[ExI] Bitcoin

[Eugen Leitl]

On Thu, Apr 04, 2013 at 08:33:03PM -0700, Gordon wrote:

> > When someone creates a new clone of the Bitcoin system, the default outcome is that no-one will be interested, since they can just use Bitcoin instead of the new clone that no shops/etc are accepting yet anyway.
> 
> 
> And yet the trading markets for these BTC clones seem to be thriving, comparable at least to the early days of BTC. I count quite a few of them, at least six or seven. Are all those people fools?

Are all gamblers fools?
 
> > .. those new currencies will need to have some advantage when compared to Bitcoin. (And "a single unit of this currency costs fewer dollars than a single Bitcoin" doesn't count as an advantage.) 
> Why is "a single unit of this currency costs fewer dollars than a single Bitcoin" not an advantage? For the moment, at least, I have rejected the idea that digital currencies are comparable to precious metals. It seems to me that they are like different denominations of a fiat currency, albeit one that is issued by the people instead of by central banks. Some say Litecoin is to Bitcoin what silver is to gold. I'm thinking it is more like a US quarter is to a US dollar.

BTC is almost infinitely frangible. In theory you could run the world
economy on a single BTC.

Digital currencies are similiar to precious metals in the sense that
they cannot be inflated at will. They are based on the assumption that
certain computations don't have significant shortcuts, and they have
a feedback mechanism (via mining, or, rather, minting difficulty) to
adjust the mining rate.
 
> I appreciate your thoughts on this subject.

As a meta observation your reasoning leading your conclusions is not
obvious.