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Question:

Bitcoin is a global cryptocurrency. Sure it has a first-mover advantage but so does Google. Today someone searches with google, tomorrow they may switch to Bing. Can't the same be said of Bitcoin and say Litecoin / Dogecoin / whatever? So why is Bitcoin worth more than Litecoin let's say? Both are accepted by Coinbase etc.

Currencies have network effects - everyone who will transact in a specific currency increase the value of that currency for everyone else.

So one reason BTC is worth more (speaking of entire market cap here) than, say, LTC, is because it is accepted more places.

Another reason is that BTC is perceived (rightly or wrongly) as more stable than other crypto currencies.

But all those legitimate reasons are amplified dramatically right now by speculation.

Bitcoin has brand positioning. It might not be technically the best, but brand positioning is really important if you are in a market. It occupies a clear position in people's mind.

Does the common man think of "cryptocurrency", or does he think of "bitcoin"? If in that persons head, "bitcoin" is the same as "cryptocurrency", then it will be really hard for a competitor.

Google is a nice example. "I will google it for you". Nobody says "I will bing that", or, sadly for other search engines, "I will search the web". We say "I will google it". In our head, google is the search engine, and the search engine is google. So if bitcoin is in that same ballpark, good luck to the competitors.

But I'm not saying other cryptocurrencies can't bring anything new to the table, such as Ethereum or Monero. But bitcoin definitely has the brand positioning advantage.

Distribution of new coins that are "mined" are dependent on the price of electricity and popularity. Being first means it was the most popular by default, so it had the most diverse group of "miners", all of them. I could make CrapCoinV37 today, with only myself "mining" it, it would be a worthless expense of electricity if it wasn't popular. The price of Bitcoin stays reasonably in equilibrium with the cost of electricity required to "mine", which is substantial.

Most importantly, the Coin that has the highest expense to "mine" is the most secure. To attack Bitcoin by out pacing the current miners, it would require millions of dollars in hardware which could just as easily be used to legitimately acquire Bitcoin by mining.

However second place is easily attacked, as the case with BCH, the bitcoin attempted fork. Miners are using their hardware to primarily mine Bitcoin, paying for the hardware, then occasionally attacking BCH, to break it's adjustment algorithm.

That's interesting. I have so many follow-up questions but I gotta head out to dinner. Time for just one... if you're saying ICO company coins are worth sand - and the value of Etherium is as a platform for ICO companies. That seems like the definition of a bubble. No?

Well, you could certainly draw that conclusion and make that argument, but I like to think of it as investing in the internet vs. investing in pets.com during the dot-com bubble.

As of right now, you are right. The entire crypto market is speculative. I think a platform like Ethereum has a better chance of being valuable than a random token that someone with no blockchain experience put together a whitepaper for in a few days and then launched an ICO for.

While the value of the average token may decline as a result of investors sobering up, I suspect the number of token sales will increase exponentially, at a rate that exceeds the per token decline in value, resulting in a net increase in the aggregate value of the token market, and with it, Ethereum.

>>In order to purchase an altcoin such as BAT (the token behind the brave browser the article refers to), you have to first purchase Bitcoin. If you want to sell your BAT tokens, you will receive Bitcoin.

BAT is an ERC20 token on Ethereum. In order to purchase it you buy Ether, and then go to a decentralized Ethereum exchange like 0x and purchase it. When you sell BAT, you receive Ether.

Yeah BAT was not the best example. I was just trying to illustrate that ANY altcoin can be purchased using BTC. Only some can be purchased with ETH

My point is that a token is not an altcoin, as it does not have its own independent blockchain. Almost all tokens are issued on Ethereum, and thus almost all can be purchased without any centralized intermediary using Ether. It's much easier to get into/out-of tokens using ETH than using BTC.

Okay I think we are actually arguing the same thing though. The original argument was why I thought currencies/platforms like BTC and ETH should be considered more valuable than random altcoins (independent of if they are ERC-20 or not).

I am not trying trying to argue about if BTC or ETH is better.

Oh okay, gotcha. Yeah I agree. Major currencies like ETH and BTC act as liquidity bridges for smaller cap digital assets. Tokens, which are digital assets issued on preexisting platforms, use ETH as their conduit, and altcoins, which are digital assets with their own native platform, mostly use BTC, and less commonly ETH, as theirs.