Bitcoin will one day be superseded by a technically superior NuCoin. What then?

[cbeast]

Blah blah, Nucoin3, blah blah Nucoin4.

[ericwang]

TL/DR: The blockchain will be preserved.

Truth. Let's say NuCoin comes out and is technically way better than Bitcoin, and starts a new blockchain. What will happen? People will fork NuCoin into NuCoin2, which is exactly like NuCoin except it preserves the original Bitcoin blockchain. Because the vast majority of crypto early adopters are heavily invested in the Bitcoin block chain, NuCoin2 will win out over NuCoin.

Good Point. This is very much likely to happen for today's internet. The biggest one with the most users is winning everything they want, just like what is happened on Chinese company Tencent, whatever new game becoming popular, Tencent just integrate a similar one into their QQ platform and easily surpass the original one.

[hiltonizer]

We're seeing it now with Dogecoin

[JorgeStolfi]

Let's say NuCoin comes out and is technically way better than Bitcoin, and starts a new blockchain. What will happen? People will fork NuCoin into NuCoin2, which is exactly like NuCoin except it preserves the original Bitcoin blockchain. Because the vast majority of crypto early adopters are heavily invested in the Bitcoin block chain, NuCoin2 will win out over NuCoin.

Large Bitcoin holders may do that and of course they will want their "reborn Bitcoin" to remain the dominant currency.  But why would the rest of the rest world follow suit?  People who buy digital currencies only for trade will not care about tradition or the welfare of bitcoiners; they will consider any currency that the merchant is willing to accept, and choose the one that has the smallest spread, simpler/faster protocol, was recommended by Oprah, etc.

It is also possible that a big bank or a consortium of merchants (say Microsoft, Apple, Walmart, Virgin, ...) will launch their own crypto currency iCoin, initially offering a 5% discount for purchases made with it. Of couse they will start off with a large stash of pre-mined iCoins.  Why is this unlikely to happen?

[Romyen]

Let's say NuCoin comes out and is technically way better than Bitcoin, and starts a new blockchain. What will happen? People will fork NuCoin into NuCoin2, which is exactly like NuCoin except it preserves the original Bitcoin blockchain. Because the vast majority of crypto early adopters are heavily invested in the Bitcoin block chain, NuCoin2 will win out over NuCoin.

Large Bitcoin holders may do that and of course they will want their "reborn Bitcoin" to remain the dominant currency.  But why would the rest of the rest world follow suit?  People who buy digital currencies only for trade will not care about tradition or the welfare of bitcoiners; they will consider any currency that the merchant is willing to accept, and choose the one that has the smallest spread, simpler/faster protocol, was recommended by Oprah, etc.

Not many merchants are likely to accept a new coin because it will have higher volatitity. You can see that by comparing the price fluctuations of bitcoin against fiat to those of altcoins. The altcoins have much higher volatility. This is still an obstacle for bitcoin, but a much bigger obstacle for altcoins. You also have a network effect: merchants won't accept a new coin because other merchants or customers aren't using it either. I see bitcoin eventually being displaced by another coin, but it will take much longer than you think. I can't predict how long, but the transition won't happen overnight.

[go1111111]

Large Bitcoin holders may do that and of course they will want their "reborn Bitcoin" to remain the dominant currency.  But why would the rest of the rest world follow suit?  People who buy digital currencies only for trade will not care about tradition or the welfare of bitcoiners; they will consider any currency that the merchant is willing to accept, and choose the one that has the smallest spread, simpler/faster protocol, was recommended by Oprah, etc.

The average user will follow suit with what the large Bitcoin holders steer them toward because they won't have a reason to care either way. They'll likely prefer the Bitcoin community because it has a track record of trustworthiness. People who speculate and trade on currencies are a very small % of the population, and don't really matter in terms of adoption.

Merchants will prefer something supported by the Bitcoin community because it has a reputation of being supported by serious devs who care about creating a currency for the long term, and it will have the most developer support (Bitcoin developers are generally invested in the Bitcoin blockchain).

It is also possible that a big bank or a consortium of merchants (say Microsoft, Apple, Walmart, Virgin, ...) will launch their own crypto currency iCoin, initially offering a 5% discount for purchases made with it. Of couse they will start off with a large stash of pre-mined iCoins.  Why is this unlikely to happen?

I think it is likely to happen, but I don't think it will gain traction because the message from the Bitcoin community that Bitcoin is the "open" alternative free from corporate or government control is simple and appealing enough to the masses.

