Bitcoin Forum

So, a reality check. Why you might want to think and spend more effort promoting BTC and real world use.

All these new coins recently have only helped make me think more closely about what each was offering. I've been following the Alt-TC for a long while and yet today, I'm rethinking and consolidating the small wins I've made; which I have say is really refreshing.


Firstly the bleeding obvious for those who need it: Steps to lazy profit - Pump and dump
1. Find something of value (Bitcoin)
2. Copy it; adding little or no value.
3. Point at it - and shout "see how much profit we're going to make!!!!!!!". Create the excitement.
4. Wait for noobs and opportunists to jump before thinking.. hell it's fun; why wouldn't people get caught up in it. This new thing, is the same as the successful thing!!
5. Profit and repeat


Most new coins are offering nothing - you might as well be holding Linden dollars, for all the prospect of spending them in the real world.

BTC works - it really does work well. So, why would a real world merchant need to use another coin? Please, tell me why.
None of the alt's beats a green address in a fast and reliable way.

In the event that Proof of Stake becomes useful, then PPC will be affected by that and it's unlikely that a mix coin will win if Proof of Work is stung. PPC then is the only real other option at the moment.

Namecoin is a fun application but if you have no use for it, then why are you buying it?
Devcoin, nice idea but is it working?.. Frankly I don't see it, though I'd really like to see it happen.


Beyond BTC and PPC then is really wild guessing with your eyes closed - if you've got money to burn then fine but it's all just pump and dump until one of them resolves.

So, some coins use scrypt.. so what, that's just a different crypto and the effect on mining isn't going to make or break the coin. TRC starved of oxygen for a while but if that happened to BTC, you wouldn't be looking to similar coins, you'd be looking for something different. Perhaps LTC would lend some support for a while but if BTC failed then LTC would surely follow; if BTC becomes everything we hope, then what use LTC? The developers of new coins benefit enormously for the experience and the profit but we need to see Alt-TC coins for what they are. Unless the Alt-TC coins become known in the real world as linked to something concrete they will never be secure store of value.. perhaps one will become a gaming currency but right now.. I'm sticking with BTC and PPC.

Tell me I've got it wrong and maybe tomorrow I'll rethink :)

you've got it wrong! ;)

Saying it doesn't make it true.. how apt then your reply.

I think he was making a joke.

I guess with that logic the whole world should just use the U.S dollar right? lol

I don't understand what you're suggesting.

Bitcoin beats the US dollar in so many ways.

How do Alt-TC beat BTC? Really, why would anyone need another coin?? Why would a merchant want to accept multiple coins.
If it works, then it works. If it runs into difficulty, then we'll need something different.

"BTC works - it really does work well."

This is patently not true.  Any arguments you make after this statement are based on a false fact.  There are plenty of threads arguing against the technical, economic, and moral aspects of bitcoin.  We don't need  to discuss them here.

My question, that you haven't answered, is what are Alt-TC offering that is more than BTC.

I'm just playing devil's advocate today.. perhaps I'll be all enthusiastic again tomorrow but this is where I'm at right now.

Sure, I get that I really do.. but I think it's important that we do question and challenge the reality. Otherwise, we might be misleading ourselves. The winner will be robust because it meets all challengers. I would love if an Altcoin can defend itself against the challenge that it's offering nothing - but it would need to evidence that difference and I haven't seen that yet.

Competition is always healthy.

If BTC is really is the God that most people seem to think it is; then BTC is antifragile and will survive regardless of how many alt coins people release.

In the meantime.. alt-coins are extremely good profits! ;D

Most of the new altcoins do not offer anything. They are just pure pump and dumps (last one yacoin with ridiculous instamine) but most don't care because you can make easy money with them. Devs probably make insane amount of money, so there will be new coins until at some point bubble bursts and we might witness mass extinction.

I don't think it harms to have different coins running on different algorithms with different features. The issue is the release of pump'n'dump coins that serve no other purpose save a quick profit for some, and a loss for many.

It's good to have a coin like LiteCoin that runs along side Bitcoin, as it runs on a different algorithm. If something were to happen to Bitcoin, an attack, or some other unanticipated black-swan type fault LiteCoin could assume the mantle. It's healthy to have a basket of currencies, although it's pretty easy, at least one would hope, to discern the crap ones from the legitimate ones that bring something new to the table.

Yes - and I'm all for the innovators making a profit that they can then perhaps contribute something more in the future.. there's a lot of reasons for devs and minors atm, learning and profiting and good luck to them; but I'm just noting that spawning more of the same isn't real innovation.

I wonder what might happen is a large mix of alsorts of attempts and challenges over time and the current fast burn of same-coins perhaps it just one flavour of that. Perhaps we're just learning about what can work and what can't and no doubt the variety can't do any harm to the outcome; but it might do harm if we're naive about what is different and what is the same.

They were created to gain more BTC and LTC. It was never more obvious then with FTC and CHN. PPC is interesting but i'm still not sure on it yet because of it using sha256, I think if they went with another hash it would be way more successful in the long run.

