rpietila Altcoin Observer

[illodin]

So I guess we'll just have to wait for the perfect coin to appear - Cryptonite fork (mini-blockchain) with proven PoW (maybe Cuckoo Cycle when it gets an optimized miner) and anonymity features. Imagine the amount of miners jumping in with both feet and hands.

[yldouright]

If we logically assess the conclusion of a global crypto-currency, it seems to point to a one coin scenario. The vast majority of pundits are on the record stating BTC will be that coin. When we consider the potential problems and destructive effects of value with merged mining, it is not unreasonable to assume the eventual demise of all the other altcoins. In fact, there are very few alt-coins exhibiting healthy charts and the number of dead and nearly dead crypto is growing. Still, you have some investors willing to take that chance, note the link below:
Primecoin [XPM] is being purchased here.

[kbm]

If we logically assess the conclusion of a global crypto-currency, it seems to point to a one coin scenario.

Why would you think that? There's so many different fiat varieties of money like USD, EUR, CNY etc... Theres so many different varieties of hard-metal currencies like gold, silver, etc... There's visa, mastercard, discover, wells fargo, for credit-type currencies (granted these are denominated in fiat values). There's paypal too. Point is .. of the thousands of ways to pay someone with something that have already manifested in 2014, what could possibly make you think (logically) that there will be one currency past that?

[illodin]

In other news, Cloak's Proof-of-Stake-Anonymity has apparently solved the Byzantine Generals problem (I thought Bitcoin already solved it): https://bitcointalk.org/index.php?topic=637704.msg8128502#msg8128502

[Este Nuno]

If we logically assess the conclusion of a global crypto-currency, it seems to point to a one coin scenario. The vast majority of pundits are on the record stating BTC will be that coin. When we consider the potential problems and destructive effects of value with merged mining, it is not unreasonable to assume the eventual demise of all the other altcoins. In fact, there are very few alt-coins exhibiting healthy charts and the number of dead and nearly dead crypto is growing. Still, you have some investors willing to take that chance, note the link below:
Primecoin [XPM] is being purchased here.

I think it's completely unreasonable to assume the eventual demise of all other altcoins. It doesn't make any sense at all to me.

Many people still question whether Bitcoin itself will end up being the market leader 10, 20 years from now. People are never going to stop trying to innovate in the currency space now that Bitcoin has opened people's imaginations(and wallets).

[yldouright]

Este Nuno, kbm
It's not completely unreasonable. The alt-coins dilute the value of the accepted currency. In other words, when they are first created, they have a comparative trade value which over time is either endorsed or abandoned, just like a foreign paper currency on the monetary exchange. When a foreign currency implodes, it drags down the value of all the other currencies because that currency was traded away for realer goods, which raises their relative value against all currencies. We'll use BTC as the example for illustration:
A new crypto-coin is announced, it is mined and exchanged (ie: dumped) for BTC establishing a relationship of relative value. Now, what happens when that alt-coin dies? This is the downward pressure we see in the price of BTC. The closer we move toward a global economy, the closer we move toward a natural monetary monopoly and if the world population decides that crypto-coin will be the preferred medium of exchange, why is it unreasonable to assume that one surviving coin will be it?

[Lohoris]

I think it's completely unreasonable to assume the eventual demise of all other altcoins. It doesn't make any sense at all to me.

Many people still question whether Bitcoin itself will end up being the market leader 10, 20 years from now. People are never going to stop trying to innovate in the currency space now that Bitcoin has opened people's imaginations(and wallets).

I agree with yldouright: you are not talking about money, you are talking about assets or standards.

There are some things who welcome competition and use it to promote innovation, while there are other things that are strong aggregators with a positive feedback loop: the more people use a coin the more that coin is useful (same thing happens with social network, for instance).

This will not completely eraticate every altcoin imaginabile, but is a very strong disincentive.

