The specific reason that cryptocurrencies like BitCoin won't proliferate without heavily differentiated features is security. Blockchain-based systems become more secure the more people use them, so there isn't a very good reason to use anything but the most secure one out there. This means that there are very few if any equilibria where similar cryptocurrencies will coexist. I could see fiatcoins (nondistributed cryptocurrencies with single trusted government issuers like today's paper currencies) and bitcoin carving out separate niches, but for almost any feature that proves worthwhile in a distributed currency it's very likely bitcoin would just add this feature, immediately making that the most secure way to utilise it. It makes very little sense for there to ever be a competing version of BitCoin unless it is fundamentally different in some respect.
None of this even takes into account the network effects of being already trusted, already accepted, software and services being available for it, etc. Why weren't there many competing shell currencies in 19th century Africa? Because only one made sense for a given society at a given time, despite the trivial possibility of more.
Thanks this is helpful perspective.
You've just provoked another thought though. If bitcoin is super successful in the crytocurrency space, taking say 90% market share in 10 years time, then it will be time for the antitrust regulators to start getting heavy.
Maybe the technology makes this hard. Maybe the supranationality makes it hard. Maybe the de-centralisation makes it hard. But where there's a will there's usually a way.
Bitcoin hoarding might be an issue as well. Price deflation (measured in bitcoins) would make it a bad decision to ever spend them unless you have no alternative.
Lower transaction volumes would reduce its utility as a form of exchange. Then it becomes more of an investment tool than a transactional tool. Plus it would gravitate towards the hands of a few rich people, as with all forms of wealth since time immemorial.