Bitcoin will inevitably Fail as Altcoins suceed

[Elwar]

30,000 bitcoins were snatched right up in 30 minutes on bitstamp.

1 million would lower the price but only temporarily as people pour their money in for cheap coins.

[devphp]

2014 is the tipping point for Bitcoin.

Bitcoin is like UUCP, which was invented in 1978 and was actively used for 20 years, then when TCP/IP Internet got popular, UUCP usage dropped, but one of the last legacy UUCP services was shut down only in 2012, although very few people used it since 2000.

Bitcoin now is like UUCP in 1994 when PPP connection protocol was standardized. It can still grow, but not at its prior rate, and new emerging protocols and technologies are on the rise to make it obsolete within a few years. Or even faster than that, as the time it takes to develop technologies has contracted, as numerous examples of late show.

[Billbags]

It appears all you know about Bitcoin is from blogs you have read on the internet. You definitely do not know the economics, finance, legal issues and mining facts involved with Bitcoin. I would say you may have been involved with Bitcoin for a couple of months, if not just a couple of weeks. Posts like yours reminds us all how far we have made it in this Revolution. You should really learn some basic facts about what's really going on here and you may finally get it.

Since this is probably really all about altcoins, here's the speech:

Bitcoin itself had in the past been vulnerable to very similar things that you said happened and now see happen with altcoins these days, but fortunately THAT WINDOW IS NOW CLOSED.

Part of the definition of the bitcoin protocol includes the checking of the proof of work put into various block chains, and then choosing the one with the most work. Bitcoin has more proof-of-work in its blockchain than any other competing cryptocurrency, and so by definition it must be the one chosen, and all others ignored.

Altcoins are all very similar to Bitcoin: there is a block chain to store transactions, a consensus mechanism to build the block chain, and a cryptographic protocol to register transactions. Some prominent examples are PPCoin, Primecoin, Litecoin, and Freicoin.

Some altcoins incorporate interesting new ideas, but there is an essential feature of Bitcoin which they all lack. It is not a matter of its technology, but rather of history and community. Quite simply, a medium of exchange that is more widely accepted on the market is more useful than one which is not. This is known as the network effect. An initial imbalance between two nearly equal media of exchange will benefit whichever is more widely accepted until a single one overwhelms the rest. There is no limit to this effect: ultimately one would always expect a single currency to overcome all its competitors.

Because it was started earlier and has had a greater opportunity to grow and attract users, Bitcoin has a market larger by a wide margin than all the markets of all the altcoins put together, and this makes it vastly more useful as a currency. To defeat Bitcoin, an altcoin would require not just superior technology, but such vastly superior technology as to be an advance over Bitcoin comparable to the advance Bitcoin represents over fiat currency. Furthermore, a truly great innovation would much better serve people by being incorporated into future versions of Bitcoin rather than by requiring them to switch to something else. Indeed, the people who have proposed new ideas that are actually good, such as Zerocoin and mini-blockchain, did not develop their own currencies around them, but have simply described their usefulness as features.

The Bitcoin community is not just overwhelmingly larger but of overwhelmingly better quality as well. Bitcoin is surrounded by real entrepreneurs working hard to create new and useful services for Bitcoin. Altcoins are surrounded by loud-mouthed pretenders with irrational hopes of duplicating Nakamoto's success. This does not mean that there is anything intrinsically wrong with altcoins: the problem is simply that once Bitcoin exists, then there is no additional value, from a monetary standpoint, of creating knock-offs. Can anyone really expect to create something of value by rereleasing Bitcoin under a new name and with a few tiny changes to its source code? What makes Bitcoin great cannot easily be duplicated. Thus, while the Bitcoin community matures and grows as more and more entrepreneurs are attracted to its potential, the altcoin communities can only whine for attention.

For a new currency to take bitcoins place it would have to represent a significant improvement over bitcoin, or bitcoin would have to first FAIL before this could happen. So the question is not will bitcoin become obsolete, but will (your proposed new coin) overtake bitcoin? I don’t see any reason to believe that Altcoins represents a fundamental new innovation with meaningful improved functionality.

