Quote from: drawingthesun on July 07, 2014, 11:35:44 AM

Hal Finney said that if a CryptoCoin that had no real advantage over Bitcoin and were to overtake the value of Bitcoin it would create a disastrous situation where all the CryptoCoins would lose their value. His reasoning was that if investors (1) saw that another coin can overtake Bitcoin, based on hype and manipulation alone it would call into question "can any type of faith based currency (2) actually be a store of value".

My argument would be similar to Hal's, but I'd take it a step further and perhaps come to a different conclusion (since I haven't seen Hal's original comments in context I don't know his conclusion).

Yes, it would be disastrous if a hype-based clone were to overtake a preexisting leader, but only by having such coins try to do it and fail is the value of the leader convincingly demonstrated. If clones are impeded by barriers to entry (for example by technical or knowledge barriers) and one can only speculate about whether a hype-based coin could overtake the leader, then the leader's value will always be impaired.

tldr: the more shitcoin clones fail, the more value accrues to the leader.