Will Bitcoin be surpassed in value by an alternate cryptocurrency and when?

[piramida]

For me, altcoins and bitcoin will become closer and closer in value everyday.

For you, reality does not matter? Look at the charts. They are not. They are going different directions Exchange rates of all of the altcoins goes like that in the end: http://www.cryptocoincharts.info/period-charts.php?period=alltime&resolution=day&pair=ftc-btc&market=btc-e i.e., to zero. Maybe *for you*, they might be, so can I sell you 1FTC for 1BTC when you consider they are equal in value? Please advise when to expect.

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[zby]

I am pretty sure that that will happen - but not with the copy-cat coins, mind you. This will happen once someone discovers a new algorithm improving over bitcoin in some critical area. And no bitcoin is not like Internet - you cannot connect a 'proof of stake' algo to the 'bitcoin protocol' running nodes.

[erre]

Altcoins are strictly linked to btc , imho they will not entirely crash till the bitcoin stand. I think that (hopefully) we'll see some sort of regulation in the future (i.e. some requisites will be needed to be a "trusted" coin), and that day all currently exchanged cryptocurrencies will go up by a lot

[theonewhowaskazu]

When and if Bitcoin is surpassed in value by an alternate cryptocurrency that derives its value in a way similar to that of Bitcoin (limited internal supply, fast transfers around the world), then Crypto as a concept is dead because it proves that the limited internal supply matters not, because people can just inflate the overall supply of cryptos.

[KFR]

If, for example, in the unlikely event that SHA-256 becomes compromised I for one am quite glad that there will be blockchains around based on an alternative hashing algorithm e.g. Litecoin.

Thing is, in such an unlikely event, bitcoin would change to SHA-512 or whatever would be cool then, overnight.

All ASIC Miners would be expensive garbage and the network would be inexistent.
You can't switch SHA256 Hardware to SHA512.

GPU Miners just need a code update, but this is not going to work for single purpose ASICs.

Indeed.

I know Bitcoin is a protocol and I know it was designed to adapt to change as necessary.  My concern is, and I'm the first to point out it's a very remote possibility, that it might one day suffer from something catastrophic and not be able to adapt quickly enough to sufficiently mitigate the damage.  If you're prepared to consider that eventuality then having some alt coins around just makes good sense - and it certainly doesn't do much harm.  

In short, I'd rather my aircraft had two engines even if one was merely a redundant backup.

[DeathAndTaxes]

If, for example, in the unlikely event that SHA-256 becomes compromised I for one am quite glad that there will be blockchains around based on an alternative hashing algorithm e.g. Litecoin.

Thing is, in such an unlikely event, bitcoin would change to SHA-512 or whatever would be cool then, overnight.

All ASIC Miners would be expensive garbage and the network would be inexistent.
You can't switch SHA256 Hardware to SHA512.

GPU Miners just need a code update, but this is not going to work for single purpose ASICs.

Indeed.

I know Bitcoin is a protocol and I know it was designed to adapt to change as necessary.  My concern is, and I'm the first to point out it's a very remote possibility, that it might one day suffer from something catastrophic and not be able to adapt quickly enough to sufficiently mitigate the damage.  If you're prepared to consider that eventuality then having some alt coins around just makes good sense - and it certainly doesn't do much harm.  

In short, I'd rather my aircraft had two engines even if one was merely a redundant backup.

IF SHA-256 is partially compromises (i.e. faster but not many thousands of magnitudes faster) then people will simply design new ASICs which are more efficient that take advantage of that flaw.  On the other hand if the flaw is large enough that GPU becomes competitive then in the mean time people will use GPU on the Bitcoin chain.

In the highly dubious scenario that SHA-256 is eventually blown wide open where a single cpu core can generate thousands of blocks per second then the network (any network) is going to need to be hard forked to new a new hashing algorithm.  When it is hard forked it is trivial to reset difficulty to something more manageable at the same time.  For example (and I reallly doubt this will happen) but say Bitcoin in the future was forked to use Scrypt.  The developers could look at the difficulty of LTC for example and make Bitcoin's starting difficulty 10% of that.  Many LTC miners would switch over to BTC and the network would operate just fine from that hard fork point.