One of the big things that draws people to bitcoin is that they can mine it on their home computer. Once the asic's take over sha-256 coins that will take the "fun" out of it for alot of people. No more finding the perfect video card, overclocking it and finding the max stable hash rate balanced with cooling. Just order a box and let it sit in the corner. -.- Its so antiseptic.

as long as there are asic's there will be scrypt coins.

Yes, I couldn't find a detail of how SHA-3 works, so it's hard to judge the difference. I don't see SHA-256 failing but perhaps if there's a risk of Government or those with big resources interfering then it's worth considering something more.

Guess humour isn't universal! ;)

I find a big problem with your thinking - its purely based on a very limited specification in a very small window.

I agree that BTC and PPC are cool coins, however, LTC is also cool for the same reason.  Even FTC has something to say and suddenly we are up to 4 coins!

The problem is that you are looking for an ideal, and the world doesn't work like that.

Different coins are focused on different problems, and each will be great at their speciality.  Eventually, we will find some which are good at a number of different things, and they will become more popular, and eventually, we will have 7 or 10 or 35 different coins with enough of a user base to be considered mainstream. Maybe only BTC and PPC will be used by loads of people everywhere, but I very much doubt its going to be that clear cut!

Its expecting that only 2 coins which have already been developed will make it all the way through to mainstream adoption, regardless of future developments, where you got it wrong! :)

I think you're where I was yesterday ;)

Also, I got the humour but then it also did capture rather well the idea, of how Alt-TC are convincing themselves they are successful by saying they are successful over and over..

Ya things are getting a tad ridiculous with MinCoin, BitBar, YAC (like is this dev dude even trying? YAC? )

But, hey, this is The Internetz.  Hopefully in this Darwinian system the truly better coin will rise to the top if it gets created.

I think there is space for a 3rd major coin, behind BTC and LTC, that has very quick confirms, for purchasing things online... but will just have to see where the coin falls.

All these scam coins do take money out of BTC's worth but hey, there isn't anything that could or should stop them from being created. Hopefully ppl will just get sick of the truly useless ones and become more scam-aware and just be more hesitant to use them.   

The only coin that is more scarce than Bitcoin is Mincoin. People will only collect coins if the next generation of coins are more scarce than Bitcoins.

21 Million Bitcoins? There are 10 million Mincoins, plus Mincoins are based around scrypt and have fast transactions. Yet no one mentions Mincoins when they talk about alt-coins. It's always inflated overly produced pump and dump coins like Feathercoins. There are more Litecoins than Bitcoins so Litecoins will never be worth as much and their value is forever tied to the value of Bitcoin. If the price of Bitcoin goes down so goes Litecoin because Litecoin is less scarce than Bitcoin.

This is not true of Mincoin. When the Price of Bitcoin goes down Mincoin stays the same. PPcoin also stays the same when the Price of Bitcoin goes down. Scarcity does matter for collectors, we want a limited edition coin to collect.

It's funny when things are 'obvious' on messageboards, it's usually off base. Way to completely misunderstand the FTC community. Then again, it's the Internet, everyone is rich, good looking and right. :)

The problem with Feathercoins, Chinacoins and other pump-dump coins is each new coin seems to up the total number of coins making it less and less attractive to long term collectors. Basically the only reason anyone buys these coins is for short term profits because they have no long term profit capability when theres trillions of them.

Go ahead, collect a few hundred out of the trillions upon trillions of grains of sand on the beach and then sell them in exchange for a pile of feces. It's just pump and dump. The way to make it work and I keep advocating it, the supply of these new alt coins has to be rare enough that you can't just go and buy them all up instantly, or mine millions of them in a day. It should be scarce like say 11 million, 10 million, even 5 million, and it should take a while to mine large amounts.

I think Mincoin has it right but thats just one coin. I think Bitbar went too extreme about it but as a concept it's going in the right direction. People will trade their Bitcoins for coins which are worth more. If a Bitbar is worth 10 Bitcoins now it makes perfect sense to trade 10 Bitcoins for a Bitbar so that if the price of Bitcoins collapses you've put your Bitcoin into the Bitbar. It makes sense to trade Bitcoin for Mincoin each Mincoin is worth twice the value of a Bitcoin long term. This makes sense for long term holders and collectors.

It does not make much sense for speculators who make up the vast majority of the people on exchanges. They want Feathercoin and Chinacoin because they have no intention of investing for 2-3 years, they are thinking 2-3 weeks or 2-3 days. That is the difference between scarce coins and the over produced coins. The over produced coins generate immediate profits because they are mined quickly, instamined or premined, and theres if you mine a billion in a few days then hype it up while you DDOS the exchanges so the price of Bitcoin drops, then yeah you can make a major profit doing that several times until people figure out the script.

