[ExI] Bitcoin

Aleksei Riikonen aleksei at iki.fi
Fri Apr 5 02:31:57 UTC 2013


On Fri, Apr 5, 2013 at 3:54 AM, Gordon <gts_2000 at yahoo.com> wrote:

>
> When I wrote those words above, I was alluding to the possibility that
> although bitcoin is ingeniously structured to ensure scarcity of bitcoins
> over the long run, analogous to what nature has done for gold, the
> proliferation of alternative digital currencies might nonetheless inflate
> the overall digital money supply into the indefinite future. Just as
> central banks can "print money" out of thin air, so too can anyone create a
> new bitcoin-like digital currency. If am correct about this then the
> scarcity of digital money is illusory and it loses an important advantage
> over ordinary fiat money. I would rather be incorrect. What is wrong with
> my thinking here?
>

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.

In order for new cryptocurrencies to get off the ground, and for a
significant number of shops to bother adding them as an alternative payment
option, 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.)

(An example of an advantage that would allow a new cryptocurrency to
compete for market share would be a major country sponsoring said currency
in some way, for example by promising tax breaks for transactions that use
that particular currency.)

-- 
Aleksei Riikonen - http://www.iki.fi/aleksei
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.extropy.org/pipermail/extropy-chat/attachments/20130405/b192228f/attachment.html>


More information about the extropy-chat mailing list