Will there ultimately be just one cryptocurrency?

[ratcatcher]

OK, to be honest I'm posting here because I'm new and I have to do so before I'm allowed to post anywhere else.  But I thought I'd try to kick off an interesting discussion - though I'm sure it's one that has been had many times, here and elsewhere.

I've played around (not seriously) with Bitcoin, Litecoin and, recently, CoinyeCoin.  It's clear that there is now a whole plethora of cryptocurrencies out there.  Some are scams, some experimental, some vanity projects.  But even after one eliminates those, there are still many "serious" contenders.

So what do folks think will happen in the longer term?  Will there be several currencies that will establish themselves in the marketplace or will the market ultimately have room for only one?  Will Bitcoin be the last man (or woman) standing?

From a user's point-of-view I can see lots of disadvantages with multiple currencies and no real advantage.

[jonanon]

I think all that most coins wont stand the test of time, I expect to see 4 or 5 coins that get used as currency - bitcoin being the biggest.

[Akka]

Well, crytocurrencies are almost impossible to kill. As long as there is still a single copie of the code and the blockchain, they life on.

So I don't think any one of them will truly die.

But I think that in the long term, interst in most of them will fade and there will be less and less of them that truly matter, simply due to the fact that they provide no or very limited usability, while others are usable at more and more places. And I think this will eventually affect all of them but one until basically only one remains that is truly used. The only real hot canidate for this is IMO currently Bitcoin.

Plus most of the current new currencies don't stand a chance as they are build for people that think "they have missed the Boat", the problem with that is, once they have a reasonable success, the target group of them, that helps them grow will again be in the "missed the Boat" Situation and therefore rather make a new coin again, than to jump on the established coin, while the people that go for a established coin rather go for the most established one. They are limited in their potential right from the start.

[Sindelar1938]

Maybe not one but definitely only a few
Extremely zero sum

[dhavin]

Right. I was half joking in another thread that 20 years from now when it comes time to make your mortgage payment, you'll just invent your own cryptocurrency and convince the bank to adopt it.

It's really hard to say - I agree, that once established and traded, there's very little to kill it other than, something better coming along. People traded copper until they could mine silver, then iron, etc. The same might be true of cryptocurrencies and I am not naive enough to think that bitcoins will come out on top. Bitcoins have a good marketshare right now and strong media presence, but don't think for a moment that it means that it'll stay numero uno.

Once people start seriously trading services and commodities for bitcoins, someone is going to notice a lot of taxes are going unpaid. It may spawn a need for governments to track where payments are going so that it comes back down to paying taxes on transactions, or maybe they'll demand a piece of the transaction as a fee. If that were to happen, a more secure method of moving cryptocurrency would need to be invented.. because well, frankly, people like being anonymous and hate paying taxes.

Will something like this happen this year? Not likely, but I wouldn't be surprised if there's a well funded team of developers somewhere already working on it.

[hilariousandco]

I think there will probably be a handful of major players and a few widely accepted coins. I also think some countries or entities may even create or use their own, but I don't see why they couldn't just use Bitcoin.

[ratcatcher]

Well, crytocurrencies are almost impossible to kill. As long as there is still a single copie of the code and the blockchain, they life on.

I'm not (yet) too familiar with the mechanics of how cryptocurrencies work, but I realise that it's essentially a peer-to-peer setup.  As long as you have a copy of the blockchain you can both make and process transactions.

But presumably when I fire up my software, it needs to know how to connect to other peers on the network.  My understanding is that this is done using the nodes in the .conf file - is that right?  Presumably when my software connects to a node it flags me as online and available as a peer, and tells me of other available peers.

But who runs those nodes, and what would happen if they disappeared?  Presumably people would be unable to connect to the network so the currency would effectively be paralysed.

In other words if the nodes are shut down, doesn't the currency effectively die?

[Akka]

I'm not (yet) too familiar with the mechanics of how cryptocurrencies work, but I realise that it's essentially a peer-to-peer setup.  As long as you have a copy of the blockchain you can both make and process transactions.

But presumably when I fire up my software, it needs to know how to connect to other peers on the network.  My understanding is that this is done using the nodes in the .conf file - is that right?  Presumably when my software connects to a node it flags me as online and available as a peer, and tells me of other available peers.

But who runs those nodes, and what would happen if they disappeared?  Presumably people would be unable to connect to the network so the currency would effectively be paralysed.

In other words if the nodes are shut down, doesn't the currency effectively die?

When you start the software. You are a node. I'm not familia on exactly how your node finds other nodes. But the ones in the conf file are only known nodes that your one has found before.