A genuine coin offers either new technology, increased scarcity, or both. If the mathematics and psychology are not changed due to increased scarcity, or if the technology isn't new, it's probably a scam coin. Mincoin had new mathematics and psychology of scarcity making it superior to Litecoin in many ways. If Litecoin for example has direct competition it will probably be from Mincoin. PPcoin wouldn't compete with Litecoin it would replace it entirely. Litecoin wont be able to replace Bitcoin because the people who have Bitcoins when 1 Bitcoin is worth $100,000 if we get there, will never trade 1:1 for Litecoins when Litecoins are worth $10,000 or $20,000. The difference between $100,000 and $20,000 is so huge psychologically that there is no way Litecoin could ever overcome it and let's be honest. If Bitcoin were $100,000 Litecoin would probably be more like $3000-4000. It simply will not be able to compete with coin collectors who will sell all their Litecoin holdings for Bitcoin the moment it looks like Bitcoin could reach $100,000. This dump will keep the price of Litecoin from ever getting that high but it also means less people will use it because the value of Bitcoin in dollars will be so far beyond it.

So one thing to consider with all this is what value potential does that coin have in USD? The coin has to compete with USD, not just Bitcoin, not just alt-coins. Someday we may have cryptocurrencies where 1 coin is worth $10 million USD, but that cryptocurrency wont be Bitcoin because the math makes it improbable, and it wont be Litecoin because Litecoin moves the math to the opposite direction, so for long term holders and collectors we will need coins which will have value increase over the years if successful. A $10 million dollar coin is possible if there are only 5 million total that exist. These are the kinds of coins that coin collectors would trade BTC for to buy in hopes that they will be worth $10 million. Just as long as the technology is better than BTC I think it's fair.

Forever 0.002..

0.003 but I see your point. My point is that new coins have to offer new psychology, new math, new technology, to fit into different niches. People who like to collect coins love limited editions and it's just a niche. Coins will eventually figure out how to fill that niche and these limited edition coins will become incredibly valuable. In my opinion these coins should be treated as the store of value or store of wealth commodities so that other coins can focus more on acting like a currency.

The point is we need coins we can buy or mine which might someday be worth $10 million each if we hold onto them. We also need coins which we can use to make microtransactions really fast. Somehow Mincoin is able to hit the psychology of both these activities by allowing for long term holders to save them hoping they'll be worth more than Bitcoin even though we all know that probably wont happen, but at the same time for actual transactions it's much faster than Bitcoin or even Litecoin. Go and test it out.

The flaw in Mincoin is it does not seem to be under active development. The creator changed the math of Litecoin which altered the psychology drastically and made it more deflationary and I think this is a good thing because we actually needed a deflationary scarce version of Litecoin. But what happens next with it?

PPcoin is also needed because I think long term we all know Proof of Work isn't going to work. Mining isn't going to be profitable for much longer and the writing is on the wall. Transaction fees aren't going to change that either and if Bitcoin tries that route then PPcoin and Proof of Stake coins will be cheaper and will win.

I perhaps should have mentioned FreiCoin.. I don't understand it entirely but it does look to me close to something that the Islamic Banking community might be ok with.. large market there. I expect it would need a tweak or two. I'm not sure why anyone would buy it as investment, so perhaps an Islamic Bank would have to premine and make equivalent for it to work well.

Mincoin offers nothing but novelty and the creaters failed to create the excitement at the start - just like they are rebooting SC with no fanfare. Doing it after the fact is much harder and eventually people will tire of it and look to BTC because that can be spent and in reality there is zero difference but for the fraction.

If you're a fan of Mincoin.. where can you spend it? Same for Bitbar and all the other wannabes.. they really need to make themselves useful, which is the big opportunity - making alt-coins real world useful and not just an obscure investment for geeks.

Freicoin features demurrage which is an anti-hoarding tax. I like the idea but I don't like the fact that there are 100 million coins. Perhaps if it were much more scarce the idea might make sense because I do think if we end up with a Bitcoin elite as some have termed it, where you have people who become Billionaires from mining or buying Bitcoin, those people should ultimately be made to invest or spend. I don't agree with the rate or numbers chosen by Freicoin to do it. I think for instance Demurrage shouldn't take place until we actually have Bitcoin billionaires. I think also the rate has to somehow be adjusted against something else. To just promote GDP just to promote GDP isn't a good idea because there could be situations where there is nothing useful to buy, and to force people to spend when theres nothing reasonable to spend it on isn't good. Also it might encourage short term investments rather than long term, and also how many coins would you need to have before demurrage kicks in?

If you have a total of 21 million coins like with Bitcoin and you have demurrage to that, then perhaps everyone who has over 50,000 coins should pay the hoarding tax? In this case it starts making sense and I would think it's a good idea if the size of the tax increases with the length of time the coins are hoarded in combination with the amount.

Like if someone hoards only 50 coins but hoards it for 10 years that should not trigger demurrage but if they are hoarding 50,000 coins over 5 years it should.

Unenforceable.. you have no way of counting the coins a person owns.. multiple accounts; multiple wallets even.

Isn't novelty something we want in a niche coin? I admit it does not enhance the technology so from a technologically perspective it's not new (it's just Litecoin with different math), but from a psychological and economic perspective it's very different. You can tweak Litecoin and come up with a better Litecoin and this is still valuable if it's proven to actually be better based on those tweaks. If Mincoin had active development I would be confident in it's long term future, but because of it's tweaks I think it has a niche it's filling which no other Litecoin based coin effectively fills so it's safe for now.

