Quote from: Rarrikins on August 29, 2013, 11:03:16 AM

Even if you ignore the non-US currencies doing rather well because you think fiat currencies aren't relevant to the discussion ...

Transaction costs (logistics + regulation + accounting laws + tax laws + ...).

Quote from: Rarrikins on August 29, 2013, 11:03:16 AM

... the 'competition' between gold and silver didn't have a victor either.

Transaction costs.

Quote from: Rarrikins on August 29, 2013, 11:03:16 AM

Even fully-electronic payment systems have big competitors like Visa and Mastercard.

Both Visa and Mastercard are merely payment systems built on top of currencies, which somewhat diminishes the network effect. Furthermore, they are not an open protocol, and using them requires contractual relationship with service providers (probably several: bank, credit card company, payment processor if you're a merchant). This creates, surprise, transaction costs.

With cryptocurrencies, these transaction costs are dramatically lower and this increases the proportion of the network effect on demand. It is more likely that the market composition will be a single dominant one and a bunch of smaller ones.