In physics, we learn about the concept of entropy. Entropy is often described as “chaos”, “randomness”, or “disorder”. To simplify quantum mechanics as much as possible, imagine a basket with a line drawn down the middle, and throw some balls into the basket. If all the balls are on one side of the line, that is an ordered state and has low entropy. If the balls are spread across both sides then it has higher entropy.

Now, let us take the concept of entropy and apply it to cryptocurrencies. We can imagine each cryptocurrency created has a possibility that some value can be placed within it. If all possible value is placed in bitcoin, and none in litecoin or altcoin, then this is a low entropy state. The laws of thermodynamics dictate that entropy in a system should always increase. So we should expect the total cryptocurrency value to be spread among all the possible altcoins.

Going back to our example of balls in a basket, one can easily get all the balls onto one side of the line simply by tilting the basket. This represents the concept of enthalpy, or energy within the system. Just as gravity pulls the balls onto one side of the basket, enthalpy can pull things into a higher entropic state. The most proof-of-work has been put into bitcoin, and so it takes higher energy to put any value into an altcoin.

From an entropy standpoint, there will always be alternate currencies, and the value assigned to them will always be greater than zero. But from an enthalpy standpoint, bitcoin is favored over altcoins, so the total value of each altcoin will remain very low compared to bitcoins.

^ You are 100% correct on this topic!!!!!  op is clueless!!!! ****This needs to be moved to altcoin section****

[btcxyzzz]

1) Satoshi Nakamoto owns a reported 1,000,000(1million) bitcoins. Does anyone else see the huge huge problem with this? If Satoshi's bitcoin wallet or addresses were hacked or taken control of by a relative, friend, or others and they decided to even sell a fraction of the coins, coupled with the already uncertain market, Bitcoin's price will plummet to less than $1 per coin. Honestly, Satoshi owning 1million bitcoins has doomed Bitcoin from the start. This is one of the Major reasons why so few legit organzations are out there accepting Bitcoin as a means of payment and another reason why most people looking at Bitcoin think of it as a ponzi scheme(which it is) or scam.

Yes, this is a bit of a problem, but it's not guaranteed it will turn out badly. It even can turn out good, read what I think Satoshi would do with his enormous wealth: https://bitcointalk.org/index.php?topic=784545.msg8840162#msg8840162

Also, fact Satoshi has so much coins does not make Bitcoin a ponzi scheme.

2) The Bitcoin Foundation, or the board representing Bitcoin, is full of illegal activity with dozens of former foundation members resigning from their positions this year. Charlie Shrem, a (former?) foundation member, has been invicted on April 10, 2014 on accusations of "operating an unlicensed money transmitting business, money laundering conspiracy and willfully failing to file suspicious activity reports with banking authorities". He was using Bitcoin to help users of the illegal drug marketplace, Silk Road, buy drugs with Bitcoin, as well as operating an unlicensed money transmitting business, (former) Bitinstant and Brock Pierce (current) foundation member, is an accused Child Molester.

I don't have problem with Charlie Shrem, I believe many other don't have too, even if he goes to jail. Fact Brock Pierce is accused pedophile has not much to do with Bitcoin.

3) Bitcoin is centralized. It is controlled by the mining pools. For instance, just a few months ago, Ghash.io caused quite a scare in which even Peter Todd, a core developer for Bitcoin, announced that he would be selling 51% of his Bitcoin's due to Ghash.io controlling and approaching 51% of Bitcoin's entire hashrate, which would easily allow them to commit a 51% attack on Bitcoin, thereby killing the currency by basically printing duplicate Bitcoins.

I don't believe that will happen in the future, network hash rate is already much bigger, besides, one owning more than 51% of hashrate does not have much incentive bringing the Bitcoin down.

