Bitcoin Forum

There are basically two different view of bitcoin's future

1. Bitcoin becomes a popular payment system, everyone pick a smartphone with built-in bitcoin app, and they start to receive bitcoin salary. Its value is very stable so that people don't worry about losing 10% of their purchasing power overnight

2. Bitcoin become the world's most reliable digital currency and fastest international settlement network. Large financial institutions use it to quickly settle millions dollar worth of value transfer across the globe, many mutual/pension funds and even governments periodically invest in it, its value keeps changing every day, but the long term trend is up


The first vision has some difficulties:

First, bitcoin is deflative by design, its value will always rise against fiat money long term wise, thus people will always spend fiat money and save bitcoin if possible, resulting very little amount of bitcoin transactions being done for daily consumption

Typically, when people want to spend their bitcoin, they sell it on exchange during a rally, and slowly spend those fiat money they get from the sale


Second, besides Visa/Mastercard, some of the latest mobile payment network can already do instant transaction with almost zero fee. They use fiat money, thus have 100% domestic merchant support. Bitcoin does not have any fee/speed advantage against them, and the volatile exchange rate also makes it a bad currency for daily spending

So, low value real time transactions are best suited to use a centralized local fiat money payment network. Bitcoin generally can not handle high frequency transactions well due to its design: Every transaction on blockchain is a final settlement and must be written to thousands of databases around the world. On the contrary, a centralized local payment network writes only to its own databases

Due to above difficulties, driving bitcoin development towards first direction will consume large amount of resources and efforts but still get poor result. Being able to buy pizza using bitcoin does not mean that it is created to maily buy pizza. True, it has superior properties than fiat money, but just because it is so much better, people will use it for more advanced purposes than daily shopping. For daily shopping, fiat money is enough


On the other hand, the second vision of a long term saving medium and international payment network is more inline with the unique strength of bitcoin: Limited supply, censorship resistance and trustless transaction. No existing financial solutions can compete with bitcoin in these area, so it will quickly occupy the market where these properties are desired and become the leader

What is your opinion?

Please add cloud mining option in the poll. :)

I'm not exactly sure how I feel about this thread. In my opinion, if one of these two predictions becomes a reality, the other will take place. I don't think it's possible to have one extreme without the other.

Anyways, what I personally feel is the best possible future for use case is bridging living inequalities worldwide. We already see on a small scale that Bitcoiners in third world countries that participate in simple things such as signature campaigns can earn more than from a working class job in their country. If Bitcoin was used as a payment for these individuals on a larger scale, the standard of living could greatly increase worldwide.

Thanks for reminding me of those countries who do not have a good fiat money system, this makes the usage more complicated. If people don't have a reliable fiat money to use, then bitcoin's payment function suddenly becomes more important

Maybe the question should be about the blockchain instead of bitcoin, I changed it

Added a mining option, I guess most of the transactions on blockchain today are pools paying miners  ;D

You're missing a few options.

• None of the above
• All of the above
• Some of the above
• Some other possibilities

For example, what if my vision doesn't include "Supermarket shopping", but does include "durable goods" such as:

• Automobiles
• Furniture
• Household Appliances
• High end electronics
• Firearms
• Jewelry

Or what if my vision includes business-to-business transactions, especially things like:

• Farm Equipment
• Construction Equipment
• Wholesale
• Business Services

Note that if the on-chain volume isn't high enough, then the typical person (even someone "saving" or engaging in "international remittance") won't be able to participate.  If huge multinational corporations are using bitcoin for international remittance of millions, or even billions of dollars worth of bitcoins per transaction, then there isn't any individual that is going to be able to afford the transaction fees necessary to compete with such transactions.

The blockchain is seen as the main technological innovation of Bitcoin, since it stands as proof of all the transactions on the network. A block is the ‘current’ part of a blockchain which records some or all of the recent transactions, and once completed goes into the blockchain as permanent database. Each time a block gets completed, a new block is generated. There is a countless number of such blocks in the blockchain. So are the blocks randomly placed in a blockchain? No, they are linked to each other (like a chain) in proper linear, chronological order with every block containing a hash of the previous block.

The ever-growing size of the blockchain is considered by some to be a problem due to issues like storage and synchronization. On an average, every 10 minutes, a new block is appended to the block chain through mining.

And I agree with:

i chose the second option because i don't see bitcoin taking the place of fiat and the current payment methods for our day to day expenses like supermarket shopping. in comparison it is always going to be easier to use fiat instead of bitcoin.

but for savings and international payment network, bitcoin or any technology that uses blockchain is the best option because of the fast transactions with high security and on top of that it is practically free with the amount of fee that you have to pay

I think of it as some kind of commodity / store of value. It is, of course, much more than that; it is portable, digital, a payment protocol. But I view its payment capabilities less as a way to do "supermarket shopping" and more so a way transfer that store of value. In other words, I don't see it as a currency, a medium of exchange; I view it as commodity that is magnificently easy to divide and transfer. Generally, I am less concerned about micropayments and more concerned about keeping bitcoin decentralized and free of external controls.

