What are the chances BTC is replaced by something better soon?

[Piper67]

Chances are extremely low for two reasons:

1) Bitcoin already has an ecosystem that is several orders of magnitude larger than all the other alt coins put together.

2) There's no value in putting your weight behind an alt-coin, when more of them can be created literally out of a website. So if Bitcoin is to be dethroned by another coin, why would that one be dethroned by the next and so on until it all collapses in a valueless mess.

[whtchocla7e]

2) There's no value in putting your weight behind an alt-coin, when more of them can be created literally out of a website.

There is always value in putting your weight behind something good and innovative.
Forget the current alternative coin stereotype. That's all kiddie stuff derived from Bitcoin.

[Dafar]

Good question OP... I really hope it doesn't happen because I'm heavily invested in BTC.

However one thing that worries me though is the fact that Satoshi didn't properly predict the mining process becoming an arms race where only the rich and powerful miners can participate. Correct me if I'm wrong but the whole mining process was supposed to be something that everyone could participate in making it a true P2P network. So now that mining has become out of reach for the average person, how does it (or will it) change the vision of bitcoin? Will this lead to future problems that were not envisioned before? Is this an indication that other problems can happen that have not been though of before due to new technology?  

These are the main issues that worry me... not shit like China banning bitcoin, or USA trying to regulate bitcoin... all that is expected. Every government and federal banks (basically the real crooks) should see bitcoin as a threat and for good reason.

Rapecoin

  lol!!! i like this guy

[pbody]

Bitcoin was first to market. It will take something to go seriously wrong with it for another coin to take number one spot.

Facebook, Google and so on are your examples.
It won't get replaced.

P.S. NXT sucks.

Facebook was not first. Friendster and Myspace were out long before it. Google was not first either, it was a fork of Lycos, Yahoo, etc.

[gentlemand]

But we're not talking signing up for just another free site. We're talking about your money. Huge amounts of it in some cases.

It'll take tidal waves of press and education for the average person to buy into Bitcoin. Once they're in, the last thing they'll want to do is risk it all again for a new alternative unless there's something astoundingly compelling about it. The site vs site thing is not a valid comparison.

[kwest]

Bitcoin has opened a Pandora's box, meaning it has inspired the evolution of currencies.
Once cannot deny that things like MintChip were indeed inspired by Bitcoin.. and governments around the world are bound to develop similar "smart currencies" if MintChip is successful.

Meanwhile, decentralized and open source "smart currencies" will still remain, just like Linux distros can co-exist with Windows and OSX. Personally I'm looking closely at the development of Zerocoin and eMunie.. both innovative in their own rights.

[El Dude]

You mean like zerocoin? ;-)

However, this isn't a zero sum game. More than one coin can compete.

It's like having more than one currency!

To replace bitcoin it needs alot. But indeed, Zerocoin could get number 2 or 3.

Zerocoin won't replace litecoin to become the number 2 coin not gonna happen. Stealth addresses would make zerocoin useless http://www.reddit.com/r/Bitcoin/comments/1v7ayg/revolution_in_bitcoin_privacy_stealth_addresses/

[Spam_vt]

So to all the tech savy people in here - what advantages could other cryptocurrencies bring that will give them a crucial edge over BTC, and how fast could something like that come along?

I think the biggest problem with Bitcoin is that the transaction volume can't scale past a certain point.  Bitcoin blocks can only support 5-7 transactions per second at max, which is way too low to support a large-scale public adoption.  Compare to Visa with 2,000 t/s and Paypal with 40+ t/s (numbers from https://en.bitcoin.it/wiki/Scalability ).  As the transaction volume gets closer to the block limit, the transaction fees go up and it becomes impractical to use Bitcoin for small value transactions.  As it stands, Bitcoin transactions are already too expensive for payments in the $1-$2 USD range (transaction fees around $0.20-$0.50).

Altcoins can provide value because they can offload some of that transaction volume and usually have lower transaction fees.  For example, Litecoin can support 4x the transaction volume of Bitcoin (with 4x faster blocks) and has transactions fees around $0.03.  But a 4x improvement is still nowhere near what we need to get to Visa-level numbers (or even catch up with Paypal).

I see two possible "end games" for Bitcoin:

1.  Bitcoin stays as the "gold standard" relative to other altcoins, but altcoins are used for most day-to-day transactions.  Bitcoin is only used for high-value transactions.  In this way, we solve the scalability limit by adding more coins.
2.  Some new cryptocoin comes along that has a whole new transaction/block structure and supports a much higher transaction volume than Bitcoin (e.g. 1000x).  None of the existing altcoins do this yet.  This is the only case where I can see Bitcoin actually dying.  

[Dr Bloggood]

So to all the tech savy people in here - what advantages could other cryptocurrencies bring that will give them a crucial edge over BTC, and how fast could something like that come along?

