Quote from: Spam_vt on January 14, 2014, 07:27:57 PM

Quote from: Dr Bloggood on January 14, 2014, 11:51:35 AM

So to all the tech savy people in here - what advantages could other cryptocurrencies bring that will give them a crucial edge over BTC, and how fast could something like that come along?

I think the biggest problem with Bitcoin is that the transaction volume can't scale past a certain point. Bitcoin blocks can only support 5-7 transactions per second at max, which is way too low to support a large-scale public adoption. Compare to Visa with 2,000 t/s and Paypal with 40+ t/s (numbers from https://en.bitcoin.it/wiki/Scalability ). As the transaction volume gets closer to the block limit, the transaction fees go up and it becomes impractical to use Bitcoin for small value transactions. As it stands, Bitcoin transactions are already too expensive for payments in the $1-$2 USD range (transaction fees around $0.20-$0.50).

Altcoins can provide value because they can offload some of that transaction volume and usually have lower transaction fees. For example, Litecoin can support 4x the transaction volume of Bitcoin (with 4x faster blocks) and has transactions fees around $0.03. But a 4x improvement is still nowhere near what we need to get to Visa-level numbers (or even catch up with Paypal).

I see two possible "end games" for Bitcoin:

1. Bitcoin stays as the "gold standard" relative to other altcoins, but altcoins are used for most day-to-day transactions. Bitcoin is only used for high-value transactions. In this way, we solve the scalability limit by adding more coins.
2. Some new cryptocoin comes along that has a whole new transaction/block structure and supports a much higher transaction volume than Bitcoin (e.g. 1000x). None of the existing altcoins do this yet. This is the only case where I can see Bitcoin actually dying.

Thanks, that's the most useful answer in the whole thread and actually what I hoped to hear about!

What about solution number 3, Bitcoin is changed into a system that can handle more transactions/handle them faster. Would that be doable?

When do you think we would hit the limits for, say, a $20 transaction (BTC still being useful for it)?