[Este Nuno]

Este Nuno, kbm
It's not completely unreasonable. The alt-coins dilute the value of the accepted currency. In other words, when they are first created, they have a comparative trade value which over time is either endorsed or abandoned, just like a foreign paper currency on the monetary exchange. When a foreign currency implodes, it drags down the value of all the other currencies because that currency was traded away for realer goods, which raises their relative value against all currencies. We'll use BTC as the example for illustration:
A new crypto-coin is announced, it is mined and exchanged (ie: dumped) for BTC establishing a relationship of relative value. Now, what happens when that alt-coin dies? This is the downward pressure we see in the price of BTC. The closer we move toward a global economy, the closer we move toward a natural monetary monopoly and if the world population decides that crypto-coin will be the preferred medium of exchange, why is it unreasonable to assume that one surviving coin will be it?

I think it's completely unreasonable to assume the eventual demise of all other altcoins. It doesn't make any sense at all to me.

Many people still question whether Bitcoin itself will end up being the market leader 10, 20 years from now. People are never going to stop trying to innovate in the currency space now that Bitcoin has opened people's imaginations(and wallets).

I agree with yldouright: you are not talking about money, you are talking about assets or standards.

There are some things who welcome competition and use it to promote innovation, while there are other things that are strong aggregators with a positive feedback loop: the more people use a coin the more that coin is useful (same thing happens with social network, for instance).

This will not completely eraticate every altcoin imaginabile, but is a very strong disincentive.

Sure, there will be one dominant form on money in the world in the future. But I don't think we're ever going to see a monopoly happen. There are lots of niche cases that come up and people will always try to fill those needs. Also, people will always try to compete to become the market leader, even if thousands of failed before them. That is as long as the barriers to entry stay as low as they are now.

[fluffypony]

I think it's completely unreasonable to assume the eventual demise of all other altcoins. It doesn't make any sense at all to me.

Many people still question whether Bitcoin itself will end up being the market leader 10, 20 years from now. People are never going to stop trying to innovate in the currency space now that Bitcoin has opened people's imaginations(and wallets).

I agree with yldouright: you are not talking about money, you are talking about assets or standards.

There are some things who welcome competition and use it to promote innovation, while there are other things that are strong aggregators with a positive feedback loop: the more people use a coin the more that coin is useful (same thing happens with social network, for instance).

This will not completely eraticate every altcoin imaginabile, but is a very strong disincentive.

I think that we will definitely see the rise of a handful of cryptocurrencies fit for various purposes. Remember: even in the existence of a global economy, that wouldn't mean that in-game currencies such as those used in WoW or EVE are now redundant and every in-game currency is going to be Bitcoin (or whatever). Similarly, purely on a currency level, altcoins can be used for loyalty point systems. So I don't think we'll see the level of idiotic scammy altcoins we see today once the big shake out has happened in a few years, but that doesn't mean that altcoins will be completely non-existent:)

[yldouright]

Este Nuno, fluffypony
If BTC does become the currency standard of trade, there will be little incentive to use any other coin and even less incentive to produce alternates. To give a trivial example, take the little white plastic tables they put in the center of pizzas to keep the cheese off the cardboard box. There are alternatives to it but why use them if the standard works well and doesn't have any glaring defects or economic penalties?

As an aside, I'm glad you decided to soften your response calling me completely unreasonable  

[aminorex]

In other news, Cloak's Proof-of-Stake-Anonymity has apparently solved the Byzantine Generals problem (I thought Bitcoin already solved it): https://bitcointalk.org/index.php?topic=637704.msg8128502#msg8128502

Will you please end this constant pimping of scrofulous flea-ridden whores?  

This is the courtesan channel.  We have standards.

[aminorex]

The alt-coins dilute the value of the accepted currency.

Quite the contrary.  Alt coins are one of the primary use cases of BTC.  You cannot get alts unless you first get BTC (with exceptions for mining, &c, which are relatively insignificant except in eggregious pre-mine cases, which aren't relevant to the point).  Consequently, there is more demand for BTC.  No dilution is even possible until alts are usable in cases where they displace BTC.  So far these are insignificant.  My estimation is that outright scams (whether via scamcoins or hacks or fractional reserve, what-have-you) are the largest value-drain on the BTC economy, by two orders of magnitude.  The biggest drain on BTC value is emission, but that is independent of the size of the economy.

[vuduchyld]

The alt-coins dilute the value of the accepted currency.