4) The most damming evidence of Bitcoin's certain death as of right now(excluding Satoshi's huge 1million Bitcoin stash) however, is Willy. Willy was a bot used on the MtGox exchange from since back in 2012. Willy was illegaly using false fiat funds to buy large quantities of Bitcoin's every hour for days and months on end, which was what led to All of Bitcoin's previous bullruns, as well as dumps when Willy reversed the trend and started selling Bitcoins. Basically, Bitcoin's entire price rise history and dumps, is due not to the traders, not to the news, but to a bot using fake money to buy bitcoins and sell them at a profit. Based upon that information, one can only guess that Bitcoin will never see a $1000+ price per coin again. http://willyreport.wordpress.com/2014/05/25/the-willy-report-proof-of-massive-fraudulent-trading-activity-at-mt-gox-and-how-it-has-affected-the-price-of-bitcoin/

Given how tiny Bitcoin is, compared to world economy, I say 1k USD is ridiculously cheap Bitcoin. See you in few years. Those are not good enough reasons to be that bearish. You're bearish primarily because desperation level is at ATH right now. Do you see all that investments, do you see queues in front of Bitcoin ATMs in next bullrun? Infrastructure is built right to support all of that. You haven't missed the train, but don't miss another one. Bull run will happen 2 years from now, the most.

[2dogs]

A little info about me: I'm a decent sized Bitcoin holder, having a little under 1,000 bitcoins as of right now. I bought most of them in late 2012 and sold quite a bit more around mid 2013. Anyway, at the beginning I entertained the thought that Bitcoin will truly change the world and become a revolutionary, unstoppable force. But, after really looking at both sides of the story, I realized that Bitcoin is doomed to fail no matter how much media exposure it gets. I know what I type below seems hypocritical, with myself owning Bitcoins, but I can't hold it in any longer and watch all the brainwashing go on in this forum. I truly do not believe that Bitcoin will stay on top the next coming years, for the reasons listed below, it's(Bitcoin's) entire history has been falsified. I have recently turned my attention away from Bitcoin and into Altcoins, which believe it or not, lack the faults that Bitcoin has below and improve on nearly everything that Bitcoin can't.

Basically I've come up with a few basic reasons why everything we knew about Bitcoin, price wise, has been false, and that the entire market is 100% manipulation and games.

Interesting... you bought BTC in 2012, yet registered new here today?
Where did you first learn about BTC if it wasn't here?
I have to agree with you on the Bitcoin Foundation and the fact that Gavin is paid by them.
The wordpress article on the bot was quite excellent - are you the author of that research?

[findftp]

1) Satoshi Nakamoto owns a reported 1,000,000(1million) bitcoins. Does anyone else see the huge huge problem with this?

No. Wold love them to own them myself

2) The Bitcoin Foundation, or the board representing Bitcoin, is full of illegal activity with dozens of former foundation members resigning from their positions this year.

They are a bunch of people who do not represent me. I did not choose them, neither did they chose me.

3) Bitcoin is centralized. It is controlled by the mining pools.

But who controls the hashing? The miners! There are a lot of them.

4) The most damming evidence of Bitcoin's certain death as of right now(excluding Satoshi's huge 1million Bitcoin stash) however, is Willy.

All markets are manipulated.
Alt-coins even more.

No offense, but to me your story really sounds like trolling.
I suggest you sell all your bitcoins and trade them for your beloved alts.
I will happily buy the bitcoin from you.
Now that I think of it, I should buy some extra bitcoins right now.

[Billbags]

1) Pure speculation. No one knows what he has, not for sure so 1million is assumed. Since you speculated I'll speculate. You can believe those coins are part of the overall plan and are safe with instructions left in case something happened to him. And NO it doesn't bother me.

2) The Bitcoin Foundation does not own or represent Bitcoin. Most of those idiots are gone anyway. I hate Gavin getting paid by them, but it's better than the government paying the lowest bidder to try to do the job. Remember we still have people like Andreas and gmaxwell on our side.

3) Mining is not centralized, I own a small farm and that's first hand knowledge. There are solutions for the 51% attack situation. When the fix needs to be implimented it will be. Gavin and others have had the solution(s) ready for awhile now. There are also permanent solutions out there they just haven't been implemented yet. Peter Todd is nobody. He was trying to get his way and at the same time saw a chance to sell half his coins without people raising a brow. The whole 51% thing just makes good press, it's all about selling fear, thats why you never hear that a 51% attack would be noticed immediately and the fix would shut the attack down almost immediately making all the attackers blocks invalid. To the normal citizen Bitcoin user it would be a small "hiccup" and banks have big "hiccups" all the time and no one really complains. Banks even close on the weekends and are getting hacked/fraud/ID thefts daily. The public knows about the 51% issue and watches for it and they know there is a quick fix if it would happen before a permanent solution is in place. The reason they won't is because Bitcoin is not a "Scamcoin".
http://gavintech.blogspot.com/2012/05/neutralizing-51-attack.html?m=1
https://bitcoinfoundation.org/2014/07/mining-decentralisation-the-low-hanging-fruit/
https://bitcointalk.org/index.php?topic=281180.0

