What Litecoin means for Bitcoin (and crypto in general) once it's on Mt.Gox

[crazy_rabbit]

Mods: this is about Bitcoin- even though Litecoin is in the title.

Gox has made it official that they will be adding Litecoin support once the new trading engine has been rolled out. Regardless of what people may think of Litecoin, this is a big step forward towards building a mostly-crypto world.

Currently arbitrage opportunities abound between exchanges for those with very large pockets who can afford to get, and leave large amounts of fiat on each exchange that they trade on. It's nearly impossible to move non-btc currencies between exchanges in anything resembling an efficient manner.

What Litecoin is going to open up is a more efficient arbitrage system between exchanges. It wont solve the issue of getting Fiat into/out of the exchanges, but it will allow traders to move more capital quickly between exchanges for profit.

What this means though is that long term our market system will become much more efficient. It will help decentralize exchanges and it will help stabilise prices. It will also give crypto an order of magnitude more privacy (which might be another regulation issue) as it effectively gives users a chance to break the privacy issue of the block chain. Moving from one coin to another will effectively erase the link between the origin and destination of your bitcoin (with some caveats) as your bitcoin can leave to Litecoin at one place in the blockchain and return from Litecoin is a completely different place. It won't be foolproof (Exchanges will be able to keep track of you and services) but it will help.

Interesting times ahead.

[1715265373]

1715265373

[1715265373]

1715265373

[1715265373]

1715265373

[adpinbr]

Good post. The only thing that will change arbitrage wise it the gap between BTC-E and Mtgox will close IMHO. That sucks for those making money off that ATM, but I dont see how that effects the global crypto ecosystem

[crazy_rabbit]

Gox has made it official that they will be adding Litecoin support once the new trading engine has been rolled out.

That is not true. What they said is this:

"As risky as it is to invoke the name of Litecoin (LTC???), we must apologize for not keeping everyone up to date. The fact is that the current
situation means a continued delay, but for good reasons. We’re looking at July right now, though that depends on a few things. Mainly, we
want to do things correctly from the beginning."

I interpret them as just being cautious about promising a specific day. I don't think with statements like this they don't intend to follow through.

[adpinbr]

Gox has made it official that they will be adding Litecoin support once the new trading engine has been rolled out.

That is not true. What they said is this:

"As risky as it is to invoke the name of Litecoin (LTC???), we must apologize for not keeping everyone up to date. The fact is that the current
situation means a continued delay, but for good reasons. We’re looking at July right now, though that depends on a few things. Mainly, we
want to do things correctly from the beginning."

I interpret them as just being cautious about promising a specific day. I don't think with statements like this they don't intend to follow through.

+1 its like the 4th time they talked about LTC, wether you are a LTC advocate or not it doesn't matter, they lose all their reputation if they dont follow thru

[acoindr]

You know this brings up a good point I hadn't thought of. People around Bitcoin for a good length of time know it quickly becomes clear how superior Bitcoin is to other currencies when trying to move value, for example, when news comes out about an exchange or some other factor affecting Bitcoin significantly.

Suddenly people appreciate that Bitcoin can flow anywhere on the system, exchanges, merchants, private wallets etc. People with cash/USD etc. are stuck unless they can convert to Bitcoin to move value to more desirable places. Mt.Gox adding Litecoin (which may also spur others) will expand that ability giving people more options, which is always a good thing.

[junglist.massive]

I thinkt that LTC is kinda like silver for gold BTC
there will be usefull

[amincd]

The only effect of adding coins from a network that is near duplicate of Bitcoin (and Litecoin is a near duplicate of Bitcoin) to an exchange is increasing the supply of coins.

Instead of diluting the Bitcoin market with a copycat blockchain with 84 million additional coins, MtGox should redenominate BTC to mBTC so that people looking for 'cheap' coins can get them.

[iANDROID]

Massive buy order for first three week. 0.039BTC/LTC

And, then massive sell: 0.021BTC/LTC.

[acoindr]

The only effect of adding coins from a network that is near duplicate of Bitcoin (and Litecoin is a near duplicate of Bitcoin) ...

Litecoin may be similar to Bitcoin, but it's not Bitcoin. That's actually the reason I began promoting its adoption. Even if there was another coin called Bitcoin with the exact same settings, but with a different imprint of coin owners and development team it wouldn't be Bitcoin (the one we call Bitcoin on MtGox).

In fact Litecoin does have other key differences. One is its hashing algorithm, which provides an in place backup if Bitcoin's ever breaks (or vice versa). Another is its blocks being 4x faster. Anyone on this forum a significant length of time will recall multiple threads complaining about not receiving even 1 confirmation, even when paying fees, sometimes for hours. Time is a factor in payments. To think it's not I think is frankly unrealistic.

... to an exchange is increasing the supply of coins.

Let's put things in perspective shall we? Bitcoin and other cryptocurrencies thus far limit their total supply to some number of millions, Bitcoin's being 21 million and Litecoin 84 million, for example. There is a world population exceeding 7 billion and growing. Meanwhile, there are dollars (alone) with monetary unit supply in the several trillions. Does that help?

Instead of diluting the Bitcoin market with a copycat blockchain ...

The point of being a different coin is that it's not the same blockchain. Also, since when is there a "Bitcoin" market? Isn't there only a free global market?

... with 84 million additional coins, MtGox should redenominate BTC to mBTC so that people looking for 'cheap' coins can get them.

That doesn't mean cheap coins. Google's stock price is currently $880 per share. If I say I'll sell you .001 of a Google share for .88 cents each do you really think you've gotten "cheap" Google stock?

[meanig]

The addition of Litecoin or any other number of altcoins to the exchanges won't make any difference to combating arbitrage. That's because the arbitrage arises from friction caused by moving fiat around and not bitcoins.

For instance you can buy a bitcoin on Bitstamp for $101 and sell it on Gox $110 at the moment. A perfect arbitrage opportunity you might think but withdrawing USD from Gox is difficult and that's the reason behind the price gap. Adding altcoins into the mix won't change that.

[amincd]

The only effect of adding coins from a network that is near duplicate of Bitcoin (and Litecoin is a near duplicate of Bitcoin) ...

Litecoin may be similar to Bitcoin, but it's not Bitcoin. That's actually the reason I began promoting its adoption.

Right, it's not Bitcoin. It's a near duplicate of Bitcoin, with 99.99% of the same code, and three superficial innovations through two changed parameters.

In fact Litecoin does have other key differences. One is its hashing algorithm, which provides an in place backup if Bitcoin's ever breaks (or vice versa).

We don't have to have a fully functional parallel network with its own ecosystem of exchanges to have a backup hashing algorithm. Using a backup hashing algorithm is a matter of changing the Bitcoin code to swap out SHA256 for something else.

While there is some benefit from the experimental data provided by using that hashing algorithm in a live network, a much smaller network could provide all of the data that could be of value to us.

Another is its blocks being 4x faster. Anyone on this forum a significant length of time will recall multiple threads complaining about not receiving even 1 confirmation, even when paying fees, sometimes for hours. Time is a factor in payments. To think it's not I think is frankly unrealistic.

If this is in fact an advantage, then the Bitcoin protocol should be changed to use a shorter block time. We shouldn't launch a new blockchain, that resets everyone's currency holdings to zero, and adds 21-84 million new coins, every time a minor protocol improvement is discovered.

A currency's viability is not just about technology. It's also about value. We need to work to preserve and protect the value of bitcoins, which requires not encouraging the adoption of additional blockchains that add to the total number of coins and provide the same currency function.

... to an exchange is increasing the supply of coins.

Let's put things in perspective shall we? Bitcoin and other cryptocurrencies thus far limit their total supply to some number of millions, Bitcoin's being 21 million and Litecoin 84 million, for example. There is a world population exceeding 7 billion and growing. Meanwhile, there are dollars (alone) with monetary unit supply in the several trillions. Does that help?

You don't get it. 21 million bitcoins isn't less than 7 billion. A bitcoin is equal to 100,000,000 Satoshis. Going from 21 million to 106 million coins (21 million bitcoins + 84 million litecoins) would mean inflating the money supply by 400%. That is all that matters.

And you really think litecoin will be the last cryptocurrency with an enthusiastic group of early adopters claiming it's a necessary 'silver to Bitcoin's gold'? No of course not. There will be others, and they will be push until MtGox puts them on the exchange too.

At this rate, cryptocurrency will have an inflation rate far above any fiat currency. This is already the criticism that Bitcoin's harshest critics are making against it, and now we see that it potentially has some merit, with late-comers to Bitcoin pushing for the addition of 84 million coins, on their Bitcoin 2 network, to the currency supply.

Instead of diluting the Bitcoin market with a copycat blockchain ...

The point of being a different coin is that it's not the same blockchain.

It is almost exactly the same as Bitcoin, and will be used in almost exactly the same roles. More coins = each coin has less value. Supply and demand is an iron-clad economic law.

Also, since when is there a "Bitcoin" market? Isn't there only a free global market?

It's a Bitcoin market when it's all based on Bitcoin technology.

... with 84 million additional coins, MtGox should redenominate BTC to mBTC so that people looking for 'cheap' coins can get them.

That doesn't mean cheap coins. Google's stock price is currently $880 per share. If I say I'll sell you .001 of a Google share for .88 cents each do you really think you've gotten "cheap" Google stock?

Yet people always claim Bitcoin-alts are cheaper than Bitcoin, for no other reason than the price they see on an exchange is lower.

[str4wm4n]

no to brag but it feels pretty cool to be responsible for Ł being the litecoin symbol, I hope gox implements it's use.

[bbit]

no to brag but it feels pretty cool to be responsible for Ł being the litecoin symbol, I hope gox implements it's use.

what was your responsibility with it ?

[adpinbr]

its like the 4th time they talked about LTC, wether you are a LTC advocate or not it doesn't matter, they lose all their reputation if they dont follow thru

You mean those who are heavily or maybe completely into LTC now will stop using Gox? They will revolt and cause massive BTC price drops by
dumping BTC they don't have anymore? They will deposit or withdraw nothing and thus destroy Gox or something?

It has nothing to do with the reveng eof the litecoiners. If a company that is the size and has the media attention like gox does they will follow thru with it. Especially in a line of business where there are always problems and people got to trust you and that you are doing the best that can be done, its not wise to promise something and not do it. Besides that they didnt need to promise it. Mtgox is losing its first mover advantage. A good way to counteract that is by being the first mover elsewhere. without litecoin mtgox doesnt have much going for it ATM besides liquidity. And in the BTC world its easy to switch exchanges

[amincd]

^ LTC threatens MtGox's entire business. It will absolutely destroy investor confidence in Bitcoin, and by extension, all cryptocurrencies derived from Bitcoin. Only those looking to pump their litecoins can't see that.

[acoindr]

Right, it's not Bitcoin. It's a near duplicate of Bitcoin, with 99.99% of the same code, and three superficial innovations through two changed parameters.

In case you don't know Bitcoin's code is open source. It's not proprietary. It's designed so that anyone can view, use, copy or alter it for free. The same goes for Litecoin, and in fact something similar happened to Litecoin called FeatherCoin. The fact that the code can be largely used as is speaks to how good the original design is.

We don't have to have a fully functional parallel network with its own ecosystem of exchanges to have a backup hashing algorithm. Using a backup hashing algorithm is a matter of changing the Bitcoin code to swap out SHA256 for something else.

"Swapping" something out, like the hashing algorithm, isn't like flipping some switch. Any protocol change in Bitcoin is inherently hard, and gets harder the larger the group is which uses Bitcoin because there are more opinions about what change should be made, if any at all, and how and when to go about it. Indeed I don't see much chance for any successful protocol change once Bitcoin reaches a near global user base. Protocol changes wouldn't be impossible, but I'd say extremely difficult.

A currency's viability is not just about technology. It's also about value. We need to work to preserve and protect the value of bitcoins, which requires not encouraging the adoption of additional blockchains that add to the total number of coins and provide the same currency function.

No we don't need to preserve and protect the value of bitcoins. That's not how a free market works. The free market will assign the value where it should be.

You don't get it. 21 million bitcoins isn't less than 7 billion. A bitcoin is equal to 100,000,000 Satoshis.

No you don't get it. A dollar is equal to 100 pennies. That doesn't make the dollars in your pocket worth less. Only more whole dollars in the money supply does that.

Going from 21 million to 106 million coins (21 million bitcoins + 84 million litecoins) would mean inflating the money supply by 400%. That is all that matters.

No it doesn't mean that. You can't inflate Bitcoin's money supply, nor Litecoin's, and the two are not the same money supply. Now what you can do is increase the total cryptocurrency money supply. However, that has already happened. There are a lot more cryptocurrencies than Bitcoin and Litecoin. And that creation hasn't ended, I assure you.

And you really think litecoin will be the last cryptocurrency with an enthusiastic group of early adopters claiming it's a necessary 'silver to Bitcoin's gold'? No of course not. There will be others, and they will be push until MtGox puts them on the exchange too.

No I don't think that. Like I said above there will be other new coins regardless to what you or I say. However, those new coins while being able to duplicate the code of Bitcoin or Litecoin can't as easily duplicate their user base. That's the key.

At this rate, cryptocurrency will have an inflation rate far above any fiat currency. This is already the criticism that Bitcoin's harshest critics are making against it, and now we see that it potentially has some merit, with late-comers to Bitcoin pushing for the addition of 84 million coins, on their Bitcoin 2 network, to the currency supply.

I understand your fear, but I believe it's unwarranted. As I describe above the inflation of cryptocurrency is inevitable as the code is open source. However, that doesn't mean every unit of cryptocurrency created has value.

It is almost exactly the same as Bitcoin, and will be used in almost exactly the same roles. More coins = each coin has less value. Supply and demand is an iron-clad economic law.

That's true, but I don't believe there will be much more than Bitcoin and Litecoin accepted at a global scale; that means a total money supply measured in millions, not trillions like what the world is used to now.

It's a Bitcoin market when it's all based on Bitcoin technology.

Like I said above, Bitcoin is open source, not proprietary. And the name "Bitcoin" is arbitrary. You could call Litecoin Bitcoin an call the blockchain trading now on MtGox SatoshiCoin.

[Meatpile]

What it means is a never ending stream of BUY THIS NEW ONE perpetual annoyance that really devalues the whole idea of digital currency to me

[adpinbr]

^ LTC threatens MtGox's entire business. It will absolutely destroy investor confidence in Bitcoin, and by extension, all cryptocurrencies derived from Bitcoin. Only those looking to pump their litecoins can't see that.

If it threatens their business why are they doing it? There business is based on a comission for exchanges and LTC will raise their volume a shitload. LTC does have a place, to try to say you can predict everything about BTC is ridiculous and we need a back up. also i think LTC further decentrilization is great. I profited enough on my LTC, and i dont need to pump , yet i dont have so much that i cant dump( I could sell at profit and not kill the market), yet i keep them cause I think they are going to 30 before BTC goes to 1000. And I think BTC has a lot o attention LTC needs some more. Having LTC, r another readily available substitute, will keep the BTC rulers in check, miners and Devs wont be able to do wtvr they want

[str4wm4n]

no to brag but it feels pretty cool to be responsible for Ł being the litecoin symbol, I hope gox implements it's use.

what was your responsibility with it ?

https://bitcointalk.org/index.php?topic=79849.0

[Loozik]

Adding LTC to MtGox means:

1. More transactions routed via MtGox = bigger income for MtGox

2. More opportunities for traders = traders are happy

I see no negatives.

[acoindr]

What it means is a never ending stream of BUY THIS NEW ONE perpetual annoyance that really devalues the whole idea of digital currency to me

A never ending stream of alt-coins has already happened. The majority of them are either dead or have value measured so low as not to be taken seriously.

Really, Bitcoin spinoffs were seen far ahead of time. I was never bothered by their possibility, even before I supported Litecoin (even before it existed), because I knew there were some things spinoffs couldn't easily duplicate. That's why they are permissible without undermining the entire concept.