I told you some niche coins are to be collected as a store of value and not as a currency. Gold bars, where do you spend them? You can't spend gold but you can buy it knowing it's value will keep going up over time. So what I'm saying is we need some coins just for that purpose to satisfy long term coin collectors who have an entirely different psychology from the short term speculator types who love Chinacoin and Feathercoin. The long term bulls and long term collectors want more coins like Mincoin while the short term profiteers want more coins like Feathercoin and Chinacoin. The technologists want to see a more secure or an anonymous coin.

I'm of a technologist and long term collector mindset. I'm not into the short term profiteering mindset unless I literally have no other way to make profit. The lack of balance is causing the collector types to contemplate or even go into mining or buying stuff like Feathercoin because when Feathercoin is 400% more profitable than any other coin at the time there is no better option but to mine that. But it doesn't change the fact that no one is going to collect Feathercoins and the niche exists for collectors.

The actual currency which will become mainstream should be Bitcoin, as it's the best technology. The candidates to beat Bitcoin in technology right now would be limited to Netcoin and PPcoin. Litecoin only beats Bitcoin in speed of transaction, but not in security. PPcoin may someday beat Bitcoin in security and Netcoin can improve on PPcoin. I agree more thought has to go into the technology and security side but at the same time the coins have to fill different psychological niches.


And that is the problem I have with Demurrage. I don't see how it can practically work. It's not going to be very fair to the people who don't have many coins to have to be taxed. I'm not against taxes or transaction fees but when those fees get too high people are going to transfer their wealth to another coin.

Hi Luckybit,

your posts are long and frequent, but I fear you have come to a deadlock in all your arguments, especially about that scarcity matter of coins.

In some of the first posts I read from you in another thread it appeared to me that you have a point, but now your arguments appear to me to become less and less reasonable, I see an increasing number of unproven claims in your post in the best case, and even more evidently wrong statements and assumptions.

"Bitbar" is even more scarce.

This statement is completely Illogical and of course untrue, it is neither proven by logic reasoning nor by market experience.

Except from that, crypto coins should be designed for use as an exchange and storage medium, not for collection. If collection coins are requested by the market participants (i.e. not coins to be used for payments), I propose to introduce a coin with a block generation rate of 6 hours per block. (I am mentioning this, because you repetitively make your arguments from the perspective of the collector, not from the perspective of the user, see also further below)

...which seems to prove your arguments wrong (sorry  ;)). It seems that Mincoin is the same as Litecoin/Feathercon, with the sole difference of another cap limit. This makes it the best example of a pump&dump scheme. (Avg block generation time in last 24 hours: LTC 2.5 minutes, FTC 34 minutes (!), MNC 1.9 minutes).

You also have to learn that you cannot make psychology theories about people's behavior out of nothing. If people behave different from what you originally thought, you have to question your theories and not try to persuade the world that they should behave acc. to your theories - this is doomed to fail. (I am saying this because my impression is that this is what you are trying to do, perhaps unconsciously - please forgive me if I am wrong [now I am also trying to be a psychlogist  ;)])

So you call Feathercoin a pump&dump, but Minecoin is not, just because the latter has the decimal point shifted by 1 and a half digits? This speaks for itself. Hey, then kilo-FTCs are no pump&dump, but milli-MNCs are a very bad pump&dump scheme!

Yes, there are 4 times more LTC than BTC. But if LTC turns out more useful in some distant future due to shorter confirmation times, this *may* be conceived as an added value and be reflected in exchange rates acc. to supply & demand. But it can also be that LTC never comes close to 25% of BTC value, just because BTC stays ahead in terms of infrastructure/market penetration for merchants, service providers, clients, apps etc. (just like people stay with facebook even if google+ has better features). The value does not only depend on the number of coins.

:D No! Not because it is less scarce. If the price (vs. FIAT) goes up and down in parallel to BTC it's just because both are crypto-currencies, i.e. the same kind of commodity!

Of course it is! It just exists for only 1 month now, so this is much too short to draw conclusions w.r.t. exchange rate on illiquid markets. By the way, the currency mMNC (milli-Mincoins) is less scarce than Bitcoin by a factor of ca. 500, still they always have a fixed ratio to MNC, namely 1:1000, although MNC are more scarce by a factor 2. Acc. to your theroy MNC and mMNC should evolve in different directions, which renders your theory self-contradictory.

I cannot believe this argument is meant to be serious. And by the way, crypto-coins should be designed to work as a medium of exchange and storage, that's their intrinsic value. If crypto-currencies were there to serve collector's needs, they would be pump&dump ponzi schemes, so every responsible crypto-coin designer should NOT listen to requests from coin collectors! This idea is insane. Is it possible that I am feeding a troll while writing these lines?
I propose all passionate coin-collectors start collecting kBTCs from today on - they are 1000 times more scarce than Bitcoins and collecting them will certainly be fun  ;)

Also my kLTCs go up and down fully in parallel to LTC, although LTC is 4 times less scarce than BTC, whereas one kLTC is 250 times more scarce then BTC (1 kLTC = 1000 LTC, by definition).

Likewise, I have mBTCs (I can even set the mBTC unit in the bitcoin-qt or Elecrum client, and soon you will be able to trade mBTCs also on exchanges!), but this does not suddenly make it a better or worse coin.

