Bitcoin Forum

A friend of mine asked me where I think Bitcoin is headed.
I am planning to give a talk about this on the next Israeli Bitcoin Meetup, so I thought I might start gathering my thoughts on a new thread anyway.

TL;DR of the future I believe in, with high probability:

1. Governments keeps pulling shit off like the Cyprus bank crisis (https://zingfin.quora.com/All-You-Need-to-Know-About-the-Cyprus-Problem).
2. More and more people, wealthy and mid class, learn about Bitcoin and its "promise of salvation from banks". They will not all understand its depth, but they will see more people they trust turn to Bitcoin, and thus will turn to Bitcoin.
3. Eventually it won't be considered a risky investment, but rather a sensible part of every portfolio.
4. Infrastructure will get a lot better, including core Bitcoin and other layers on top of it such as [http://ripple.com/]Ripple[/url].
5. Every major business accepts Bitcoins.
6. Large financial bodies will start insuring Bitcoin companies ... people would be able to deposit BTC in a "bank", and not worry about hakers (like they don't worry much about hackers today).
7. Eventually (this might take 20-30 years), Fiat will just fade away. Future generations won't understand why we even needed so many currencies to begin with. Bitcoin will become the global currency.

The details might turn out a bit different (e.g. the winning currency might not be just Bitcoin, but some combination of Bitcoin and an alt, or perhaps just an alt) ... perhaps something entirely new will come and change (improve) things so much that Bitcoin will only be considered a stepping stone towards that new thing. But the gist will be the same.

I don't think step 6 is going far. There isn't any good reason to put BTC in a bank. Once people start treating BTC like current fiat and using banks that loan it back out with 'fractional reserves' we will have accomplished nothing.

Insured accounts? haha bank accounts in fiat are 'insured' now.

I'm missing the local part of the story.
Clearly Bitcoin is not ready for small ad-hoc purchases (such as a visit to the market).
What do you think will complement that aspect of local trade?

Bitcoin will be finding its feet over the next 12 months. I know of a few massive things being built for bitcoin ATM that will bring in millions of users. I cant say anything now because i don't want to give the idea's away before they are up and running.
I see bitcoin hitting the $1000. mark in the not to distant future.

I think the Bitcoin ATM is the turning-point technology. In my opinion the biggest hurdle for mainstream use is the steps needed in obtaining bitcoin in the first place.

Current solution aren't good enough for "Gavin's mom".
Gavin mom will need to use a bank. A more transparent and competitive bank, but a bank.


Physical bitcoins / printed currency backed by Bitcoin.
Governments can hold BTC in their vaults and issue paper money, and act as a 1:1 or 1:X reserve system.
Like money was backed by Gold once, it will be backed by Bitcoin.

In the future electronic systems will be more prevalent and this will not be any issue.


+1. $1000 in 2013-2014.

I think it's a powerful combo of dozens of different things, the ATM is a key player but not the only one or most important one IMHO.

I ment at the moment sorry for the confusion. but year your right the atm is a massive step.

Try here:

https://www.bridgewalkerapp.com/

In Japan they just wave their phone at stuff and they've bought it.  That'll be world-wide pretty soon.  And Bridgewalker makes that happen right now in bitcoin, for anyone with an android phone.

"So many currencies" (i.e. complementary regional currencies) do make sense, even in a Bitcoin world. See Prof Bernard Lietaer (http://en.wikipedia.org/wiki/Bernard_Lietaer)'s work about it.

The future of Bitcoin is with all of us who are still, despite the price rise, early adopters.  That being said, Bitcoin won't get to where everyone wants it to go by sitting on our hands and staring at the ticker screen.  If everyone did that, rather than investing in improving the infrastructure or increasing the amount of products/services available, we wouldn't get very far.  Better to be the casino than the gambler. 

I agree with you on most points. I think a very important step for Bitcoin to take is to acquire a solid legal framework so institutional investors are able to join the party. The role of the Bitcoin Foundation is crucial in this aspect. Once this framework is implemented, all bets are off and Bitcoin will be gaining immense traction.

I doubt that an alternative currency will ever be able to surpass Bitcoin, due to the network effect. There might be some layers build on top of Bitcoin, but the Blockchain will remain.

+1000. Coolest teacher of the year award.

I second this.

Very intersting ! +1

I love Ghana, especially cape coast or the timber market in accra.