[illpoet]

being a silver hoarder i was naturally attracted to litecoin from the beginning.  The fact is that crypto currency is such a good idea that there is room for more than 1 blockchain in the world.  If the fear is that it will somehow dilute bitcoin i believe thats unfounded. Seeing as how you could combine the sum total of both currencies and not even get 100 million they are both rare enough to be valuable. There is easily more than 100 million ounces of gold in the world and yet its still considered extremely rare.   Sure there are a gazillion alt coins now basically ripping off litecoin but thats the cool thing about the free market, it decides what has merit and what doesn't.  Thats why bitcoin will be king, ltc will be the queen and i believe theres room for a prince or two thats yet undecided.  The coins that spring up just because someone with a little coding knowledge wants to get rich off bein an early miner *cough* sc io ix *cough* will never gain any traction.    

Im kind of surprised namecoin hasn't really gained ground. I guess its because there is no gui wallet for it and pretty much no community/dev support.  I could see them being incredibly valuable in the next five years just because they allow ppl to circumvent costly domain registration services.  kind of how palladium wasn't worth a whole lot until  it was found to be  an inexpensive way to dilute platinum in catalytic converters etc...

i had a big debate about this over a campfire the other weekend with a friend who is a bitcoin snob.  So its still in my mind.  I think its just human nature that there will always be people that want 50 of something versus 1 of something even if the values are similar.

[acoindr]

Seeing as how you could combine the sum total of both currencies and not even get 100 million they are both rare enough to be valuable. There is easily more than 100 million ounces of gold in the world and yet its still considered extremely rare.

Actually, there are an estimated 10 billion ounces of gold which would be around 100 times more than BTC/LTC combined.

Let's say 1 ounce of gold is now $1,000. That means BTC/LTC valued on par with gold would be around $100,000 per unit. Of course, some people believe gold could/should actually be worth $10,000 or more considering its scarcity as compared to fiat currency like dollars.

[Vivisector999]

Actually if anything, I think getting LTC recognized more could only help crypto-currency to becoming more well used.  And I honestly believe neither Bitcoins/Litecoins or any of the other current alts are going to be able to take over as a mainstream currency.  There are far to many flaws with each one.  But by bringing the 2 coins closer together will help.  Bitcoins are good for slow moving big transactions.  Litecoins are better for faster smaller transactions.  Neither yet are great if you were to have them go mainstream and have the 50 people standing in a Starbucks line waiting for all the Bitcoin transactions to process and confirm before they could leave with their lattes.

Also the conversation that 2 crypto-currencies can not exist side by side in a global marketplace is plain silly.  Fiat has been doing so easily.  Or does it really mess up the value of the US dollar if some people are using Mexican Pesos?  No one ever said Litecoin would automatically be trading at the value of a Bitcoin.  They will remain at totally different values for all times.  Lastly, having more then 1 crypto-currency means more people in the crypto using pool.  Many miners have already begun to move away from Bitcoins, and the crazy difficulty rates, and the prices of ASIC miners will ensure not everyone will jump into the coin.  But giving the people leaving, and a lot of latecomers a way into the game only adds to the total market.

[Zangelbert Bingledack]

Anyone who's worried about altcoins messing things up for Bitcoin, read this:

http://www.reddit.com/r/Bitcoin/comments/1bxrrw/playing_devils_advocate_why_bitcoin_will_crash_to/c9bhvme

[nawazish1]

I think LTC is gonna compete with BTC. Any thing is possible. At the start BTC was also the same price almost.

[Stephen Gornick]

What I'ld like to know is who suffers if Mt. Gox offers Litecoin trading and there is a 51% attack against Litecoin in which those funds were then double spent against Mt Gox.

Mt. Gox was asked this question, but they declined to provide an answer:
 - http://pastebin.com/RVe7LbH9

As a result, it must be presumed that funds are not safe when left with an exchange that trades alt coins and doesn't have a policy or other protections regarding a 51% attack:

Your Bitcoins Are Not Safe At Alt-coin Exchanges
 - http://www.bitcoinmoney.com/post/53207712103

[amincd]

In case you don't know Bitcoin's code is open source. It's not proprietary. It's designed so that anyone can view, use, copy or alter it for free. The same goes for Litecoin, and in fact something similar happened to Litecoin called FeatherCoin. The fact that the code can be largely used as is speaks to how good the original design is.

Just to make absolutely clear: I believe people have a right to create any derivative of Bitcoin that they want, and no one should use physical force or threats to prevent them from doing so.

Respecting the right of others to compete does not mean having to refrain from trying to beat them in the market through legitimate means, like non-violent persuasion and technical innovation.

I think Bitcoin and Bitcoin-based currency in general could benefit if the community works to make Bitcoin out-compete any new derivative that emerges.

Competing could mean debunking hype that Bitcoin-alt promoters spread, adopting new protocol features (e.g. a shorter block time) that are found to be advantageous, choosing to make Bitcoin the exclusive cryptocurrency traded on an exchange, etc. I'm not advocating >50% attacks against, or lying about, Bitcoin-alts to stifle them. The Bitcoin community using legitimate means to compete against competitors is GOOD for the market.

We don't have to have a fully functional parallel network with its own ecosystem of exchanges to have a backup hashing algorithm. Using a backup hashing algorithm is a matter of changing the Bitcoin code to swap out SHA256 for something else.

"Swapping" something out, like the hashing algorithm, isn't like flipping some switch. Any protocol change in Bitcoin is inherently hard, and gets harder the larger the group is which uses Bitcoin because there are more opinions about what change should be made, if any at all, and how and when to go about it.

We're talking about a flaw in the hashing algorithm, I'm assuming. If there is a flaw, then the whole community will support changing it, because the network can't function otherwise.

Indeed I don't see much chance for any successful protocol change once Bitcoin reaches a near global user base. Protocol changes wouldn't be impossible, but I'd say extremely difficult.

If that's your concern, there's a better way to create a new Bitcoin-alt: fork the blockchain with all of the transaction data that exists up to some point in time, so the new blockchain doesn't dilute the currency holdings of all Bitcoin users.

This way, if you had 50 BTC in the original network, you would have 50 BTC in the new network too. The two forks could then compete, and if the new one with the protocol change is in fact more effective, then it will take market share from the old network.

This method respects the 21 million BTC limit, which is what gives it its ability to maintain value. I believe this method of creating competing forks would significantly increase the probability that Bitcoin-based cryptocurrency as a whole succeeds.

A currency's viability is not just about technology. It's also about value. We need to work to preserve and protect the value of bitcoins, which requires not encouraging the adoption of additional blockchains that add to the total number of coins and provide the same currency function.

No we don't need to preserve and protect the value of bitcoins. That's not how a free market works. The free market will assign the value where it should be.

The free market is our decisions, absent compulsion. You're not being forced to maintain and protect the value of bitcoins, but if people choose to do so, using legitimate voluntary means, that is just as much part of the free market as your decision to not care about the limit on the coin supply.

You don't get it. 21 million bitcoins isn't less than 7 billion. A bitcoin is equal to 100,000,000 Satoshis.

No you don't get it. A dollar is equal to 100 pennies. That doesn't make the dollars in your pocket worth less. Only more whole dollars in the money supply does that.

No you still don't get it.

We're not talking about dividing bitcoins up into smaller pieces. We're talking about changing the proportion of the total currency supply that each individual has.

By increasing the supply to above 21 million coins, a person who has a certain number of coins sees their share of the total supply decrease.

Going from 21 million to 106 million coins (21 million bitcoins + 84 million litecoins) would mean inflating the money supply by 400%. That is all that matters.

No it doesn't mean that. You can't inflate Bitcoin's money supply, nor Litecoin's, and the two are not the same money supply. Now what you can do is increase the total cryptocurrency money supply.

I didn't claim it's inflating Bitcoin's money supply. It's inflating the total cryptocurrency money supply, as you point out.

But from the point of view of someone who wants their bitcoins to maintain their value, an almost identical peer-to-peer currency, with virtually identical properties, and with its own set of 84 million coins, seeing adoption has the same effect as the supply of bitcoins increasing.

No I don't think that. Like I said above there will be other new coins regardless to what you or I say. However, those new coins while being able to duplicate the code of Bitcoin or Litecoin can't as easily duplicate their user base. That's the key.

How much adoption Bitcoin's counterparts see will depend on our decisions. What I'm arguing is that it's in the Bitcoin community's best interest to not encourage the adoption of direct competitors.

You equate this with rejecting the free market, while I argue that seeking to compete, using legitimate methods, to win in the market is what the free market is all about.

MtGox is a private company and is free to choose what goods it will host on its trading platform. I'm acting in the capacity of a private individual, and I am free to encourage MtGox to choose to not display Bitcoin-copycats on its platform. There is nothing in my actions that conflicts with the free market.

I understand your fear, but I believe it's unwarranted. As I describe above the inflation of cryptocurrency is inevitable as the code is open source. However, that doesn't mean every unit of cryptocurrency created has value.

The inflation of cryptocurrency is inevitable, but how fast alternative cryptocurrencies are adopted is a matter of decisions. MtGox's decision to allow a cryptocurrency that is nearly identical to Bitcoin to be traded on its platform would significantly increase the risk of fragmentation.

Maybe in the long run, this happening will be for the best. I don't know, I can only guess. My guess is that the promotion of cryptocurrencies that are very similar to Bitcoin is harmful to adoption. I believe investors will be turned off by seeing currencies that are nearly identical to Bitcoin gaining users.

It is almost exactly the same as Bitcoin, and will be used in almost exactly the same roles. More coins = each coin has less value. Supply and demand is an iron-clad economic law.

That's true, but I don't believe there will be much more than Bitcoin and Litecoin accepted at a global scale; that means a total money supply measured in millions, not trillions like what the world is used to now.

We'll see. I think that if litecoin gains any level of acceptance, it will not be the last derivative of Bitcoin to do so.

It's a Bitcoin market when it's all based on Bitcoin technology.

Like I said above, Bitcoin is open source, not proprietary. And the name "Bitcoin" is arbitrary. You could call Litecoin Bitcoin an call the blockchain trading now on MtGox SatoshiCoin.

I choose to call it 'Bitcoin technology', as that is what makes sense to me. I'm not asking for law enforcement to break down your door for using a different name, but I have a right to call it whatever I want.

[crazy_rabbit]

What I'ld like to know is who suffers if Mt. Gox offers Litecoin trading and there is a 51% attack against Litecoin in which those funds were then double spent against Mt Gox.

Mt. Gox was asked this question, but they declined to provide an answer:
 - http://pastebin.com/RVe7LbH9

As a result, it must be presumed that funds are not safe when left with an exchange that trades alt coins and doesn't have a policy or other protections regarding a 51% attack:

Your Bitcoins Are Not Safe At Alt-coin Exchanges
 - http://www.bitcoinmoney.com/post/53207712103

They people who would suffer are the same as those who would suffer if bitcoin was attacked. Although that's become harder to do, it's still possible- and it's become more worthwhile then ever before if you could pull it off.

Litecoin however is smartly slightly more difficulty to attack in terms of expense. At this point it's becoming about as secure as bitcoin pre-asic

[Zangelbert Bingledack]

My impression is that both Bitcoin and Litecoin are set up so as for the mining power to always be well ahead of the amount necessary to make a 51% attack unprofitable. A bit more worrisome is some kind of catastrophic technical failure in Litecoin, which is more likely than with Bitcoin since LTC has much less dev support.

But hopefully MtGox will limit LTC trading volume to a sensible level to allow for such risks.

[joeperry]

If we don´t need litecoin, we don´t need dolar or euro too, (why do we use more than a fiat currency?) each one will choose wich one is comfortable for him.

Besides,Im afraid that Bitcoin has the risk of being monopolised by Asicminer or a handful od companies. In the other hand I like mining cryptocurrencies and soon I wont be able to do so, with bitcoin.

[Shawshank]

crazy_rabbit is continuosly promoting alternative currencies, including Bitcoin testnet coins. He strives to put his ads in the Bitcoin discussion thread, instead of the alt-coins thread, where it should really stay.

In my opinion, this behavior does no good to the cryptocurrency world. Currently, all alt-coins are just forks any guy can create in one afternoon, and just dilutes the focus on Bitcoin.

Anyway, I will personally abandon Mt Gox if this happens and I will join some other exchange.

[elektrax]

I think the asic industry is exactly what bitcoin needed - cryptocurrency directly tied to manufacturing, jobs and trade in the real world. i think this further cements bitcoin as the de-facto cc, and leaves little room for alt coins.

[🏰 TradeFortress 🏰]

Like gox matters.

[glub0x]

litecoin is 99% like bitcoin and we are 99% like chimpanze
what matter is the remaining 1% !

[crazy_rabbit]

crazy_rabbit is continuosly promoting alternative currencies, including Bitcoin testnet coins. He strives to put his ads in the Bitcoin discussion thread, instead of the alt-coins thread, where it should really stay.

You say this like it's a bad thing. People like you don't want discussion because it strains your comfort zone. Good/bad for you. If you don't want to discuss ideas, don't participate. Easy as pie. The ignore button isn't just for trolls, you can also use it on people like me because they make you think outside the box.  

In my opinion, this behavior does no good to the cryptocurrency world. Currently, all alt-coins are just forks any guy can create in one afternoon, and just dilutes the focus on Bitcoin.

Ah! The truth comes out, you are scared about diluting your wealth/focus on bitcoin. :-0

Anyway, I will personally abandon Mt Gox if this happens and I will join some other exchange.

You would be doing the entire community a favor if you decentralised your trading anyway, like everyone should be doing (IMHO). Too bad you won't help decentralize the exchange economy just on it's own merits though. A decentralised currency needs a decentralised economy. I guess I can look forward to LTC on GOX just so that you can have enough incentive to help Bitcoin out.

Ironic isn't it? It takes an Alt currency to spur you into action to strengthen Bitcoin.

[acoindr]

I think Bitcoin and Bitcoin-based currency in general could benefit if the community works to make Bitcoin out-compete any new derivative that emerges.

This is the reason I feel alt-coins are necessary. You're never going to be able to gain enough consensus on any given protocol change to do them smoothly (therefore not at all) once adoption reaches a certain point. There will be too many opinions preferring different routes to go. I made this realization (about not gaining consensus) during the uproar over the announcement of a potentially power consolidating Bitcoin foundation.

Competing could mean debunking hype that Bitcoin-alt promoters spread, adopting new protocol features (e.g. a shorter block time)

That's not hype. Litecoin having a faster block time is a fact.

... that are found to be advantageous, choosing to make Bitcoin the exclusive cryptocurrency traded on an exchange, etc. ...

You'll never successfully control a truly free market, which is why they are so powerful and why I love that Bitcoin depends on it. What I don't think you understand is that whether or not Mt.Gox adds Litecoin matters little to Litecoin's success now. Litecoin has IMO reached a critical mass of adoption to be successful in the long run, providing nothing kills it (or Bitcoin) like some hashing flaw or something else unforeseen. Going against market wishes to add Litecoin exchange support would only provide more opportunity for exchanges that did. Eventually the market would get what it wants provided the free market continues without being stifled.

We're talking about a flaw in the hashing algorithm, I'm assuming. If there is a flaw, then the whole community will support changing it, because the network can't function otherwise.

Yes, I agree changing the hashing algorithm is one case where we might have a successful protocol change with a user base even at global scale. However, it would still be hard (disagreements on which algo to switch to, etc.) and likely cause messy economic disruption, which was more my point.

The free market is our decisions, absent compulsion. You're not being forced to maintain and protect the value of bitcoins, but if people choose to do so, using legitimate voluntary means, that is just as much part of the free market as your decision to not care about the limit on the coin supply.

I agree with the first part. However, I do care about a limit on coin supply. As long as that limit is measured in the millions for a global user base of 7 billion I don't have much concern.

No you still don't get it.

We're not talking about dividing bitcoins up into smaller pieces. We're talking about changing the proportion of the total currency supply that each individual has.

By increasing the supply to above 21 million coins, a person who has a certain number of coins sees their share of the total supply decrease.

Like I said before you can't increase Bitcoin above 21 million coins. Not every user that holds bitcoins will hold litecoins and vice versa. I do of course believe there will be lots of overlap in user bases, but technically your bitcoins would still be subject to a 21 million total limit.

But from the point of view of someone who wants their bitcoins to maintain their value, an almost identical peer-to-peer currency, with virtually identical properties, and with its own set of 84 million coins, seeing adoption has the same effect as the supply of bitcoins increasing.

