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Have you ever seen or heard of anyone pay $1M or $100K for a .com address? Why do they do that when there's like 256 TLDs?

Why does anyone pay $20M to live in a box in Manhattan when they could buy a huge ranch in Montana and live like a king?

Some blockchains are more valuable than others. And their blockspace is limited, just like Manhattan real estate.

The reasons for this are numerous, but a big part of it comes down to security and liquidity. If you are going to create a digital agreement, you want a blockchain with a high degree of security and predictability. You also want composability with other applications so you can have access to an ecosystem and other financial services.

the space of .com addresses are physically limited. the space in manhattan is physically limited.

creation of a new cryptocurrency does not have such limits. like everything else digital. it is the same difference between physical goods, and software. software costs zero to copy. physical goods are physically limited.

so, with the topic of this post's link - even if someone somewhere perfects the security scheme of a blockchain, in the end it all is futile - because it can be copied. If there is enormous pressure by some powerful entities to an on-chain fork, but it is not feasible because of all the built-in security of the blockchain system and protocol, they can still have enough influence to create a new coin, undermining the "limited" property of the first coin. It is a new brand of coin, operated, mined, minted by mostly different people. The coin has the same features, same security - but liquidity is directly stolen from other coins because we have finite amount of people. Through exchanges, you can exchange them. In the end, when you remove the "get rich quick" scheme, they are all the same, and can be issued infinitely, albeit on different "names". Don't get too hung up on names.

You can't tell me "the network is too valuable, it is impossible create additional coins" either because that is what has been happening from the beginning. All those coins, with slightly different features - in the end perhaps one will have it all, but what is the ultimate purpose? Given enough pressure, it can be copied, new "money" can still come into circulation to be used by people that accept it. It is not impossible, it is happening, has always happened since bitcoin. Each dogecoin minted today, affects the value of bitcoin tomorrow.

> Each dogecoin minted today, affects the value of bitcoin tomorrow.

Dude, same with Montenegro real estate affecting the value of your apartment in Manhattan.

> If bitcoin was the only possible cryptocurrency but the hype around cryptocurrencies was the same, a bitcoin would cost substantially more today.

Just like if the rest of the land didn't exist, your Manhattan apartment would cost substantially more today.

I responded to this above but again just for you: land is ALREADY physically limited. the whole /point/ of cryptocurrencies was to provide the same type of scarcity artificially for the digital realm. my point is, the fact that you can create additional coins and split the liquidity between the two means that the task has failed. my further claim is that the even the attempt is futile. academically interesting, practically (for this given purpose) futile.

There is still so much open space to build cities, but everyone seems to want to live in the existing ones.

...because the existing and established ones have something unique to offer and to copy that would be an enormous (and slow) undertaking (but it is being done, civilization has always been spreading to free areas, it is just slow) - but once you crack open an hassle free secure consensus system (software, not bound by limited physical reality) the old one does not have anything unique to offer for the group of people who are unhappy about who holds the power.

If there was an exact replica of Manhattan (or if it was trivial to create it) - and I mean really exact with all the affordances it provides - think of an empty copy of the world, Manhattan is in the same place, but mostly empty (just established), that you can switch to with a keypress (and could switch back and forth) - what would happen?

>...because the existing and established ones have something unique to offer and to copy that would be an enormous (and slow) undertaking

Exactly. That's also the case for cryptocurrencies. You can instantly fork a cryptocurrency or a blockchain, but you're essentially copying a blueprint. You can copy Manhattan's city layout as a blueprint or other written/drawn representation, but you still need actual builders and resources to copy the physical structures, just like you need miners, mining rigs, and users to build an alternative to Bitcoin that has any value.

Assuming the same PoW algorithm, you'd need your alternative to exist for as many years as Bitcoin does to achieve the same blockchain length, for example, with a lot of distributed miners to achieve similar security guarantees.

