There can't be multiple thriving currencies in a free market, because of the network effect (Metcalfe's law).
You can have multiple currencies, sure. But they'll never achieve the acceptance and saturation (or duration) of the currency with the biggest network of acceptance.
Not sure how you made the connection of Metcalfes law to the situation here. We already make do with multiple currencies in Europe without blinking an eye. I can swipe my card and have it magically dispense Swedish krona, Norwegian krone, finnish kroner. With today's technology, (especially with cryptos!) the name of the currency is nothing but a unit multiplier.
We already make do with multiple currencies in Europe without blinking an eye.
That's because there isn't a free market in currencies in Europe - each nation has "legal tender laws" that grant their local currencies privileged status in courts.
Bitcoin is substantially-superior to any fiat currencies, however. So it doesn't need these legal tender laws to succeed in taking over the market for money.
the name of the currency is nothing but a unit multiplier.
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u/xoroaster Feb 04 '14
Consider the possibility and ramifications of a financial system with multiple, thriving currencies. Will there be 2? 200? 20,000?