[thinkloop]

Let's say NuCoin comes out and is technically way better than Bitcoin, and starts a new blockchain. What will happen? People will fork NuCoin into NuCoin2, which is exactly like NuCoin except it preserves the original Bitcoin blockchain. Because the vast majority of crypto early adopters are heavily invested in the Bitcoin block chain, NuCoin2 will win out over NuCoin.

It is possible, even if unlikely, that a flaw is discovered in the block chain itself, rendering existing transactions untrustworthy.

[Romyen]

TL/DR: The blockchain will be preserved.

Truth. Let's say NuCoin comes out and is technically way better than Bitcoin, and starts a new blockchain. What will happen? People will fork NuCoin into NuCoin2, which is exactly like NuCoin except it preserves the original Bitcoin blockchain. Because the vast majority of crypto early adopters are heavily invested in the Bitcoin block chain, NuCoin2 will win out over NuCoin.

Duplicating the bitcoin block chain isn't likely to happen, and if it does, it will fail. A coin technically superior to bitcoin, in some people's opinion, won't be techically superior to others. Since there won't be universal agreement, bitcoin will not dissapear, but bitcoin holders will start out with equal amounts of bitcoin and nucoin2. There is no incentive to do that, because it doesn't reward early adopters. People will simply ignore nucoin2 and stay with nucoin1. There are already altcoins out there that some people think are better than bitcoin. Why haven't any of these coins duplicated the bitcoin blockchain? Because the incentive doesn't exist.

[go1111111]

A coin technically superior to bitcoin, in some people's opinion, won't be techically superior to others. Since there won't be universal agreement, bitcoin will not dissapear,

Because of network effects, there will likely be only one dominant coin. Whether or not other coins disappear completely or limp along as someone's hobby doesn't matter much. This doesn't require universal agreement. I'm sure lots of people today disagree that facebook is better than myspace -- doesn't matter, facebook still won.

but bitcoin holders will start out with equal amounts of bitcoin and nucoin2. There is no incentive to do that, because it doesn't reward early adopters. People will simply ignore nucoin2 and stay with nucoin1.

Early Bitcoin adopters, when they see that nucoin1 or nucoin2 will likely be the dominant coin, will back nucoin2 because they are heavily invested in the nucoin2 blockchain. The incentive comes from knowing that Bitcoin will be replaced, and realizing that they are much better off if it gets replaced by nucoin2 rather than nucoin1.

There are already altcoins out there that some people think are better than bitcoin. Why haven't any of these coins duplicated the bitcoin blockchain? Because the incentive doesn't exist.

The creators and early investors in new coins haven't duplicated their new coin's blockchains because with their current block chain they are the early adopters and they stand to gain from pumping it. They know their target market for their new coin consists mostly of people who missed out on Bitcoin's early days, and are hoping to get rich off of an altcoin. These coin creators see that they don't need to create a coin that threatens Bitcoin to take advantage of their target market. It's easier to make money with an altcoin by starting a new chain and convincing other people that if they invest early in the new coin they'll be rich.

The idea is that early investors in Bitcoin will be the ones to create a fork of RandomAltCoin, if they think RandomAltCoin has a legitimate shot of taking over. The reason this hasn't happened is that no altcoin currently offers any significant innovation over Bitcoin. Bitcoin early adopters know that they have nothing to worry about.

[iluvpie60]

Bitcoin cannot claim eternal divine perfection, so inevitably there will arise a "NuCoin" that has the same nice properties but is technically better in some respect -- and will therefore replace Bitcoin as  the preferred medium of payment for internet commerce.   

What will happen to the Bitcoin then? Owners of course would like to swap them for equal worth of NuCoins.  But who will agree to the swap?

I'm sure there are dozens of forums superior to Craigslist from a technical perspective. Yet Craigslist is the website with the 11th greatest traffic in the US, so it remains on top. Craigslist is a stupidly simple website... yet it has lots of traffic, and that perpetuates it's popularity. Furthermore, Craigslist's users are not financially bound to support it-- anyone who owns a significant amount of Bitcoin is.

Of course Bitcoin cannot claim "divine perfection," but it does have a first to market advantage. And given the type of painful transition a major switch would be, there would have to be a far superior replacement currency.

I'm curious (no sarcasm intended):

What new, superior quality will this new money have?

Note: I believe the "swap" you speak of would dictate a centralized authority (automatically making the new currency inferior), unless it was built off the existing Bitcoin blockchain.

Great post Peter R.