Where is "All the above (and then some)"?

I predict the blockchain will get longer. 

Thanks for mentioning more points

The current block size debate to its root need to have an estimation about what kind of transaction will be on the blockchain in future. If majority of users are going to use blockchain to do low value high speed transaction, then the block size must be scaled to several GB, which cause significant technical difficulties for the infrastructure. However, if most of the transactions are high value low speed transactions, then it becomes much easier to handle

An interesting comparison is Fedwire system, where Federal Reserve banks sending money between its member banks. Average value per transfer is 6.55 million dollars in 2014, and it made 135 million transactions during 2014, which translates into 4.28 transactions per second, similar to bitcoin right now

And the number of Fedwire transactions per day just increased 2.4x since 1988, so the annual growth is only a couple of percent

http://www.federalreserve.gov/paymentsystems/fedfunds_ann.htm


So if you want to build bitcoin to be a system similar to Fedwire, then current bitcoin is already fine, no big changes are needed for the foreseeable future


However, even Jeff Garzik don't think bitcoin development will take this approach, in his BIP 100 he said:

"In a minority view, bitcoin is a commodity to which an inconsequential payment network is attached. These users view bitcoin as purely as a commodity whose storage cost is far less than the equivalent value of storage. To these users, increasing transaction volume on the network, scaling to support millions of users is simply folly. As the system approaches the speed limit, transaction fees rise. This user base generates little transaction volume, and higher transaction fees are still offset by the value gained from the network’s protection of their commodity. These users likely feel inaction, keeping the speed limit intact, is the most rational step for their situation.

Conversely, a prevailing view is that this speed limit presents a severe constraint on growth and adoption. The speed limit, in the face of user base growth, will lead to higher fees, ultimately reaching an equilibrium when the system capacity of 7 transactions/second is reached. This will cause a ripple effect where blockchain-centered business plans are shelved, or never started in the first place, for lack of perceived scalability. Higher fees then drive a preference for centralized services which can aggregate those fees across multiple bitcoin users, or strike bulk rate deals. The use of bitcoin becomes a rather exclusive club"


So you see, his view is that the low value high frequency trading is important for user base growth. My observation is, for new users it is important to have a frictionless experience, but later on they would still treat bitcoin as commodity instead of daily transaction medium, because most of the people prefer to do those with inflative fiat money. Those people who constantly do small bitcoin transactions are either buying drugs or gambling, mostly illegal in every country's law

Definitely not for retail purchases. The only area i have confidence it will excel is the money remittance part where low cost fast money transfer gives all the advantages against existing transfer options.

It is an interesting idea that political enemies can delete the entries in land registry office. Who controls the land registry office?

It will be good that everyone accept the registration of property ownership on the block chain, but how to prove that some numbers on blockchain correspond to some land? I guess you would still need a registry office setup by some authorities to define the relationship between blockchain and land, and if that registration record is wiped out by your political enemy, you would lose the relationship between blockchain and the property

For example you can code in a set of GPS corrdinate of a piece of land in blockchain and name of its owner, but how can you prove that this person is the real owner of that land?

wtf? the bitcoin blockchain is alot more than just for shopping or remittance. please add more options!

https://www.youtube.com/watch?v=4nOfHpOFhN8


@DannyHamilton

thx!

The paradox of smart contracts: To trust the smart contract, you must trust a centralized authority "Oracle" who provide the information that triggers the events in those contracts. But if you have to rely on centralized authority then there is no need for blockchain

Yes exactly, for example for a farmland:

You can have 10-20 trustees measuring the farmlands GPS coordinates whenever it gets sold, then they all input it, and all farmland would be put in a decentralized registry, so that everybody would know which belongs to whom (with some private info hidden for unauthorized personal to preserve some privacy)

Then when it gets sold again, the new buyer can see immediately the size of the land , even with google maps technology, or something similar, and when the transaction is completed in front of other trustees, the ledger gets updated with the new buyers info.

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This is 1 case, but the first one would be an ID system, based on PGP or a decentralized version of it. Instead of ID,Social Security numbers or whatever you got in your country. You would have a public key / private key system for all ID verification.

You would get the private key after you hit 16, and the public key would be used to interact in the world. And whenever you feel your private key gets compromized, you can change it, but the new key would be derived from the old one, in a way to be able to track your identity, but to not reveal the new password.

In a perfect world this could work, however ID theft online is very common nowadays, a private key does not prove that you are the real owner of the private key. That's the reason when you register at an exchange you must submit both id documents and invoice to your permanent residence, in some case you have to hold your passport to take a photo, in order to prove that you are the owner of the passport

I voted for super market shopping but I wanted to add savings and international remittance too with my vote.I think these polls should be multi-answered to cover all the aspects and features those someone can adds to his answer to describe more accurately his point of view about the vision of blockchain.

But its still more secure than the current systems. Some sites require copy of ID, photo holding in your hands, utility bills ,etc.

But some sites only require your ID code, so somebody could take a loan in behalf of you just by knowing your ID, they can enlist you into school just by ID number, they can open a brokerage account just by knowing ID number, etc.

