Category Archives: General

Does it Make Sense to have Only Bitcoin?

Bitcoin developer Amir Taaki

image source: The Guardian

I continue to hear this argument that the world only needs one kind of crypto-currency and that is Bitcoin.   Although Bitcoin is the first successful distributed P2P digital currency and it is the best support currency, that however does not imply that another alternative coin cannot exist.

I would argue that a Bitcoin monopoly cannot possibly exists in the long run.  Rather, there absolutely needs to exist alternative crypto-currencies which one can trade Bitcoin into.   Think about it, if you could only trade Bitcoin into Fiat (i.e. USD, EUR, GBP etc.)  then this would be a problematic situation from a Taxes point of view.   Does one have to pay tax everytime one sells Bitcoin into Fiat?   The existence of an alternative currency avoids this tax requirement.

I predict in the future that there will be multiple crypto-currencies that serve different audiences.   Currently, almost all crypto-currencies are identical.  I however see a day when there would be coins that would support stronger identity requirements,  stronger claw back provisions, coins that discourage mining and even coins that are closed to the public.