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

[Dr Bloggood]

I've observed  most of the major cryptocurrencies and I don't see any that threatens bitcoin soon.
Don't forget that a currency not only needs solid fundamentals (code and design) but also a dev team, miners, and adopters. Many of the altcoins have one-man dev team, a relatively small amount of mining power (as compared to that of bitcoin). But some of the alt coins do have believers and these believers are a strength. Scrypt coins' strength is that they are the domain of the little guy miner. But can these scrypt coins last when the asics move in? That's the question.

Not concerned about believers. Just concerned about fundamental advantages.

[Dr Bloggood]

The way I see it, Bitcoin has some serious issues at the moment.

Proof of Work is a huge problem in my mind right now. It's a pretty big barrier of entry, you basically need lots of money to get into mining to buy hardware, and combined with mining pools, this creates too much centralization. This is coming to light now with the Ghash story. But even if Ghash were to disappear today, then all that means is that the power is centralized in the next couple of pools. Either way it's very few people who have quite a bit of control over the network.

It's still very difficult to get into. It's either registering with an exchange, or going on something like localbitcoin.com and trying to find someone. Then on top that, the problem gets compounded by the enormous price fluctuations.  Bitcoin price volatility has been a huge issue for a long time for many people.

Security is also a big risk. People are used to just putting their money in the bank and feeling safe. But now you have to keep your own Bitcoin yourself somehow. Lots of people have lost quite a bit of Bitcoin that way.

So another Cryptocurrency can take advantage of these issues (and many more) and take over Bitcoin in that way. Proof of Stake looks to be one up and coming alternative that's already feasible.



But here's the thing. None of these things are inherent in Bitcoin. They could all get fixed at some point in time. Emphasis on 'could'. It's possible the Proof of Work situation will change into something else, and although this seems very unlikely at this point, the situation may be forced on us if the pools decide to abuse their power one day. Trading fiat for BTC may become easier as more services move into that space. Even security is surely to improve over time with better wallet software, and even hardware-wallets in the future.

So in my mind it really all depends on what happens in the Bitcoin arena in the upcoming years. If enough of these problems get addressed, then there's really no room for Bitcoin to be replaced by anything. But if they don't, then it's almost a guarantee that something will replace Bitcoin.

Yup, I guess this will all become adresses when the time comes. Volatility is just a function of a small number of participants and also of the newness of the endeavour.

[Dr Bloggood]

- Coins with smaller blockchain size (e.g. auto-pruning?)

What is auto-pruning?

- Proof of Stake coins

What is that? Sorry if it's a basic question - googled it but still don't understand:

http://en.wikipedia.org/wiki/Proof-of-stake

[Dr Bloggood]

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).

Now that sounds pretty bad and like a real thread. We will probably be at $5000 this year.

[rext]

that "something better" would have to have benefits that rivals that of bitcoin

[BTCisthefuture]

It's certainly possible. It's going to have to happen sooner than later though imo because the longer bitcoin is around and the more adoption it gets the harder it's going to be to knock it of it's pedestal.

I see a few situations,  in no particular order

1) something BETTER really does come along, massive improvements over bitcoin. I don't see this happening anytime soon, as someone else said earlier "bitcoin is good enough"

2) Government crackdowns lead to bitcoin being unable to gain massive adoption, as a result something else will come along to try to fill that gap while still saying on the good side of governments

3) A large big name brand comes up with their own decentralized currency, sure it would be a bit more centralized than bitcoin but imagine if someone like google came along with their own open source dencentralized currency.  That big name brand alone could likely cause a lot of everyday folks and businesses to hop on board, especially if it solves some of the "problems" bitcoin has.

[davedx]

3) A large big name brand comes up with their own decentralized currency, sure it would be a bit more centralized than bitcoin but imagine if someone like google came along with their own open source dencentralized currency.  That big name brand alone could likely cause a lot of everyday folks and businesses to hop on board, especially if it solves some of the "problems" bitcoin has.

It would not surprise me at all if we see a GooglCoin in the near future.

Charles Lee, the creator of Litecoin, used to work at Google. It wouldn't surprise me if they have a number of experts already in-house, if not already building a cryptocurrency.

Despite not being the innovation powerhouse of years gone-by, Google is still pretty creative with technology. This would be right up their street.

A GooglCoin would have lots of synergy with existing products, like Google Wallet, Android Play, AdWords/AdSense.

To be honest, I'm quite surprised they've not made a move already.

[Purple]

Bitcoin may not be perfect but it's good enough. Something would have to go very wrong for Bitcoin to be anything other than the main player.

Like someone getting 51% and ruining the economy?

[mikewoods]

Replaced, probably not.
Think of countries in EU that excepted Euro as official currency, they still use their old currencies as well.

[bithic]

Here's a great essay from Anon136 of this forum that explains the key innovations in Nxt's unique Proof-of-Stake/Transparent Forging implementation. Definitely worth the read.

https://docs.google.com/document/d/1E_ToOMG2l1XThx6YnyXEajXaf6H1k2yjq8XkAF0ScB4/mobilebasic?pli=1

I think Nxt could challenge Bitcoin in time. Some of these ideas will be hard for Bitcoin to adapt to (would require changes at the fundamental level, which might necessitate a hard fork - difficult to do when so much money is at stake). Bitcoin could possibly come up with other ways to remain competitive though. I think this year will be very interesting.

eMunie looks very interesting too. As does Zerocoin. From what I gather, Bitcoin could implement Zerocoin, but probably won't in order to cooperate with governments. It wouldn't be able to implement the Nxt or eMunie ideas without a significant rewrite though, as these have very different ways of doing things that are not based on Bitcoin.

