Did I start the discussion of BTC -> altcoin avalance effect? Did I start the discussion on Monero here?
No, I did. And will continue to address the monumental defence erected by Z.B.:
Original theses:
- The exit requires as little as 10% selling their coins in the previous majority ledger, which effects a huge decrease in the value of the remaining coins there due to the negative wealth effect, while increasing the value of their new ledger by approximately the equivalent amount of positive wealth effect. Thus the small minority of the "rogues" can enrich themselves in the expense of the majority by so doing, creating a new majority ledger in terms of marketcap.
If your main point is how few "rogues" (~10%) it takes to switch to a new majority ledger, I think you may be neglecting the arbitrage opportunities that would create. Arbitrage seems to undo the cascade effect of the small exchange float, with arbitrageurs profiting from that market inefficiency.
The arbitrage works if enough of the existing holders of the new chain truly believe in the old chain, and are in the new chain only to make money. I don't chastise anyone for thinking this way as there is hardly anyone in the myriads of other alts who believes in their alt more than in BTC, so it's convenient to assume that this is the case universally.
I was planning to offer my thoughts on this avalance effect. So now appears to about the right point for me to jump in.
Someone asked me recently what I would do with the Bitcoins if I created an altcoin and sold coins in an ICO. I replied I would sell the Bitcoins and buy my own coin. I don't view Bitcoin as my unit-of-account (no one sells me anything with a constant BTC price over time), so I might as well hold the coin with the greater upside. The greater volatility and liquidity of the smaller float is a concern that has to be weighed for any short-term liquidity needs.
But readers should know that rpietila is not vested (at this moment) in anything I might do. So I do presume he is writing not with anything about me in mind, even though we are sort of close acquaintances from the past circa 2008 but had not communicated regularly since 2013 or so.
Bitcoin was not vulnerable to such a shift before because it was moving up and it was growing fast amongst the free thinking investor and technie demographics (masses don't count because they don't drive choices about fledgling upstarts). Altcoins that gained some momentum were eroded by profit taking back into Bitcoin (and their mistakes in distribution and lack of original code and design), e.g. Doggiecoin.
Bitcoin has now moved closer to the time where it will be offloaded to the masses (the greater fools) and the smart money will look for the next big trade. Suppose we have at least a 10 bagger on the way, probably much greater maybe 50 - 100X ROI. So still it is going to be a challenge to go against Bitcoin's price momentum. Thus I don't see a reverse wealth effect on Bitcoin as viable at this time, and thus if an altcoin rises too fast it will be taken out by profit taking cashing out to Bitcoin (unless it has an ideological fervor or distribution that prevent this
). I think any coin that wants to achieve it will have to pull in adopters from outside the Bitcoin community.There is not yet a clear "go to" altcoin for this movement. Cryptonote/Monero has introduced a very important feature, but it is not yet clear if this by itself is enough to warrant an ideological+wealth effect stampede. I was told there is still a large (500?) ongoing community in the Nxt/jl777/SuperNet. I interject to rpietila's argument that the most likely scenario is not wealth effect alone, but an ideological fervor that inflames that budding wealth effect. So I am agreeing with him and Bitcoin supporters that the attitude towards altcoins of not adding anything significant is a justified allegation.
The arbitrage factor dominates for as long as Bitcoin is growing and the challenging altcoin doesn't appear to have the oomph to cross the chasm.
No altcoin is going to displace Bitcoin's dominance of the masses (at least not in pure crypto-coin market and on this cycle). Bitcoin has won that. But who wants to? That is they dying NWO system. The Winklevosses et al are going to cash out on the big move of the masses in by giving them accounts on the behemoths. They are selling the masses (chattel) to the NWO.
Edit#1: the scenario I envision is some altcoin is going to make a big move during the 2016 - 2017 period. In 2017, BTC will offloaded to the masses coincident with the peaking US dollar and US stockmarket bubbles. That altcoin is going to gain significant early adopter attention, but it will exhale and quiet down a bit (the usual pattern of growth for fledgling upstarts). Then later from 2018 or so, it could become a go to investment as the global economy moves into radical transformation and Bitcoin has already been dumped to the masses.