As far as I am concerned some Nigerians are already using bitcoins!

avoid mentioning step 6.....

thats then making people think that bitcoin will become a government fiat.

instead say people will keep their bitcoins on them, whether its on a laptop memory stick, a piece of paper or a smartphone. and there is no yearly interest made from bankers 'borrowing' your money overnight. but the yearly interest is just the value increase for just hoarding the coins.

there maybe services where you can put in pocket money amounts to convert to fiat or use as escrow to instant payments that are PRE-confirmed before being spent at starbucks etc but long term storage should stay with the owner.

as this is the whole point of bitcoins.. no centralisation.

A few points:
1) Some people won't want to handle their own BTC. They'll be worried about how to properly secure it, etc.
2) Services to insure those people's balances against a hack/theft/whatever make sense.
3) Fractional reserve can happen, but not like today. With no ultimate backstop of a "lender of last resort" that can simply issue new money, people will not tolerate the levels of leverage that exist in our current fiat system (eg, people will get scared sooner, so banks won't leverage as much, else they'll face a run). Thus, even if/when fractional reserve banking happens with bitcoin, it will not grow to the egregious size we have today.

No banks, thank you. They are not needed anyways!!!

Why not? Currently, banks are a necessity. But if all the transaction power is given to the people, banks will became what they should have been in the first place: A service. Mainly for people who are willing to pay a small fraction of money to have their other money kept in safety. Let's face it, being your own bank is risky

Many computers get infected with malware. Most computers don't have cash that you can make a copy of either though. It doesn't take much thought or effort to find examples of decidedly not dumb people losing Bitcoin. Bitcoin will redefine "bank," not eliminate them.

Absolutely. Right now it's killing me that if I ever mess up my security I'll lose a lot of money. You can always follow procedures and think you're doing the right things, but there are always accidents possible which are very hard to foresee. That's why I'll always keep a combination of my own wallets and some insured wallets in various banks, once these are available (perhaps even generating interest).

you can safe your wallet on a usb drive or paper wallet or brainwallet  ???

Sure, but what if your house burns down? Or what if I generate a brainwallet from an unsecure computer? There are lots of Black Swans around the corner.

What if the government just confiscates your gold as it happende before in the US?

What if your government decides to freeze your funds because it was hanging its  gluteus maximus a tiny but too far out the window?


:)

Well those are risks as well. That's why I would like to have a combination of paper wallets, hybrid wallets and insured BTC bank accounts.

100% agreed!

Honestly, I am most afraid of perception problems.
People cling to fiat and banks because they have Stockholm syndrome. Anarcho capitalists are most likely already on board or at least seriously considering it. The regular sheep view the whole BTC with doubt and fear. The word is getting out there slowly, but, and this leads to my second point... Big Business, and Big Government... they will not relinquish control. Ever. No Way! They are watching, and my guess is, plotting as well.
What do you do in an experiment???? You OBSERVE. Take note of what works, and why. Take note of what isn't working, and why. Try experiment again with alterations in the variables to see if you can not control these outcomes.
I'm am pretty sure that there are huge teams of developers at work, covertly, to create and introduce a competitor that exploit all the weaknesses of BTC, and simply reproduce the parts that regular noobz seem to be attracted to.
My paranoid fantasy? IDK!
They might be able to start a cryptocurrency that has less volatility. I certainly approach with a little trepidation towards the idea of spending a dollar if by evening that dollar has doubled in value. I shop for bargains, dude, not gouges!
Users could very well choose a centralized and standardized "lookalike" if it is marketed properly. Say PayPal makes a PPpenny- they mint 51% all right away and then open up mining to the miners with the same difficulty/rewards type situation as a newly birthed crypto$. They allow early adopters to see good rewards but retain majority ownership of this economy. Then PP is basically who is backing this and it is a "backed" currency. They continue to refuse to accept BTC as well as lobby govt to make unbacked currency restricted beyond usefulness. Meanwhile, their considerable PR dept is touting the safety and "trust" offered by their PPpennies all the while magnifying the drawbacks of BTC. They will play on public misconceptions to do this if necessary. We are competing with them and they hate us and will be both secretive and ruthless. 
Really, I wish people were more committed to anarcho capitalism, but the disappointed idealist within me isnt into holding his breath on this one.

You will see the premined coins in the blockchain. Who would think it was fair other than their cronies?

OK, that allays some of my fears. Still... The perception problem... as you can see I'm swimming in it... and I'm one of the converted!
I'm just saying, that as much as we all look at and try to deal with the squeeky parts of this machine, Big Brother most likely has many times the manpower working at exploiting problems. Of course, the opt-in thing you mention, also their role as potential payment processors are on their table too, and these things bode well for BTC.
Its just my way of unraveling things backwards, but thats what these forums are good for.