And the ID number is public, its not like the PIN code of your card that comes sealed in a black envelope. Basically anybody that held your ID card in your hand can do bad for you with it. The only thing that keeps them away of doing it is the threat of jail, but with more and more sophisticated criminals, i dont think the ID number should be fully public.

You should have at minimum a public key, but in order to authenticate that, you need to sign it with a private key.

This does not prove that you are the owner of it,but in any theft case, you can just modify it quickly, and then settle the problems with the authorities if you can find the bad guy who stole it.


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It is not perfect, but it would be more efficient, and secure than current ID system with public info.

Same can be done with credit/debit cards, it's not like the card number is confidential, even if its says it is, how the fuck is it confidential if it's printed on the front of your debit card, that anybody can see or take a photo of when you use it?

I guess thats why Mastercard uses the 3D-Secure system, but thats still a very amateur addition to security.

Good point, it seems it is only possible to do a single vote on this forum

Of course it is good to have every possible function available, if we have TB level fiber network in each home and ZB level harddrive in each personal computer, but if technology does not allow that, we should focus on the mainstream usage. The purpose of this pool is to find out what majority of people want from bitcoin

my device does not support blockchain wallet but then also when I downloaded it from google I mean the apk and installed it then it does its work :) but just a little bit hanging sometimes maybe due to my device requirements anyways I am using the latest version in the googleplay

The key is to prove the relationship between a blockchain object and a real world object

Bitcoin has no direct relationship to real world objects, but there are exchanges and payment processors who establish such relationship so that you can easily exchange bitcoin with real world objects. Or to say, exchanges guaranteed that your bitcoin will be able to exchange for similar value of any currencies any time

It is different to have a relationship between a string on blockchain and a real world objects like property. There is no one that can guarantee the owner of that string can claim that land without going through a lengthy process of ownership change. Unlike bitcoin, where the change of ownership of money is almost instant, you need some formal and legal process to claim the ownership of a land

So then how is your bank account tied to your work at your job? Isnt it the same framework.

Or your paypal account to e-bay goods & services.

The framework to tie objects to digital systems is simple, and it only requires verificability, and transparency, and trust.


Its also easy to create 1000's of newbies accounts to destroy the voting system.

Either you filter out the newbie accounts, or you make it a money based voting system, just like in a stock corporation.

I can tie the solar system to my bitcoin address, but that does not mean that I own the solar system  ;)

The key is to enforce this tie, bitcoin's tie with fiat money is enforced by the market force on exchanges, you put bitcoin on exchange and you will receive fiat money as return. But where should I put a string from the blockchain and receive the solar system as return?

I did not voted because my answer would be all of the above plus others like fully automated finance, online payments, new investment schemes, etc.

No because there is no exchange that lists or enforces the solar system as a sellable good.

But if you put a pair of shoes or a lamp for sale in bitcoin, the exchange can enforce that by providing a civilized dispute resolution system, a trust system, escrows and even private detectives (maybe in the future, to track down scammers more effectively that the police).

So you know exactly that you get a pair of shoes if you give bitcoins. The risk is only of scammers, but that can be resolved with the earlier written suggestions.

Of course there is no physical tie between these, but they are done via contracts, agreements, both verbal and written.

Contracts are the only civilized and efficient way to govern society. And the technical side can be handled by blockchain (perhaps smart-contracts)!

That's trading things with bitcoin, not using blockchain to register property ownership

My vision will be to incorporate Bitcoin into every service on the internet, where micro payment is received or given.
I want every person on this planet to have the opportunity to receive micro payments at zero fees for their online
contributions. We need to distribute wealth to everyone, not just a few individual super wealthy people.

Why in this modern day, do we still need to have people dying of hunger? If Bitcoin can enable micro payment options
for everyone, we will see much less poverty.

This recent passage from the bitcoin-wizards channel is worthy of mention here:

When there is a breach of the contract, the Judge must be able to enforce the court ruling. A court without violence power backing have no authority.

The blockchain is trustworthy, but that's only part of the picture, law enforcement must follow the judgement given by the blockchain, that's the difficult part. In stead of reading the contract written by hand, police must first acquire computer science degree to understand what is the precise meaning of a blockchain contract  :D

This speculation is factored into bitcoin's exchange rate.  If, at a given exchange rate, both customers and merchants prefer holding bitcoin to holding fiat money then the rate will move.


Were bitcoin more widely accepted, it could compete very well with these networks for being more efficient.  Merchants do not have to pay a fee to accept bitcoin transactions.

Sort of like a "Bitcoin of things" ? :D

It would be a nice acomplishment and its totally doable in the next 5-15 years.


Imagine paying for all online services (tv, games, movies, adult, shopping etc) with only bitcoin.

No more waiting for credit card confirmations, no more card theft, just bitcoin to be more secure and easy to spend money!

what I think would happen is that bitcoin will still be used as an investment option and the market is still volatile with same ups and downs.
what I wish could happen is that bitcoin becomes more like a currency so that I can (not replace) but use bitcoin as an alternative for fiat and credit cards for my purchases anywhere I want.