In the long run, bitcoin will be worth $0.

[ElectricMucus]

Here's where your argument breaks down (in my opinion):

You seem to think that the Bitcoin vs. [as of yet unknown altcoin] situation can be compared to the browser history. Major innovations by a newcomer in this field more than once caused the previous market leader to lose its established position (Netscape replaced by IE, IE by Firefox, Firefox by Chrome).

However I hold that the *coin situation is more similar to the history of social networks. A major innovator, with sufficient momentum generated by word of mouth, can sometimes replace the previous market leader -- say, when Facebook destroyed Myspace's entire business model. But innovation and word of mouth do not guarantee success in this field: upon release, Google+ had huge momentum, the whole might of the world's largest Internet company behind them, and was/is arguably a much more pleasant experience than Facebook. Yet, they completely tanked in their effort to even approach the position of Facebook.

The difference is previous investment in the product. Browsers require very little of it (just install a new one), social networks a lot (all your friends are on it, you'd have to convince them to follow you). Now please be honest: in terms of investment, which of the two does a cryptocurrency resemble more?

(caveat: I admit, there's always the possibility to shift your investment from one currency to another, and this is maybe somewhat easier than shifting "investements" in a social network. However, even with the option of trading currencies, this process is not frictionless, and will therefore be a serious barrier for any competitor)

You answered it already, kind of.
Once the amount of "friction" is overcome people will switch to an improved system.

But that is also not the whole factor: Facebook took over myspace not only because it took over it's consumerbase. It started from it's own consumerbase which wasn't a subset of myspace, other people who didn't previously use social networking started to use it and only after it became larger than myspace people started the switch.
This is also why the current "alt chains" aren't a real competition to bitcoin they are essentially part of it. Real competition can only come from outside the project, on a new codebase and from a new group of people as early adopters.  I don't even think that such a new cryptocurrency would call itself a "coin" or compare itself with bitcoin for that matter.
It being competitive with bitcoin would most likely be only be apparent after the fact.

[ZephramC]

Bitcoin will become obsolete once there is a cryptocurrency which does exhibit the following properties:

• the possibility for split-second confirmed transactions
• logarithmic growth of storage space and network bandwidth for transaction data (Bitcoin is linear to exponential)
• a significant fraction of computation consists of useful work

I know the former two can be solved, only the latter one would require some new innovation.

If the new cryptocurrency will keep all the benefits and advantages of bitcoin then maybe yes. But I am afraid that some point are incompatible. (How would split-second confirmations guarantee safety against double-spending? How would logarithmic growth of storage space motivate miners to compete for it? Who will set and influence what is "useful work"?)

[ElectricMucus]

Bitcoin will become obsolete once there is a cryptocurrency which does exhibit the following properties:

• the possibility for split-second confirmed transactions
• logarithmic growth of storage space and network bandwidth for transaction data (Bitcoin is linear to exponential)
• a significant fraction of computation consists of useful work

I know the former two can be solved, only the latter one would require some new innovation.

If the new cryptocurrency will keep all the benefits and advantages of bitcoin then maybe yes. But I am afraid that some point are incompatible. (How would split-second confirmations guarantee safety against double-spending? How would logarithmic growth of storage space motivate miners to compete for it? Who will set and influence what is "useful work"?)

If I had an answer to these questions I would probably try to implement it rather than posting here.

I thought of something along the line of different difficulty targets at once, ie a transaction gets one split second confirmation first, then in the order of seconds, then minutes, hours, days...
Storage space has not really something to do with mining, immediately I thought about leaving out the "full node" concept altogether, nodes depending on other nodes to confirm transactions, mine multiple smaller tranactions into larger ones, and so on, there probably is a much more elegant solution though.
As for the useful work part, that is something very difficult, I don't really have an idea of how to tackle it, one approach would be to use things like FFT for hashing and use the currency to buy computation power. Miners engaging in some sort of contest instead/in addition to hashing based proof of work, etc... This is very much hazy.

[oda.krell]

This is also why the current "alt chains" aren't a real competition to bitcoin they are essentially part of it. Real competition can only come from outside the project, on a new codebase and from a new group of people as early adopters.  I don't even think that such a new cryptocurrency would call itself a "coin" or compare itself with bitcoin for that matter.
It being competitive with bitcoin would most likely be only be apparent after the fact.

This part I completely agree with. Something totally *different* from Bitcoin (only, it'll turn out to be not that different after all) could effectively replace it. I just caution not to make it sound like that happening to be a certainty (in the first decade or so after widespread adoption of Bitcoin). Could happen, sure. Doesn't have to, though, and I think those smart enough will see it coming in time to get out of Bitcoin.