I think the biggest problem with Bitcoin is that the transaction volume can't scale past a certain point.  Bitcoin blocks can only support 5-7 transactions per second at max, which is way too low to support a large-scale public adoption.  Compare to Visa with 2,000 t/s and Paypal with 40+ t/s (numbers from https://en.bitcoin.it/wiki/Scalability ).  As the transaction volume gets closer to the block limit, the transaction fees go up and it becomes impractical to use Bitcoin for small value transactions.  As it stands, Bitcoin transactions are already too expensive for payments in the $1-$2 USD range (transaction fees around $0.20-$0.50).

Altcoins can provide value because they can offload some of that transaction volume and usually have lower transaction fees.  For example, Litecoin can support 4x the transaction volume of Bitcoin (with 4x faster blocks) and has transactions fees around $0.03.  But a 4x improvement is still nowhere near what we need to get to Visa-level numbers (or even catch up with Paypal).

I see two possible "end games" for Bitcoin:

1.  Bitcoin stays as the "gold standard" relative to other altcoins, but altcoins are used for most day-to-day transactions.  Bitcoin is only used for high-value transactions.  In this way, we solve the scalability limit by adding more coins.
2.  Some new cryptocoin comes along that has a whole new transaction/block structure and supports a much higher transaction volume than Bitcoin (e.g. 1000x).  None of the existing altcoins do this yet.  This is the only case where I can see Bitcoin actually dying. 

Thanks, that's the most useful answer in the whole thread and actually what I hoped to hear about!

What about solution number 3, Bitcoin is changed into a system that can handle more transactions/handle them faster. Would that be doable?

When do you think we would hit the limits for, say, a $20 transaction (BTC still being useful for it)?

[Dr Bloggood]

Good question OP... I really hope it doesn't happen because I'm heavily invested in BTC.

However one thing that worries me though is the fact that Satoshi didn't properly predict the mining process becoming an arms race where only the rich and powerful miners can participate. Correct me if I'm wrong but the whole mining process was supposed to be something that everyone could participate in making it a true P2P network. So now that mining has become out of reach for the average person, how does it (or will it) change the vision of bitcoin? Will this lead to future problems that were not envisioned before? Is this an indication that other problems can happen that have not been though of before due to new technology?  

These are the main issues that worry me... not shit like China banning bitcoin, or USA trying to regulate bitcoin... all that is expected. Every government and federal banks (basically the real crooks) should see bitcoin as a threat and for good reason.

I don't think Satoshi hasn't predicted that, for sure he knew. Money flows to where money is. It's just a new stage, it's professionalised, that's ok. I don't see any problems with that.

[QuestionAuthority]

Bitcoin has opened a Pandora's box, meaning it has inspired the evolution of currencies.
Once cannot deny that things like MintChip were indeed inspired by Bitcoin.. and governments around the world are bound to develop similar "smart currencies" if MintChip is successful.

Meanwhile, decentralized and open source "smart currencies" will still remain, just like Linux distros can co-exist with Windows and OSX. Personally I'm looking closely at the development of Zerocoin and eMunie.. both innovative in their own rights.

MintChip will never take off. It's been around since 2012 and there's still only three things you can buy with it (tuques, back bacon and life size posters of Michael Shanks from SG1).

[nwbitcoin]

So to all the tech savy people in here - what advantages could other cryptocurrencies bring that will give them a crucial edge over BTC, and how fast could something like that come along?

I think the biggest problem with Bitcoin is that the transaction volume can't scale past a certain point.  Bitcoin blocks can only support 5-7 transactions per second at max, which is way too low to support a large-scale public adoption.  Compare to Visa with 2,000 t/s and Paypal with 40+ t/s (numbers from https://en.bitcoin.it/wiki/Scalability ).  As the transaction volume gets closer to the block limit, the transaction fees go up and it becomes impractical to use Bitcoin for small value transactions.  As it stands, Bitcoin transactions are already too expensive for payments in the $1-$2 USD range (transaction fees around $0.20-$0.50).

Altcoins can provide value because they can offload some of that transaction volume and usually have lower transaction fees.  For example, Litecoin can support 4x the transaction volume of Bitcoin (with 4x faster blocks) and has transactions fees around $0.03.  But a 4x improvement is still nowhere near what we need to get to Visa-level numbers (or even catch up with Paypal).

I see two possible "end games" for Bitcoin:

1.  Bitcoin stays as the "gold standard" relative to other altcoins, but altcoins are used for most day-to-day transactions.  Bitcoin is only used for high-value transactions.  In this way, we solve the scalability limit by adding more coins.
2.  Some new cryptocoin comes along that has a whole new transaction/block structure and supports a much higher transaction volume than Bitcoin (e.g. 1000x).  None of the existing altcoins do this yet.  This is the only case where I can see Bitcoin actually dying.  

