Is competition healthy for Bitcoin?

[BlackBison]

This is literally the worst analogy I've heard yet. Congrats.

Better the worst analogy than the worst prediction: you have been saying LTC will crash for months now. Hows that working out for you?

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[mccorvic]

This is literally the worst analogy I've heard yet. Congrats.

Better the worst analogy than the worst prediction: you have been saying LTC will crash for months now. Hows that working out for you?

Lol. I haven't said LTC would crash.  I've just said it was a terrible idea.

Now LTCers are just making stuff up about me because they can't argue a use for their BS.

[BlackBison]

Apologies if I made an error there mccorvic, there are hundreds of anti-LTC dead bodies lying by the wayside over the last 12 months so excuse me if I can't remember exactly what you said 

[mccorvic]

Apologies if I made an error there mccorvic, there are hundreds of anti-LTC dead bodies lying by the wayside over the last 12 months so excuse me if I can't remember exactly what you said 

Eh, maybe you mistook one of my claims that if LTC reaches any REAL modicum of success, i.e. more than just emo-sad GPU miners use it, then the whole SYSTEM will crash. BTC and LTC both.  Though I don't know if I specifically ever used the word crash.

[BlackBison]

How can you possibly think that mccorvic? I just cannot believe hardly anyone gets how 2 competing cryptos will likely lead to faster progress through competition etc. Of course there are negatives, but I believe 2 competing dev teams will push the crypto concept much further much faster, than just a potentially lumbering, arrogant btc team with no real incentive to innovate or take any risks that might jepoardize their own personal btc treasure hoards.

[amincd]

So world of warcraft gold and eve online currency and second life lindens and such all become more and more valueless as more and more such things come into existence?

No, because WOW gold and Second Life Lindens are different currencies for different virtual worlds. Bitcoin variants are almost clones of Bitcoin, and would have the same use as bitcoins, thus increasing the bitcoin-like-currency money supply.

It would be like a company creating a WOW gold II, that can be used as currency in the WOW MMOG, and people accepted it. It would effectively double the supply of WOW gold, and reduce the value of each gold coin. If parties could create unlimited numbers of WOW gold variants that could be used in the WOW world, and the WOW servers accepted them as of equal value, then the economy would experience rapid inflation, and the currency would become less useful, if not totally useless.

[JoelKatz]

It would be like a company creating a WOW gold II, that can be used as currency in the WOW MMOG, and people accepted it. It would effectively double the supply of WOW gold, and reduce the value of each gold coin. If parties could create unlimited numbers of WOW gold variants that could be used in the WOW world, and the WOW servers accepted them as of equal value, then the economy would experience rapid inflation, and the currency would become less useful, if not totally useless.

Unless it also brought in new players or increased interest from existing players. It's all about supply and demand.

More importantly, I think we all know that Bitcoin's key to long-term success is increased adoption as a means of exchange. Deflation harms that because it means that prices need more frequent adjustment. A small amount of inflation (assuming it is gradual and small, rather than sudden and huge) would actually be a good thing. It would also help to drive out speculation, which would decrease the risk of a bubble collapse. Collapses are disastrous to adoption because they make Bitcoin risky as a means of exchange. So anything that drives off speculation is good for Bitcoin's long-term success.

[amincd]

Unless it also brought in new players or increased interest from existing players. It's all about supply and demand.

That's true, but I think promoting the adoption of new bitcoin-like blockchains might reduce interest, because it would undermine interest in holding bitcoin-like-currency in general.

More importantly, I think we all know that Bitcoin's key to long-term success is increased adoption as a means of exchange. Deflation harms that because it means that prices need more frequent adjustment.

I think it's an open question whether deflation harms its success. Deflation creates speculative interest, which increases the number of bitcoin holders, and increases the market cap, which increases the purchasing power of the bitcoin holding economy (which creates merchant interest).

I also think it's an open question whether price deflation makes a currency less useful due to volatility. If the rate is predictable, it can be planned in.

[mccorvic]

Unless it also brought in new players or increased interest from existing players. It's all about supply and demand.

That's true, but I think promoting the adoption of new bitcoin-like blockchains might reduce interest, because it would undermine interest in holding bitcoin-like-currency in general.