I also have a MichaelCoin, which is defined as 1 MichaelCoin = 123.45 BTCs. If you are a passionate coin collector though, I am willing to sell you one MichaelCoin for only 199 BTC!

So all this is just a matter of definition, you are totally over-interpreting the relevance of cap limit of coins.

Why? Who is "we"? "we" coin collectors? But anyway - such coins already exist! One of them is the MBTC (Mega-Bitcoin), I call it MBC now, that is defined as 1MBC=1,000,000 BTCs. One MBC is currently worth $100 million each. Unfortunately, I only own 0.00....01 MBCs at the moment, because they are so scarce.

This is *exactly* the same for Mincoin, it is no less a pump-and-dump coin. Just because the nominal cap limit is shifted by a few digits for one coin, it doesn't make it a fundamentally different coin. But you are suggesting all the time that this does make a fundamental difference, which is really ridiculous.

Grains of sand have no value as medium of exchange, as opposed to crypto-coins. So they have no intrinsic value unlike crypyto-coins. I think you are again arguing from the collector's perspective, not from the user's perspective, otherwise you wouldn't have come up with this comparison.

You (or "they") cannot just "buy them *all* up". The percentage of *all* coins that one is able to buy up does not depend on where the decimal point of this coin was defined to be located. The cap limit is fully irrelevant when talking about percentage of coins.

Note: The fact that some alt-coins are valued in strange relation to their cap-limits on some exchanges does not mean that the alt-coins are designed wrongly, but it just shows that lots of inexperienced participants are active on the exchange markets at this early stage. This would certainly change once professional trades start benefiting from these irrationalities.

These numbers are purely arbitrary.

So Bitbar overdid it... "interesting"  ;). I think if the block generation time for bitbar would be higher (a few hours on average), bitbar could become the perfect "collector coin"  ;), similar to gold bars (=the bitbar logo).

You are again making the false assumption that coins that are less scarce than BTC are falling when BTC is falling (i.e. have a fixed exchange rate towards BTC), whereas coins that are more scarce than BTC are not falling when BTC is falling (i.e. they rather keep their exchange rate towards FIAT currency, not BTC). This theory is far-fetched and clear nonsense. The prices are made on the exchange markets and do not follow the rules you are proclaiming here. Normally I would have expected such argument from a naive person or from a troll, but maybe you are just mis-led by your own ideas and have not yet realized that you have run too long with your thoughts in the wrong direction.



Morover, about another topic, on Demurrage with Freicoin:

You again hang on to the same error. Whatever the basic idea of a coin is (here it is the demurrage), this idea does not make more or less sense depending on whether you place the decimal point 1 or 2 digits further to the left or to the right.

Your reasoning is arbitrary. One could equally well plead that those owning much should pay less demurrage (in percent terms, not in absolute terms of course) because they are already paying a lot to the community anyway.
I think both extremes are nonsense (apart from being not realizable). With Freicoin, in fact those who own little pay little demurrage, those who own much pay much demurrage. In fully linear relation to their funds. This is the fairest and simplest mechanism I can possibly think of. Effectively it acts like the principle of osmosis (to draw an analogy to biology), and it operates in opposite direction as today's debt interest based system, it means transferring wealth from the rich to the overall community. But I do not want to go into this here any further, it is macro-economical stuff and also rather political.

Kind regards,
Michael

(hope I did not feed a troll here, and if not, hope I could help)

BTC = long term investments, big transactions (like buying a car or real estate)
LTC = everyday use for small transactions.

BTC is just too slow for everyday use with small amounts. LTC wins here IMO.

I'm not sure LTC is any more practical than BTC. BTC using green addresses would work fine. Real world use needs those like WU or gyft, to make it easy to integrate with current fiat spending.. and more than just at a few stores that accept gift cards.. so a debit card equivalent.

We need practical real world solutions, not more alt-coins.. that's also where the real money will be now.

If BTC has issues then LTC will surely follow.. along with all the others; there's always potential for another coin to become the long term solution to all problems but I don't see any beating the simple combination of BTC+PPC just yet.

ltc isnt associated to btc, if btc fails, ltc will be No1

Hello MichaelS, thank you for your response. Allow me to clarify my positions.

There is more to a coin than mathematics and technology. My argument is that we have two variables with the first being the coin price and the second being the coin value. According to my argument the coin price is influenced by psychology and the coin value is influenced by it's technological utility. My argument is that speculation is based around psychology. I argue that appealing to the psychology of speculators is important because it attracts early adopters to the coin just like appealing to the psychology of miners is important to attract them to secure the network.

Bitbar in specific may very well be more scarce than Mincoin but from their website they do a terrible job explaining the technology behind it and it's barely readable. I admit I don't know the technical details of Bitbar because I have not examined the source code. I can understand your view that Mincoin could be viewed as a clone of Litecoin but it can never be a pump and dump coin because it takes far too long to create a large portion of coins from which to dump. I view Mincoin as an experimental coin because at the time it was the first coin to have a smaller amount in total units than Bitcoin by more than half. If you're prone to view this as purely psychological then perhaps it should be considered a long term psychological experiment which can be used in the future as a case study, but I do not see it behaving as a pump and dump coin as it's not even on the major exchanges, it has never been pumped or dumped and has stayed at relatively the same price range. Feathercoin however was pumped almost overnight and ended up on BTC-E in record time and got dumped over the course of a few hours. I was there and I watched the psychology of the people doing the dumping and the psychology of the people doing the buying and the main interest expressed in public was short term profit, while when I look at Mincoin the main interest expressed in public is of long term profit and talking about how Mincoin could someday by worth much more than it is. This isn't the sign of a pump and dump coin and if it was meant to be that then it has failed as a short term investment.