Quite the contrary.  Alt coins are one of the primary use cases of BTC.  You cannot get alts unless you first get BTC (with exceptions for mining, &c, which are relatively insignificant except in eggregious pre-mine cases, which aren't relevant to the point).  Consequently, there is more demand for BTC.  No dilution is even possible until alts are usable in cases where they displace BTC.  So far these are insignificant.  My estimation is that outright scams (whether via scamcoins or hacks or fractional reserve, what-have-you) are the largest value-drain on the BTC economy, by two orders of magnitude.  The biggest drain on BTC value is emission, but that is independent of the size of the economy.

Thought-provoking.  Thanks for sharing.

[kbm]

Este Nuno, kbm
It's not completely unreasonable. The alt-coins dilute the value of the accepted currency. In other words, when they are first created, they have a comparative trade value which over time is either endorsed or abandoned, just like a foreign paper currency on the monetary exchange. When a foreign currency implodes, it drags down the value of all the other currencies because that currency was traded away for realer goods, which raises their relative value against all currencies. We'll use BTC as the example for illustration:
A new crypto-coin is announced, it is mined and exchanged (ie: dumped) for BTC establishing a relationship of relative value. Now, what happens when that alt-coin dies? This is the downward pressure we see in the price of BTC. The closer we move toward a global economy, the closer we move toward a natural monetary monopoly and if the world population decides that crypto-coin will be the preferred medium of exchange, why is it unreasonable to assume that one surviving coin will be it?

So the statement then is more that bitcoin would be reserve currency. While I wouldn't mind that at all, due to owning bitcoin, I'd have to make the point that there are still massive political and physical barriers that need to be dealt with that people are still grappling with today (I believe BRICS just met and formed something to bypass the fed pretty recently). The only way the current reserve currency for the world got to its current place is with guns and resources. Crypto doesn't have guns. Who is going to support it as a world currency? There's no political affiliation therefore nobody is standing behind it with guns and resources saying it's going to be worth a lot throughout your lifetime.

What does crypto offer? Lots of hopes and resources saying it's going to be worth a lot in my lifetime. No guns, or imposition of will. Only investors, and their word that it will be worth more next year. I'm not currently convinced that without some serious political endorsements (not just regulation - and more like the entire country of Argentina) that any of this will ever go anywhere unless some country with a metric shitton of both guns and resources happens to start using it. (edit: anywhere besides lowering transaction fees to almost zero -- that's still extremely valuable and was the main reason I've invested.)

But which one of them would let themselves be at the mercy of the various mining hardware scattered across the entire world (mostly not in their control) that's required to get that sweet inflation in their money supply so they eventually don't have to pay $.01 for 50 loaves of bread? Who would be the first to jump on that train? This is the basis of my statement - nobody would voluntarily do that, they would make their own fork and run on that chain, where there would be a very large amount of niche-filling currencies.

[nakaone]

Este Nuno, kbm
It's not completely unreasonable. The alt-coins dilute the value of the accepted currency. In other words, when they are first created, they have a comparative trade value which over time is either endorsed or abandoned, just like a foreign paper currency on the monetary exchange. When a foreign currency implodes, it drags down the value of all the other currencies because that currency was traded away for realer goods, which raises their relative value against all currencies. We'll use BTC as the example for illustration:
A new crypto-coin is announced, it is mined and exchanged (ie: dumped) for BTC establishing a relationship of relative value. Now, what happens when that alt-coin dies? This is the downward pressure we see in the price of BTC. The closer we move toward a global economy, the closer we move toward a natural monetary monopoly and if the world population decides that crypto-coin will be the preferred medium of exchange, why is it unreasonable to assume that one surviving coin will be it?

So the statement then is more that bitcoin would be reserve currency. While I wouldn't mind that at all, due to owning bitcoin, I'd have to make the point that there are still massive political and physical barriers that need to be dealt with that people are still grappling with today (I believe BRICS just met and formed something to bypass the fed pretty recently). The only way the current reserve currency for the world got to its current place is with guns and resources. Crypto doesn't have guns. Who is going to support it as a world currency? There's no political affiliation therefore nobody is standing behind it with guns and resources saying it's going to be worth a lot throughout your lifetime.

What does crypto offer? Lots of hopes and resources saying it's going to be worth a lot in my lifetime. No guns, or imposition of will. Only investors, and their word that it will be worth more next year. I'm not currently convinced that without some serious political endorsements (not just regulation - and more like the entire country of Argentina) that any of this will ever go anywhere unless some country with a metric shitton of both guns and resources happens to start using it. (edit: anywhere besides lowering transaction fees to almost zero -- that's still extremely valuable and was the main reason I've invested.)