[Kiki112]

not really
there will always be people trying to copy bitcoin, and so 1+1=2
the answer is no

the question is will there ever be less then 10 cryptocurrencies,and the answer would be maybe

[bitpop]

There's always been one. Wtf is a dooge

[Kenshin]

There's always been one. Wtf is a dooge

I think it is a new coin. 

[ratcatcher]

When you start the software. You are a node. I'm not familia on exactly how your node finds other nodes. But the ones in the conf file are only known nodes that your one has found before.

In the case of the Coinye wallet (which is, I think, basically the same software as most of the others), the coinyecoin.conf file is part of the zip archive and isn't subsequently modified in any way when you run the software.  So it's pre-populated with the IP addresses for nodes and these don't change subsequently.

Or is there another .conf file somewhere that's updated dynamically?

[bitpop]

When you start the software. You are a node. I'm not familia on exactly how your node finds other nodes. But the ones in the conf file are only known nodes that your one has found before.

In the case of the Coinye wallet (which is, I think, basically the same software as most of the others), the coinyecoin.conf file is part of the zip archive and isn't subsequently modified in any way when you run the software.  So it's pre-populated with the IP addresses for nodes and these don't change subsequently.

Or is there another .conf file somewhere that's updated dynamically?

Yes peers.dat

[BitcoinConsultant]

From a user's point-of-view I can see lots of disadvantages with multiple currencies and no real advantage.

There is a key advantage to multiple currencies which outweighs all and any disadvantages you see. Competition. Competition breeds efficiency and higher value for all.

There will always be plenty of different cryptos to play with. There can be no enforceable law that prevents new ones from being developed.

But I assume what you really mean is, how many cryptos are likely to be widely used as money?

Bitcoin is the market leader. It has momentum and acceptance inherited from being the first. Most of the altcoins are built on the same protocol and thus there is no real reason for the market to care about them. People may accept them but I doubt in any meaningful numbers.

As I understand it, an altcoin is essentially a new blockchain (identical in build to the Bitcoin blockchain) with plugins. They all use the same core kind of technology. The "plugins" just add new functionalities.

So perhaps Bitcoin will continue to be used as a currency/commodity until an altcoin with superior currency qualities appears. Other altcoins like Namecoin will be used for other purposes and may not be used as currency but as a different kind of property. An altcoin could be developed as a simple contract verification mechanism with no value as a currency per se. In which case the "coin" is redundant. Though I don't think this is necessarily true, as it could be that all cryptos preserve the qualities of currency.

So I think the most accurate answer to your question would be that it is not a matter of how many cryptos will exist, but rather how many separate cryptos are required to satisfy the number of desired use cases for the technology. Currency being just one use case. And the answer to that would be as many different cryptos as people can think of uses for them. How many crypto-currencies will occupy the same space? It will probably be a near zero-sum game with just one prevailing for each market/purpose and an untold number of others competing to out-do it in that space.

[Flashman]

Yes, but it has to run around with a sword, pick fights with the others at photogenic locations and chop their heads off.

[ratcatcher]

Or is there another .conf file somewhere that's updated dynamically?

Yes peers.dat

OK, so a bunch of people get together and launch a currency.  They create a wallet which has a .conf file containing some initial nodes which, presumably, correspond to hosts under their control.  They make the wallet available for download.

People start to use it and their software discovers other nodes which it stores in peers.dat.  Is that correct?

Now, let us assume that the developers then abandon that currency and over time stop running nodes on the hosts listed in the .conf file.

If I have this right in my mind, those with wallets already created can continue with transactions (because their software has already discovered and recorded other nodes) but someone downloading and installing the software from scratch wouldn't be able to get started because the nodes in the .conf file no longer exist.

So unless someone else decided to "take over" (in a figurative sense) and update the software then over time you'd get very few new users.

[troy112]

There will be multiples, but far lesser. When people start understanding there is no advantage of just having clones...

[bitpop]

Or is there another .conf file somewhere that's updated dynamically?

Yes peers.dat

OK, so a bunch of people get together and launch a currency.  They create a wallet which has a .conf file containing some initial nodes which, presumably, correspond to hosts under their control.  They make the wallet available for download.

People start to use it and their software discovers other nodes which it stores in peers.dat.  Is that correct?

Now, let us assume that the developers then abandon that currency and over time stop running nodes on the hosts listed in the .conf file.

If I have this right in my mind, those with wallets already created can continue with transactions (because their software has already discovered and recorded other nodes) but someone downloading and installing the software from scratch wouldn't be able to get started because the nodes in the .conf file no longer exist.

So unless someone else decided to "take over" (in a figurative sense) and update the software then over time you'd get very few new users.

Yes once created even the owners can't stop it.