Quote from: BigJohn on January 15, 2014, 05:46:47 AM

The way I see it, Bitcoin has some serious issues at the moment.

Proof of Work is a huge problem in my mind right now. It's a pretty big barrier of entry, you basically need lots of money to get into mining to buy hardware, and combined with mining pools, this creates too much centralization. This is coming to light now with the Ghash story. But even if Ghash were to disappear today, then all that means is that the power is centralized in the next couple of pools. Either way it's very few people who have quite a bit of control over the network.

It's still very difficult to get into. It's either registering with an exchange, or going on something like localbitcoin.com and trying to find someone. Then on top that, the problem gets compounded by the enormous price fluctuations. Bitcoin price volatility has been a huge issue for a long time for many people.

Security is also a big risk. People are used to just putting their money in the bank and feeling safe. But now you have to keep your own Bitcoin yourself somehow. Lots of people have lost quite a bit of Bitcoin that way.

So another Cryptocurrency can take advantage of these issues (and many more) and take over Bitcoin in that way. Proof of Stake looks to be one up and coming alternative that's already feasible.

But here's the thing. None of these things are inherent in Bitcoin. They could all get fixed at some point in time. Emphasis on 'could'. It's possible the Proof of Work situation will change into something else, and although this seems very unlikely at this point, the situation may be forced on us if the pools decide to abuse their power one day. Trading fiat for BTC may become easier as more services move into that space. Even security is surely to improve over time with better wallet software, and even hardware-wallets in the future.

So in my mind it really all depends on what happens in the Bitcoin arena in the upcoming years. If enough of these problems get addressed, then there's really no room for Bitcoin to be replaced by anything. But if they don't, then it's almost a guarantee that something will replace Bitcoin.

Yup, I guess this will all become adresses when the time comes. Volatility is just a function of a small number of participants and also of the newness of the endeavour.