Uhh... Litecoins/Feathercoins/Namecoins/Peercoins actually already outclass Bitcoin in every single category. Less energy used to verify transactions(currently Bitcoin takes 30 USD to 40 USD to verify, insane and stupid as hell)/faster transaction verifications/less fees/less miners required to do the work/larger quantities/ETC.

next 12 to 18 months ppl will be saying BTC ROFL.

[ZephramC]

I think:
1) For this "NuCoin" (or new-coin) to succeed it will have to be dramatically superior. No only better or only superior, but massively better. Otherwise the tradition and widespread adoption of Bitcoin would be Bitcoin's great advantage. (If you want to defeat an army you have to overpower it at least 2:1, if not more. If you want to steal a girl from another guy you have to be not "just a little bit better" mate but dramatically better.)
2) The switch will be gradual process, it won't happen overnight or in few weeks. (Technology has made things faster, but some processes in human society are still slow.)
3) If there is some substantial weakness discovered (or substantial feature missing) discovered  in Bitcoin such as possibly lading to overnight switch, it will probably be incorporated into Bitcoin.
4a) Those who will be among the first to recognize and adopt superior NuCoin will gain tremendously. Those who will join after that will gain much. Those who will go with the masses will neither gain nor loose and those sticking with dying Bitcoin will of course loose.
4b) There will be many seemingly superior concepts, many NuCoins claiming to be the case (4a). Most of them, if not 99% will be scams, failures, partial failures or coins only for limited niche adoption. Those who will wrongly believe those "big chances" and "marvelous new superior concepts" will loose when they hit dead end.
4c) Nevertheless, there is big space for another alt-coins coexisting with Bitcoin, serving some more specific applications (micro-transactions, anonymization, comune-like economics, speculation, specific markets, etc.)

[pjviitas]

The "nucoin" that gets adopted won't have anything to do with its superiority.  It will prob get adopted when someone tries something stupid with bitcoin.   Trying to corner the bitcoin market or attacks on the network comes to mind.

[Romyen]

A coin technically superior to bitcoin, in some people's opinion, won't be techically superior to others. Since there won't be universal agreement, bitcoin will not dissapear,

Because of network effects, there will likely be only one dominant coin. Whether or not other coins disappear completely or limp along as someone's hobby doesn't matter much. This doesn't require universal agreement. I'm sure lots of people today disagree that facebook is better than myspace -- doesn't matter, facebook still won.

but bitcoin holders will start out with equal amounts of bitcoin and nucoin2. There is no incentive to do that, because it doesn't reward early adopters. People will simply ignore nucoin2 and stay with nucoin1.

Early Bitcoin adopters, when they see that nucoin1 or nucoin2 will likely be the dominant coin, will back nucoin2 because they are heavily invested in the nucoin2 blockchain. The incentive comes from knowing that Bitcoin will be replaced, and realizing that they are much better off if it gets replaced by nucoin2 rather than nucoin1.

There are already altcoins out there that some people think are better than bitcoin. Why haven't any of these coins duplicated the bitcoin blockchain? Because the incentive doesn't exist.

The creators and early investors in new coins haven't duplicated their new coin's blockchains because with their current block chain they are the early adopters and they stand to gain from pumping it. They know their target market for their new coin consists mostly of people who missed out on Bitcoin's early days, and are hoping to get rich off of an altcoin. These coin creators see that they don't need to create a coin that threatens Bitcoin to take advantage of their target market. It's easier to make money with an altcoin by starting a new chain and convincing other people that if they invest early in the new coin they'll be rich.

The idea is that early investors in Bitcoin will be the ones to create a fork of RandomAltCoin, if they think RandomAltCoin has a legitimate shot of taking over. The reason this hasn't happened is that no altcoin currently offers any significant innovation over Bitcoin. Bitcoin early adopters know that they have nothing to worry about.

Sunny King seems to believe that peercoin is a significant improvement over bitcoin. The genesis block for peercoin is less than 5 years younger than the genesis block for bitcoin, and he could have simply migrated the bitcoin blockchain rather than starting a new one from scratch. All adopters of bitcoin would have been included. However, he doesn't have an incentive to do that, and he acted rationally by starting from scratch, given his belief, because he and other early adopters of peercoin stood to gain more by starting a new blockchain. That is true regardless of whether Sunny King himself was an early adopter of bitcoin. He can still have his bitcoins, and get richer off peercoins. The same is true for other altcoins, regardless for whether they are pump-and-dump scams. Some altcoin developers might or might not have been early adopters of bitcoin, but that point isn't even relevent, because it doesn't change their incentives. If some altcoin replaces bitcoin as the dominant player, the process will be slow, giving early adopters of bitcoin plenty of time to jump ship and stay rich.