TheMotorcycleBoy wrote:Putting the energy consumption arguments to one side, what I'm also trying to get my head around is why there are indeed several crypto assets. I imagine that competition naturally gives rise to the multitude.
Why is the favourite BTC? Maybe its like a brand thing, like how I prefer Magnum ice creams over the tesco own brands. Perhaps BTC will be usurped by another.
I actually do not see BTC as necessary a crypto currency, but more a crypto asset. Its arguable that in times of crisis its an advantage for CBs to have the ability to inflate their balance sheets, and pay furloughed workers etc etc.
And BTC would also seem a poor choice as a currency, due to its volatility, with its worth potentially governed by emotional speculators.
I'm thinking its seen more as a new gold. But why did we need another one?
Finally its weakness....the algorithm eventually being devalued when Quant Compute starts to predominate?
Matt
Right let's see if we can address those.
Back in the 70's the well known economist Hayek argued that people should be allowed to choose from competing currencies.
Hayek believed it was markets, not states, that guaranteed individual liberty. For Hayek, liberty is “a policy which deliberately adopts competition, markets and prices as its ordering principles”.
https://www.icaew.com/insights/viewpoin ... -of-cryptoMany since have made the same arguments.
Implementation and suppression have been the problem.
For example, in this thread there has been many comparisons to gold.
Well let us consider E-gold.
https://en.wikipedia.org/wiki/E-goldOr the liberty dollar.
https://en.wikipedia.org/wiki/Liberty_d ... e_currency)
Bitcoin was the first of the crypto-currencies and it's success was due to it's decentralised nature (making suppression difficult) and it's strength at preventing double counting (the block chain).
The method was put into the public domain meaning that it could be examined for faults by many and any faults fixed.
However bitcoin is certainly not without it's faults or issues. Hence a number of alternative crypto-currencies have sprung up.
Some actually think that it's likely that bitcoin will be replaced eventually with a lighter cheaper alternative.
For example bitcoins block chain contains EVERY transaction of every unit. Obviously communication and processing requirements are likely to expand exponentially. One solution adopted is to limit the size of the transaction blockchain and forget older transactions once the number exceeds a certain size.
Other ideas are to change the algorithm to require less computing, making transactions cheaper. Ethereum are doing that.
I personally am dubious about some of the alternative. At least one of which was simply a fraud. Such thoughts are likely to lead to a preference for bitcoin over the alternatives.
Then again some may just be a joke.
There is one called Dogecoin. Is it pronounced Doj like the ruler of Venice? Or more likely, given it's mascot Dogy?
https://dogecoin.com/Though I understand that Mr Musk quite likes it and got some for his son, so what do I know?
https://twitter.com/elonmusk/status/1359519541219500033Currently I have no concerns that criminals will manage to spend nation state levels of money on quantum computing to attack crypto-currencies, though I suppose that it is something that some nation might consider.