4) Your talking about MtGox in 2012. Every aspect of that operation was a scam from the day they opened. No body cares about MtGox. Exchanges don't operate like that anymore, there's too many eyes watching now. That's ancient history of the start up phase of Bitcoin. That place was ran by kids. Most of us knew that at least a year before they shut down. That's called growing pains. Exchanges today have insured accounts. That's called stability. I myself have four bots trading Btc-e and Circle wallets with MY coins insured 100%. I still keep most in Armory offline. As the person above me stated "All markets are manipulated".

[bornil267645]

Bitcoin will never fall, you know why? Because it will always have criticism like this making it last even more. Many altcoins came and gone, but bitcoin is still here. So as far as those who follows bitcoin remains loyal, bitcoin will survive.

[hasherr]

Even if satoshi have 1 mil coins and he decides to dump it, market will eat them all up, just like it ate those 30K some weeks ago. There are just too many ppl trusting and invested in btc.

[Q7]

The thing is that if you create an altcoin that resembles everything that bitcoin has or even better, from name, coin specs, that altcoin will still fail. Bitcoin is there and is currently there by virtue because it is the first. And if bitcoin fails, no other altcoin will ever reach the level bitcoin has gained. People will lose confidence in crypto *completely* and that is that.

The question on whether bitcoin will fail remains to be answered. 4 years back they say it was going to fail but it didn't. The signs are there, the vulnerability is there, the word decentralization makes no sense, however that doesn't mean that it is going to fail and flop completely tomorrow. We'll just have to see...

[cambda]

Centralized currency is issued by some entity and nobody else can control it, no matter what. It can be argued Bitcoin cannot be centralized, because anybody can put as much hashpower as he likes and have own fee per transaction policy for his blocks. Obviously many have expensive electricity so they cannot be much competetive, but this is not Bitcoin fault.

[jabo38]

A little info about me: I'm a decent sized Bitcoin holder, having a little under 1,000 bitcoins as of right now. I bought most of them in late 2012 and sold quite a bit more around mid 2013. Anyway, at the beginning I entertained the thought that Bitcoin will truly change the world and become a revolutionary, unstoppable force. But, after really looking at both sides of the story, I realized that Bitcoin is doomed to fail no matter how much media exposure it gets. I know what I type below seems hypocritical, with myself owning Bitcoins, but I can't hold it in any longer and watch all the brainwashing go on in this forum. I truly do not believe that Bitcoin will stay on top the next coming years, for the reasons listed below, it's(Bitcoin's) entire history has been falsified. I have recently turned my attention away from Bitcoin and into Altcoins, which believe it or not, lack the faults that Bitcoin has below and improve on nearly everything that Bitcoin can't.

Basically I've come up with a few basic reasons why everything we knew about Bitcoin, price wise, has been false, and that the entire market is 100% manipulation and games.


1) Satoshi Nakamoto owns a reported 1,000,000(1million) bitcoins. Does anyone else see the huge huge problem with this? If Satoshi's bitcoin wallet or addresses were hacked or taken control of by a relative, friend, or others and they decided to even sell a fraction of the coins, coupled with the already uncertain market, Bitcoin's price will plummet to less than $1 per coin. Honestly, Satoshi owning 1million bitcoins has doomed Bitcoin from the start. This is one of the Major reasons why so few legit organzations are out there accepting Bitcoin as a means of payment and another reason why most people looking at Bitcoin think of it as a ponzi scheme(which it is) or scam.

