5
2
I like Bitcoin and I like the ideas to create a limited number of bitcoins. However, I see a lot of new crypto-currencies. It seems anyone could fork bitcoin, change something in the algorithm, and release a new crypto-currency.
So I'm afraid that one could create hundreds of new crypto-currencies each day without any value.
Is this a plausible scenario?
6
Yes, this is a real possibility. Effectively, Satoshi Nakamoto created a billion dollar market-capitalization of currency out of thin-air. Of course major corporations are going to attempt their own flavor, it is the nature of capitalism and it is a very healthy reality, which ultimately ends with a satisfied consumer. Progressive companies are forking it, prototyping new designs, and adding improvements. In the end, the quality, scale and technical effectiveness of your product will create the market-demand absent of billion dollar promotional marketing campaigns. BTC is a purely organic, community driven crypto-currency which sells it self.
Currently, the infancy of BTC is very analogous to early 20th century automobile manufacturing. There were hundreds of car companies created in the US only of which 3 major manufacturers survived (Ford, GM, Chrysler). Analogous to the rise of a myriad of crypto-currencies each of which claims to be better than the previous. How could you trust these crypto-currencies...? That is an unanswerable question which only the market will decide in the coming years.
BTC is the first and most secure crypto-currency; its design and function are superior to many other proprietary builds.
4
There are hundreds of chemical elements, but that didn't stop gold from becoming valuable. It's all about people's willingness to trade.
As far as I can tell, you wouldn't really have to change the Bitcoin algorithm. Just run Bitcoin as-is on a distinct network with a brand-new block-chain, and you have a new digital currency. But if you can't convince anyone else to join your new network, you're just wasting your time.
3
In a free market economy, the consumers will chaotically and naturally choose the best product.
Those who think they can create a digital cryptocurrency "better" than Bitcoin - however they define "better" - are more than welcome to do so and try to convince others of their reasoning. If the reasoning is sound and people like it, the market will reward the founder with use of their currency!
1Personally, I see altcoins as testing grounds for new features. For example, I think that Bitcoin might one day get features similar to Namecoin, or that the mining algorithm might change to something like Litecoin. – Nick ODell – 2013-05-23T02:52:47.223
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didn't stop goldI'm not sure this is a great analogy. There are plenty of reasons to not use Chlorine or Hydrogen as currency, while Bitcoin and Litecoin are very similar in a technical sense. – Nick ODell – 2013-05-23T02:56:06.970There've been papers exploring all the (very good) reasons why Gold alone became the favoured store of value for most of humankind, some of them: relatively scare but not too much, easily findable in pure state in nature (as opposed to silver compounds which need to be broken down or iron mineral to be worked), easy to identify correctly (when platinum was discovered in Peru, it was mistaken at first for a compound of silver), doesn't oxidize, resistant to most acids, it's pretty, it's soft - so easy to work for jewelry, statues, etc. – Joe Pineda – 2014-02-13T13:31:02.153