Bitcoin ≈ MySpace
5nf5.blogspot.com
5nf5.blogspot.com
The same way the fork was fixed and how any upgrade happens with Bitcoin. An idea is proposed, a small group of developers work on it, the mining pool operators decide to implement it or not, then all the individual miners vote on it by deciding which mining pool to mine for. Basically any change has to have 51% agreement from the miners.
"Ironically, for what is suppose to be a highly decentralized currency, the collapse was avoided because the system was "controlled by the will of a very small number of people – particularly, the operators of mining pools" who effectively agreed which block chain to support."
The avoided collapse only appears to be a centralization of power because it was a good decision. I'm defining good decision here as one that increases the value of a bitcoin. The majority of miners were using the new software, the majority of businesses were using the old software. If nothing was done, bitcoin mining for everyone with the new version would have kept plugging along fine, but all the businesses that had to re-install or rewrite their old Bitcoin software would have had to shut down for many hours or days.
The majority of mining pool operators decided that it was better for the longterm growth of Bitcoin to give up the bitcoins that they mined on the new chain and minimize the downtime of Bitcoin businesses rather than keep the small amount of bitcoins and have Bitcoin suffer bad publicity in the coming week. This is a very important point. Every individual miner had a choice of what pool to use. When they found out about the change, they could have just as easily flipped a switch and started mining for a pool that decided to keep the bitcoins. That didn't happen. The Bitcoin miners/holders aren't reacting only to what gives them the most bitcoins today. They are thinking long term and are doing what they think will give their mined bitcoins the most value in the future.
Bitcoin is sort of like the federal government and the altcoin experiments are like state governments. If there's a really good idea that an altcoin comes up with, Bitcoin can integrate it by a 51% vote. If an altcoin experiment uses SHA-512 successfully and is gaining value over Bitcoin because of it, bitcoin can integrate that feature by a 51% vote. If an altcoin has a desirable feature, then bitcoin might be able to integrate it and enjoy the benefits of the feature + the network effect to stay relevant.
The primary issue with this post is that the author doesn't give any reason _WHY_ bitcoin will be supplanted by alternatives- In a similar way, I can say "Google stock is worthless because in a hundred years something better will have taken Google's place". No one would consider that to be a cogent argument.
Yes, currently the price of bitcoin shows that there is great pessimism among investors regarding its viability (i.e. a single bitcoin isn't worth $1000 or more right now, which would be the minimum rational value for a successful currency of this type).
This is because it is not lost on the bitcoin community that btc is a crazy idea and can still spectacularly fail for a multitude of reasons. I think any rational bitcoin user would agree that the chance of bitcoin's large-scale success within the next decade is less than 50%- This is why the reward for any investment in bitcoin right now is likely to pay of 10x-100x in the case it DOES succeed. However, if it doesn't succeed I believe it could only be because the concept of a wide-scale cryptocurrency is fundamentally flawed (I have yet to see any such flaw) not because it gets beaten by the competition.
As for the chances of another, similar, cryptocurrency supplanting bitcoin: I am almost 100% sure this won't happen. The reason for this is that bitcoin is the "javascript" of cryptocurrencies: Any deficiency that exists in bitcoin can be added as an extension to bitcoin and hence can't be a meaningful selling point for a competitor. At best, competing cryptocurrencies can fill niche roles within the bitcoin ecosystem. (For instance, a cryptocurrency with faster confirmations will probably eventually be grafted onto bitcoin payment services, but again only to fill a niche role, with bitcoin continuing as the leading currency.)
(The sole exception I think would be if the core bitcoin dev team were to screw up very very badly somehow, then another cryptocurrency might have a fighting chance.)
1. Bitcoin is the open base for monetary innovation, you should compare it to internet protocols like IP or HTTP, Linux, not some privately-owned social networks.
2. There's hardly any need to enhance anything in bitcoin itself, the security is enough, nobody has proven otherwise.
3. Alternative cryptocurrencies are 99.9% copies of bitcoin with hardly any innovation. Only proof-of-stake(ppcoin) algorithm and scrypt hashing(litecoin) are real changes and it is questionable if they add any value.
4. The slow speed of transactions (~10min), which other cryptocurrencies are trying to "fix", could be easily brought to instant with a help of third-party service, there are many way of doing it.
5. Bitcoin developers and pool operators aren't some kind of "kings", they are merely leaders guiding the community.
Personally I hope for a crypto-currency scheme that inflates with use and avoids the runaway "lets burn electricity as fast as we can" aspect of BTC mining.
2. The power of the network only really protects against the 51% attack. Why not have a crypto system that doesn't have such a ludicrous, energy burning arms race built in?
And of course it's a waste!
I'm not sure, but I can tell you that it's more energy than is required to ferry around bitcoins in armored trucks from now until the end of time (which is exactly 0 joules of energy)
If not, if you can point out the weaknesses in (the rest of) what he's saying, I'm sure a lot of us (myself included) would be interested to read your counterpoints. I for one don't know enough about the relevant topics to debate this piece, but it would be great to read what more informed HN'ers think about his assertions (and why).