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Question: Would Bitcoin collapse if a Cryptocurrency that incorporated derivatives was created?  (Voting closed: June 22, 2011, 09:51:56 PM)
Yes, within Days - 0 (0%)
Yes, within Months - 1 (16.7%)
Yes, within a Year - 0 (0%)
No, Cryptoderivatives = fail - 1 (16.7%)
No, They would coexist - 3 (50%)
Depends, on how large bitcoin is when this happens - 1 (16.7%)
Total Voters: 6

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Author Topic: Cryptocurrency with Cryptoderivatives  (Read 856 times)
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June 19, 2011, 09:51:56 PM

Supposing such a currency is technologically feasible, could Bitcoin survive the creation of a competing alternative currency that incorporated cryptoderivatives? Why did you pick your answer?

Recent security breaches at Mt. Gox have shown how vulnerable bitcoin is to counterparty risk at exit points (the risk that Mt. Gox or other another counterparty loses your money, the high fees you pay to insure Mt. Gox against this risk).
If a cryptocurrency with derivatives was created, the security of Bitcoin could be duplicated in derivatives market that allowed significant speculation on future price movements within a p2p system.
The only counterparty risk would be the integrity of the block chain (which exists in the current system already).

For a proposal on one way in which cryptoderivatives might be set up, see

In a Society in which there is no law, and in theory no compulsion, the only arbiter of behaviour is public opinion. But public opinion, because of the tremendous urge to conformity in gregarious animals, is less tolerant than any system of law. When human beings are governed by "thou shalt not", the individual can practise a certain amount of eccentricity: when they are supposedly governed by "love" or "reason", he is under continuous pressure to make him behave and think in exactly the same way as everyone else. - George Orwell
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