Every theory I have comes from obvervation. But if you'd like to prove any of my theories wrong there are plenty of behaviors to observe and case studies to conduct, it's easy to use that behavior as part of a case study. We have charts and records of everything that happened with Feathercoin, Mincoin, or any other coin and we can see the psychology of the panic seller and we can see the psychology of the coin collector, it's all in the charts. Speculation if you view it as a sport, hobby or profession is based around psychology and any successful speculator on this forum will know that.
 
It's also something we can see from the trollbox at BTC-E, or from observing many other virtual currencies and the behavior in that. You're in from a mathematics background but in my opinon if you divorce the math from the psychology then you're not going to understand behavior. Human behavior is not rational, people who are collecting coins are not always doing it for rational reasons, what I'm saying is that the foundation of the Bitcoin economy is not rational and this is why there is volatility. Automated trading has only made it easier to exploit that irrationality but once again it's not rational and no you cannot introduce a coin without appealing to psychology, but this is my opinion. Litecoin appeals to psychology even in the name of the coin, the name is cool and catchy, the logo is cool and catchy, it's got faster confirmation time, it's got more total units, this is all about psychology. At the same time Mincoin does the same thing, it's got less total units than Bitcoin, it's got a catchy name and logo, it's got faster confirmation time, it's marketed as rare.

But really how do you see Mincoin as a pump and dump coin but you see Litecoin as legit? Litecoin was designed to appeal to the psychology of miners who mine it while Mincoin was designed to appeal to the psychology of speculators who collect and trade coins. Scrypt does not enhance the security of the network, it simply allows GPU miners to continue mining and that is about it. SHA256 is better and the use of ASICS do not necessarily hurt the network provided that the ASICs are distributed. So basically the GPU miners wanted a coin other than Bitcoin that they could mine with their GPUs and still make a profit, it was all built around psychology and not some improvement in the mathematics or in the security. If you can see some improvement in the security, tell me how it improves the security over Bitcoin to have faster confirmation time? Tell me how moving away from SHA256 can possibly improve the security? Litecoin is very well marketed.

The success of Facebook is also a result of marketing. Myspace was the better technology but why did Facebook beat Myspace? Facebook appealed to the Ivy league universities at first claiming in order to join Facebook you had to be a member of an Ivy league university. Then they opened it up to all universities next, and then finally they opened it up to everyone. It started as an exclusive club atmosphere. It appealed to psychology and the feeling of belonging to a cool exclusive club to beat Myspace which didn't have that cool exclusive feel. It offered no technological advantage over Myspace, it had no first mover advantage over Myspace, but it beat Myspace entirely on psychology and marketing. Even now to this day it's not better than the competition but it uses psychology to lock people in.

I think you have the attitude that if a technically and mathematically superior coin is created that this alone is all that is needed. My argument is that yes you really do have to appeal to the psychology of coin collectors. A coin really has to seem rare, feel scarce. A coin must have a catchy name that people remember. A coin must have an eye pleasing logo. A coin must fill a psychological niche or several. A coin must appeal to speculators and to miners if it's going to get an army of early adopters to support it. Technology might attract you and me, I really do appreciate technological innovations in Bitcoin, PPcoin, Qubic, Namecoin. But I also appreciate the psychological appeal of Litecoin, Novacoin, Terracoin, Mincoin. The coin to challenge Bitcoin in my opinion will need to be technologically superior while also having the psychological appeal and I think your primary focus is only on the technological innovation. If this in fact is the case then how can you explain why Litecoin is in second place when it's basically a clone of Bitcoin which uses scrypt to appeal to the psychology of miners? It's not really all that different from Bitbar appealing to the psychology of gold bugs, or Mincoin appealing to the psychology of coin collectors, and then you have Terracoin and Novacoin which are speculator dream coins.


I understand the users perspective. The perspective of users is that the is no infrastructure. There is no place to earn Bitcoins, there is no place to easily buy Bitcoins, there are limited places to spend Bitcoins, and all of these options come with risks of losing Bitcoins. It's bad enough exchanges are being hacked, but cryptostocks was hacked, Gox was DDOSed, and the price reflects the psychological attitude of the users. The problem the users are having is infrastructure doesn't exist to make Bitcoin a true medium of exchange and if Bitcoin worked as a true medium of exchange there really isn't much of a need right now for Litecoin. Litecoin isn't more secure than Bitcoin in any way that I can see and it's only a different psychological appeal, but not actually better and even the Silver to Bitcoin gold thing is a psychological appeal. All of the appeal in Litecoin is based around the psychology I'm talking about and if my arguments were so wrong then Namecoin, Devcoin, PPcoin, all should be higher priced than Litecoin because they all have more value  and more innovation than Litecoin. PPcoin is Proof of Stake and is a new protocol. Namecoin is a sort of name based value exchange protocol which will have all sorts of technological appeal. Devcoin is an extremely important coin because it's the one coin which attempts to solve the infrastructure problem.