The number of transactions per second that Bitcoin can handle is limited to 7 per second artificially, and can be changed when needed.  Read about it in the white paper - Satoshi was very aware of a figure of 100k per second as being necessary as part of the scale up.

The biggest issue for bitcoin is the fact that it is currently going through the process of becoming legal and respectable. Once it has done this, and all the difficult questions have been answered, the door will be open for governments to introduce their own official version of crypto currency - with the advantage of any losses being covered by government insurance - just in the same way that if you burn cash, it can be replaced if you can prove it happened and have the remains.

When that happens, Bitcoin will die, possibly within a few months.  It will never die completely, but it will become the IRC of the currency world!

Think of it like the wrong example given earlier. Google, was not first to market, but actually one of the last. They took every fault in the market, and fixed it.  Within months, everyone forgot about Altavista, Dogpile and Yahoo, and to Google became a verb within 2 years.

Bitcoin, the protocol will grow and grow, but Bitcoin, the currency will be replaced, as soon as the mainstream finally understand and trust the process - don't hold your breath though!

[jonanon]

I think there is too much sentiment towards BTC for people to give it up that quickly 

[whtchocla7e]

I think there is too much sentiment towards BTC for people to give it up that quickly 

People tend to drop their sentiments at first sight of $$$.

[Holliday]

I think there is too much sentiment towards BTC for people to give it up that quickly 

People tend to drop their sentiments at first sight of $$$.

Bitcoin is the best "money" currently in existence. In order for my sentiments to change, a superior form of "money" will have to replace it!

[Spam_vt]

What about solution number 3., Bitcoin is changed into a system that can handle more transactions/handle them faster. Would that be doable?

When do you think we would hit the limits for, say, a $20 transaction (BTC still being useful for it)?

We can change the block parameters in Bitcoin to support a higher transaction volume, but that only works up to a certain point.  For example, if you allow 1000x more transactions in the blockchain, then the blockchain becomes 1000x bigger (20 GB -> 20 TB) and it's too big to host on one machine.  Then you need some centralized service to host the blockchain and you lose the decentralized nature of Bitcoin.

You can do some optimizations to make the blockchain smaller (e.g. pruning old spent transactions), but that still doesn't get us the whole way there.  I can see Bitcoin supporting, say, 500 transactions/second with some modifications, but I don't see any way to get up to 5000.

Off-blockchain transactions are another way to solve this, but then you are back to a centralized service to process those transactions.  Inputs.io was supposed to do this but they got hacked and had most of their coins stolen.

Bitcoin can support $20 transactions as long as the transaction fee stays less than ~$1 (I would consider a 5% fee to be an upper limit for a practical transaction).  We could get to that point if the value of 1 BTC got into the $5000 range, or if the transaction volume got high enough that miners started requiring higher transaction fees (e.g. 3-4x the current transaction volume).

[btcusury]

Top contenders to replace Bitcoin:

- "2nd generation cryptocurrencies" (NXT etc)
- Coins with faster block time
- Coins with smaller blockchain size (e.g. auto-pruning?)
- Proof of Stake coins
- Higher-anonymity coins

[Holliday]

Top contenders to replace Bitcoin:

- "2nd generation cryptocurrencies" (NXT etc)
- Coins with faster block time
- Coins with smaller blockchain size (e.g. auto-pruning?)
- Proof of Stake coins
- Higher-anonymity coins

Only if, once determined beneficial, Bitcoin can not (or does not) co-opt these features.

[pening]

The number of transactions per second that Bitcoin can handle is limited to 7 per second artificially, and can be changed when needed.  Read about it in the white paper - Satoshi was very aware of a figure of 100k per second as being necessary as part of the scale up.

At which point the only people who'll be able to handle the transactions will be colos.  Or "Bit-banks" as they'll be known then.

Official "govcoin" is the obvious medium term replacement to Bitcoin, maybe not 3 years, but if Bitcoin doesn't bomb out they will utilise the framework, or maybe even if it does.  It could deal with a lot of issues government have if they controlled their own blockchain and it was the primary method of transactions: fraud, tax evasion and money laundering spring to mind. Would be ironic if it became a tool of Big Brother...

[garcias]

Bitcoin has opened a Pandora's box, meaning it has inspired the evolution of currencies.
Once cannot deny that things like MintChip were indeed inspired by Bitcoin.. and governments around the world are bound to develop similar "smart currencies" if MintChip is successful.

Meanwhile, decentralized and open source "smart currencies" will still remain, just like Linux distros can co-exist with Windows and OSX. Personally I'm looking closely at the development of Zerocoin and eMunie.. both innovative in their own rights.

Me too 
Emunie and CureCoin and today one that make me follow  them: Digibyte
Any news about ZeroCoin?