That's true, but like I said before the total limit on globally accepted cryptocurrency I believe will be measured in the millions, which is extremely scarce.

The inflation of cryptocurrency is inevitable, but how fast alternative cryptocurrencies are adopted is a matter of decisions.

I agree. That's why I said it was critical to start making Litecoin a viable Bitcoin market competitor before Bitcoin got too far ahead, and I began promoting LTC as part of my solution to the Bitcoin foundation when it was at $0.04.

...Maybe in the long run, this happening will be for the best. I don't know, I can only guess. My guess is that the promotion of cryptocurrencies that are very similar to Bitcoin is harmful to adoption. I believe investors will be turned off by seeing currencies that are nearly identical to Bitcoin gaining users.

Perhaps those who don't yet see things as I do might, but they will be ultimately overruled by the market.

... I think that if litecoin gains any level of acceptance, it will not be the last derivative of Bitcoin to do so.

I believe that's true, but also that the level of acceptance at a global scale will be limited to only a few coins, the reason being spinoffs must significantly add value or have any traction quickly killed by other spinoffs.

I choose to call it 'Bitcoin technology', as that is what makes sense to me. I'm not asking for law enforcement to break down your door for using a different name, but I have a right to call it whatever I want.

What I meant was there is no such thing as 'Bitcoin technology' that belongs only to something called Bitcoin.

[ninjarobot]

Im kind of surprised namecoin hasn't really gained ground. I guess its because there is no gui wallet for it and pretty much no community/dev support.  I could see them being incredibly valuable in the next five years just because they allow ppl to circumvent costly domain registration services.  kind of how palladium wasn't worth a whole lot until  it was found to be  an inexpensive way to dilute platinum in catalytic converters etc...

Actually Namecoin does have a GUI wallet.

In fact, a new beta version of namecoin-qt was released just this week that also adds a .bit name registration and domain management UI. I tried it and it is pretty darn awesome.

Namecoin also has active developers. Mainly khal and snailbrain.

[amincd]

Competing could mean debunking hype that Bitcoin-alt promoters spread, adopting new protocol features (e.g. a shorter block time)

That's not hype. Litecoin having a faster block time is a fact.

Almost everything claimed about litecoin is hype:

Scrypt is not GPU proof, as we've seen. It's not FPGA or ASIC proof either.

2.5 minute block times have very little effect in real use-cases. It's too long for point of sale, and not necessary for shipped goods. It's only useful for depositing BTC at an e-wallet, by reducing the time it takes for the deposit to be considered confirmed.

Shorter block times do NOT make Bitcoin-alts more secure. They reduce the time it takes for transactions to reach the maximum level of network security, but reduce that maximum level by wasting more honest work on latency. It's a trade-off between securing transactions more quickly and making a blockchain more secure from >50% attacks.

I personally think a shorter block time is in fact a slight protocol improvement, but I don't think an alternative network with this feature makes up for the advantage Bitcoin has in the size of its network of users/nodes, its hashrate and the amount of supporting services/software it has, and claims suggesting otherwise are pure hype by miners looking to make money on their low-demand coins.

I also don't think it makes sense to start a new blockchain that resets everyone's currency holdings to zero every time a minor protocol improvement comes along. It's better to upgrade the Bitcoin protocol over time in my opinion.

... that are found to be advantageous, choosing to make Bitcoin the exclusive cryptocurrency traded on an exchange, etc. ...

You'll never successfully control a truly free market, which is why they are so powerful and why I love that Bitcoin depends on it. What I don't think you understand is that whether or not Mt.Gox adds Litecoin matters little to Litecoin's success now. Litecoin has IMO reached a critical mass of adoption to be successful in the long run, providing nothing kills it (or Bitcoin) like some hashing flaw or something else unforeseen.

I strongly disagree. Litecoin is near copy of Bitcoin, and is less useful than it in almost every use-case. Its success is not inevitable, and MtGox could do Bitcoin and Bitcoin-based cryptocurrency a big favor by not hosting near-copycats of Bitcoin like it on its exchange.

Going against market wishes to add Litecoin exchange support would only provide more opportunity for exchanges that did.

You're defining the market as anything you and litecoin miners want. They are constantly sending MtGox messages to add it, because inflation profits them. What's not visible is the number of Bitcoin users who do not want near-copycats of Bitcoin being traded alongside Bitcoin on MtGox.

Since I, and others who don't want Bitcoin-based networks to fragment, are also part of the market, you can't accurately say that the market 'wishes' for MtGox to add litecoin and other Bitcoin-alts.

Eventually the market would get what it wants provided the free market continues without being stifled.

Yea it could get what it wants and not add litecoin to the exchange.

Yes, I agree changing the hashing algorithm is one case where we might have a successful protocol change with a user base even at global scale.

Thank you for conceding that.

Like I said before you can't increase Bitcoin above 21 million coins. Not every user that holds bitcoins will hold litecoins and vice versa. I do of course believe there will be lots of overlap in user bases, but technically your bitcoins would still be subject to a 21 million total limit.

You're dwelling on a technicality that is completely irrelevant to my point, which is that Bitcoin users and investors are hurt by the adoption of nearly identical networks that add new coins that can be used in similar roles as bitcoins. The effect of their adoption is the same as the number of bitcoins increasing past 21 million.

But from the point of view of someone who wants their bitcoins to maintain their value, an almost identical peer-to-peer currency, with virtually identical properties, and with its own set of 84 million coins, seeing adoption has the same effect as the supply of bitcoins increasing.

That's true, but like I said before the total limit on globally accepted cryptocurrency I believe will be measured in the millions, which is extremely scarce.

A bitcoin is an arbitrary unit. Only if you use the 100,000,000 Satoshi unit known as a bitcoin would it be seen as scarce. If we use a smaller unit, then it's not scarce.

In any case, what's important is that the adoption of near copies of Bitcoin leads to a rapid rate of inflation in the Bitcoin-based cryptocurrency money supply. I think that's bad.

I think either Bitcoin will remain the dominant cryptocurrency, or we will see increasing fragmentation and inflation of BTC-based cryptocurrency. I don't think it's likely that Bitcoin will only have one competing parallel network, and no more after that. In other words, it's either a universal money protocol known as BTC or it's a steadily increasing number of incompatible protocols.

The inflation of cryptocurrency is inevitable, but how fast alternative cryptocurrencies are adopted is a matter of decisions.

I agree. That's why I said it was critical to start making Litecoin a viable Bitcoin market competitor before Bitcoin got too far ahead, and I began promoting LTC as part of my solution to the Bitcoin foundation when it was at $0.04.

I disagree with your assessment of this being the best way to plan against the corruption of Bitcoin. I explained my opinion on what is a much better way to create a Bitcoin-alt:

fork the blockchain with all of the transaction data that exists up to some point in time, so the new blockchain doesn't dilute the currency holdings of all Bitcoin users.

This way, if you had 50 BTC in the original network, you would have 50 BTC in the new network too. The two forks could then compete, and if the new one with the protocol change is in fact more effective, then it will take market share from the old network.

This method respects the 21 million BTC limit, which is what gives it its ability to maintain value. I believe this method of creating competing forks would significantly increase the probability that Bitcoin-based cryptocurrency as a whole succeeds.

...Maybe in the long run, this happening will be for the best. I don't know, I can only guess. My guess is that the promotion of cryptocurrencies that are very similar to Bitcoin is harmful to adoption. I believe investors will be turned off by seeing currencies that are nearly identical to Bitcoin gaining users.

Perhaps those who don't yet see things as I do might, but they will be ultimately overruled by the market.

Perhaps the market agrees with them and it will overrule you. Maybe BTC-based cryptocurrency in general will fail to gain traction because people won't feel it's a secure store of wealth, with new copycats constantly reducing the market share of each.

Making an appeal to the will of the market without explaining why you think the market agrees with you doesn't add anything to the discussion.

... I think that if litecoin gains any level of acceptance, it will not be the last derivative of Bitcoin to do so.

I believe that's true, but also that the level of acceptance at a global scale will be limited to only a few coins, the reason being spinoffs must significantly add value or have any traction quickly killed by other spinoffs.

We can agree to disagree. I think endless fragmentation is a very serious threat to BTC-based cryptocurrency, and worth the community rallying around a single universal protocol that is able to maintain the value of coins.

I understand that investing in Bitcoin-alts can be very profitable. I just think they are bad for the field in the long run.

I choose to call it 'Bitcoin technology', as that is what makes sense to me. I'm not asking for law enforcement to break down your door for using a different name, but I have a right to call it whatever I want.

What I meant was there is no such thing as 'Bitcoin technology' that belongs only to something called Bitcoin.

I disagree. I think almost all of the code and concepts used in BTC-based cryptocurrency are 'Bitcoin technology', since it came from Bitcoin, and the many developers who contributed to the BTC network (and were remunerated in BTC for their work).

crazy_rabbit is continuosly promoting alternative currencies, including Bitcoin testnet coins. He strives to put his ads in the Bitcoin discussion thread, instead of the alt-coins thread, where it should really stay.

In my opinion, this behavior does no good to the cryptocurrency world. Currently, all alt-coins are just forks any guy can create in one afternoon, and just dilutes the focus on Bitcoin.

Anyway, I will personally abandon Mt Gox if this happens and I will join some other exchange.

+1

[CrypTrader]

In order for NameCoin to really take off there needs to be an easy installer for Linux/OSX/Windows that works as like a DNS proxy for name resolutions.

[acoindr]

Almost everything claimed about litecoin is hype:

By whom? By me?

Please point to one thing I've ever said about Litecoin that is hype and not factual. I've said that Litecoin has 4x faster block times than Bitcoin, and this can be preferable to many users in many cases. I don't think that's false. I've also said Litecoin using a different algorithm can be beneficial if Bitcoin's breaks or vice versa. I also believe that is true, because once you have a large economy in motion it's very damaging for all transactions to suddenly need to halt. If there is only Bitcoin and nothing else then if Bitcoin ever fails for any reason, whether technical, or corruption, or whatever else, then it means severe global economic damage to all that use cryptocurrency (since there is only Bitcoin).

Scrypt is not GPU proof, as we've seen. It's not FPGA or ASIC proof either.

Again, when have I ever said Scrypt is GPU proof? For that matter please link directly to where anyone said that. They may have, but I'm not going to believe that simply because you said it.

What I think is more likely is you have a misunderstanding of why Scrypt was chosen for Litecoin.

Scrypt is designed to raise the resource demands of the algorithm making the size and the cost of a hardware implementation much more expensive, and therefore limiting the amount of parallelism an attacker can use. Specifically, the algorithm is designed to use a large amount of memory. There is a significant trade off in speed in order to get rid of the large memory requirements. I'm paraphrasing here from wikipedia:

http://en.wikipedia.org/wiki/Scrypt

Such a trade off often exists in computer algorithms: you can increase speed at the cost of using more memory, or decrease memory requirements at the cost of performing more operations and taking longer. The idea behind scrypt is to deliberately make this trade off costly in either direction.

Ultimately this means mining litecoins is done with a different efficiency for GPUs, FPGAs and ASICS than mining bitcoins. This doesn't mean these systems can't mine litecoins effectively. It only says they do so with a different efficiency, which is the point.

2.5 minute block times have very little effect in real use-cases.

That is your statement. Is it a fact? I don't think so. In fact, I know it's not, because I personally have experienced the beneficial effect of having LTC confirmed quicker as compared to BTC when I transacted LTC. Are you saying I wasn't a real use case?

It's only useful for depositing BTC at an e-wallet, by reducing the time it takes for the deposit to be considered confirmed.

Have you ever heard the expression time is money? Do you know where that comes from? It's because at any given time having access to money at one point can have a different value than having access to the same amount at some other point. For example BTC exchange rates fluctuate. Some cryptocurrency users trade coins daily trying to make a profit. If their coins can't be confirmed at some location before they have access to trade them when and where they want to it can cost them real money.

Shorter block times do NOT make Bitcoin-alts more secure.

Who said they did? Again, link to the problematic claims you cite.

They reduce the time it takes for transactions to reach the maximum level of network security, but reduce that maximum level by wasting more honest work on latency.

What do you mean "reduce the maximum level"? Are you suggesting there is some cap for the total computing resources Litecoin can use?

It's a trade-off between securing transactions more quickly and making a blockchain more secure from >50% attacks.

No it's not. A block chain, any block chain, is only as secure from 51% attacks as the amount of resources it takes on average to outperform the honest network. That's true of Bitcoin and all proof of work only block chains. All of Litecoins 2.5 minute blocks now are far more secure than  Bitcoin's blocks when it was only Satoshi and a few others (like Hal Finney) mining Bitcoin. Also note that combined proof of work and proof of stake coins like Novacoin (which I also support) add another dimension to the 51% attack issue.

I personally think a shorter block time is in fact a slight protocol improvement, ...

Well which is it? Above you said 2.5 minute block times have very little effect in real use-cases.

... but I don't think an alternative network with this feature makes up for the advantage Bitcoin has in the size of its network of users/nodes, its hashrate and the amount of supporting services/software it has,...

I'm not sure if you're aware that amount of users/nodes, hashrate, and amount of supporting services/software for any block chain including Bitcoin can change. Again, when it was only Satoshi and Hal Finney mining Bitcoin in 2009 how much of the above support did it have?

... and claims suggesting otherwise are pure hype by miners looking to make money on their low-demand coins.

Here again you're saying a lot about claims made but linking to nothing. I'll be more inclined to think you have a legitimate gripe about hype if you can link to something.

I also don't think it makes sense to start a new blockchain that resets everyone's currency holdings to zero every time a minor protocol improvement comes along. It's better to upgrade the Bitcoin protocol over time in my opinion.

I don't believe a reset of everyone's wealth to zero for protocol changes is wise or welcome either. I believe in upgrading Bitcoin's protocol when possible too.

I strongly disagree. Litecoin is near copy of Bitcoin, and is less useful than it in almost every use-case.

Is that a fact or your opinion? I mean the part about being less useful in almost every use case? I believe it's only your opinion.

You're defining the market as anything you and litecoin miners want.

No I'm not. I understand a market has differences of opinion. That's why I'm spending significant time in this written exchange with you. It's also the reason there are buy versus sell actions on exchanges.

Since I, and others who don't want Bitcoin-based networks to fragment, are also part of the market, you can't accurately say that the market 'wishes' for MtGox to add litecoin and other Bitcoin-alts.

It's true I can't say that for the entire market, but I didn't. Like I said above people within a market can (and will) have differences of opinion. However, market pressure will usually result in some action or another. I'm saying market pressure can be the reason Litecoin will be more of a success than it is already.

You're dwelling on a technicality that is completely irrelevant to my point, which is that Bitcoin users and investors are hurt by the adoption of nearly identical networks that add new coins that can be used in similar roles as bitcoins.

Not if those investors also hold the other coins.

A bitcoin is an arbitrary unit.

No it's not. If you think it is then sell me a bitcoin for $1.00.

In any case, what's important is that the adoption of near copies of Bitcoin leads to a rapid rate of inflation in the Bitcoin-based cryptocurrency money supply. I think that's bad.

Creation of alt-coins doesn't automatically mean adoption of them. Have you any idea how many alt-coins there are now?  More than you can count on two hands.

I think either Bitcoin will remain the dominant cryptocurrency, or we will see increasing fragmentation and inflation of BTC-based cryptocurrency.

I had similar thinking at first. I didn't always support Litecoin. When it was announced I probably felt a bit like you do now towards it, as an unnecessary entrant to the scene. I later came to believe an ecosystem with only Bitcoin is the real danger. There is too much that can go wrong. Everything would have to go perfectly, and history has shown that usually isn't the case when it comes to Bitcoin.

I don't think it's likely that Bitcoin will only have one competing parallel network, and no more after that. In other words, it's either a universal money protocol known as BTC or it's a steadily increasing number of incompatible protocols.

Again, there is already far more than Bitcoin on the scene. What you don't seem to appreciate is that the majority of them don't have traction. Can't you see things appear to be progressing more closely to what I predict than you do?

I disagree with your assessment of this being the best way to plan against the corruption of Bitcoin. I explained my opinion on what is a much better way to create a Bitcoin-alt:

fork the blockchain with all of the transaction data that exists up to some point in time, so the new blockchain doesn't dilute the currency holdings of all Bitcoin users.

