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November 30, 2013, 09:55:37 AM |
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Another advantage of multiple, competing currencies is that a market can absorb fluctuations in another market. Imagine, for example, if three months from now a major flaw was found in bitcoin or a severe exploit came to light (nevermind how this would effective screw over many copy-cat alts) that had a severe impact on being able to securely transact; instead of market panic and the collapse of BTC back into fiat, a secondary alt could absorb the panic and provide capital relief while the system was hotpatched.
This is a very crude example, but you get the gist. It doesn't even have to be something so system; competing markets can absorb the everyday ebb and flow, quelling panics and providing stability.
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