2) The Bitcoin Foundation, or the board representing Bitcoin, is full of illegal activity with dozens of former foundation members resigning from their positions this year. Charlie Shrem, a (former?) foundation member, has been invicted on April 10, 2014 on accusations of "operating an unlicensed money transmitting business, money laundering conspiracy and willfully failing to file suspicious activity reports with banking authorities". He was using Bitcoin to help users of the illegal drug marketplace, Silk Road, buy drugs with Bitcoin, as well as operating an unlicensed money transmitting business, (former) Bitinstant and Brock Pierce (current) foundation member, is an accused Child Molester.

3) Bitcoin is centralized. It is controlled by the mining pools. For instance, just a few months ago, Ghash.io caused quite a scare in which even Peter Todd, a core developer for Bitcoin, announced that he would be selling 51% of his Bitcoin's due to Ghash.io controlling and approaching 51% of Bitcoin's entire hashrate, which would easily allow them to commit a 51% attack on Bitcoin, thereby killing the currency by basically printing duplicate Bitcoins.

4) The most damming evidence of Bitcoin's certain death as of right now(excluding Satoshi's huge 1million Bitcoin stash) however, is Willy. Willy was a bot used on the MtGox exchange from since back in 2012. Willy was illegaly using false fiat funds to buy large quantities of Bitcoin's every hour for days and months on end, which was what led to All of Bitcoin's previous bullruns, as well as dumps when Willy reversed the trend and started selling Bitcoins. Basically, Bitcoin's entire price rise history and dumps, is due not to the traders, not to the news, but to a bot using fake money to buy bitcoins and sell them at a profit. Based upon that information, one can only guess that Bitcoin will never see a $1000+ price per coin again. http://willyreport.wordpress.com/2014/05/25/the-willy-report-proof-of-massive-fraudulent-trading-activity-at-mt-gox-and-how-it-has-affected-the-price-of-bitcoin/

They are all valid concerns, but I doubt it will stop bitcoin.  

1. If Satoshi dumped his coins, it would seriously kill the price, but it would recover.
2. As if banks and governments don't also have such dirty histories?
3. Miners are very selfish, if they centralize too much they will destroy the very thing they are trying to build.  They will act in self-interest
4. Willy did boost the price of Bitcoin, but after Willy shut down it has been free and has more or less held its own.  Yes, it is down some, but it can definitely raise up again.  The first bubbles were created by Willy, but also had lots of speculators giving Willy a hand.  Basically, Willy didn't do it all alone, but was a big factor.  Right now Bitcoin is building real infrastructure.  The next bubble will be because Bitcoin is actually working.  

[ChuckBuck]

It's funny the OP make all these untrue points, but the fact of the matter is all Altcoins are copycat, gimmicky pump and dump schemes.

I mean Dogecoin was the biggest Alt for awhile based on an Internet Meme, and we're supposed to take Altcoins seriously?

[devphp]

the fact of the matter is all Altcoins are copycat, gimmicky pump and dump schemes.

You obviously haven't done your homework.

[ChuckBuck]

the fact of the matter is all Altcoins are copycat, gimmicky pump and dump schemes.

You obviously haven't done your homework.

How so?  Isn't Bitcoin the first and original coin created by Satoshi Nakamoto based on the old Hashcash.  Yea, I read the white paper.   

Aren't Altcoins derivative from this first coin?  Homework done.

[devphp]

Aren't Altcoins derivative from this first coin?  Homework done.

Some are (copycat), some are far from it. Homework not done.

[ChuckBuck]

Aren't Altcoins derivative from this first coin?  Homework done.

Some are (copycat), some are far from it. Homework not done.

Anything after the first, is derivative or copying some aspect of the first.  Don't tell me you have some stake in some of those crappy alts?

[zoukenn]

Why do you want to be terrorist giving this type of news? Relax, no one know future and no one know what will happen.

[bitnanigans]

MtGox, man! Still haunting us up till today. It's like that STI that you can't get rid off no matter what you try.

[adhitthana]

The quality of the people involved with the sdiechain whitepaper shows that at least some prominent knowledgeable Bitcoiners recognize that altcoins technology is pretty interesting and even superior in many aspects to Bitcoin.
Just as no one knew where bitcoin would be a couple of years ago, no one knows where altcoins will be over the horizon. And the horizon is not that far away