How in the world do you decide which point in time is the right one to invalidate transactions? You're saying a much better way to create a Bitcoin alternative is an intentionally disastrous hard economic fork?

This way, if you had 50 BTC in the original network, you would have 50 BTC in the new network too.

Not if you received those 50 BTC for a payment after the fork cut off for valid transactions.

Perhaps the market agrees with them and it will overrule you.

That can happen too. In fact I said the market was bigger than myself and my detractors too in the thread where I first proposed supporting Litecoin as a solution to the Bitcoin foundation.

I disagree. I think almost all of the code and concepts used in BTC-based cryptocurrency are 'Bitcoin technology', since it came from Bitcoin, and the many developers who contributed to the BTC network (and were renumerated in BTC for their work).

I didn't say the code wasn't 'Bitcoin technology'. I said all code doesn't belong only to something called Bitcoin. If you think it does you need to become familiar with what open source means.

https://en.wikipedia.org/wiki/Open_source

[amincd]

By whom? By me?

By many of those who promote it, not you.

I've said that Litecoin has 4x faster block times than Bitcoin, and this can be preferable to many users in many cases. I don't think that's false.

I think it's not true that this is preferable in 'many cases'. In the vast majority of cases, either propagation confirmation is adequate (point of sale), or waiting 30-60 minutes for multiple block confirmations is not a hindrance because shipping takes longer than that anyway.

I've also said Litecoin using a different algorithm can be beneficial if Bitcoin's breaks or vice versa. I also believe that is true,

I think this is hype, for the reason that Bitcoin switching to a new hashing algorithm wouldn't take any longer - and I think would be much faster - than diverting all transaction activity to a new blockchain.

Scrypt is designed to raise the resource demands of the algorithm making the size and the cost of a hardware implementation much more expensive, and therefore limiting the amount of parallelism an attacker can use.

The resource demands of mining will always trend towards the revenues of mining. Therefore, the only factor that determines the resource demands of mining is the value of coins generated by mining. The proof of work algorithm is completely irrelevant.

In other words, your claim is unfounded hype, and misunderstands the economics of mining.

Ultimately this means mining litecoins is done with a different efficiency for GPUs, FPGAs and ASICS than mining bitcoins.

The claims that I saw repeatedly made by scrypt supporters is that it makes a Bitcoin-alt GPU-proof. Those claims stopped being made when GPU mining became more efficient than CPU mining for scrypt-based Bitcoin-alts. After that, the most common claim was that scrypt was FPGA/ASIC-proof, meaning that there wouldn't be large enough gains in mining with FPGAs/ASIC to ever make GPU mining uncompetitive.

I think even litecoin miners are starting to acknowledge that this is not true, as discussions on how to design and develop scrypt FPGAs/ASICs are becoming more common.

2.5 minute block times have very little effect in real use-cases.

That is your statement. Is it a fact? I don't think so. In fact, I know it's not, because I personally have experienced the beneficial effect of having LTC confirmed quicker as compared to BTC when I transacted LTC. Are you saying I wasn't a real use case?

What I mean is that it's more useful in a very small percentage of use-cases. Claims suggesting otherwise are hype designed to pump the currency in my opinion, and are motivated by the fact is that litecoin has very little to differentiate it from Bitcoin (having 99.99% of its code based on Bitcoin's) so its promoters need to play up its differences.

It's because at any given time having access to money at one point can have a different value than having access to the same amount at some other point. For example BTC exchange rates fluctuate. Some cryptocurrency users trade coins daily trying to make a profit.

I agree that this is an advantage. I already said as much. My argument is that it makes up a very small minority of use-cases of BTC-based cryptocurrency.

They reduce the time it takes for transactions to reach the maximum level of network security, but reduce that maximum level by wasting more honest work on latency.

What do you mean "reduce the maximum level"? Are you suggesting there is some cap for the total computing resources Litecoin can use?

By wasting more honest work due to more latency, shorter block times reduce the hashrate needed to successfully execute a >50% attack.

It's a trade-off between securing transactions more quickly and making a blockchain more secure from >50% attacks.

No it's not. A block chain, any block chain, is only as secure from 51% attacks as the amount of resources it takes on average to outperform the honest network.

Yes it is. Take some time to understand what I'm arguing instead of rushing to disagree with me.

Latency only affects honest miners. Someone attempting a >50% attack does not need to worry about latency, since they are building on their own blocks. With shorter block times, the ratio of propagation time to mining time increases, and the honest miners lose more of their work to orphan blocks, which increases the advantage of the attacker.

It's for this reason that a blockchain with 10 second block times would be very easy to >50% attack. The rest of the network would lose a huge amount of work to orphan blocks, while an attacker could secretly build its alternate chain with no work lost to orphans, and then release it on the network.

I personally think a shorter block time is in fact a slight protocol improvement, ...

Well which is it? Above you said 2.5 minute block times have very little effect in real use-cases.

What do you mean "which is it"? I just stated "very little effect", which doesn't contradict "slight protocol improvement". If it has a very slight positive effect, then it would be a slight protocol improvement.

Responding to your misinterpretations of my comments is getting tiresome.

... but I don't think an alternative network with this feature makes up for the advantage Bitcoin has in the size of its network of users/nodes, its hashrate and the amount of supporting services/software it has,...

I'm not sure if you're aware that amount of users/nodes, hashrate, and amount of supporting services/software for any block chain including Bitcoin can change.

That's irrelevant to my point which is that right now, using Bitcoin is much more convenient for almost any use than using any Bitcoin-alt, because it has a larger supporting economy, which more than makes up for any slight disadvantage that it has due to a longer block time.

... and claims suggesting otherwise are pure hype by miners looking to make money on their low-demand coins.

Here again you're saying a lot about claims made but linking to nothing. I'll be more inclined to think you have a legitimate gripe about hype if you can link to something.

You're denying that this hype (e.g. scrypt being ASIC proof) has been regularly promoted by Bitcoin-alt hypers? Do I really need to spend time digging up instances of it and quoting them for you? In any case, I'm not going to spend that much time to convince you. You can choose to believe me or not.

I also don't think it makes sense to start a new blockchain that resets everyone's currency holdings to zero every time a minor protocol improvement comes along. It's better to upgrade the Bitcoin protocol over time in my opinion.

I don't believe a reset of everyone's wealth to zero for protocol changes is wise or welcome either. I believe in upgrading Bitcoin's protocol when possible too.

Everyone's currency holdings in the new blockchain are reset to zero. To the extent that the new blockchain replaces the Bitcoin blockchain in certain niches, it reduces the value of the coins held by Bitcoin users.

I strongly disagree. Litecoin is near copy of Bitcoin, and is less useful than it in almost every use-case.

Is that a fact or your opinion? I mean the part about being less useful in almost every use case? I believe it's only your opinion.[/quote]

There's no way to prove something like this is a fact, so it's only my opinion.

You're defining the market as anything you and litecoin miners want.

No I'm not. I understand a market has differences of opinion. That's why I'm spending significant time in this written exchange with you.

Then please stop claiming that "this is what the market wants" and otherwise implying that being against Bitcoin-alts is opposing the market.

Since I, and others who don't want Bitcoin-based networks to fragment, are also part of the market, you can't accurately say that the market 'wishes' for MtGox to add litecoin and other Bitcoin-alts.

It's true I can't say that for the entire market, but I didn't.

You said "the market", which out any qualifiers, which implies "the entire market". You didn't say "much of the market" or "some of the market", just "the market".

I'm saying market pressure can be the reason Litecoin will be more of a success than it is already.

I understand. My view is that market pressure can lead to litecoin not becoming successful, and can lead to MtGox not supporting it.

You're dwelling on a technicality that is completely irrelevant to my point, which is that Bitcoin users and investors are hurt by the adoption of nearly identical networks that add new coins that can be used in similar roles as bitcoins.

Not if those investors also hold the other coins.

The other coins will continue to increase in number, so it's not an appealing investment. Inflation is a zero sum game. The only group that benefits is miners. With steadily increasing inflation, for the sake of miners, eventually investors could lose interest in all BTC-based cryptocurrencies. Much of the allure of Bitcoin is the prospect of 21 million bitcoins being used for a significant percentage of world commerce, but that goes away when there is nothing stopping Bitcoin 2, Bitcoin 3, ad infinitum, from being produced and taking market share from Bitcoin 1.

There's no denying that from an investor's point of view, an increasing number of blockchains gaining adoption reduces the allure of investing in coins.

A bitcoin is an arbitrary unit.

No it's not. If you think it is then sell me a bitcoin for $1.00.

Please stop misreading my comments. I know you can understand the point I'm trying to convey. What I'm trying to say is that the choice of a bitcoin as the standard unit of account in the Bitcoin economy is an arbitrary choice: it could be millicoins or Satoshis instead.

So when you claim that bitcoins are very 'scarce', because there are 21 million, you're assuming something that is completely arbitrary (the choice of bitcoin as the standard unit of account) is a fundamental physical quality of Bitcoin, as opposed to an accounting convention.

Fundamentally, the amount of bitcoin is not 'extremely scarce', because bitcoins can be divided to 8 decimal places.

In any case, what's important is that the adoption of near copies of Bitcoin leads to a rapid rate of inflation in the Bitcoin-based cryptocurrency money supply. I think that's bad.

Creation of alt-coins doesn't automatically mean adoption of them. Have you any idea how many alt-coins there are now?  More than you can count on two hands.

I didn't say 'creation'. I said 'adoption'. I'm trying to discourage adoption of near copycats of Bitcoin.

I think either Bitcoin will remain the dominant cryptocurrency, or we will see increasing fragmentation and inflation of BTC-based cryptocurrency.

I had similar thinking at first. I didn't always support Litecoin. When it was announced I probably felt a bit like you do now towards it, as an unnecessary entrant to the scene. I later came to believe an ecosystem with only Bitcoin is the real danger. There is too much that can go wrong. Everything would have to go perfectly, and history has shown that usually isn't the case when it comes to Bitcoin.[/quote]

Even if there are no major competitors to Bitcoin, there will always be many smaller ones, and those can provide all of the backup we need.

Bitcoin itself can also always be forked if it runs into major problems. I just don't see the need to risk serious fragmentation and loss of investor confidence in BTC to create a major, nearly identical, parallel network as a backup.

If it was extremely distinct from BTC that would be one thing, but all of the Bitcoin-alts will very likely have any weakness that BTC has, since their code is almost exclusively derived from BTC. Therefore, I see the benefit, in terms of providing a backup, as minimal, and not even close to making up for the risk it poses to investor confidence.

I don't think it's likely that Bitcoin will only have one competing parallel network, and no more after that. In other words, it's either a universal money protocol known as BTC or it's a steadily increasing number of incompatible protocols.

Again, there is already far more than Bitcoin on the scene. What you don't seem to appreciate is that the majority of them don't have traction. Can't you see things appear to be progressing more closely to what I predict than you do?

We can agree to disagree.

I think they will probably continue to not have traction, but I also believe though that if one of them does gain traction, then the likelihood of more following increases significantly. I see it as a serious risk, and worth trying to avoid.

I disagree with your assessment of this being the best way to plan against the corruption of Bitcoin. I explained my opinion on what is a much better way to create a Bitcoin-alt:

fork the blockchain with all of the transaction data that exists up to some point in time, so the new blockchain doesn't dilute the currency holdings of all Bitcoin users.

How in the world do you decide which point in time is the right one to invalidate transactions? You're saying a much better way to create a Bitcoin alternative is an intentionally disastrous hard economic fork?[/quote]

You pre-announce a new fork, giving people time to decide whether they want to upgrade to use the new network before it's created. It's pretty straightforward, and less disastrous for Bitcoin users than a competing blockchain being created in which they have zero BTC.

Even if they choose to not adopt the new Bitcoin-alt, at least in the event that it succeeds, they would still see their coins gain in value, since they hold some in the alt.

This way, if you had 50 BTC in the original network, you would have 50 BTC in the new network too.

Not if you received those 50 BTC for a payment after the fork cut off for valid transactions.

That's easy to solve. You include a minor change to the transaction format in the Bitcoin-alt, so that valid transactions in the Alt blockchain are invalid in the original blockchain, and vice versa.

That can happen too. In fact I said the market was bigger than myself and my detractors in the thread where I first proposed supporting Litecoin as a solution to the Bitcoin foundation disagreement.

Thank you for conceding that there is no way to know what the market will do or wants.

I didn't say the code wasn't 'Bitcoin technology'. I said all code doesn't belong only to something called Bitcoin. If you think it does you need to become familiar with what open source means.

I never said it 'belongs to Bitcoin', in the sense of being its property. Describing something as the 'Bitcoin market' or 'Bitcoin technology' doesn't mean I believe that the source code is not free to be modified and used to create parallel networks.

[TsuyokuNaritai]

Shorter block times do NOT make Bitcoin-alts more secure.

Who said they did?

All else equal, moderately shorter block times are more secure. Of course, that has to be weighed against the relative cost to perform such an attack on BTC vs LTC, given BTC's significantly higher hashing power.
 
reddit.com/r/litecoin/comments/1cssqr/the_math_why_litecoin_is_more_secure_than_bitcoin/

[amincd]

Shorter block times do NOT make Bitcoin-alts more secure.

Who said they did?

All else equal, moderately shorter block times are more secure. Of course, that has to be weighed against the relative cost to perform such an attack on BTC vs LTC, given BTC's significantly higher hashing power.
 
reddit.com/r/litecoin/comments/1cssqr/the_math_why_litecoin_is_more_secure_than_bitcoin/

They are not more secure. That analysis misses the honest work lost to latency, which increases with shorter block times.

[TsuyokuNaritai]

All else equal, moderately shorter block times are more secure. Of course, that has to be weighed against the relative cost to perform such an attack on BTC vs LTC, given BTC's significantly higher hashing power.
 
reddit.com/r/litecoin/comments/1cssqr/the_math_why_litecoin_is_more_secure_than_bitcoin/

They are not more secure. That analysis misses the honest work lost to latency, which increases with shorter block times.

Sure, for ridiculously short block times, but for 10 minutes [Edit: I mean 2.5 ] average is latency loss significant enough to counterbalance the effect above? Source/numbers?

[stdset]

If Litecoin gets adoption comparable to Bitcoin, it's inevitable that they will compete.
Now let's try to imagine two scenarios:

1) Bitcoin wins. The more people accept a currency, the more people want to accept that currency as well. Bitcoin wins because of that network effect. Litecoin dies. The world moves foward with the new amazing technology, hopefully to become more free and prosperous. Bitcoin continues to appreciate by orders of magnitudes.

2) Litecoin wins. Bitcoin value crashes to 0. But so does value of Litecoin. Why? Because any sane individual sees that a cryptocurrency which was once the only cryptocurrency in the world, which, when other cryptocurrencies emerged, was called "the king of cryptocurrensyes", crashed. And litecoin is not different. Litecoin is nearly a copy of bitcoin. So, it will crash as well. One of greatest inventions of mankind will be wasted, the world will return to old and not so good fiat.

[amincd]

All else equal, moderately shorter block times are more secure. Of course, that has to be weighed against the relative cost to perform such an attack on BTC vs LTC, given BTC's significantly higher hashing power.
 
reddit.com/r/litecoin/comments/1cssqr/the_math_why_litecoin_is_more_secure_than_bitcoin/

They are not more secure. That analysis misses the honest work lost to latency, which increases with shorter block times.

Sure, for ridiculously short block times, but for 10 minutes average is latency loss significant enough to counterbalance the effect above? Source/numbers?

With 10 minute block times, 1% of honest work is lost to latency. With 2.5 minutes, I'm assuming it's 4%.

I personally think it's worth the loss in honest work to get more quickly secured confirmations, especially for a network like Bitcoin which has a massive hashrate making it safe from a >50% attack, but it's pretty subjective.

Also, shorter block times increases the advantage given to mining nodes with more connections to other mining nodes and faster internet connections, which counteracts decentralization.

[amincd]

If Litecoin gets adoption comparable to Bitcoin, it's inevitable that they will compete.
Now let's try to imagine to scenarios:

1) Bitcoin wins. The more people accept a currency, the more people want to accept that currency as well. Bitcoin wins because of that network effect. Litecoin dies. The world moves foward with the new amazing technology, hopefully to become more free and prosperous. Bitcoin continues to appreciate by orders of magnitudes.