You can create a Hacker News clone pretty quickly. (For the sake of argument, let's say you could do it in a day by forking an open source repo.) It doesn't mean your clone instantly devalues Hacker News.

Maybe if you grow your clone's community over years and it generates a lot of interesting discussions, people will use both, and maybe if eventually the discussions become more frequent and have higher signal:noise than HN's, HN activity may gradually decline as people decide to use your site more than HN. But this is about community and network effects, which you can't copy overnight. You have to build them over time.

But here lies the problem: the new Manhatten would be a deserted place. No people, no open shops, no work, no open restaurants.

Sure, you can move there toghether with a few 100 other people, but it won't be Manhatten as you know it.

The value is in the social network.

You can go and copy Facebook tech, it's not that crazy hard. Will you be Facebook? No because none of your friends are on FacebookGold.

You forget that the value of crypto is not the technology, but the social network behind it. You can of course fork anything, but that doesn't mean because you have the same tech, you have the same value.

Proponents of cryptocurrency will claim that the network effects of a given currency add to the perceived value. There are also differences in implementations between the cryptocurrencies where each has differing properties.

Critics claim that cryptocurrencies are valued under the greater fool paradigm. A speculator buys a cryptocurrency with the intention of selling it on to the 'greater fool'.

There are regulatory barriers erected around traditional payment processing to consider. As not all cryptocurrency transactions are subject to these regulations, they offer a discount. Cryptocurrencies offer a medium for those unable to transact by other means.

Not a big crypto person, but my understanding is that a part of the "digital scarcity" problem is addressed by the consensus mechanism. You can go create a fork, but (without sufficient processing power) that fork won't be able to be the longest chain, and the consensus mechanism is that the longest chain is the _real_ chain.

Two point: the consensus is that the 'most difficult' (not longest) chain which follows the agreed consensus rules is the 'real chain'. This is not necessarily the one with the most computing power associated with it, especially in the case of a fork, where two different sets of consensus rules diverge. The main issue with being the smaller side of the fork is that if you are still using the same proof of work mechanism then you are vulnerable to 51% attacks from the larger fork, which tends to lower prices and so discourage mining which makes the situation worse (and this has happened to multiple bitcoin forks, including 51% attacks). This may in principle be less of a concern with PoS, because the 'mining resource' also splits with the fork and stakers can continue to stake both sides, reducing the strength of the positive feedback loop (though not completely, since the less popular and lower priced coin is more vulnerable to someone trying to buy enough of it to execute a 51% stake attack).

Yes, my point is, that applies for a single coin. The conceptual shift I'm talking about here is that (my definition of fork here is) /another/ coin. Another coin (like ethereum, doge, whatever) is just another "fork" of "cryptocoin-coin". People in need of cryptocoins, if only one existed, would acquire, buy, mine that one. But now that they have multiple options, it is split between all, to varying degrees. As long as they are interchangeable, they are the same thing pretty much. In a fully cryptocoin future world, when a dogecoin is minted, it affects the value of bitcoin. So any x-coin does not live in a vacuum, and can only be scarce in its own network.

> As long as they are interchangeable, they are the same thing pretty much

You keep asserting this as true but I think you are just confused.

If the problem of secure, non-wasteful, convenient, easy to use, programmable and distributed ledger problem is solved once ... how will coin X be different from coin Y? Especially if you can exchange X for Y and Y for X... They will all increase the usable "coin" supply without any singular chain having the means to do anything about it. From there, the scarcity argument goes out the window and becomes an academic exercise (...if we had an isolated single blockchain, this would apply type arguments).

I'm not sure I follow. If a dogecoin is minted, so what? I don't know why bitcoin or other crypto in particular would care so much more than anything else in the world. They work differently, record different information, and are about as interchangeable as any two different physical things.

I'm not sure why it would matter that a coin is only scarce in it's own network. That's the only context it can ever exist in. You can't yank a dogecoin out of the doge network and stuff it into the bitcoin network.

