I've been lurking here for a while but finally registered because I'm interested in discussing the economics of the alternative cryptocurrencies. I've been reading this thread on litecoin:
https://bitcointalk.org/index.php?topic=167028.20I'm wondering about how much space there is for a plurality of competing cryptocurrencies. In the case of gold and silver, even though one commodity is more valuable than the other, they are both still valuable. Further, in the case of fiat currency, there are more and less valuable currencies, yet they all have some intrinsic value. So, similarly, with cryptocurrencies, is there room for there to be competing currencies with intrinsic value, or will the dominant cryptocurrencies wipe out the value of the less favored ones?
My current opinion is that there is intrinsic value to each cryptocurrency, and this intrinsic value is not dependent on the currencies dominance in the marketplace. Specifically, the amount of hashing that has been devoted to a given cryptocurrency represents an investment of processing power in that currency that adds value to the currency. So even if another cryptocurrency is superior, if an older currency has a significant amount of processing "equity" invested in it, it would still represent a tremendous store of intrinsic value. And perhaps a cryptocurrency would acquire additional intrinsic value when it meets a hashing threshold that protects it from a 51% attack.
This is probably all well-troden ground at this point, but I guess that's why I'm restricted to posting in the newbies section. I would love to hear anyone's thoughts on these or related matters.
And a sincere thanks to all of the providers of this forum, it's a wonderful resource, and I'm grateful to be able to a (tiny) part of it.