2) Litecoin wins. Bitcoin value crashes to 0. But so does value of Litecoin. Why? Because any sane individual sees that a cryptocurrency which was once the only cryptocurrency in the world, which, when other cryptocurrencies emerged, was called "the king of cryptocurrensyes", crashed. And litecoin is not different. Litecoin is nearly a copy of bitcoin. So, it will crash as well. One of greatest inventions of mankind will be wasted, the world will return to old and not so good fiat.

That's basically what Hal Finney said about the consequences of a competing Bitcoin-derived cryptocurrency replacing Bitcoin:

https://bitcointalk.org/index.php?topic=10666.msg152988#msg152988

[weisoq]

And you really think litecoin will be the last cryptocurrency with an enthusiastic group of early adopters claiming it's a necessary 'silver to Bitcoin's gold'? No of course not. There will be others, and they will be push until MtGox puts them on the exchange too.

At this rate, cryptocurrency will have an inflation rate far above any fiat currency. This is already the criticism that Bitcoin's harshest critics are making against it, and now we see that it potentially has some merit, with late-comers to Bitcoin pushing for the addition of 84 million coins, on their Bitcoin 2 network, to the currency supply.

Indeed. It's all and only about perception. The economics of Bitcoin do not matter now (they never did really) - at all, unless you sell them. It doesn't matter if some argue Bitcoin is crypto gold or there's a finite number of Bitcoins that are divisable, or that others grumble about early adopters that gain more or that miners are the central banks etc etc.

The specific technical details of Bitcoin only ever had a finite lifespan for perceived relevance and perhaps optimising one's personal position. This is why if Bitcoin was to be more than temporal it should have just forsaken any economic doctrine (be it perceived as left/right, keynesian/austrian whatever) and just got the damn things out to people as quickly as possible and built an infrastructure to use them. To do this it has to be inflationary, not because inflation is good or bad but because the end game of cryptos was always going to be inflationary through replication.

And no I do not favour ltc, or btc for that matter over one another, except as a trade. Neither is going to 'win' - for all intents and purposes they're all going to become fungible. If not via forking, protocol adjustments to chase competition and best traits as progress dictates then in terms of spending power and utilisation options. Otherwise the alternative for each and all will be 0, which as somebody else here put it will be an incredibly wasted opportunity, for now.

[amincd]

The economics of Bitcoin matter because storing value is a necessary feature of a currency. Inflation reduces its utility as a store of value, and by extension, as a currency.

Also, as Mike Caldwell has argued, adding inflation to Bitcoin would make it lose its virulence. The prospect of buying a bitcoin today that is
one day worth $1 million has played no small part in its rapid adoption.

One final problem with inflation of cryptocurrencies is that it wastes energy. If for example Bitcoin was a major global currency and had a permanent inflation rate of 3%, that would mean that the global economy would consume resources with a value equal to 3% of the bitcoin money supply each year to produce hashes. Mining is totally useless work other than the security it provides, and security equaling 3% of a global currency's market capitalization is over-kill.

[acoindr]

amincd, you seem to be arguing not from an objective view, but one with an admitted motivation. You feel it necessary to proactively work against market adoption of Litecoin.

I read your entire response, and feel very tempted to (again) counter most everything you said. However, I don't have the time or interest in drawing this out even longer.

Instead I'll focus in on one particular point you made to try and illustrate why you and I may always have large disagreement.

A bitcoin is an arbitrary unit.

No it's not. If you think it is then sell me a bitcoin for $1.00.

Please stop misreading my comments. ...

Fundamentally, the amount of bitcoin is not 'extremely scarce', because bitcoins can be divided to 8 decimal places.

The bold emphasis is mine.

You just said fundamentally the amount of bitcoin is not extremely scarce because bitcoins can be divided to 8 decimal places.

I'm not sure how to explain to you what you're missing, and why that statement is wrong.

Yes, actually bitcoins are in fact extremely scarce when compared to billions of people potentially using them. Remove all the other alt-coins from the picture for a moment, and say there is only Bitcoin with its 21 million coin limit. It is true you can divide each and every one of those 21 million bitcoins into fractions, but what you cannot do is come up with more total whole bitcoins.

That means if you go to a store that will accept bitcoins for payment then your wealth can never be diminished by someone that adds more units with no value to the system. Whether a shopkeeper wants to label product pricing as 1 BTC or 1000 mBTC is irrelevant since mathematically those are exactly equal. However, what you must understand is adding zeros to the 'mBTC' labeling doesn't bring any more actual bitcoins into existence.

[amincd]

You just said fundamentally the amount of bitcoin is not extremely scarce because bitcoins can be divided to 8 decimal places.

I'm not sure how to explain to you what you're missing, and why that statement is wrong.

I said this to dispel your silly juxtaposition of '21 million bitcoins' with '7 billion people' in your argument that bitcoin is 'extremely scarce'.

Yes, actually bitcoins are in fact extremely scarce when compared to billions of people potentially using them. Remove all the other alt-coins from the picture for a moment, and say there is only Bitcoin with its 21 million coin limit. It is true you can divide each and every one of those 21 million bitcoins into fractions, but what you cannot do is come up with more total whole bitcoins.

That means their supply is limited. To call them 'extremely scarce' because there are 'only 21 million bitcoin' suggests that if there were '21 billion' bitcoins, they wouldn't be scarce, which shows a fundamental misunderstanding on your part on how the divisibility of bitcoin makes what units you divide them into irrelevant.

To put another way, I could counter that bitcoin currency is not extremely scarce because there will be 2.1 quadrillion Satoshis, which is more than enough for 7 billion people.

So it's not HOW MANY units there are in the currency's supply that's relevant to scarcity, it's the rate at which the currency's supply grows. It seemed to be you didn't understand this as you kept pointing to the fact that there are 21 million bitcoins and 7 billion people to try to support your scarcity claim.

[weisoq]

The economics of Bitcoin matter because storing value is a necessary feature of a currency. Inflation reduces its utility as a store of value, and by extension, as a currency.

Also, as Mike Caldwell has argued, adding inflation to Bitcoin would make it lose its virulence. The prospect of buying a bitcoin today that is
one day worth $1 million has played no small part in its rapid adoption.

One final problem with inflation of cryptocurrencies is that it wastes energy. If for example Bitcoin was a major global currency and had a permanent inflation rate of 3%, that would mean that the global economy would consume resources with a value equal to 3% of the bitcoin money supply each year to produce hashes. Mining is totally useless work other than the security it provides, and security equaling 3% of a global currency's market capitalization is over-kill.

I would agree with you if they were not replicable, but they are. The economics of limited supply and that of bitcoin matters only to those with bitcoins. The greater public couldn't care less whether it's called bitcoin, Acoin, Bcoin, specific hashing algorithms, protocols etc - only what purpose they serve and most significantly others' perception of their value as such. I agree that for now perception of Bitcoin as limited still prevails (I understand that's technically true) but that window is closing (and by Bitcoin I mean most Alts, I'm not criticising anything but principles). Yes adding inflation to Bitcoin would make it lose its virulence but with X million or billion alternatives the economic effect is and will be equivalent unless Bitcoin offers something, an infrastructure, a promise that none other now or in the future can. But it doesn't. It is possible that Bitcoin retains a high value as a specific asset traded between a specific group for specific purposes - in fact the price could be anything under those circumstances. But as a competing asset against others for broader adoption, subject to market forces, that's not going to happen.

On your energy point I agree again and is one of my major concerns about cryptos but I don't think (I also don't know) that's the issue at play yet. Ideally there'd be a means whereby cryptos could capture future energy use rather than that in the past.

[acoindr]

So it's not HOW MANY units there are in the currency's supply that's relevant to scarcity, it's the rate at which the currency's supply grows.

And you're wrong, again.

There will be a point in the future when no more bitcoins are rewarded for blocks - in other words no more currency inflation. Is that true or false?

The answer is true, but if that's the case then how can your statement also be true? It can't. You said it's the rate at which the currency supply grows that's relevant to its scarcity. In other words, if there is no currency growth (as will happen with Bitcoin eventually) then there is no relevance for scarcity. That is completely false.

There will be 21 million bitcoins in existence for the world, and no more available. That limit makes them scarce. Currency supply growth rates have nothing to do with it at that point.

[amincd]

I would agree with you if they were not replicable, but they are. The economics of limited supply and that of bitcoin matters only to those with bitcoins. The greater public couldn't care less whether it's called bitcoin, Acoin, Bcoin, specific hashing algorithms, protocols etc - only what purpose they serve and most significantly others' perception of their value as such. I agree that for now perception of Bitcoin as limited still prevails (I understand that's technically true) but that window is closing (and by Bitcoin I mean most Alts, I'm not criticising anything but principles).

You could very well be right, but it's also possible that Bitcoin has a network effect, that will result in it maintaining its dominant market share despite the emergence of copycats.

So it's not HOW MANY units there are in the currency's supply that's relevant to scarcity, it's the rate at which the currency's supply grows.

And you're wrong, again.

There will be a point in the future when no more bitcoins are rewarded for blocks - in other words no more currency inflation. Is that true or false?

The answer is true, but if that's the case then how can your statement also be true? It can't. You said it's the rate at which the currency supply grows that's relevant to its scarcity. In other words, if there is no currency growth (as will happen with Bitcoin eventually) then there is no relevance for scarcity. That is completely false.

I'm not sure why you're having so much trouble understanding my argument. Either I'm doing a very poor job of articulating myself, or you're deliberately misunderstanding me to avoid admitting you were wrong.

Here's what I'm stating: it doesn't matter if the algorithm determined that there will only be 21 million bitcoins or 21 billion. All that matters is that the supply is limited.

When you claim that Bitcoin only has 21 million bitcoins, which makes it "very scarce" because there are 7 billion people, it suggests you don't understand this.

There will be 21 million bitcoins in existence for the world, and no more available. That limit makes them scarce. Currency supply growth rates have nothing to do with it at that point.

Once again, you're not understanding my comment. Currency supply growth would be zero after some point in time, since the total supply will be limited at 21 million. "No supply growth" and "limited supply" are two different ways of saying the same thing. At what particular quantity of coins the supply is limited at is irrelevant. The only thing that's relevant is that the supply *IS* limited.

[acoindr]

Nice try.

This

The only thing that's relevant is that the supply *IS* limited.

does not equal this:

So it's not HOW MANY units there are in the currency's supply that's relevant to scarcity, it's the rate at which the currency's supply grows.

You should be big enough to admit when you're wrong, not try to save face after I've pointed out how you're in error. When you're talking about money - currency supply, inflation, deflation, measurements (like what 1 bitcoin is), etc. - these things do matter.

[amincd]

I was trying to convey the same point in both quotes. You should be above trying to misinterpret and misrepresent my comments to try to discredit my argument.

[acoindr]

I was trying to convey the same point in both quotes. You should be above trying to misinterpret and misrepresent my comments to try to discredit my argument.

Like I said, when it comes to money being specific matters. It so happens rate of inflation can absolutely be a factor in how scarce a currency is, and it usually is, but it's not the only factor as you said it is.

Fine distinction of terms and concepts is important, especially when discussing or formulating opinions on a topic as complex as money.

[AKWAnalytics]

I was trying to convey the same point in both quotes. You should be above trying to misinterpret and misrepresent my comments to try to discredit my argument.

Your arguments aren't very good to begin with.

[amincd]

I was trying to convey the same point in both quotes. You should be above trying to misinterpret and misrepresent my comments to try to discredit my argument.

Your arguments aren't very good to begin with.

I'm not surprised that someone invested in litecoins doesn't think my arguments are very good.

I was trying to convey the same point in both quotes. You should be above trying to misinterpret and misrepresent my comments to try to discredit my argument.

Like I said, when it comes to money being specific matters. It so happens rate of inflation can absolutely be a factor in how scarce a currency is, and it usually is, but it's not the only factor as you said it is.

Fine distinction of terms and concepts is important, especially when discussing or formulating opinions on a topic as complex as money.

But I never denied that the 'rate of inflation' is a factor in how scarce a currency is. I took issue with your claim that bitcoin is scarce because its 21 million coin supply is insufficient for a population of 7 billion. It wasn't the rate of inflation that you were indicating was the source of its scarcity, but the low nominal number of coins, which in reality is irrelevant.

[Vivisector999]

You are correct that a Bitcoin could be broken down into Satoshi to provide enough currency units to populate the world market's needs for currency.  But will you accept at that time that they say all your BTC will now have the equivalent value of 1 Satoshi per BTC???  Or do you expect the world economy will accept the idea of moving fully to a currency that accepts the idea a few people that were early adopters can hold 1/1000th of the world's economy to themselves.  Satoshi would become richer than a G7 country, as he supposedly owns 800,000 BTC.  It is reasons like this that Bitcoins or any other long established and limited cryptos will not take over as the default world's currency.  No one will go for that idea, no matter how nice you might think it would be.  

[amincd]

You are correct that a Bitcoin could be broken down into Satoshi to provide enough currency units to populate the world market's needs for currency. But will you accept at that time that they say all your BTC will now have the equivalent value of 1 Satoshi per BTC???  Or do you expect the world economy will accept the idea of moving fully to a currency that accepts the idea a few people that were early adopters can hold 1/1000th of the world's economy to themselves.  Satoshi would become richer than a G7 country, as he supposedly owns 800,000 BTC.  It is reasons like this that Bitcoins or any other long established and limited cryptos will not take over as the default world's currency.  No one will go for that idea, no matter how nice you might think it would be.  

If cryptocurrency takes hold, even with multiple blockchains, there will be early adopters that become extremely wealthy. People will buy into it for the same reason they buy into Apple stocks: they value personal financial gains more than they value denying early adopters wealth.

In any case, in the long run, holding a large amount of bitcoins, even in the event of massive success, will be not be as lucrative as owning large amounts of income-producing assets in the Bitcoin economy. The bitcoins will continually be circulated, and those who provide goods/services will constantly be able to replenish their store of coins, while those that do nothing but hold coins will be able to spend their wealth once.

The total market capitalization of a base currency is only a small fraction of the total wealth that exists in the world. Most wealth is not in currency. If Bitcoin becomes HUGE, I don't expect it to be worth more than a few hundred billion dollars. In that case, Satoshi would be worth something in the tens of billions of dollars. That's not any more than the founders of other tech giants like Facebook and Apple.

[acoindr]

I took issue with your claim that bitcoin is scarce because its 21 million coin supply is insufficient for a population of 7 billion.

I never said 21 million coins is insufficient for a population of 7 billion and you can't quote where I did. This is just another example of you saying something that doesn't match reality. Anyway, I'm tired of the discussion with you. Go ahead and reply with your best as I'm sure you want the last word(s).

[amincd]

I took issue with your claim that bitcoin is scarce because its 21 million coin supply is insufficient for a population of 7 billion.

I never said 21 million coins is insufficient for a population of 7 billion and you can't quote where I did. This is just another example of you saying something that doesn't match reality. Anyway, I'm tired of the discussion with you. Go ahead and reply with your best as I'm sure you want the last word(s).

You said it here:

However, I do care about a limit on coin supply. As long as that limit is measured in the millions for a global user base of 7 billion I don't have much concern.

and here:

That's true, but like I said before the total limit on globally accepted cryptocurrency I believe will be measured in the millions, which is extremely scarce.

And also here:

Yes, actually bitcoins are in fact extremely scarce when compared to billions of people potentially using them. Remove all the other alt-coins from the picture for a moment, and say there is only Bitcoin with its 21 million coin limit.

You did add this right after:

It is true you can divide each and every one of those 21 million bitcoins into fractions, but what you cannot do is come up with more total whole bitcoins.

which is correct. But your first point, that bitcoin is scarce because there are 'very few' of them compared to the population of the world, is not. It doesn't make a difference if there is only 1 bitcoin in the world economy, or 1 trillion, as long as it is divisible enough where everyone can have a share of the total supply.

[redwraith]

crazy_rabbit is continuosly promoting alternative currencies, including Bitcoin testnet coins. He strives to put his ads in the Bitcoin discussion thread, instead of the alt-coins thread, where it should really stay.

In my opinion, this behavior does no good to the cryptocurrency world. Currently, all alt-coins are just forks any guy can create in one afternoon, and just dilutes the focus on Bitcoin.