"I want to buy <<whatever>> and pay with ZCoin, not XCoin." Either the seller accepts ZCoin, or they lose a sale. So sellers need to accept multiple coins; buyers can acquire and pay with different coins.

Different coins compete with each other.

(Or rather, they would -- if they were actual currencies and not just elaborate technological Ponzi schemes.)

> If people are free to create new chains out of thin air and build networks around it, how is anything digital "scarce"?

For the same reason we speak mostly English, Spanish, Chinese and Hindi, even though there are infinite possible languages.

The language metaphor is interesting, but IMO it proves the point.

Learning a new language takes time, a lot of time.

We speak mostly Spanish, Chinese and Hindi because the majority was born with them and spent years learning them to communicate with other people who already speak them.

English spoken by non English native speakers is what many people learned to communicate with people speaking other languages than their native tongue.

But most of them never reached (or will reach) native speakers' fluency. So in a way it can be seen as an inferior product with many flaws (like my English for example).

If switching languages was as easy as copying software, we would probably speak infinite languages.

But in reality the amount of languages one can learn during a life time is very much finite (and the incentive and opportunity are very limited in general)

So, yes, bitcoin is the most powerful brand right now but there is nothing inherently peculiar about it, if another digital coin offers the same features people will use it, regardless of the brand.

Learning German if you are Japanese, live in Japan and communicate with Japanese people, on the other hand, it's a big investment with no real obvious gain beyond intellectual fulfilment.

anyway, there are ~7,000 living languages used around the World right now, there's no reason to believe that at least the same number of digital coins won't be in use once digital coins will become an everyday tool.

> If people are free to create new chains out of thin air and build networks around it, how is anything digital "scarce"?

Say I just created HNCoin, a copy of bitcoin, and offered you one HNCoin for 0.001BTC. Would you take the deal?

If I were part of the clique that were unhappy with how bitcoin operated and who holds wealth and power in the world without the means of attacking bitcoin itself because of its built-in security features, yes, I'd start supporting it along with my comrades. This is not a theoretical thing either, happened thousands of times and it keeps happening as we are in the Cambrian period of this concept so lots of new things are being tried under different "brands". In the end, if the problem is solvable, a simple to use, not wasteful, programmable etc. secure distributed ledger will emerge. Then what? A group can't take over the existing one but if the needs emerge, they can create a brand new one and influence people (off silicon) to use it. Again, that is what has been happening since the beginning. Take the ponzi / get rich quick / I have no other hope mentality away and it will all be the same in the end - if they are used functionally that is.

You can't inflate a coin by creating another coin. The markets for each coin aren't going to be identical, as each coin attracts a different set of buyers.

In other words, there might be people who would buy ETH, but never BTC and the other way around.

...and there are others that would buy BTC if it was the only option but would be happy with ETH given that it exists. With those people buying / minting X instead of Y (but would use Y if X didn't exist), the amount of digital coins increased out of thin air just like that! Without any control mechanism from the bitcoin protocol (an unsolved / unsolvable(?) problem).

So the fact that the people like you say exists does not prevent the existence of the people that I am talking about.

And if the secure, easy to use, non-wasteful, programmable and distributed ledger problem is solved once then ALL coins after that become the same. In that environment "people who would buy ETH, but never BTC" will not make any sense.

You're effectively saying that once someone decides to grow potatoes, apples are no longer scarce, because people might instead grow potatoes and trade them for apples. The secure, easy to use, non-wasteful, distributed calorie problem can only be solved _once_, so ALL potatoes are apples.

If only apples existed and suddenly potatoes were invented, then plant-based carbohydrates just became less scarce.

If only British pounds existed and suddenly the Australian dollar was invented, you could suddenly do business in another currency.

Exactly.

Just like Swiss francs and Euros and US dollars are different things and will never be measured against or valued in terms of each other.

Q.E.D.

This is basically why bitcoin maximalists are bitcoin maximalists.

Same as you can print your own Dkarras Dollars and issue a new currency. Then see how much that affects the value of the USD.