The far more likely failure is a failure of the public key cryptography and there is no biodiversity in crypto land.  They all use the exact same algorithm with the exact same elliptical curve so any flaw would be like a biological virus which kills not one species but all life on a planet.  There is no need for all alt-coins to use the same public key cryptography but then again if you are just making a pump and dump why waste time actually engineering some diversity.  

[KFR]

....  For example (and I reallly doubt this will happen) but say Bitcoin in the future was forked to use Scrypt.  The developers could look at the difficulty of LTC for example and make Bitcoin's starting difficulty 10% of that.  Many LTC miners would switch over to BTC and the network would operate just fine from that hard fork point.

Right.  But they'd need Litecoin, or another scrypt-based alt coin, to be around for them to be able to do that.  I think we're agreeing.

To reuse my analogy from above, taking parts from the redundant backup engine can only be done if you actually have one.

[DeathAndTaxes]

....  For example (and I reallly doubt this will happen) but say Bitcoin in the future was forked to use Scrypt.  The developers could look at the difficulty of LTC for example and make Bitcoin's starting difficulty 10% of that.  Many LTC miners would switch over to BTC and the network would operate just fine from that hard fork point.

Right.  But they'd need Litecoin, or another scrypt-based alt coin, to be around for them to be able to do that.  I think we're agreeing.

To reuse my analogy from above, taking parts from the redundant backup engine can only be done if you actually have one.

Well no they wouldn't need LTC to be around that was just an example.  They wouldn't need any coin to be around (although I don't think alt-coins will die off completely).  Bitcoin could be hard forked to any proof of work, even one which doesn't even exist today.  Note this won't be trivial, it pretty much would only occur in a "if we don't change then Bitcoin is worth exact $0 anyways so there is nothing to lose by halting the blockchain and forking from some block prior to when the attacks started" scenario. If people didn't have sufficient numbers of GPUs to mine they would go out and buy them.  There was nothing around when Bitcoin started and the network grew organically.

The point is there is no redundant engine with alt-coins.  The most vulnerable element is the public key cryptography and they all copied it line for line.   Symmetric cryptography and hashing algorithms have generally stood the test of time especially those which have the length of time "in the field" that SHA-256 does.  It is public key cryptography which has been a challenge to keep secure on any lifetime long scale.   Generally speaking key sizes have had to increase over time to remain secure from improved cryptanalysis and Moore's law.   As all altcoins (to date although that may change in the future) copy the same ECDSA code (and curve), they share the same latent flaws.  Your redundant engine scenario is more like, every engine in the world is identical and all of them on every type of plane explode simultaneously.  It doesn't really matter if you have two engines or twenty thousand engines if they all are destroyed simultaneously there is no redundancy.

In nature this monoculture threat is avoided by bio diversity.  Species evolve independently and thus there are very few scenarios that would wipe out all life on the planet.  Something someday may wipe out all humans but it is unlikely a single biological threat would kill all life.  Sometimes diseases will jump species but I don't think there is a single pathogen which can affect all lifeforms.  Even genetic evolution within the human species means a scenario which kills "most" humans is far more likely than one which exterminates the entire species.  Alt-coins (to date) are like a scenario where all lifeforms share 99.9999999% of the same DNA.  There is no bio diversity in a scenario like that.

[KFR]

I'm right there with you for most of that.  But I still feel safer having Litecoin around and indeed encouraging the existence of alt coins - especially if they'll innovate further and especially if they'll improve/increase resilience.  

I guess I'm just trying to dispel the notion that "alt coins should go away and stop stealing Bitcoin's market share."  

I don't think that's something you've been saying in any way but it is an argument I see put out there and am keen to counter it with the simple notion that competition is healthy.  

edit:
I completely agree with your 'bio-diversity' concerns and think you've made the point here very well.  But Bitcoin can't really experiment with its architecture any more as too much value is vested in both the coins and the network.  Litecoin et al can still do that and could very well end up introducing the kind of 'bio-diversity' that we'd both welcome with open arms.

