The U.S. political system is unique in having two dominant political parties. Our Founding Fathers who never thought of political parties but when considering big state versus small state representation devised a compromise that converted the popular vote to a winner take all state electoral college system. It's a system that had the unintended game theory consequence of stabilizing with two dominant political parties when they developed.
Political parties formed at the beginning of President George Washington's administration with the differing opinions of Alexander Hamilton, Secretary of Treasury, favoring a strong centralized government promoting industry and Thomas Jefferson, Secretary of State, favoring power to the state governments and an agricultural society. By 1830 the Jeffersonian's regrouped with Andrew Jackson's election as today's Democrats and John Quincy Adam's Federalist morphed into the Whig Party. In the 1850's disaffected Whigs who disagreed with their party's pro slavery leadership broke off and formed today's Republican Party. The election of Abraham Lincoln in 1860 made the GOP the new majority party and eliminated the Whigs as the system reverted back to its stable two party preference. From the 1900's to the present, an era where central government took more and more power from the states, the two major parties remained Democrat and Republican but one exchanged its progressive Northern urban constituency for the other's regressive Southern rural one.
The Libertarian Party formed in 1971 as a Conservative offshoot of a GOP gone wildly off course when President Richard Nixon declared himself a Keynesian and put the country on wage and price controls. Today the party is the third biggest vote getter of the past presidential election but at three or four percent nowhere near a level to replace either of the dominant parties. With a Classical Liberal ideology and fifty state organization its a party that lies in wait for a set of circumstances to make it a dominant party. The current opportunity is that the GOP breaks apart and leaders gravitate to the Libertarian party much like former Republican Governors Gary Johnson and William Weld did as Libertarian candidates in the 2016 Presidential election. Unlike other third parties which solely coalesce around a personality, Libertarians have the possibility acquiring an elected Governor who combines personality with a political apparatus that would make a giant inroad into the Electoral College barrier, enough so that like with Abraham Lincoln the old party collapses and the new one takes over.