[
When the market cap of Monero will exceed the marketcap of bitcoin that will be a great day. When shall it happen?
In the beginning I thought alts are secondary to Bitcoin, so can only serve niches that entitle them to at max a few % of marketcap. Bitcoin used to be between 90-95% of total crypto marketcap then.
Some time after I had bought into Monero, I realised that it does everything that Bitcoin does, but better (by being anonymous by design). This lead me to think that normal innovation adoption rules apply, and even if Commodore 64 has 100% of the markets at some point, it can be replaced by IBM PC, or NES, or both, subsequently. For this stage, I even formulated the wealth preservation theorem that stated "if any of the alts reaches 20% of BTC marketcap
for the reason that it is better than BTC, this will cause 2-5% of BTC wealth to move to that alt for wealth preservation/hedging, which will snowball the alt to become 80% instead of 20% (hence trump BTC in market cap).
Now I am unsure if such a mechanism would actually take place, due to so much inertia that has been accumulated in the system. So I am leaning towards peaceful coexistence, which allows multiple coins to live and have higher and lower market caps. The history shows this is not a winner-takes-it-all market, even if I had thought so. The opposite is true: small things grow and die, BTC stays. But BTC does not account for 90-95% of the market cap any more, as the small things have grown faster.
Yes, there is still a scenario that some coin will take over Bitcoin, and the only coin that has realistic chance to do it is Monero. This will likely require a major flaw in Bitcoin first, but it is already suffering from a death by thousand cuts, if we are honest and clear-sighted.
There is an aspect of Monero that is still not understood my many if not most market participants and the above post is a good example. This is of course the maximum 1 MB blocksize in Bitcoin issue, which is not mentioned in the post. Ironically I was introduced to Monero in 2014 when I came across rpietila's old Altcoin Observer thread by accident
while researching the blocksize issue in Bitcoin. At the time I considered the 1 MB blocksize issue in Bitcoin a serious but fixable flaw that was not getting the attention that it warranted. Now I am convinced that it is a major flaw with no clear solution and it is possible that a solution may not exist at all, making it a fatal flaw. In order to address this flaw the only solutions that I am aware of require both an adaptive blocksize limit
and a tail emission.
The economics then become rather stark. If one eliminates tokens whose primary purpose is or was something other than use as a currency by end users. Then one gets Bitcoin, Litecoin, Monero, Dash, Dogecoin and we are down to number 13 in market cap. Litecoin has the same major or fatal flaw as Bitcoin. Then we get Monero. Next on the list is Dash which also has the same major flaw. One could argue however the flaw in the case of Dash as not fatal because unlike Litecoin or Bitcoin, Dash has at least a very small chance of incorporating a tail emission. Ironically this is because of the controversy surrounding the instamine launch of Dash. The next in line is Dogecoin which already has a tail emission. If it implements an adaptive blocksize for example similar to that in Monero it could become a contender.
If we consider that there is a valid pent up demand for transactions that Bitcoin has not been able to meet for close to three years nor for that matter can any of its other major competitors , then I would consider the highly toxic position of someone that is
caught short Monero at this point, if even a small fraction of the growth in Bitcoin, that could have occurred were it not for the 1 MB blocksize limit in Bitcoin, were flow instead to Monero. Crypto Kingdom by the way just recently got a very minuscule dose of this deadly financial poison, and is now on the way to a full recovery.