This is absolutely correct.  No one will want to participate in peer-2-peer currency, or whatever phrase you like, if they know any child can make an "alt-chain" whenever they want that can effectively devalue their savings. 

[markm]

The Galactic Milieu game has lots of currencies.

Take a look at http://galaxies.mygamesonline.org/digitalisassets.html

Are you suggesting that if the Martians had not given blockchain technology to the Brits, the Canucks, General Mining Corp, General Retirement Funds, whoever is behind bitNicKeLs, and the (galactic) United Nations the Martian BotCoin would be worth seven or more times as much?

The Brits, Canucks, United Nations and so on would have happily driven up the value of the Martians' currency for them instead of promoting their own?

Au contraire, I think the players who play the ministers of finance or whatnot that engaged in all that stuff are correct that it is the very fact that each currency has huge reserves of many other currencies available with which to back their coins that helps them all be valuable.

If no one backed bitcoins with any dollars or yen or botcoins or BBQcoins or Litecoins or gold or platinum or nickel or whatever, bitcoin likely would not be worth as much as it is worth today.

-MarkM-

[bitcool]

This is absolutely correct.  No one will want to participate in peer-2-peer currency, or whatever phrase you like, if they know any child can make an "alt-chain" whenever they want that can effectively devalue their savings. 

The field of alt-chain coins is littered with dead bodies. If one can survive, something must be done right.

You too can create a alt-chain and try to devalue my savings  ...  let's see how that goes.

[cbeast]

The Galactic Milieu game has lots of currencies.
If no one backed bitcoins with any dollars or yen or botcoins or BBQcoins or Litecoins or gold or platinum or nickel or whatever, bitcoin likely would not be worth as much as it is worth today.

It takes many ingredients to make a 4-course meal. Those other assets are not as liquid as Bitcoin, but I would not say they are all desireable ingredients, unless you are French.  

[mccorvic]

This is absolutely correct.  No one will want to participate in peer-2-peer currency, or whatever phrase you like, if they know any child can make an "alt-chain" whenever they want that can effectively devalue their savings. 

The field of alt-chain coins is littered with dead bodies. If one can survive, something must be done right.

You too can create a alt-chain and try to devalue my savings  ...  let's see how that goes.

Well, thus far NO alt-chain has survived.  If you think LTC has already achieved any success level outside of the equivalent of a penny-stock you be crazy.  I'm talking about IF LTC reaches any main stream ears.  People will be able to extrapolate and come to the logical conclusion.

Again, LTC offers nothing new or interesting over BTC.  It is just in the midst of a PR surge by a few people wanting to get the price up a bit so they can swap back to BTC.  If you think the faster-but-less-secure confirmations is the reason to go to LTC, then explain why you won't dump and switch to the next coin that is even faster than ltc. Or dump and switch to the next alt-coin that is even faster than the last?

[markm]

Go GeistGeld! Ten second blocks! Or maybe its 15 seconds. Something like that.

And merged mined, so unlike Litecoin it can share/recycle the same hashing power used by Bitcoin.

If only I had a few more gigs of RAM...

-MarkM-

[mccorvic]

This is absolutely correct.  No one will want to participate in peer-2-peer currency, or whatever phrase you like, if they know any child can make an "alt-chain" whenever they want that can effectively devalue their savings.  

The field of alt-chain coins is littered with dead bodies. If one can survive, something must be done right.

You too can create a alt-chain and try to devalue my savings   ...  let's see how that goes.

Well, thus far NO alt-chain has survived.  If you think LTC has already achieved any success level outside of the equivalent of a penny-stock you be crazy.  I'm talking about IF LTC reaches any main stream ears.  People will be able to extrapolate and come to the logical conclusion.

Again, LTC offers nothing new or interesting over BTC.  It is just in the midst of a PR surge by a few people wanting to get the price up a bit so they can swap back to BTC.  If you think the faster-but-less-secure confirmations is the reason to go to LTC, then explain why you won't dump and switch to the next coin that is even faster than ltc. Or dump and switch to the next alt-coin that is even faster than the last?

Bitcoin is FOSS.