But which one of them would let themselves be at the mercy of the various mining hardware scattered across the entire world (mostly not in their control) that's required to get that sweet inflation in their money supply so they eventually don't have to pay $.01 for 50 loaves of bread? Who would be the first to jump on that train? This is the basis of my statement - nobody would voluntarily do that, they would make their own fork and run on that chain, where there would be a very large amount of niche-filling currencies.

despites the technical superiority, the network is (close) to neutral from outer influence on a world wide scale. the monetary supply is known and (almost) unalterable and what is most important: it is neutral in that sense that the network does not mark your transaction - the moment this will be changed I am out. this is not some libertarian bullshit dream, this is the real value of this network and that is the reason why it has a huge potential.

[Este Nuno]

As an aside, I'm glad you decided to soften your response calling me completely unreasonable 

Sorry, it wasn't meant as a personal insult. I was strictly referring to the possibility of Bitcoin becoming the only form a currency used and was not attempting to imply anything other than that.

[Este Nuno]

In other news, Cloak's Proof-of-Stake-Anonymity has apparently solved the Byzantine Generals problem (I thought Bitcoin already solved it): https://bitcointalk.org/index.php?topic=637704.msg8128502#msg8128502

Will you please end this constant pimping of scrofulous flea-ridden whores? 

This is the courtesan channel.  We have standards.

I think he's trying to poke fun at them, no?

I don't know much about cloak but I'm highly skeptical. Especially reading a couple pages of that thread. It's the lowest common denominator of cryptocurrency over there.

[kbm]

despites the technical superiority, the network is (close) to neutral from outer influence on a world wide scale. the monetary supply is known and (almost) unalterable and what is most important: it is neutral in that sense that the network does not mark your transaction - the moment this will be changed I am out. this is not some libertarian bullshit dream, this is the real value of this network and that is the reason why it has a huge potential.

I think people can still mark your coins/transactions with bitcoin, in that if you're aware that one BTC was traded for something in one part of the world you could have a different part of the world 'marking' it for regulation in a different part of the world because of that. I would believe that the ability to do so is a direct result of 'network marked' transactions. Maybe we're talking about different kinds of markings? Maybe I'm totally wrong? Can anyone tell me that this is not the case?

add: I'm pretty sure I've seen threads dedicated to discussing these types of fungibility issues .. I'll go look for them.

OK so it's not the coins themselves that can be traced, but the people:

http://www.coindesk.com/bitcoin-fungibility-essential/
http://www.coindesk.com/government-sale-bitcoin-establishes-fungibility-precedent/

But still .. you can be singled out for taking the wrong coins from the wrong people. I think I saw someone post a coinbase picture saying they can't use their coins but instead can only withdraw them because of such an issue .. i'll look for it.

[yldouright]

aminorex
You need to review the logic presented in my examples to better understand the mechanics of the dilution. Observing the relative value after the transactions complete, not the short term effects of buying/trading for BTC that show it is not quite the contrary.

kbm
What buys guns? What buys governments? There may be a point of critical mass where the populations of the world become enlightened enough to choose what their medium of exchange will be, or there may not be. Don't read more into my statements than what they state. If dedicated mining hardware is seized, will the network fail or will it consolidate the efforts of the populace against the misanthropes that performed this act of violence? What of the coins that already exists, will they be seized? There are too many unpredictable variables to adopt a complete pessimism but I wouldn't put all my eggs into a crypto-basket either. Currently, crypto-coin is a warning to the central banks. The future will tell us more.

[aminorex]

You need to review the logic...

I agree on the natural monopoly point, but the dilution point I don't see at all.  You simply asserted that the collapse of the aggregate alt economy was the (implied, primary) cause of btc price atrophy.  I question the causal link, and assert that even in the presence of a (hypothetically postulated) clear causal mechanism, any such pressure is insignificant in comparison with other, larger factors.  I named fraud and related property crime as one such factor which I think would overwhelmingly dominate over any impact of altcoin price fluctuations, taken as an isolated aggregate factor.

Did I miss anything?