Looking into LiteCoin a bit makes me wonder: if LiteCoin were to gain transaction, what's stopping a 3rd, 4th, and 5th currency from gaining traction as well? Wouldn't this effectively eliminate bitcoin's ability of being a "deflationary currency" because other equivalent currencies can be created without end?
The mere fact that nothing else has approached the same popularity as Bitcoin leads me to believe that there is some sort of pressure preventing an explosion of multiple digital currencies.
I know there already are several alternate currencies, so why don't they have the effect of diluting bitcoin as I expect they would?