Anyway, I will personally abandon Mt Gox if this happens and I will join some other exchange.

Bye, bye!

[N12]

If Litecoin gets adoption comparable to Bitcoin, it's inevitable that they will compete.
Now let's try to imagine to scenarios:

1) Bitcoin wins. The more people accept a currency, the more people want to accept that currency as well. Bitcoin wins because of that network effect. Litecoin dies. The world moves foward with the new amazing technology, hopefully to become more free and prosperous. Bitcoin continues to appreciate by orders of magnitudes.

2) Litecoin wins. Bitcoin value crashes to 0. But so does value of Litecoin. Why? Because any sane individual sees that a cryptocurrency which was once the only cryptocurrency in the world, which, when other cryptocurrencies emerged, was called "the king of cryptocurrensyes", crashed. And litecoin is not different. Litecoin is nearly a copy of bitcoin. So, it will crash as well. One of greatest inventions of mankind will be wasted, the world will return to old and not so good fiat.

That's basically what Hal Finney said about the consequences of a competing Bitcoin-derived cryptocurrency replacing Bitcoin:

https://bitcointalk.org/index.php?topic=10666.msg152988#msg152988

True story. Scamcoin supporters are endangering the progress of the whole effort only for their short-sighted greed.

[adpinbr]

You are correct that a Bitcoin could be broken down into Satoshi to provide enough currency units to populate the world market's needs for currency.  But will you accept at that time that they say all your BTC will now have the equivalent value of 1 Satoshi per BTC???  Or do you expect the world economy will accept the idea of moving fully to a currency that accepts the idea a few people that were early adopters can hold 1/1000th of the world's economy to themselves.  Satoshi would become richer than a G7 country, as he supposedly owns 800,000 BTC.  It is reasons like this that Bitcoins or any other long established and limited cryptos will not take over as the default world's currency.  No one will go for that idea, no matter how nice you might think it would be.  

I agree for now BTC is the way to go cause no one cares about crypto currencies. Once it starts getting accepted there may be a move for "faircoin" wher everyone gets to start mining at the same time, AFTER THEY REALIZE THEY SHOULD BE MINING

[weisoq]

I would agree with you if they were not replicable, but they are. The economics of limited supply and that of bitcoin matters only to those with bitcoins. The greater public couldn't care less whether it's called bitcoin, Acoin, Bcoin, specific hashing algorithms, protocols etc - only what purpose they serve and most significantly others' perception of their value as such. I agree that for now perception of Bitcoin as limited still prevails (I understand that's technically true) but that window is closing (and by Bitcoin I mean most Alts, I'm not criticising anything but principles).

You could very well be right, but it's also possible that Bitcoin has a network effect, that will result in it maintaining its dominant market share despite the emergence of copycats.

Perhaps although I don't think so. One of the first questions I get when people ask me about Bitcoin is something along the lines of 'can they be copied and how can we do that?' One of the next questions when they realise there are already alts is something along the lines of 'why are people buying bitcoins then when Xcoin is cheaper'. There's not a very bitcoin-positive answer to that and I'm not sure at all about any long-term network effect under these circumstances when parting with money is concerned. Bitcoin already ignores issues such as relative global purchasing power, it really shouldn't ignore basic market forces in pursuit of a network effect.

True story. Scamcoin supporters are endangering the progress of the whole effort only for their short-sighted greed.

But that's exactly what everybody else says about Bitcoin supporters (whether either point is true or not).

To get back on topic, of course Litecoin on Gox will hammer bitcoin (perception if not also price). If it's not gox it's some other exchange and if it's not ltc it's some other alt. Bitcoiners should have been killing alts from day one. But even so that would only have delayed the inevitable. Eventually somebody with bigger pockets and resources than the average bitcointalker would have come along and done it anyway.

[N12]

To get back on topic, of course Litecoin on Gox will hammer bitcoin (perception if not also price). If it's not gox it's some other exchange and if it's not ltc it's some other alt. Bitcoiners should have been killing alts from day one. But even so that would only have delayed the inevitable. Eventually somebody with bigger pockets and resources than the average bitcointalker would have come along and done it anyway.

Eventually, some entities deeply invested into Bitcoin will (collude to?) exterminate the Scamcoins via 51% attacks.

[Liquid]

Id say BTC LTC NMC

I would not leave out LTC 

[Liquid]

I agree but its a "Classic" now  

Also YAC does not have established roots like LTC does and might not ever

[BitcoinFX]

To get back on topic, of course Litecoin on Gox will hammer bitcoin (perception if not also price). If it's not gox it's some other exchange and if it's not ltc it's some other alt. Bitcoiners should have been killing alts from day one. But even so that would only have delayed the inevitable. Eventually somebody with bigger pockets and resources than the average bitcointalker would have come along and done it anyway.

Eventually, some entities deeply invested into Bitcoin will (collude to?) exterminate the Scamcoins via 51% attacks.

The alt. coin market is mostly good for Bitcoin!

Currently I'm minning Bitcoin, Litecoin and Digitalcoin 24/7. I've even mined a few BitBars, Argentum and some other alt. coins.

Proof-of-Stake coins like PPcoin should be seen as a true innovation.

A percentage of the alt. coin that I've mined in the past few weeks I've traded up and exchanged on sites like cryptsy.com for Bitcoin. These are quantities of Bitcoin that I could not of aquired by mining Bitcoin in the same period of time. Moreover, I've purchased x4 Block Erupter USB ASIC (thus far) with those very Bitcoins, increasing my own Bitcoin hash rate, thus making a contribution to the Bitcoin economy as a whole.

Alt. coins will allow others to discover, trade, aquire and buy Bitcoin and vice versa. Hardcore Bitcoin supporters should use their old GPU mining rigs and FPGA's to mine Litecoin and other alt. coins, as Bitcoin becomes dominated by ASIC's.

Yes. Some alt. coins are total garbage and will probably just phase out by themselves i.e. there is certainly no need for anyone to collude to destroy others creativity.

I'm sure Satoshi would in fact think that all these alt. coins are really great! It's not all about Bitcoin you know, it should be about supporting crypto-currencies in general. Look at the bigger picture!

[joeperry]

This debate remembers me the never ending discussion about bretton woods and those bored arguments. The title is a clue about what it will be in 50 or 100 years, crypto currencies will replace fiat currencies, and I cant Imagine a world with just one coin, as I cant imagine with a single lenguage.

Litecoin and Bitcoin will not be the end of this, are just the beginning and they are just too young to say nothing. I see Litecoin very promising but is younger than the young Bitcoin. You cant ask for more, they are just the begining and guys try to make some bucks with them, and let people decide what could be, if litecoin kills bitcoin it will be because this currencie wasnt good enough to have his place in the world economy, if bitcoin kills litecoin we can say the same.

Just enjoy the trip, folks  

[Liquid]

When 1 bitcoin = $100 

[weisoq]

To get back on topic, of course Litecoin on Gox will hammer bitcoin (perception if not also price). If it's not gox it's some other exchange and if it's not ltc it's some other alt. Bitcoiners should have been killing alts from day one. But even so that would only have delayed the inevitable. Eventually somebody with bigger pockets and resources than the average bitcointalker would have come along and done it anyway.

Eventually, some entities deeply invested into Bitcoin will (collude to?) exterminate the Scamcoins via 51% attacks.

They might, but it's too late. It was always too late because there'll only be another then another etc. Unless those entities are willing to exhaust a bottomless pit of resources in pursuit of that (and I can't see why as it makes no sense - only shooting oneself in the foot - but not unthinkable) I think it's more likely that either competition will realign many existing and future cryptos (the ones that don't go to zero) towards similar protocols/technicalities over time or those entities will instead to do the most economically rationale thing and just sell high to buy low before others do.

[m4ttanderson]

I believe that while we shouldn't focus just on one exchange (I use BTC-e & Vircurex for trading, Coinjar for buying, Bitrade for selling), we should support their efforts in adding another crypto.

I'm definitely in support of LTC inclusion with FTC as well. You gotta diversify your portfolio and build practical uses in order to have an ever evolving coin. Much like Dollars, Yen, Euros etc.

re: Vote for FTC on Mt Gox - https://support.mtgox.com/forums/20514198-Featured-Requests

[Vivisector999]

I think people are crazy not to see the benefit of alt coins.  It's all a matter of greed that some people push to have just 1 type of coin.  Sure it might not exactly have a niche market etched out yet, but that doesn't mean something won't come along.  I think everyone can agree that Bitcoin is not going to make inroads into the fast food/coffee shop market due to the speeds of transactions.  LTC probably won't even make ripples in that market.  But since the dream is to have the entire world economy to switch from fiat to crypto, then only an idiot would think that only 1 coin can do all that.  Alt coins could act like a personal wallet (Fiat you carry with you, not talking Bitcoin personal wallet) or store card (Like my re-chargeable Tim's coffee card) does now in the current economy.  Bitcoin could hold the majority of people's currency (Like a bank does now), and people could switch a few satoshi's over to the crypto of their choice when they go out to purchase groceries, or get that morning coffee.

Plus different pools of people working at getting different ways to get crypto accepted by the masses can only help crypto be accepted, which would help Bitcoin in the long run.  Or whatever crypto takes over as the dominant one.  It's quite funny to see a large group of supposedly technologically advanced people stumble on the idea that innovation is bad, and if the original product is unhinged as the top, it would mean the entire system would collapse.  I can't think of a single innovation in recent times when something was created and kept as the defacto standard, where no person/company added something to make it better.  And I think that is the reason that people deeply ingrained in Bitcoin don't like the alts.  They are to busy worrying that some innovation will eventually take out the coin they put so much money/time into.

[acoindr]

What people don't realize is all the disagreement is the exact reason I realized alt-coins like Litecoin had a role to play.

When Litecoin (and other alts) were announced I paid them little attention. I just didn't see how they provided significant value enough to be adopted by the community on par with Bitcoin. (I believe Erik Voorhees still has this opinion.)

When the disagreement over Bitcoin Foundation broke out I realized with startling clarity there could be irreconcilable opinions between people, no matter how much debate ensued. I saw this could apply to more disputes than just the foundation, and might even threaten Bitcoin (with tempers, hard forks etc.) as stakes grew and more opinions came on board. I felt there was growing risk in corralling increasingly divergent opinions under one tent, and expecting harmony. Indeed this was long before the block size issue blew up in the community. A single coin I felt invited disaster because while threats from the outside might be defensible, a diverse group unable to counter infighting (and possibly corruption) could fall from within.

That was the important feature I realized alt-coins had which Bitcoin didn't. They provided an alternative. That was the thing Bitcoin could never provide by itself. After I realized this I found other ways alt-coins strengthened cryptocurrency overall (like providing technical/economic backup, easing pressure on block chain scalability, experimentation, etc.).

While I missed the significant value of alt-coins at first, I later realized they could be indispensable for trying to gain cryptocurrency success overall.

What people against Litecoin (or Mt.Gox adding it) I think don't realize is it's probably inevitable already Litecoin will see widespread adoption. Whether or not Mt.Gox adds it doesn't change the large number of people already holding it, which is where coins get traction/value in the first place. There are 18,810,954 litecoins in people's hands now. That's slightly more than the number of bitcoins currently. Litecoin is already being exchanged and has a growing user base, just like Bitcoin.

Last, for those worried about an unending string of new coins, don't. You can't stop that happening anyway, and you may even find (later as I did) real benefit to this. The reason new coins can't easily destroy older established ones is exactly because older coins are older and established. Any coin's code can be duplicated, so coins competing on that level only are not differentiated. What can't be duplicated easily is the willingness of a large user base to use a coin. For every coin that attempts to gain this, but offers no real value, i.e. reason to be adopted, the coin's value is never any more than how quickly the features it has can be cloned (i.e. probably zero).

If you don't believe more than one coin can co-exist and be valued by the market properly (and differently) you're not paying attention. That is already the situation we have now.

[crazy_rabbit]

What people don't realize is all the disagreement is the exact reason I realized alt-coins like Litecoin had a role to play.

When Litecoin (and other alts) were announced I paid them little attention. I just didn't see how they provided significant value enough to be adopted by the community on par with Bitcoin. (I believe Erik Voorhees still has this opinion.)

When the disagreement over Bitcoin Foundation broke out I realized with startling clarity there could be irreconcilable opinions between people, no matter how much debate ensued. I saw this could apply to more disputes than just the foundation, and might even threaten Bitcoin (with tempers, hard forks etc.) as stakes grew and more opinions came on board. I felt there was growing risk in corralling increasingly divergent opinions under one tent, and expecting harmony. Indeed this was long before the block size issue blew up in the community. A single coin I felt invited disaster because while threats from the outside might be defensible, a diverse group unable to counter infighting (and possibly corruption) could fall from within.

That was the important feature I realized alt-coins had which Bitcoin didn't. They provided an alternative. That was the thing Bitcoin could never provide by itself. After I realized this I found other ways alt-coins strengthened cryptocurrency overall (like providing technical/economic backup, easing pressure on block chain scalability, experimentation, etc.).

While I missed the significant value of alt-coins at first, I later realized they could be indispensable for trying to gain cryptocurrency success overall.

What people against Litecoin (or Mt.Gox adding it) I think don't realize is it's probably inevitable already Litecoin will see widespread adoption. Whether or not Mt.Gox adds it doesn't change the large number of people already holding it, which is where coins get traction/value in the first place. There are 18,810,954 litecoins in people's hands now. That's slightly more than the number of bitcoins currently. Litecoin is already being exchanged and has a growing user base, just like Bitcoin.

Last, for those worried about an unending string of new coins, don't. You can't stop that happening anyway, and you may even find (later as I did) real benefit to this. The reason new coins can't easily destroy older established ones is exactly because older coins are older and established. Any coin's code can be duplicated, so coins competing on that level only are not differentiated. What can't be duplicated easily is the willingness of a large user base to use a coin. For every coin that attempts to gain this, but offers no real value, i.e. reason to be adopted, the coin's value is never any more than how quickly the features it has can be cloned (i.e. probably zero).

If you don't believe more than one coin can co-exist and be valued by the market properly (and differently) you're not paying attention. That is already the situation we have now.

+1

[Liquid]

Ok lets say you are right then why do newbies and crypto beginners like the idea of owning some LTC then ? Its not all about bitcoin you know

I do value your maturity and intelligence on the subject though

I can send you some LTC if you want post up your address 

[Technomage]

I've been following some of the silly discussions in this thread and I'd like to weigh in on some things.

First of all, as far as actual usage, all alternative cryptocurrencies, including Ripple, are, as of right now, absolutely useless compared to Bitcoin. Once we understand that, we can continue the analysis on a fair basis.

Claiming that the altcoins have a significant diluting effect on Bitcoin, is a statement with no actual facts backing it. Thus far all of the other cryptocurrencies have managed to get a very small market cap compared to Bitcoin. Here I don't even address the possibility that most likely altcoins will bring in more people to the cryptocurrency scene, which will actually increase the whole cryptomoney market cap.

Bitcoin market cap = ~1.1 billion USD
Litecoin market cap = ~50 million USD
Ripple market cap = ~17 million USD (1.2 billion XRP distributed so far based on founder statement, 7000 equals 1 bitcoin, 1 bitcoin is $100)
Other altcoins = ~50 million total?

One can disagree with the way I calculate the XRP market cap, but I can assure you that's the only sane way of doing it.

So, now that we know that the altcoins are basically useless at this time, and their total market cap is very small compared to Bitcoin, we can clearly see that they have no significant "diluting" effect on Bitcoin. It's almost the same as saying that Bitcoin is diluting the Euro. Which is obviously ridiculous. They do dilute Bitcoin more than Bitcoin dilutes the Euro, but anyway. You get the point.

What are altcoins good for? They are good for experimenting with stuff that Bitcoin simply can't. Potentially exciting cryptocurrency innovations can come from there. They can also provide some additional mixing capabilities to the cryptomarket, thus allowing more privacy.

One can argue that some innovations already exist. Faster block time (in my opinion an insignificant issue), different algorithm for proof of work (don't agree on scrypt superiority at all, but I do see it as a good backup), different model entirely (proof of stake included) etc.

