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Bitcoin partisans seem to have an overly categorical approach to the concept of first-mover advantage and network effects. These effects are real, but it's a ma
by krrrh 13y ago
Bitcoin partisans seem to have an overly categorical approach to the concept of first-mover advantage and network effects. These effects are real, but it's a matter of degree.
Creating a viable new credit card for instance, would require dozens of billions of up front dollars invested in marketing, incentives, and infrastructure rollout. It would still be a risky bet that customers would see a need. These are network effects and first mover advantages in extremis.
Creating a viable crypto-currency only requires a funny picture of a dog, and/or a good story. For all the hype, the spread of bitcoin into the real world economy is a rounding error. For the 99.999% of the world population that has never held any crypto-currency, who's to say that any of them should prefer bitcoin over any other? If the benefits of bitcoin are every bit as disruptive as supporters claim, then what makes bitcoin immune from the disruptive effects of new improved crypto-currencies, or for that matter innovations in nation-state-backed currencies?
What makes anyone think that 99.999% of the world's population will hand over a portion of their wealth to 100,000 cool nerds, because those cool nerds decided for everyone else that bitcoin was their one and only?
- gnaritas 13y ago> What makes anyone think that 99.999% of the world's population will hand over a portion of their wealth to 100,000 cool nerds, because those cool nerds decided for everyone else that bitcoin was their one and only? A fair question, because bitcoin has the network capacity to work securely and is less vulnerable to attack than all other coins by virtue of its sheer size. 51% attack on Bitcoin is much less likely than with any other coin. Payment processing requires using the best available network, Bitcoin wins.
- krrrh 13y agoI agree that's one of the strongest arguments in its favour. All the now useless ASIC devices out there also make any new coin that uses SHA-256 vulnerable to attack. It's likely that only one blockchain/coin per algorithm can ultimately succeed.
- gnaritas 13y ago> It's likely that only one blockchain/coin per algorithm can ultimately succeed. Exactly. The nerds win because they got there first. Doge loses because it's merely a worthless clone. Popularity with users does not make a secure coin, popularity with miners does.
- krrrh 13y agoYeah, but popularity with miners doesn't make a coin desirable by people who are already pretty happy with cash. Even if bitcoin takes over the world, the shines won't care. They choose on the moon.