[MatTheCat]

 

Just some recognition for some very good posts that have at least for me shed some light on the alt-coin universe.

[surfer43]

you bought a lot of zerocoins, didn't you?

lol no, no such thing yet

[jinni]

What an interesting thread.

I have extreme doubt that Bitcoin will succumb to an altcoin soon. As far as I can understand the blockchain has a very large potential for adaptability if needed.

But, like DeathAndTaxes says, Bitcoin is vulnerable because it has only one code. His evolutionary view is interesting, and probably similar to what happened in early evolution of life. How one life-form prospered and almost conquered everything, until a virus or a parasite came along.

It seems to me that as of yet no argument can be made of how Bitcoin can become permanent. Yes it can last for long, but not necessarily forever.

The simile is fiat. It started during the Song dynasty in China and has developed into new forms until this day. I think that Bitcoin is simply an evolution of fiat as fiat was an evolution of 'gold-or-other-precious-things' (or as gold was of barter).

So at some point the revision of the code needed to Bitcoin is going to become too great, but by that time, as always, intelligent and forward thinking people will have enough time to transition.

Hence we will either be not intelligent enough or not forward thinking enough and hence we will not deserve the new found wealth. But the altcoins that are currently in existence are no more than monopoly money.

[I_bitcoin]

I'm right there with you for most of that.  But I still feel safer having Litecoin around and indeed encouraging the existence of alt coins - especially if they'll innovate further and especially if they'll improve/increase resilience.  

I guess I'm just trying to dispel the notion that "alt coins should go away and stop stealing Bitcoin's market share."  

I don't think that's something you've been saying in any way but it is an argument I see put out there and am keen to counter it with the simple notion that competition is healthy.  

edit:
I completely agree with your 'bio-diversity' concerns and think you've made the point here very well.  But Bitcoin can't really experiment with its architecture any more as too much value is vested in both the coins and the network.  Litecoin et al can still do that and could very well end up introducing the kind of 'bio-diversity' that we'd both welcome with open arms.

Bio-diversity is good.  In fact, it is also good in Bitcoin space and we should welcome attempts to write completely Bitcoin compatible clients/servers/miners from the ground up.

[Tirapon]

What an interesting thread.

I have extreme doubt that Bitcoin will succumb to an altcoin soon. As far as I can understand the blockchain has a very large potential for adaptability if needed.

But, like DeathAndTaxes says, Bitcoin is vulnerable because it has only one code. His evolutionary view is interesting, and probably similar to what happened in early evolution of life. How one life-form prospered and almost conquered everything, until a virus or a parasite came along.

It seems to me that as of yet no argument can be made of how Bitcoin can become permanent. Yes it can last for long, but not necessarily forever.

The simile is fiat. It started during the Song dynasty in China and has developed into new forms until this day. I think that Bitcoin is simply an evolution of fiat as fiat was an evolution of 'gold-or-other-precious-things' (or as gold was of barter).

So at some point the revision of the code needed to Bitcoin is going to become too great, but by that time, as always, intelligent and forward thinking people will have enough time to transition.

Hence we will either be not intelligent enough or not forward thinking enough and hence we will not deserve the new found wealth. But the altcoins that are currently in existence are no more than monopoly money.

This is a good post.

Here's a question: Gold as money 'evolved' from the barter system, as a better way for people to transact with one another. Silver also found its way into use as a means of transaction/store of value. There is arguably no difference between silver and gold in terms of fundamental properties which make for a sound form of money. Why do we therefore have these two 'precious' metals?

[KFR]

Cross-posting this link from another thread specifically because it speaks to your question.

http://www.bbc.co.uk/news/magazine-25255957

[Tirapon]

Cross-posting this link from another thread specifically because it speaks to your question.

http://www.bbc.co.uk/news/magazine-25255957

Thanks for that, interesting read. So indeed, gold is better than silver as a form of money, and yet silver is still used in pretty much the same way...

[jinni]

What an interesting thread.

I have extreme doubt that Bitcoin will succumb to an altcoin soon. As far as I can understand the blockchain has a very large potential for adaptability if needed.