Ripple is the most innovative of them all, it's very different. Then again Ripple has significant issues as well. It's way more centralized and it's also way more closed. At the moment at least. I'm at this time very skeptical of Ripple, but the core idea behind it is more innovative than the other altcoins.

Finally, I wouldn't really worry about altcoins. They can dilute Bitcoin a bit, and they are mostly useless, but they can also bring in new people and create more diversity for the cryptocurrency economy. That can't be bad. The market will make sure the useless ones die eventually. Remember that Bitcoin has a huge lead in brand name, publicity and network effect. All the others are way, way behind, and regardless of the innovations they bring, they will have a tough time catching up.

Even though in some ways the "Bitcoin is gold, Litecoin is silver" analogy is bad, in some ways it holds true. Litecoin will most likely remain a significantly cheaper cryptocurrency. Not relative to the monetary base, but in actual market cap.

I'm surprised if Litecoin ever manages to sustain a market cap that is over 10% of Bitcoin market cap. Right now it's at 4%, which I think is actually a bit high. Litecoin has perhaps 1% of the usage Bitcoin has, so it's a bit overvalued. It's very speculative though, so who knows.

[Mjbmonetarymetals]

I've been following some of the silly discussions in this thread and I'd like to weigh in on some things.

First of all, as far as actual usage, all alternative cryptocurrencies, including Ripple, are, as of right now, absolutely useless compared to Bitcoin. Once we understand that, we can continue the analysis on a fair basis.

Claiming that the altcoins have a significant diluting effect on Bitcoin, is a statement with no actual facts backing it. Thus far all of the other cryptocurrencies have managed to get a very small market cap compared to Bitcoin. Here I don't even address the possibility that most likely altcoins will bring in more people to the cryptocurrency scene, which will actually increase the whole cryptomoney market cap.

Bitcoin market cap = ~1.1 billion USD
Litecoin market cap = ~50 million USD
Ripple market cap = ~17 million USD (1.2 billion XRP distributed so far based on founder statement, 7000 equals 1 bitcoin, 1 bitcoin is $100)
Other altcoins = ~50 million total?

One can disagree with the way I calculate the XRP market cap, but I can assure you that's the only sane way of doing it.

So, now that we know that the altcoins are basically useless at this time, and their total market cap is very small compared to Bitcoin, we can clearly see that they have no significant "diluting" effect on Bitcoin. It's almost the same as saying that Bitcoin is diluting the Euro. Which is obviously ridiculous. They do dilute Bitcoin more than Bitcoin dilutes the Euro, but anyway. You get the point.

What are altcoins good for? They are good for experimenting with stuff that Bitcoin simply can't. Potentially exciting cryptocurrency innovations can come from there. They can also provide some additional mixing capabilities to the cryptomarket, thus allowing more privacy.

One can argue that some innovations already exist. Faster block time (in my opinion an insignificant issue), different algorithm for proof of work (don't agree on scrypt superiority at all, but I do see it as a good backup), different model entirely (proof of stake included) etc.

Ripple is the most innovative of them all, it's very different. Then again Ripple has significant issues as well. It's way more centralized and it's also way more closed. At the moment at least. I'm at this time very skeptical of Ripple, but the core idea behind it is more innovative than the other altcoins.

Finally, I wouldn't really worry about altcoins. They can dilute Bitcoin a bit, and they are mostly useless, but they can also bring in new people and create more diversity for the cryptocurrency economy. That can't be bad. The market will make sure the useless ones die eventually. Remember that Bitcoin has a huge lead in brand name, publicity and network effect. All the others are way, way behind, and regardless of the innovations they bring, they will have a tough time catching up.

Even though in some ways the "Bitcoin is gold, Litecoin is silver" analogy is bad, in some ways it holds true. Litecoin will most likely remain a significantly cheaper cryptocurrency. Not relative to the monetary base, but in actual market cap.

I'm surprised if Litecoin ever manages to sustain a market cap that is over 10% of Bitcoin market cap. Right now it's at 4%, which I think is actually a bit high. Litecoin has perhaps 1% of the usage Bitcoin has, so it's a bit overvalued. It's very speculative though, so who knows.

In a nutshell as Litecoin becomes ever more "useful" expect higher prices.

[smoothie]

I just find it funny that people think it is a good thing that gox will be doing litecoin trading. As if they haven't fucked up enough to be stripped of their market share for good.

Only good thing will come of this is more exposure for Litecoin. But anyone trading litecoin on mtgox, beware, more fuck ups are on the way of mt. of kox.

[klee]

I've been following some of the silly discussions in this thread and I'd like to weigh in on some things.

First of all, as far as actual usage, all alternative cryptocurrencies, including Ripple, are, as of right now, absolutely useless compared to Bitcoin. Once we understand that, we can continue the analysis on a fair basis.

Claiming that the altcoins have a significant diluting effect on Bitcoin, is a statement with no actual facts backing it. Thus far all of the other cryptocurrencies have managed to get a very small market cap compared to Bitcoin. Here I don't even address the possibility that most likely altcoins will bring in more people to the cryptocurrency scene, which will actually increase the whole cryptomoney market cap.

Bitcoin market cap = ~1.1 billion USD
Litecoin market cap = ~50 million USD
Ripple market cap = ~17 million USD (1.2 billion XRP distributed so far based on founder statement, 7000 equals 1 bitcoin, 1 bitcoin is $100)
Other altcoins = ~50 million total?

One can disagree with the way I calculate the XRP market cap, but I can assure you that's the only sane way of doing it.

So, now that we know that the altcoins are basically useless at this time, and their total market cap is very small compared to Bitcoin, we can clearly see that they have no significant "diluting" effect on Bitcoin. It's almost the same as saying that Bitcoin is diluting the Euro. Which is obviously ridiculous. They do dilute Bitcoin more than Bitcoin dilutes the Euro, but anyway. You get the point.

What are altcoins good for? They are good for experimenting with stuff that Bitcoin simply can't. Potentially exciting cryptocurrency innovations can come from there. They can also provide some additional mixing capabilities to the cryptomarket, thus allowing more privacy.

One can argue that some innovations already exist. Faster block time (in my opinion an insignificant issue), different algorithm for proof of work (don't agree on scrypt superiority at all, but I do see it as a good backup), different model entirely (proof of stake included) etc.

Ripple is the most innovative of them all, it's very different. Then again Ripple has significant issues as well. It's way more centralized and it's also way more closed. At the moment at least. I'm at this time very skeptical of Ripple, but the core idea behind it is more innovative than the other altcoins.

Finally, I wouldn't really worry about altcoins. They can dilute Bitcoin a bit, and they are mostly useless, but they can also bring in new people and create more diversity for the cryptocurrency economy. That can't be bad. The market will make sure the useless ones die eventually. Remember that Bitcoin has a huge lead in brand name, publicity and network effect. All the others are way, way behind, and regardless of the innovations they bring, they will have a tough time catching up.

Even though in some ways the "Bitcoin is gold, Litecoin is silver" analogy is bad, in some ways it holds true. Litecoin will most likely remain a significantly cheaper cryptocurrency. Not relative to the monetary base, but in actual market cap.

I'm surprised if Litecoin ever manages to sustain a market cap that is over 10% of Bitcoin market cap. Right now it's at 4%, which I think is actually a bit high. Litecoin has perhaps 1% of the usage Bitcoin has, so it's a bit overvalued. It's very speculative though, so who knows.

You said all I would like to say!

[Vivisector999]

Ok lets say you are right then why do newbies and crypto beginners like the idea of owning some LTC then ?

Except for very few people, cryptocoins are nothing more but yet another "(Eventualy) Make Money Online" deal.

I agree that Bitcoin users are infact very "get rich quick" in their thinking.  And the big reason they are worried about alt's, incase one really takes off and effects their money making venture.  Which is one of the reasons I started mixing it up a bit.  Alot of the alt crypto's are more for the ideas of innovation and having fun than worrying about trying to make a quick buck.  Heck the alt I started mining yesterday "Bottlecaps" is based on Fallout 3 currency.  I like some of the things they are trying with this new coin.  

PoW Scrypt with PoS has 1.5% per annum
Block Time: 60 seconds
4hr Difficulty target time
Reward: 10 coins per block until the end
Coin cap: 47433600 (9 years)
Block confirmations: 5

But in the end, I doubt it will net me any money.  But it's all for fun, which is 1 thing the Bitcoin market seems to have forgotten about.

Bitcoin users should actually embrace the altcoins.  Since they are a big testing ground Bitcoin can't take chances on.  Who knows maybe one day some Alt-coin code will help innovate Bitcoin to make it more useful for day to day transactions (Like buying a coffee at a Starbucks), which would help Bitcoin become more easily adaptable as a World currency everyone seems to want it to become. 

All this fear and hatred from the Bitcoin users seems to be kind of like a Major league sports team knocking the kids playing in the little league games, because they aren't as good as them, and telling their parents that they are idiots for wasting their time watching them play.   

[LiteCoinGuy]

Gox has made it official that they will be adding Litecoin support once the new trading engine has been rolled out.

That is not true. What they said is this:

"As risky as it is to invoke the name of Litecoin (LTC???), we must apologize for not keeping everyone up to date. The fact is that the current
situation means a continued delay, but for good reasons. We’re looking at July right now, though that depends on a few things. Mainly, we
want to do things correctly from the beginning."

I interpret them as just being cautious about promising a specific day. I don't think with statements like this they don't intend to follow through.

+1

of course they will add it when the time is ready and its a good thing to do this! of couse we dont need 1000 other alt coins that are just more but at least a handfull of good ones: like the silver:  LITECOIN

[Seth Otterstad]

The addition of Litecoin or any other number of altcoins to the exchanges won't make any difference to combating arbitrage. That's because the arbitrage arises from friction caused by moving fiat around and not bitcoins.

For instance you can buy a bitcoin on Bitstamp for $101 and sell it on Gox $110 at the moment. A perfect arbitrage opportunity you might think but withdrawing USD from Gox is difficult and that's the reason behind the price gap. Adding altcoins into the mix won't change that.

+1

OP is just trying to raise litecoin visibility in the main forum.  Move this thread to the garbage section where it belongs.

[BitcoinAshley]

The addition of Litecoin or any other number of altcoins to the exchanges won't make any difference to combating arbitrage. That's because the arbitrage arises from friction caused by moving fiat around and not bitcoins.

For instance you can buy a bitcoin on Bitstamp for $101 and sell it on Gox $110 at the moment. A perfect arbitrage opportunity you might think but withdrawing USD from Gox is difficult and that's the reason behind the price gap. Adding altcoins into the mix won't change that.

+1

OP is just trying to raise litecoin visibility in the main forum.  Move this thread to the garbage section where it belongs.

-1.
The post you responded to completely missed the point regarding arbitrage, which is that now instead of waiting a really long time to transfer USD from Gox to Bitstamp, one can simply transfer LTC to bitstamp. So we can affect not only the LTC/BTC but the USD/BTC since other exchanges have LTC/USD and LTC/BTC. Both you and meanig need to go learn what "arbitrage" means

But, I lol'd that you overlooked that and +1'd it anyways 

What people against Litecoin (or Mt.Gox adding it) I think don't realize is it's probably inevitable already Litecoin will see widespread adoption.

No, it won't happen. You might realise the reasons why but only if you sell your LTC and give yourself some time to evaluate situation in cryptocoin
and real worlds. For as long as you are holding LTC you will stay LTC biased. It is eventual profit of some sort that is blinding you from realising the
truth there. You might go as far as writting a tome of books about why LTC will be successful but it will contain nothing but crap with very little or
no connections with reality.

One can never realise the truth if he or she is holding onto something because that which he or she is holding onto distorts perception of reality.

HAHA, WHAT? Did you seriously just make the most n00b mistake of all?
1) Go sell ALL your bitcoins. Every last one.
2) THEN come back here and preach to us about how you can't talk about [LTC doom and BTC destiny] while simultaneously holding the coin.
Let me look through your post history... yes, you've talked quite a bit about bitcoins... shall I now go troll every single one of your posts, replying with "sorry, your opinion about bitcoins is automatically invalid since you hold bitcoins!"
Logic fallacy is fallacious. Fail troll is fail. Nice try dude 

[amincd]

MtGox is the biggest exchange and I think they could play a big role in whether cryptocoins remain limited to 21 million or if their circulated supply continues to increase with the adoption of very similar blockchains that have their own coins.

Since MtGox is dependent on Bitcoin's success, it could be in their best interest to give up on the small amount of business they could get from supporting Bitcoin-altchains, in exchange for boosting Bitcoin.

Ethically, I think it's fine to ask an exchange to support Bitcoin exclusively, because providing exchange services to additional blockchains requires giving them precious screen space on the exchange site.

Giving screen space on MtGox to litecoin reduces Bitcoin's exposure to give it to a blockchain that is completely unoriginal, in being technically, an almost exact copy of Bitcoin, has very little actual real world use - with much fewer merchants supporting it than Bitcoin - and undermines the whole concept of Bitcoin-based cryptocurrency by discrediting one of its most attractive features: that there will only ever be 21 million coins.

I think all of the requests they get from litecoin miners has encouraged them to come to the decision to support litecoin though. In every Facebook post they make about their future plans, you see a number of people commenting, asking them to support litecoin, and each comment getting a lot of likes.

The people who want litecoin to do well are individually more motivated than the much larger number of people who don't want Bitcoin to be diluted by altchains, so are more likely to make publicly visible statements.

The addition of Litecoin or any other number of altcoins to the exchanges won't make any difference to combating arbitrage. That's because the arbitrage arises from friction caused by moving fiat around and not bitcoins.

For instance you can buy a bitcoin on Bitstamp for $101 and sell it on Gox $110 at the moment. A perfect arbitrage opportunity you might think but withdrawing USD from Gox is difficult and that's the reason behind the price gap. Adding altcoins into the mix won't change that.

+1

OP is just trying to raise litecoin visibility in the main forum.  Move this thread to the garbage section where it belongs.

-1.
The post you responded to completely missed the point regarding arbitrage, which is that now instead of waiting a really long time to transfer USD from Gox to Bitstamp, one can simply transfer LTC to bitstamp.

Any difference in the price of BTC between exchanges is likely to apply to the price of BTC-alts as well, since price differentials are caused by factors that will affect all cryptocurrencies equally, making it unlikely that they would ever be useful for taking advantage of BTC arbitrage opportunities.

No, it won't happen. You might realise the reasons why but only if you sell your LTC and give yourself some time to evaluate situation in cryptocoin
and real worlds. For as long as you are holding LTC you will stay LTC biased. It is eventual profit of some sort that is blinding you from realising the
truth there. You might go as far as writting a tome of books about why LTC will be successful but it will contain nothing but crap with very little or
no connections with reality.

One can never realise the truth if he or she is holding onto something because that which he or she is holding onto distorts perception of reality.

HAHA, WHAT? Did you seriously just make the most n00b mistake of all?
1) Go sell ALL your bitcoins. Every last one.
2) THEN come back here and preach to us about how you can't talk about [LTC doom and BTC destiny] while simultaneously holding the coin.

Actually, the people who own BTC have no reason to be biased against BTC-alts if profit is their motive. If they really wanted to only profit, and had any reason to think BTC-alts had a future, they could easily trade their BTC for a BTC-alt, then join the hypers in claiming there's space for BTC 2, 3, 4 and 5.

They could then enjoy all of the profit that comes with coins they bought at 0.001 BTC each going to 0.01 BTC. Not investing in BTC-alts is missing out on an opportunity to make very big short term profits, whereas investing in them is not.

[meanig]

The addition of Litecoin or any other number of altcoins to the exchanges won't make any difference to combating arbitrage. That's because the arbitrage arises from friction caused by moving fiat around and not bitcoins.

For instance you can buy a bitcoin on Bitstamp for $101 and sell it on Gox $110 at the moment. A perfect arbitrage opportunity you might think but withdrawing USD from Gox is difficult and that's the reason behind the price gap. Adding altcoins into the mix won't change that.

+1

OP is just trying to raise litecoin visibility in the main forum.  Move this thread to the garbage section where it belongs.

