Bitcoin —or digital gold as it can be best described in two simple words because it is scarce and has valuable properties, yet controlled by no one, and can be sent digitally around the world— has spurred the development of a handful of alternative peer-to-peer cryptocurrencies: Namecoin, SolidCoin, ixcoin, and i0coin (with a zero). These types of forks will become more and more frequent, as the clever design of Bitcoin inspires programmers around the world. In fact, I predict the greatest risk to Bitcoin is to be superseded by a competitor built on the same cryptographic concepts.
Namecoin leverages the distributed consensus-reaching nature of the network to implement a decentralized system for domain names. SolidCoin is, in whatever way well-intentioned, a flawed attempt at fixing some perceived shortcomings of Bitcoin. ixcoin is a greedy attempt by its developer to duplicate Bitcoin and acquire as many ixcoins as possible to, ahem, get rich quick. Finally, i0coin was launched as a non-serious answer to ixcoin and, like SolidCoin & ixcoin, experiments with a faster block chain (90 seconds per block, 48 coins per block).
For an inexplicable reason, i0coin, although still very much an underground cryptocurrency with a high risk of failure, appears to have picked up a small number of supporters. Initially, it was forked by kr105, and later modified and enhanced by fusebox and ArtForz who had to reset the network difficulty by consensus after it increased very quickly, scaring its miners away. This is a failure mode that can theoretically affect Bitcoin too, but its probability decreases as its user base diversity and size increases.
The i0coin experiment intrigues me a little bit, therefore I decided to sell an AMD Radeon HD 5970 graphics card for 50000 i0coins, equivalent to about 40 BTC or $280 at current exchange rates which turned against my advantage in the last few days (consider this a sort of very risky investment). I did find a buyer, which makes it, I believe, the first tangible good ever sold for i0coins.