It's fun to cast your bread on the water, so to speak, and have it come back, reposted by someone else. Thanks "Homeland Security".
Anyhow, I realize "competitor" is a loaded word, and isn't helpful to my point. If two, three or fifty identical bitcoinesque currencies coexist and double supply, they would necessarily halve the value. There is only so much demand for currency, and if you increase supply, you do nothing to increase overall wealth. Ben Bernanke has proven this.
There seems to be confusion over my use of the word "fiat", too. I don't think Bitcoin is a fiat currency.
It has no organization to provide any decree, and no organization of thugs with guns to bash competitors. This is an ugly, but necessary, reality for unbacked currencies. This lack of thuggery leaves the unbacked bitcoin open to debasement from capable, corporate-sponsored, well-advertised competing currencies. There's no reason that Amazon couldn't create a decentralized currency, and organize it so they benefit slightly. Saying that the creator of a decentralized currency couldn't somehow benefit lacks imagination.
The free-marketers, to their credit, welcome competition. I too welcome competition in any market, but we can all agree that competition certainly isn't good for raising prices.
Digital currencies aren't inherently bad, but we have to be realistic about their capabilities and weaknesses. Unbacked, undefended currency of any kind is a risky place to be, and that is my point.
Author of Shades of Thomas Paine, a common sense blog with a Libertarian slant.
Also author of Stick it to the Man!
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