The "value pie" only has a limited size and any investment has the potential to inflate/devalue any other investment, as long as there is even a tiny amount of liquidity between them. E.g.: even Facebook stock could divert some US dollars that might otherwise be spent on physical Silver. What a lot of people seem to be hoping for is that Bitcoin will provide an enormous seigniorage opportunity for all us "early adopters" to basically 'steal' wealth from other stores of value.

I.e.: some people hope that Bitcoin will pop other people's bubbles to make more room for their own.

I think the ZH crowd refer to it as being "high on Hopium".

This is what makes Bitcoin sound so stupid and naive to outsiders! However, Bitcoin's real power lies in the fact that it can be freely copied/cloned/emulated/etc... until perhaps, one sunny day, a robust ecosystem will develop where most of the time it doesn't even matter what policy a particular currency/alt-coin/fork employs because there are so many of them that it averages-out.

I think the advantage in Bitcoin being FOSS isn't that infinite clones can be created, but rather the the public can see how it works and that it cannot have secret changes made to it the can weaken the system.

I can't follow the logic that having a ton of alt-coins somehow make everything even out.  No one will want to try and manage 15 different wallets, on different exchanges, and watch the prices of each as one temporarily becomes more popular.  No one except wanna be day-traders at least.  If you're goal is to just create a trading mini-game for yourself with no RL consequences, then yea, that'd work.  If your goal is for our little digital currency to be actually useful, used, and valued then this game is counter-productive. 

I think an apt analogy is aluminium.  When first used, it was very rare and very very valuable.  That was until a way to create aluminium from aluminum oxide and the value plummeted as the potential supply exploded.  Aluminium only has value now for its actual, practical uses.  BTC does not have the advantage of having a particle use.  LTC, at best, is attempting to prove all the haters right when they say "BTC has no value as there is nothing backing it."

[markm]

Thats incorrect, it has lots of stuff backing it.

The order books on umpteen exchanges, for one.

That alone adds up to a whole lot of dollars, yen, litecoins, ppcoins, botcoins, britcoins, GBP, etc etc etc.

You might as well say dollars have no value, or GBP has no value.

You might be right, but people go on buying bread, hookers and blow with the stuff regardless of your 'wisdom'.

-MarkM-

[mccorvic]

Thats incorrect, it has lots of stuff backing it.

The order books on umpteen exchanges, for one.

That alone adds up to a whole lot of dollars, yen, litecoins, ppcoins, botcoins britcoins, GBP, etc etc etc.

You might as well say dollars have no value, or GBP has no value.

You might be right, but people go on buying bread, hookers and blow with the stuff regardless of your 'wisdom'.

-MarkM-

Wow, you kinda just stop reading and or didn't really think before you posted.  I'll wait for someone to actually respond to what I wrote.

[markm]

Okay then here's re the fifteen wallets:

Ripple.

No one need care what currencies other people use, they just pay with what they use and get paid with what they use, automagically.

-MarkM-

[mccorvic]

Okay then here's re the fifteen wallets:

Ripple.

No one need care what currencies other people use, they just pay with what they use and get paid with what they use, automagically.

-MarkM-

Ripple is a terrible idea for a multitude of reasons.  Even then, it still doesn't do anything to address the issue we're debating.  No one would give me an IOU for a box of stale Crunch Berries even if I claimed it was the currency I wanted to use.

[markm]

Okay then here's re the fifteen wallets:

Ripple.

No one need care what currencies other people use, they just pay with what they use and get paid with what they use, automagically.

-MarkM-

Ripple is a terrible idea for a multitude of reasons.  Even then, it still doesn't do anything to address the issue we're debating.  No one would give me an IOU for a box of stale Crunch Berries even if I claimed it was the currency I wanted to use.

Of course they would, there would be nothing else they could usefully do with such an IOU, giving it back to you, its issuer, would be the only way to get rid of the darn thing. So whenever they want something from you, they fork over their dollars or bitcoins or whatever, it Ripples through the system, and you end up receiving the stale Crunch Berries IOUs your mom and pop or whoever had trusted you for. If your Crunch Berry currency you issue is the only currency you accept its the only darn thing you can end up with when someone tries to buy something from you as you chose it as what you wanted to use as your currency.

-MarkM-