[ajk]

while another competitor could arise it would take time for it to become competition, everyday that bitcoin lives is another day people trust it more

I honestly trust bitcoin more than banks or anything else mainly for the fact that I control the value of my wealth on paper, im well diversified in assets only and have only safety money in the bank and it would take serious trust for me to move my assets somewhere else

BTC is pretty safe from the time length it has been out (as an investment and store of wealth) and it has made many of those who have believed in it from the getco richer than imagined,

BTC was also someones baby, prior to it being released to the world it was well thought and perfected, look how far it has come, Seriously this is just the beginning

as someone who holds a big number of coins ill also say that it being worth 0 is going to take a long time to happen frankly because it would take me forever to liquidate my coins and there are those who have more than I do so they are in the same boat, not only that people who are wealthier than I want hordes of bitcoin and they cant have it, now why would I want to ditch something when someone who is richer than me wants it?

[Dabs]

If competition or some alt coin can come up with a just as secure public database or public ledger, with the not so big size the block chain requires, that might possibly take over as the internet currency.

You have to beat the core features of bitcoin, mainly the double-spend issue, and it's protected by strong crypto.

[arepo]

Chimps trade food for sex. http://news.nationalgeographic.com/news/2009/04/090407-chimps-meat-sex.html
I don't know if any species actually trades in stored value, though.

on a related note, they can be taught to do so, and they still trade it for sex.

[elebit]

I haven't read through the whole discussion here but let me just say this regarding new cryptocurrencies:

Trust in these doesn't come overnight. Bitcoin has been in development for about four years now.

When anything better comes along, people will not immediately jump all over it just as people still haven't jumped all over Bitcoins (Paypal is still way more popular for example). For many years it will simply trade against Bitcoins and slowly rise in valuation until it finally takes over. (And the early adopters will once again get filthy rich. That's because most cryptocurrencies never work out.)

So whether Bitcoins or another cryptocurrency "wins" in the long run doesn't really matter. Right now Bitcoins has all the momentum, for several very good reasons.

[sauna]

You answered it already, kind of.
Once the amount of "friction" is overcome people will switch to an improved system.

But that is also not the whole factor: Facebook took over myspace not only because it took over it's consumerbase. It started from it's own consumerbase which wasn't a subset of myspace, other people who didn't previously use social networking started to use it and only after it became larger than myspace people started the switch.
This is also why the current "alt chains" aren't a real competition to bitcoin they are essentially part of it. Real competition can only come from outside the project, on a new codebase and from a new group of people as early adopters.  I don't even think that such a new cryptocurrency would call itself a "coin" or compare itself with bitcoin for that matter.
It being competitive with bitcoin would most likely be only be apparent after the fact.

You can make the argument that the introduction of ASICs to BTC makes DIY mining much more difficult and that Scrypt as a technology is a very real competition to BTC. Any gamer with a PC can generate LTC/FTC but you need specialized hardware ATM to mine BTC, so newer users will likely start with some kind of scrypt based coin before moving onto BTC.

The reason all SHA based alts have not been a real competitor is that the specialized hardware used for btc can also be used for those alt coins making adoption very difficult.

[Peter Lambert]

You answered it already, kind of.
Once the amount of "friction" is overcome people will switch to an improved system.

But that is also not the whole factor: Facebook took over myspace not only because it took over it's consumerbase. It started from it's own consumerbase which wasn't a subset of myspace, other people who didn't previously use social networking started to use it and only after it became larger than myspace people started the switch.
This is also why the current "alt chains" aren't a real competition to bitcoin they are essentially part of it. Real competition can only come from outside the project, on a new codebase and from a new group of people as early adopters.  I don't even think that such a new cryptocurrency would call itself a "coin" or compare itself with bitcoin for that matter.
It being competitive with bitcoin would most likely be only be apparent after the fact.

You can make the argument that the introduction of ASICs to BTC makes DIY mining much more difficult and that Scrypt as a technology is a very real competition to BTC. Any gamer with a PC can generate LTC/FTC but you need specialized hardware ATM to mine BTC, so newer users miners will likely start with some kind of scrypt based coin before moving onto BTC.

The reason all SHA based alts have not been a real competitor is that the specialized hardware used for btc can also be used for those alt coins making adoption very difficult.

New users of bitcoins start by buying some, not by building a mining rig.

[sauna]

The first thing that everyone I've introduced BTC does is go online and start mining.

Hell, I sold mining rigs before I was able to sell people on buying the actual currency.

I think you are generalizing your experience way too much.

[jcyb9]

In the long run, we're all dead.