[utopianfuture]

I see a future with a couple of prominent blockchains, each of which has its own specialty but also competing with each others. Bitcoin has chosen to be a payment specialist. They are now very conservative of changes. They don't want to apply zerocoin protocol because they are afraid of breaking the status quo. Read here

http://www.forbes.com/sites/andygreenberg/2014/01/13/bitcoin-anonymity-upgrade-zerocoin-to-become-its-own-cryptocurrency/

There is also a limit on how big a certain blockchain can be and that make the concept of multiple- blockchains co-existing inescapable. for example:  Zerocoin when it is out could have a special strength in anonymity and perhaps being adopted a lot by underground worlds, silk-road style vendors     

NXT has a lot of potentials. All of its new features such as alias system, arbitrary message and upcoming decentralized asset exchange can make them the pioneer in certain areas such as decentralized stock exchange, pseudo internet gateway via alias system. I don't think NXT can match Bitcoin in being a payment specialist anytime soon. But they will probably be leading the way in several important new industries. The idea of a decentralized stock exchange is particularly exciting since it could unleash a lot of economic potentials hidden in communities without all the red tape from government's regulations .

[whtchocla7e]

The blockchain approach is not ideal because you need knowledge of the entire past from the beginning of time to compute the current state(s). I would like to see something more robust. Are we going to see something better in the future? I'd say it's only a matter time.

[utopianfuture]

The blockchain approach is not ideal because you need knowledge of the entire past from the beginning of time to compute the current state(s). I would like to see something more robust. Are we going to see something better in the future? I'd say it's only a matter time.

You can prune a blockchain annually. There are techniques to do so, so no need to go back to the beginning of time.

[Piper67]

Bitcoin may not be perfect but it's good enough. Something would have to go very wrong for Bitcoin to be anything other than the main player.

Like someone getting 51% and ruining the economy?

I don't think you know how a 51% attack works.

[Phinnaeus Gage]

well, this is a great topic, but I am afraid half the posters here will hijack this thread by spamming the altcoin they hold

Introducing: The Most Interesting Altcoiner in the World.  

https://www.youtube.com/watch?v=3vbziBDLvgg


"I feed him Purina Alt Coin Chow®."

<the fuckin' shit I do for this community>

[nwbitcoin]

Replaced, probably not.
Think of countries in EU that excepted Euro as official currency, they still use their old currencies as well.

No they don't - all the old currencies were deleted and the EU zone countries have their own version of the Euro.

You can't spend a DMark or a Franc anymore - they are nothing but quirky historical bits of paper! ;-)

[asdf]

Here's a great essay from Anon136 of this forum that explains the key innovations in Nxt's unique Proof-of-Stake/Transparent Forging implementation. Definitely worth the read.

https://docs.google.com/document/d/1E_ToOMG2l1XThx6YnyXEajXaf6H1k2yjq8XkAF0ScB4/mobilebasic?pli=1

I think Nxt could challenge Bitcoin in time. Some of these ideas will be hard for Bitcoin to adapt to (would require changes at the fundamental level, which might necessitate a hard fork - difficult to do when so much money is at stake). Bitcoin could possibly come up with other ways to remain competitive though. I think this year will be very interesting.

eMunie looks very interesting too. As does Zerocoin. From what I gather, Bitcoin could implement Zerocoin, but probably won't in order to cooperate with governments. It wouldn't be able to implement the Nxt or eMunie ideas without a significant rewrite though, as these have very different ways of doing things that are not based on Bitcoin.

Nxt looks cool and all, but I just don't get how it's going to work with the fixed transaction fee. If the value of Nxt rises to, say $1, That means the minimum fee for a transaction is $1! This implies a market cap of only 1 billion. How can Nxt be competitive vs other coins with such a high fee?

Otherwise, the PoS system looks really interesting. Can't we have PoS without fixed fess, or are fixed fees somehow fundamental to the PoS implementation (P2PCoin has the same issue)?

[Snowfire]

Proponents continue to state that Bitcoin can simply "evolve" to incorporate any new good ideas coming down the pike. However, any substantial change to Bitcoin or any other cryptocurrency requires a hard fork, which is functionally equivalent to creating a new cryptocurrency form scratch and convincing holders of the old units to swap them out for new ones. The essential inflexibility of cryptocurrencies (which is what makes them tamper-resistant) inevitably leads to this. At the time of a hard fork, the new system starts from zero, and the alts out there have already been established for some time; so it is by no means clear how it would play out.

[U1TRA_L0RD]

I think potential candidates are Litecoin, Protoshare, and DOGEcoin.

[jbreher]

I think potential candidates are Litecoin, Protoshare, and DOGEcoin.

Why DOGEcoin? I've not looked into it. However, I was under the impression that DOGE was a straight-up Litecoin clone wrapped in a cute and fuzzy, but non-functional and nonsensical internet meme wrapper?