Why aren't PPcoin, Devcoin and Namecoin ahead of Litecoin? Litecoin appeals to miners and miners are the most powerful group. The next most powerful group in the community are speculators. Ordinary every day users aren't who currently decide the fate of the different coins. Speculators decide to pour their money into one coin or another and it gets pumped and if they pull their money out of any coin including Bitcoin then they price will drop way down and the coin will die in the eyes of the media. Miners are also essential because if they pull out then the network is no longer secure. Appealing to the psychology of these two demographics is critical and my views have not changed but only strengthened.
And this ^ is an example of psychological appeal. Adam intuitively gets what I'm talking about.

Well, I agree to the point that we need to promote the hell out of BTC.......  got a long way to go

The trouble with PPC is the developers have dropped the ball, have a read of the main PPC thread on this forum and you will see what I mean, the last few pages are full of discussion about pretty icons for the web site, no important issues like why there is still no p2pool for PPC when Novacoin, a scrypt based PPC fork, has had p2pool support for ages. Nor is there any meaningful discussion on promoting PPC. If there is going to be Proof of stake coiin that survives then its not going to be the from the current PPC group unless some radical change in attitude happens.

The number of coins created is completely uncorrelated to the potential of pumping value into the coin then dumping it for a quick profit.

You can take any coin and label a multiple or fraction of that coin as the common unit to transact in.  Presto you get the psychological effect you are looking for without really having to change anything at all, certainly without needing an entire new coin to be created and marketed etc.  Forget the whole coin cap psychological effect and go back to the drawing board on all your ideas.

The only psychological appeal most alt coins bring is that of opportunity to buy it cheap before it rises and makes you rich.  People aren't jumping en mass on board these coins because of the logo or name or whatever other marketing fluff.

Prove it. And no it's not just the total number of coins created but also the rate of creation that contributes to pump and dump. If you create 50,000 coins a week from one coin then that one coin is going to have a lot of people trying to dump it at the end of the week because the supply will outpace the demand. What I want is for the demand to always outpace the supply so that these coins will have reasonable prices and be released at a reasonable rate and while miners might not be able to get quick profits I think it's better to slow the pace of inflation down. The total cap should be small because of psychological effect but the rate of inflation isn't just a psychological appeal to coin collector instincts but is real mathematics and is in my opinion really bad for markets. The rate of inflation has to be slowed and with Feathercoin and Chinacoin this did not happen and the result is these coins are now over mined, very cheap and psychologically a cheap coin has less people demanding to buy it.

Because why is are people all over Litecoin? It's nothing more than a well marketed coin catering to GPU miners. It's not more secure than Bitcoin. It's got a larger total cap for marketing purposes so people feel richer, it's allows for GPU mining so miners can make money, it has a catchy name and a really nice logo. It's in second place while PPcoin which actually is very innovative, is at best in third place. It's debatable if you think Proof of Stake will work but at least it's significantly different from Bitcoin and for security reasons not just to make miners happy or make speculators happy like with Litecoin and Mincoin.

In my opinion people jump on in mass because of marketing. Coins which have terrible marketing or no logo have less support and PPcoin is perfect example of such a coin with very good technology and ideas behind it and very little marketing which proves technology doesn't market itself.

in short, any coin using anything other than SHA that my ASIC cant mine is worthless. They are scam

what make you think litecoin is less secure than bitcoin

ppc have two billion. so people will feel richer,according to your point arent they

From Sunny King's paper on PPC design, I have to agree that PPC is best imitation of actual gold supply among all alt coins. PPC has some unique properties that might be valued in a not so distant future:
1. IPO. If you are stock market player, you will realize that PPC is really ambitious in becoming the one and only currency by not setting up limit in coin supply. Also such design provides a fair opportunity for the late comers to embrace PPC.

2.  1% interest. According to Sunny, this is designed to imitate the natural supply of gold. However, it's more like an incentive for PPC holders to keep PPC in their wallet, thus making supply and demand on a relative balance to avoid the inflation.

FYI ONLY.

Is not enough. I think we need a coin with a supply of 100*(world population) roughly in the end in order to be used in every day life. If you want to buy a pack of biscuits for example you want to spend between 0.1 and 10 of everything (dollar, euros, bitcoins). If the pack of biscuits will costs 0.0000001 or 10000000 the psychological impact will be to big to ignore.


There are multiple cases around the world when a currency was getting to much zeros, for examples spending 20.000 for a pack of biscuits, the national bank has cut the zeros and started the denomination in order to be easier for the people to work with the currency.

Working with mini-Xcoin ar satoshi and micro-Xcoin and so on is not acceptable. The public will ignore any currency that is to low or to high in supply and is forcing them to make transformations and other things.

Remember, most of the people are not nerds, and especially not the clerks.

