No I think it probably is somewhere in the hundreds of thousands. Total wallets is around 1.7 million and I'm assuming that most people, like myself, have more than one. I'm not trying to be hyperbolic, but just trying to point out that Bitcoin, even though it is by far the most likely cryptocurrency to succeed long-term, is still tiny in terms of its userbase.


I guess this depends on how you define the market. If you limit it to current cryptocurrency users, which overwhelmingly is made up of people who hold at least some Bitcoin, then you are right that probably anything linked to Bitcoin would likely have an automatic built in userbase. What I am trying to say is: what about people who don't even know about Bitcoin now? Why would they have any incentive to join a system that favours a relatively tiny group of what in their view are "early adopters"? (This issue is even more sensitive given the current complaints regarding wealth concentration, the 1% etc. in fiat currency.)

The answer I gave earlier applies to people that haven't heard about bitcoin too:

A very credible argument can be made that a new user benefits most strongly by joining the dominant network.   The largest network would tend to have the widest acceptance, greatest liquidity, largest market capitalization, and the strongest user base (allowing the new user to benefit as per Metcalfe's Law).  If bitcoin tends to appreciate on average at a faster rate than a basket of alt-coins, this only gives more reasons for new users to prefer bitcoin.


This is the "I-don't-want-to-make-early-adopters-rich" fallacy.  It doesn't actually make sense.  The benefit to early adopters moving forward in time is exactly the same as to adopters who choose to buy today.  Early adopters may already be rich, but if that's true then it's already happened.  As of right now, it is just as risky to continue to hold, as it is to choose to buy.  

Consider this:  Alice and Bob each have $1,000,000 in financial assets.  Alice is an early adopter of bitcoin and holds half her wealth in BTC.  Bob just learned about bitcoin today, and holds 100% of his wealth in US treasuries and stocks.  The risk Bob takes by moving $500,00 into BTC simply puts him at the same risk level as Alice moving forward in time.  The fact that Alice's bitcoins performed well in the past has no bearing on portfolio allocation moving forward.  Alice choosing to continue to hold $500,000 in bitcoin is just as risky as Bob deciding to buy $500,000 of BTC.  

The public cannot make early adopters un-rich by not investing in bitcoin.  And by investing in bitcoin, the public makes early and current investors rich to the exact same degree from this point in time moving forward.

I just think you're advertising spinoff coins with distribution based on the existing BTC block chain in completely the wrong way.  They shouldn't be referred to as altcoins, their main usage will be an insurance plan for Bitcoin itself.  If and when things like transaction fee only block rewards fail to incentivize miners to keep the block chain secure, you can have a fully functioning backup system with 1% annual increase (or other magic number) ready to go.  The problem is, Satoshi doesn't like magic numbers even though he gave them to us with transaction fees.

In time, I think we will discover there are several numbers that need to be followed in crypto in regards to inflation and interest rates that aren't magic at all, and we'll have upper and lower bounds for what works and what causes disaster.

I'm pretty confident the magic number for PoS interest rates for a coin that's been fully mined will be somewhere between 2-5%.  Not that groundbreaking of an idea, I know, but there are many people making coins coming up with horrific economic numbers.

My post further trying to explain proof of stake interest rates and magic numbers below:

Yes, and you can do it in such a way that your paper wallet stays "cold" if you wanted.  You would need to import the paper wallet's private key into an offline computer or a hardware wallet that you trusted, have the device sign the appropriate claim string, and then report back with the signature.  You would then broadcast this signature to the spin-off network either using the spin-off client, or a tx-push web service.  

If this made you at all uncomfortable, you could also move your real bitcoins to a new (cold address) before you make your claim, for then you know that the private key that claims the spin-off no longer has a real bitcoin balance associated with it.  


It would depend on the details of the spin-off launch.  There are arguments both for and against having a time-limit for making your claim (provided it is sufficiently long so as not to appear as a scam).  In either case, these details would be known at launch.  If the time limit is (e.g.) one year, you could choose to do nothing for 11 months and if the coin is dead just keep on doing nothing.  If the coin is doing something important, then you'll surely hear about it and probably decide to make your claim.  

The "network effect" argument for Bitcoin... is almost always made in a vacuum, disingenuously.

Bitcoin is a microscopic part of, in order:

(1) the internet

(2) PC/cellphone industry

(3) commodities

(4) commodity/securities exchanges

(5) banking and financial services

GLOBALLY, none of these economic sectors has a strong "network effect"... except for unusual outliers.

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In 6 months...
BTC Cap to ALT Cap ratio has fallen from 20:1 to 11:1...
And there are now 300 functioning Alt Coins totaling $650 million Cap.

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"If bitcoin tends to appreciate on average at a faster rate than a basket of alt-coins..."

This is FALSE... and you pulled this directly out of your ass.

It's only been possible...
To maintain a proper Alt Coin Index with 15-20 Alts since the fall of 2013... one may even argue early 2014.

It also depends whether the POINT of your Alt Index is to:

(a)  measure sector performance

OR

(b)  outperform BTC

If your goal is to outperform BTC with an Alt basket...
It would have been almost impossible to fail in 2014...
Because every high profile Alt that has crazy spiked would have been an obvious choice for inclusion...
And BTC is down 21% since December 31st ($735 to $580).

Are people simply not aware of basic numbers... or are Bitcoin fetishists wearing blinders?



  

I believe alts based on the bitcoin blockchain would be flawed because of the satoshi distribution and also exchange distribution.

A solution could be to have a time limit to move your coin from the genisis block (containing all bitcoins as of x height) to the new chain.

Example:

Litecoin 3 is released. Initial coins are bitcoin as of block height x.

Now those bitcoins can only be transfered into the new chain (new address system) for perhaps 6 months.

At new chain x height (6 months) all the unmoved Bitcoins can no longer be moved into the new chain. Now the currency genisis has been set.

I see this as solving many issues. It becomes obvious if satoshi moved a million Bitcoins in litecoin 3.

Lost coins don't move over and bloat the new chain.

Most importantly. People have a good idea about the coin supply and the amount of uncertainties decreases.

Perhaps they wouldn't even bother moving the new coins. As it's probably not even worth their time.

If it was mainly the FBI, satoshi and the exchanges moving the new coin then it would be obvious this entire idea to the bitcoins from x height was a bad one.

I think Monero has a real future.  All the same, I'd love to see someone combine the privacy of Cryptonote with GPU mining.  Botnets are a real problem for CPU mining, and ASICs are a real problem because they centralize the hashrate among a few players and don't help small time miners who eventually become users of the currency.  GPUs are really the best compromise.

Alt coin mining is quite profitable at the moment reportedly it has been like this since April 15 of this year. So not a long time.
It is an indication of this sector growing when one looks at the profitability of mining Bitcoin and the relative hardware investment.

The idea of a market cap representing a percentage of value is falce, value is a function of the market liquidity and velocity of the coin. So while the alt market cap has grown I don't know if it has grown in value as it isn't easy to liquidate that value.

So I don't think one can assume alts are growing faster than Bitcoin by looking at the market cap most alts actually trade for Bitcoin thus growing the Bitcoin network.