That's partly because we are at a special time in Bitcoin history. It will mature fairly soon (over the next 5 years). ASICs will plateau in power as they catch up with mainstream chip technology. Then they won't be superseded so quickly, so they'll be kept longer. They'll be produced in greater quantities. They'll become cheaper. We'll go back to more people being miners.

The way Elliptic works, they store the coins for you. You don't have the private key, they do. That's sounds logical; insurance fraud aside, they can't know how secure your computer is against keyloggers etc. The reason they are willing to offer insurance is that they have confidence in their own storage. No-one can steal the coins, not even you.

I think that kind of insurance will become quite common. The vaults that offer insurance will probably offer other services, like making regular scheduled payments. They be much like an online bank.

Also, even a 1 minute delay would be too long to wait in many situations. Especially as that would be the average and some confirmations would take longer. When I'm paying by credit card at a supermarket, if it takes as much as 10 seconds it annoys me. When I've finished and paid I don't want to hang around, waiting. So faster confirmation times don't really help unless they are a lot faster, like 50 times faster.

(I don't know whether Satoshi made this point, and don't much care.)

It might also attract miners, who would presumably continue to get a high block reward for mining, while keeping transaction fees low. In effect, the people who hold onto their coins would be subsidising, via inflation, the people who spend them. The low transaction fees would make the altcoin attractive to users and the high block rewards would make it attractive to miners, and the inflation would make it attractive to economists who believe that inflation is good provided it is low and predictable. Everyone wins.

(Apart from savers.)

That's mainly because most software written for general purpose CPUs doesn't scale well to many threads. Mining does scale well, so I'd expect hash power to increase with the number of transistors.

Total transaction fees will surely increase over time. Either by the number of transactions increasing, or the fee per transaction, or both. At the moment mining is effectively paid for by inflation. As that ends, we may find that Bitcoin transactions are no cheaper than credit card ones.

Why?

Allowing general purpose CPUs to mine effectively enables more people to mine, which distributes mining power more widely and makes 51% attacks less likely.

I'm guessing it makes it harder to run more efficiently on GPUs and ASIC.

As to the original question, I think most altcoins have features that make them superior to Bitcoin, but so far the improvement doesn't seem significant enough to derail Bitcoins momentum. With the possible exception of proof-of-stake systems, which I'm still learning about; on the face of it, it does seem to be a cheaper approach to mining and a benefit in the long term.

I think Bitcoin isn't suitable for micro-transactions. I might be willing to spend £1/month on a site I use a lot, and for a casual donation to a site I visit casually I wouldn't want to spend more than 4p. That's 0.1 mBTC, so I'd have to double it to cover transaction fees.

So getting casual/spontaneous donations in bitcoin won't work, and you need to aim for larger donations, which probably means identifying the users you provide most value for and getting donations from them, which probably means offering some kind of subscription model.

The version on this site looks too ugly for me. It needs better anti-aliasing.

The raw Bitcoin protocol is not suited for micro-transactions. That's by design. At best they take up more room in the block-chain than they are worth, and at worst they can be denial of service attacks.

(There are ways to layer micro-transactions on top of the raw Bitcoin protocol, either via a payment channel or through a third party payment processor.)

Presumably it can switch to alt-coins, though.

The transaction shows up in the block-chain. The receiver has to monitor the block-chain, looking for transactions that pay them money. This is one of the functions of wallet software.

No miners means no more transactions will be added to the block-chain, so Bitcoin would become a dead currency until/unless a new miner started again.

No. I'm saying there is demand for a global currency, and that regulation is inherently centralised, and therefore a global currency can't be regulated. A government may well succeed in creating a regulated crypto-currency, but that won't kill Bitcoin because it won't be accepted in parts of the world that don't trust the government that created it.

(I don't really hate regulation myself, by the way. I think it will happen to Bitcoin, but as a layer on top, not as part of the core protocol. Each government will regulate how bitcoin are converted to the local fiat, for example. Exchanges are already subject to "know your customer" laws, and they might be required to carry insurance against loss. Local regulations, different in each country, and there will always be countries that allow unregulated exchanges so it will always be optional.)

