Bitcoin is the dominant cryptocurrency largely because it serves as what game theorists call a "focal point" - an option people tend to choose in the absence of communication because it seems natural or special. Bitcoin benefits from being the first and most well-known cryptocurrency.

If users want to transact seamlessly, the community needs to converge on one or a few cryptocurrencies. Any one cryptocurrency would work, but Bitcoin has the advantage of incumbency and brand recognition. This makes it the default choice and very difficult to displace, even by technically superior alternatives.

Section: 2, Chapter: 6

Author: Nate Silver