Jags4186 wrote: ↑
Wed Dec 13, 2017 9:54 am
...I understand that. But my question is if bitcoin is an implementation of blockchain, but you can create as many implementations of the block chain as you want, why would bitcoin have value...
That's in fact a problem, and it's why you have Bitcoin, Litecoin, Swiftcoin, Namecoin, Peercoin, Dogecoin, Emercoin, Gridcoin... I'm tempted to say Thiscoin and Thatcoin but they might be real cryptocurrencies.
Cryptocurrencies are valuable a) as a medium of exchange that b) does not depend on trust in a central authority.
In order to make a transaction, both parties need to be equipped to participate in that cryptocurrency's network, because if you were willing to accept a trusted intermediary you could just use an ordinary "fiat" currency.
There exist companies--the only name I know is GoCoin but I am sure there are others--that provide a front-end conversion service for online retailers who want to advertise that they "accept Bitcoin, Litecoin, and Dogecoin.*" GoCoin processes the transaction, converts the cryptocurrency to dollars, and the retailer doesn't need to deal with anything but dollars. However, the customer has to trust GoCoin.
Currencies are, in effect, "natural monopolies" whose value is enhanced by universality and ubiquity; that's probably why we no longer have the situation we had in the 1800s when every big bank issued its own banknotes and merchants subscribed to Thompson's Bank-Note Reporter to find out what each banknote was actually worth.
I assume that there is a huge advantage to being among the biggest and most widely-accepted cryptocurrencies... that, other things being equal, one that is widely accepted will be worth more than one that is not... and one that is perceived to be growing in acceptance will also grow in value. After all, if you eventually want to convert your cryptocurrency to fiat money, you need to find someone with fiat money who wants to buy whatever kind of cryptocurrency you have.
So, at this point, Bitcoin has value by virtue of wide acceptance, and, therefore, a higher degree of liquidity in terms of conversion to fiat money.
GoCoin still support Dogecoin? I see announcements from 2014 but they no longer mention it by name on their web pages about currencies supported. Odd, that.
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