As I already explained, the more miners switch to the new currency, the more profit is made by the ones that don't switch. So profits will keep some mining Bitcoin, as long as the currency itself has value. If Bitcoin fails, miners switching will be a symptom, not a cause.

That's why I think you have this backwards. A government-backed crypto-currency would be a threat in the same way that an Amazon-backed one would be. Nothing to do with regulation or deep pockets to bribe miners with, just people believing that the new coins would be more spendable. If the users switch, the miners will follow.

Miners don't influence users much. People don't prefer Bitcoin because it has more miners. The influence goes the other way. Miners are paid in the coin they are mining, so if the currency is worthless (because no users) the miners won't bother with it. They might mine a few if they think it might become valuable later, but that's speculation. We've seen time after time that having miners is not enough to guarantee an alt-coin success, because it's not the miners who create the value. It's the users.

Let's keep it civil. Porn is an early adopter, if not a driver, of most new technology. Working a webcam is not the same as walking the street.

The word "classy" is not classy.

I don't understand that point. How does pre-mining save energy? What is "pos"?

I think the biggest single improvement to the Bitcoin protocol is changing the hashing algorithm to reduce the disadvantage of general purpose CPUs, so as to maximise the number of miners. Eg Litecoin.

Other than that, a coin would need a big backer. If a consortium of Amazon, Google and Microsoft all started promoting and accepting Litecoin, then I suspect focus would switch away from Bitcoin quite likely. I mention those companies because they all have server farms which they could potentially use for mining. And they are farms of of general purpose GPUs, not ASICs. They would be better at mining Litecoin than Bitcoin.

Perhaps another change would be to an inflationary policy. A lot of economists think a steady inflation rate of 1% or 2% is good for the economy, to stop people hoarding coins and to encourage investment. Without getting into the argument of whether they are right to think that, a new coin with such a policy hardwired might attract a lot of support in some circles.

Aside from that, and possibly even including that, I think Bitcoin is already so good that the "better" coins aren't sufficiently better to switch. Bitcoin has too much momentum. There's lots of venture capital going into Bitcoin. Litecoin already has several technical improvements, and it doesn't seem to be enough.

I don't follow. If some miners switch to a new coin, then the Bitcoin difficulty will drop and the remaining miners will make more coin. As long as the value of bitcoin doesn't crash, it will reach a new stable point with a lower number of miners. How is it "winner takes all"?

Which government? Do you think Europeans would be happy for their money to be regulated by America, or vice versa? Suppose Russia was the regulating government, and as part of their political argument about Ukraine they decided to black-list the coins of everyone who disageed with them? I'm British - would you trust the British government, given that in the past they used anti-terrorism laws to freeze Icelandic assets? (Hint: Iceland was not a terrorist country at the time.)

"Regulated" is a myth. It implies a central regulator, and that doesn't fit with a world currency - an internet currency.

I have a couple of supplementary questions. First, do you have similar confidence in the encryption used by Armory working wallets? As I understand it, Armory keep the live wallet file below appdata somewhere, and this will encrypt private keys (if any) but not public keys.

Second, how do you feel about password managers, especially ones like Keepass that store the password database encrypted in a local file (as opposed to ones that store online)?

My feeling is that password managers are the only sane way to avoid password reuse when so many sites and programs need passwords. And once you are using one, it makes sense to use them for everything, and it's easy to have long (30+ characters) random passwords that ought to be strong enough for Bitcoin use. Given my confidence in the passwords, I think it is OK to back-up encrypted files to sites like DropBox. Like mattbit, I am disinclined to rely on paper backups or anything kept at home.

Actually I think of my gold in grams. I don't own a whole kilogram yet.

And I agree with the original poster. If I were to write an example using bitcoin, I'd use mBTC. 1 mBTC is worth about £4.

I disagree. The more places we can spend bitcoin, the better. Each one is a step closer to the point where retailers can pay their own suppliers and employees in bitcoin. When that happens, they'll start keeping a float in bitcoin without anyone telling them to.