Why bitcoin needs competitors (such as Litecoin)

Although there are several different peer-to-peer currencies, bitcoin currently stands head and shoulders above the rest in terms of public understanding and use … a bit like Betamax video did before VHS took over the world’s living rooms.

There is litecoin – based on bitcoin protocols – which aims to provide faster processing times and easier mining. It hopes to produce a total of 84 million coins.

There is opencoin, which is still in the process of developing client software.

There are LETS — Local Exchange Trading Systems — and other pegged currencies like Brixton pounds, which are spendable only within one community. So the world has continued to turn for many years with alternative or parallel currencies.

The difference for the likes of bitcoin is the scale and anonymity, and — of course — distributed computing, provided by the internet.

We can also say that bitcoin at the moment has an actual value. In fact, it has two values. There is the price that an exchange will give you — about £60 or $92 dollars at the time of writing. And there is the cost of computing power required to mine a bitcoin, which depends on electricity, computing hardware and other variables.

Until all the coins are mined — for a total of 21 million units (expected around the year 2140) — there is no way of saying how, or even if, the currency will stand up against dollars or euros. Digital currencies might retain a high perceived value or they might go the way of Beenz or cowrie shells – although, to be fair, cowrie shells remained a solid currency in some parts of the world for several thousand years. - Read more here: http://www.coindesk.com/why-bitcoin-needs-competitors

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