But, like DeathAndTaxes says, Bitcoin is vulnerable because it has only one code. His evolutionary view is interesting, and probably similar to what happened in early evolution of life. How one life-form prospered and almost conquered everything, until a virus or a parasite came along.

It seems to me that as of yet no argument can be made of how Bitcoin can become permanent. Yes it can last for long, but not necessarily forever.

The simile is fiat. It started during the Song dynasty in China and has developed into new forms until this day. I think that Bitcoin is simply an evolution of fiat as fiat was an evolution of 'gold-or-other-precious-things' (or as gold was of barter).

So at some point the revision of the code needed to Bitcoin is going to become too great, but by that time, as always, intelligent and forward thinking people will have enough time to transition.

Hence we will either be not intelligent enough or not forward thinking enough and hence we will not deserve the new found wealth. But the altcoins that are currently in existence are no more than monopoly money.

This is a good post.

Here's a question: Gold as money 'evolved' from the barter system, as a better way for people to transact with one another. Silver also found its way into use as a means of transaction/store of value. There is arguably no difference between silver and gold in terms of fundamental properties which make for a sound form of money. Why do we therefore have these two 'precious' metals?

Cross-posting this link from another thread specifically because it speaks to your question.

http://www.bbc.co.uk/news/magazine-25255957

So there is a difference between gold and silver according to the BBC article. But let me add another, silver has been considered as a way of getting easy money during a panic. During the long depression silver was demonetized, thus exasperating the price of gold, which made the people who held loans worse off. Silver was always more plentiful, and in an alloy it would not decay easily. Thus it was easy money.

In the same sense, Bitcoin is supposed to be hard money when it is a means of wealth storage, and although it is easily used for transactions, it is not easy money because it is way too scarce. Bitcoin is hard money, so as a business owner you would be a fool not to accept it, but if you want a loan (or are a lender) you would be a fool to make it in Bitcoin.

Altcoins, on the other hand are easy money, so if you want to make a loan you are better off making it in an altcoin than in Bitcoin. If your venture is profitable you can cash in into Bitcoin.

[DeathAndTaxes]

Here's a question: Gold as money 'evolved' from the barter system, as a better way for people to transact with one another. Silver also found its way into use as a means of transaction/store of value. There is arguably no difference between silver and gold in terms of fundamental properties which make for a sound form of money. Why do we therefore have these two 'precious' metals?

The constraints of physical coinage.  The smallest gold coin in the US was roughly the size of a dime and was worth more than a laborers daily wage.  Imagine Joe Smith got paid his dime sized gold coin (about 2 grams) and went into a bar for a drink which was 1/10th of a gram.  How exactly was he going to spend it?  Were people going to mint 1/10th gram coins which were about 1/20th the size of a dime? 

[jinni]

Here's a question: Gold as money 'evolved' from the barter system, as a better way for people to transact with one another. Silver also found its way into use as a means of transaction/store of value. There is arguably no difference between silver and gold in terms of fundamental properties which make for a sound form of money. Why do we therefore have these two 'precious' metals?

The constraints of physical coinage.  The smallest gold coin in the US was roughly the size of a dime and was worth more than a laborers daily wage.  Imagine Joe Smith got paid his dime sized gold coin (about 2 grams) and went into a bar for a drink which was 1/10th of a gram.  How exactly was he going to spend it?  Were people going to mint 1/10th gram coins which were about 1/20th the size of a dime? 

You can easily have the tiniest amount of gold in a plastic wrapper. Hence one could wrap infinitesimal amounts of gold safely and trade it without the need of a minted coin.

[Edward50]

WOW, I see a lot of people in this thread of scared of the alt-coins so are bashing them. Just like they bash anyone negative about the bitcoin price. What do you expect being in a bitcoin only speculation thread.

Anyway, alt-coins may not reach bit-coin price levels but they all hold collector appeal. Most people who own bitcoin do so for the collector appeal. Therefore, alt-coins will rise a decent amount.

Alt-coins can easily be traded back and forth into bitcoins at very low cost. Better to spread your eggs around then have your bitcoin wallet hacked or stolen or some other thing and lose all your coins.