Quote from: MackTrow on July 23, 2011, 04:17:23 PM

What is to stop anyone in the world from creating alternatives to Bitcoin? Clearly, it doesn't require asset-backing. So why is it special?

In order to bootstrap initial value, a Bitcoin alternative would have to attract investment from speculators who expect it to increase in value, and then attract usage as a medium of trade in order to meet the investors' expectations.

It's clear why one would want to invest in the first cryptocurrency (Bitcoin). It's the first "thing" that can be sent through the internet, but not freely duplicated, without having some form of central control.

It's not clear why one would want to invest in the second one, without some distinguishing feature (a la Namecoin). Who would bother to switch? The alternative would be less secure in terms of hashing power, fewer people would have faith in its value, fewer merchants would have their systems set up to accept it, etc.