-1.
The post you responded to completely missed the point regarding arbitrage, which is that now instead of waiting a really long time to transfer USD from Gox to Bitstamp, one can simply transfer LTC to bitstamp. So we can affect not only the LTC/BTC but the USD/BTC since other exchanges have LTC/USD and LTC/BTC. Both you and meanig need to go learn what "arbitrage" means

But, I lol'd that you overlooked that and +1'd it anyways  

Ok, let me try to understand what you're proposing.

instead of waiting a really long time to transfer USD from Gox to Bitstamp

So lets say I have $100 on Gox and I want to transfer that to Bitstamp because bitcoins are cheaper there. I'll then send those bitcoins back to Gox and sell them at the higher Gox price giving me more than $100 at the end.

one can simply transfer LTC to bitstamp.

I sell the $100 on Gox for litecoins and then send the litecoins to Bitstamp. Then exchange the litecoins for  

Please explain how to finish the arbitrage trade keeping in mind that the LTC/BTC rate will be almost identical between Gox and Bitstamp (much like it is between BTC-e and Vircurex which already do LTC/BTC trading)

[dandannn]

I can send you some LTC if you want post up your address 

Yes please    x4lqb9gED2AVqJfescaf   

[tycho]

The addition of Litecoin or any other number of altcoins to the exchanges won't make any difference to combating arbitrage. That's because the arbitrage arises from friction caused by moving fiat around and not bitcoins.

For instance you can buy a bitcoin on Bitstamp for $101 and sell it on Gox $110 at the moment. A perfect arbitrage opportunity you might think but withdrawing USD from Gox is difficult and that's the reason behind the price gap. Adding altcoins into the mix won't change that.

+1

OP is just trying to raise litecoin visibility in the main forum.  Move this thread to the garbage section where it belongs.

-1.
The post you responded to completely missed the point regarding arbitrage, which is that now instead of waiting a really long time to transfer USD from Gox to Bitstamp, one can simply transfer LTC to bitstamp. So we can affect not only the LTC/BTC but the USD/BTC since other exchanges have LTC/USD and LTC/BTC. Both you and meanig need to go learn what "arbitrage" means

But, I lol'd that you overlooked that and +1'd it anyways  

Ok, let me try to understand what you're proposing.

instead of waiting a really long time to transfer USD from Gox to Bitstamp

So lets say I have $100 on Gox and I want to transfer that to Bitstamp because bitcoins are cheaper there. I'll then send those bitcoins back to Gox and sell them at the higher Gox price giving me more than $100 at the end.

one can simply transfer LTC to bitstamp.

I sell the $100 on Gox for litecoins and then send the litecoins to Bitstamp. Then exchange the litecoins for  

Please explain how to finish the arbitrage trade keeping in mind that the LTC/BTC rate will be almost identical between Gox and Bitstamp (much like it is between BTC-e and Vircurex which already do LTC/BTC trading)

This post and your original post show a fundamental misunderstanding of the way economies and arbitrage work. Arbitrage is not a bad thing and is not something that should be combated; arbitrage is healthy in a functioning economy. LTC on Mt. Gox enables easier arbitrage because extracting LTC from Mt. Gox will be considerably faster than extracting USD, and subject to much smaller fees. There are lots of explanations about how arbitrage works. You should find such an explanation and read it. Once you really understand it, it will be obvious why LTC on Mt. Gox will make arbitrage easier (assuming it is quicker and cheaper to move LTC around than USD, which is a fairly safe assumption), and thus the cryptocurrency economy healthier.

As for whether or not LTC or some other alt fills this role, I have no opinion (well, I have one, but it's not really important to the idea of arbitrage).

[amincd]

^ He never argued that arbitrage is unhealthy. I think you misunderstood his post. He's saying that having multiple BTC-based blockchains doesn't better enable one to take advantage of fiat-BTC arbitrage opportunities.

[klee]

Ended up to a very boring thread IMO...

[tycho]

^ He never argued that arbitrage is unhealthy. I think you misunderstood his post. He's saying that having multiple BTC-based blockchains doesn't better enable one to take advantage of fiat-BTC arbitrage opportunities.

Ah, his use of the word "combated" leads me to believe otherwise. Seems you're right about the fiat-BTC arbitrage, though. In any case, the BTC/USD rates of e.g. btc-e and vicurex are typically a lot closer than btc-e and mt. gox, presumably because there is alt-chain enabled arbitrage, so hopefully it's a non issue.

[amincd]

^ He never argued that arbitrage is unhealthy. I think you misunderstood his post. He's saying that having multiple BTC-based blockchains doesn't better enable one to take advantage of fiat-BTC arbitrage opportunities.

Ah, his use of the word "combated" leads me to believe otherwise. Seems you're right about the fiat-BTC arbitrage, though. In any case, the BTC/USD rates of e.g. btc-e and vicurex are typically a lot closer than btc-e and mt. gox, presumably because there is alt-chain enabled arbitrage, so hopefully it's a non issue.

The rates are closer presumably because the friction of getting fiat into and out of btc-e is closer to what can be found in vicurex than MtGox. I don't see any reason why BTC-altchains would enable BTC/USD arbitrage, for the reasons meanig provided.

[meanig]

^ He never argued that arbitrage is unhealthy. I think you misunderstood his post. He's saying that having multiple BTC-based blockchains doesn't better enable one to take advantage of fiat-BTC arbitrage opportunities.

Ah, his use of the word "combated" leads me to believe otherwise. Seems you're right about the fiat-BTC arbitrage, though. In any case, the BTC/USD rates of e.g. btc-e and vicurex are typically a lot closer than btc-e and mt. gox, presumably because there is alt-chain enabled arbitrage, so hopefully it's a non issue.

Using the word combat was sloppy. My opinion on arbitrage is that when it occurs you should try to profit from it until the imbalances which caused it no longer exist. Hence my use of the word combat.

....... Arbitrage is not a bad thing and is not something that should be combated; arbitrage is healthy in a functioning economy. LTC on Mt. Gox enables easier arbitrage because extracting LTC from Mt. Gox will be considerably faster than extracting USD, and subject to much smaller fees. There are lots of explanations about how arbitrage works. You should find such an explanation and read it. Once you really understand it, it will be obvious why LTC on Mt. Gox will make arbitrage easier (assuming it is quicker and cheaper to move LTC around than USD, which is a fairly safe assumption), and thus the cryptocurrency economy healthier.

As for whether or not LTC or some other alt fills this role, I have no opinion (well, I have one, but it's not really important to the idea of arbitrage).

Can you explain to me how you can use litecoins to speed up the arbitrage trade I discussed bearing in mind that all the historical evidence suggests LTC/BTC rates will be almost the same across all exchanges.

[Liquid]

I can send you some LTC if you want post up your address 

Yes please    x4lqb9gED2AVqJfescaf   

That is not a valid address

[stdset]

One can notice, that litecoin supporters usually support bitcoin as well. Most likely they feel, even if they don't realise that: if bitcoin fails, it means that litecoin fails too. But if litecoin fails, that's good for bitcoin. May be this fact alone is enough for bitcoin to eventually win.

[mgio]

The answer is simple:

1) As I said many times before MtGox will never actually implement Litecoin trading! You heard it here first!

2) Litecoin and all other alt coins are going to die. They offer no advantages over bitcoin right now and are purely speculatory. As GPU miners switch to Litecoin mining watch the price plummet as many new people are selling and no one is buying. (Yes, I know the number of LTC created a day is constant, but i believe more people will try to sell the Litecoin they mine, instead of holding).

[stdset]

Bitcoin has already won, you idiot.

Bitcoin is still in it's infancy. If bitcoin wins you'll notice it by price going to hundreds of thousands of dollars a coin. Bitcoin still can be killed.

Thank you though for doing a business accepting bitcoin. I also accept bitcoins for coding services I provide, and I'm not going to ever accept Litecoin.

[Vivisector999]

Bitcoin has already won, you idiot.

Bitcoin is still in it's infancy. If bitcoin wins you'll notice it by price going to hundreds of thousands of dollars a coin. Bitcoin still can be killed.

To be true, I think Bitcoin and all current cryptocoins will stay what they are. An experiment. There is no way top 1% will accept some computer
geeks, especialy liberitarians and anarchysts, becoming new wealthy class. Those at top right now will do everything in their power to stay there.
Bitcoin and all current cryptocoins will not be killed or overtaken but made obsolete by global currencies mandatory on every step, controlled and
tracked by elite.

Thank you though for doing a business accepting bitcoin. I also accept bitcoins for coding services I provide, and I'm not going to ever accept Litecoin.

Bitcoin Megastore does not accept bitcoins since it is part of the CafePress which does not accept bitcoins. It helps promoting Bitcoin though.

Wow finally something we can both agree on.  And I have said it many times already.  There is no way that Bitcoin will become the all out defacto World currency, even though that is what a lot of people on this site seem to believe.   

[Seth Otterstad]

Do you retarded litecoin supporters think adding feathercoin to mtgox would help eliminate arb opportunities too?  How about ixcoin?  Adding litecoin would only help arbitrage if the litecoin market cap was LARGER THAN BITCOIN.  Adding a tiny market to an exchange does nothing to smooth rates out because so little money can be funneled through the link before it creates another differential and arbitrage opportunity there.  Adding USD as an option, however, MASSIVELY helps smooth out arbitrage opportunites because USD market cap is way bigger than bitcoin so nothing happens to the USD market when you send 100k USD from japan to bitstamp for an arb.  The arb opportunities only exist because of the fees and wait time associated with sending USD wires.

[tycho]

Can you explain to me how you can use litecoins to speed up the arbitrage trade I discussed bearing in mind that all the historical evidence suggests LTC/BTC rates will be almost the same across all exchanges.

My thought is that having LTC listed on Mt. Gox will drive down the gap in USD prices, since historically the gap in prices between exchanges where both BTC and an alt are listed has been smaller than the gap between Mt. Gox and said exchanges. (This could be because of volume, or any one of another ten million reasons, though; obviously it's just a guess.)

Do you retarded litecoin supporters think adding feathercoin to mtgox would help eliminate arb opportunities too?  How about ixcoin?  Adding litecoin would only help arbitrage if the litecoin market cap was LARGER THAN BITCOIN.  Adding a tiny market to an exchange does nothing to smooth rates out because so little money can be funneled through the link before it creates another differential and arbitrage opportunity there.  Adding USD as an option, however, MASSIVELY helps smooth out arbitrage opportunites because USD market cap is way bigger than bitcoin so nothing happens to the USD market when you send 100k USD from japan to bitstamp for an arb.  The arb opportunities only exist because of the fees and wait time associated with sending USD wires.

This is an interesting point, but it's only valid if the volume on Mt. Gox is larger than LTC's market cap, which it is not (it's < 20%). Since most people involved in LTC right now are presumably speculators, it stands to reason that LTC has enough room to absorb the arbitrage, which will be significantly less than even Mt. Gox' daily volume.

[Seth Otterstad]

Do you retarded litecoin supporters think adding feathercoin to mtgox would help eliminate arb opportunities too?  How about ixcoin?  Adding litecoin would only help arbitrage if the litecoin market cap was LARGER THAN BITCOIN.  Adding a tiny market to an exchange does nothing to smooth rates out because so little money can be funneled through the link before it creates another differential and arbitrage opportunity there.  Adding USD as an option, however, MASSIVELY helps smooth out arbitrage opportunites because USD market cap is way bigger than bitcoin so nothing happens to the USD market when you send 100k USD from japan to bitstamp for an arb.  The arb opportunities only exist because of the fees and wait time associated with sending USD wires.

This is an interesting point, but it's only valid if the volume on Mt. Gox is larger than LTC's market cap, which it is not (it's < 20%). Since most people involved in LTC right now are presumably speculators, it stands to reason that LTC has enough room to absorb the arbitrage, which will be significantly less than even Mt. Gox' daily volume.

Comparing TRADING VOLUME to MARKET CAP is irrelevant.  We are talking about arbs.  Comparing MARKET DEPTH between mtgox and litecoin would be relevant.  The arbs currently exist between BTC/USD on mtgox and BTC/USD on bitstamp.  Adding tiny markets for LTC/USD or LTC/BTC will not help, and neither would it help to add IXC/BTC.  The second anyone moves a decent amount of money through the alt-pairs to take advantage of the arb, a LARGER arb will be created in the alt-pair than exists for BTC/USD.  This is because the alt-pairs have no market depth.  If several exchanges added GBP/USD, that could help with arbs since GBP is a huge market and UK bank transfers take <2hr.  I can't believe this thread hasn't gotten moved.  How is a thread where people argue "Adding (currency with tiny market cap) means more efficient arbs" allowed to pollute the main bitcointalk forum?

[adpinbr]

Lets go back to what everyone really cares about. where do you think LTC will peak? My bet is 18 USD by end of the year

[mr_random]

Lol this Seth guy is clueless.

Just because Litecoin can't (yet) be used for million dollar arbitrage possibilities does not make Litecoin useless as an arbitrage tool. It will be used successfully for small arbitrage that the order books allow.

You're also basing things on the current market cap of 2.7% which Litecoin enjoys. That could easily go up a lot when it starts being traded on mtgox, more bitcoin accepting merchants start accepting it, people use it for arbitrage, publicity sky rockets as the press report on it more etc etc.

[Mazakguy]

Man, the bitcoin'er are geting desperate. See that free money slipping away.

[Vivisector999]

Don't need much more proof than this that Alt-currencies will needed in the future.  Especially if Bitcoin ever takes off.

https://bitcointalk.org/index.php?topic=196138.0


Also, another added benefit of alt-coins are the fact that they aren't Bitcoins.  With the US gov't having Bitcoin as their latest target, every transaction is going to be scrutinized and there will be more and more sites being shutdown for using/accepting Bitcoins.  Who knows, if they become desperate enough, they may just 51% it to take it out right away.

[Seth Otterstad]

Lol this Seth guy is clueless.

Just because Litecoin can't (yet) be used for million dollar arbitrage possibilities does not make Litecoin useless as an arbitrage tool. It will be used successfully for small arbitrage that the order books allow.

You're also basing things on the current market cap of 2.7% which Litecoin enjoys. That could easily go up a lot when it starts being traded on mtgox, more bitcoin accepting merchants start accepting it, people use it for arbitrage, publicity sky rockets as the press report on it more etc etc.

So litecoin can't be used for significant arbitrage now, but it will when it starts to overtake bitcoin.  Litecoin has been around for almost 2 years and isn't even close to 100 merchants, but ANY DAY NOW IT'S ABOUT TO EXPLODE.  JUST WAIT AND SEE.

lol.  Litecoiners are so delusional.

EDIT:  oh good, the thread got moved to the right forum.  What took so long?

[DeathAndTaxes]

Don't need much more proof than this that Alt-currencies will needed in the future.  Especially if Bitcoin ever takes off.

https://bitcointalk.org/index.php?topic=196138.0


Also, another added benefit of alt-coins are the fact that they aren't Bitcoins.  With the US gov't having Bitcoin as their latest target, every transaction is going to be scrutinized and there will be more and more sites being shutdown for using/accepting Bitcoins.  Who knows, if they become desperate enough, they may just 51% it to take it out right away.

Everything that applies to Bitcoin applies to Litecoin.  FinCEN doesn't even name Bitcoin by name.  The guidance refers to "decentralized virtual currencies".

[Mjbmonetarymetals]

[FiiNALiZE]

Really this arguing is giving me a headache.

NONE OF YOU CAN PREDICT THE FUCKING FUTURE

People have been saying LTC will be worthless in 2011; it's now almost $3 each.

People are still saying that.

It might be true, it might not be.

If you knew, you won't be here right now; you'll be either hoarding it or dumping it, and you certainly won't be fucking tell anyone else.

Stop trying to impose your "knowledge" on other people, because truth is, your guess is just as good as the shit that comes out of my ass.

[Breen2543]

Really this arguing is giving me a headache.

NONE OF YOU CAN PREDICT THE FUCKING FUTURE

People have been saying LTC will be worthless in 2011; it's now almost $3 each.

People are still saying that.

It might be true, it might not be.

If you knew, you won't be here right now; you'll be either hoarding it or dumping it, and you certainly won't be fucking tell anyone else.

Stop trying to impose your "knowledge" on other people, because truth is, your guess is just as good as the shit that comes out of my ass.

+1

[Mjbmonetarymetals]

https://xrptalk.org/topic/211-conspiracy-theory-mtgox-becoming-a-ripple-gateway/