From this point of view all of the crypto-coins are broken. They are only investment and saving currency, but they don't represent a true currency that can be spend by normal people in everyday life.

I don't mine or have an ASIC. Also ASICs apparently will be able to do scrypt later.
No, I just don't see yet what LTC offers, that is distinct enough not to be simply bound to BTC fate.

It's widely accepted that miners like LTC.. go figure.. but is that sufficient?

Litecoin is less secure because GPU mining while it might be more profitable is not going to secure a network as quickly as ASICs. This is just basic knowledge, if you have ASICS already developed then all you really have to do to keep the network secure is distribute the ASICS to as many people as possible. ASICS do not cost a lot of electricity and run at 30 watts or less compared to GPU which costs much more in terms of electricity and is much more inefficient. So just on energy efficiency and overall efficiency alone ASICS are better in my opinion for security. Also the complaints about confirmation time are psychological complains from people who don't like the idea of having to wait 30 minutes to an hour for the security to go through. These people would rather sacrifice a degree of certainty for transaction speed. There is no proof right now that Litecoin offers any security advantage over Bitcoin. My conclusion is that Litecoin is a well marketed coin catering to the miner demographic.

I communicated with SunnyKing himself. He says that PPcoin has no set in stone amount but that it will adhere to the model set by Bitcoin and Litecoin. Basically it's not generating a whole lot of coins at a very fast rate and eventually will be Proof of Stake so it's going to take a long time to reach 2 billion even if that is the cap and I don't think it is as he said he is only using that number internally for consistency. If you ask me what I think Sunny King is doing I think he's going to position PPcoin to be more scarce than Litecoin no matter what and competitive with Bitcoin in terms of the per capita amounts in circulation.

In the US Dollar we have cents to represent the 1.**, why don't we just get rid of cents and make it psychologically easier? Better yet why not get rid of 20 dollar bills, 10 dollar bills, 5 dollar bills, and just trade in 100 dollar bills to make it even easier still?

The reason I think is you lose an amount of precision in exchange for that psychology. How do you handle micropayments without that added precision?

Yes, you have cents and dollars, and only cents and dollars, not mini-dollar and micro-dollars and others things.

This is true also with euro, there is euro, cents, and the precision is good enough, because nobody cares for 1 cent coin if is lost.

Also when you go to do groceries to pay something in the amount of 20.xx or 50.xx, if is in the amount of 100, you already dismiss the last decimal point, and is 100.x. All that is over 1000, is just 1000 without any decimal point, you just ignore it. And you know, for example, that you are paid 2000 a month, and you spend for groceries 20, and for a pack of gum 0.5. Now imagine this thing with bitcoin. You get a pay of 20 bitcoin and you spend for groceries 0.2, and for a pack of gum 0.005. Adding a third decimal point is to much.

I get that you live in the US, so you don't know the psychological in Europe when some countries have switched from the local currency to euros. After years the people where still converting the euros to the old currency to determine the real value.

Or how was in other countries with high inflation how hard was to deal with multiple digit currency, when buying groceries was something like 1.234.224, not to mention when buying a car was 173 millions. Was to difficult to handle for the most of the people. And was also hard after the denomination when the cut 4 zeros and to 3, and 10.000 was transformed to 1.

If this was hard, bringing a currency with multiple divisions and a lot of decimal digits will simply fail for every day use.

"There is no proof right now that Litecoin offers any security advantage over Bitcoin" doesn't mean litecoin is less secure than bitcoin, ASICs for bitcoin are not widely use, according to your point of view, 8 month ago, bitcoin is less secure compared to now because GPU mining

GPU mining while it might be more profitable, wrong, GPU move from bitcoin to litecoin day by day, if you see statistics 8month ago, only 20thash bitcoin network(litecoin now 75%), when litecoin mature ASIC soon or late will hit them

something with less technology innovations compared to others doesn't mean it won't be success, or thing with more technology innovations will be success, take over other, real market have already proved that

I do know the psychology. I've switched from dollars to Bitcoins. In my opinion the added precision is a good thing because for the Internet micropayments are essential. Just because you don't care about losing a cent it doesn't mean in the future when a Bitcent is worth more than a Euro or dollar cent that we won't care about losing that. When a Bitcent is worth 10 bucks we are going to really l care about losing the Bitcent and that added precision will matter. At the same time micropayments will allow us to get paid all over the Internet in Bitcent which today might seem ridiculous, we can get paid in fractions of a penny for Internet content with Bitcoins easier than breaking a penny up into smaller and smaller fractions but those micropayments will be very valuable to us and we will care about them even if we don't right now.

What I'm saying is it's probably beneficial for us to think more about those zeros. It is a change but it's not that hard, right now a Bitdollar is 0.01*, in the future it will be 0.0001* and it will take months or years to get to that. So I'm not really having much difficulty thinking in Bitcoin already. To me it's actually more natural to think in smaller and smaller amounts but I admit maybe it's just me, also I don't mind using a calculator prior to matching a purchase and I don't see how it's difficult to display the dollar amount next to the Bitcoin amount to help train people.

The increased precision might be psychologically difficult for people but it also means more money in your pocket which eventually you'll be able to use to buy stuff and then it will be associated with those products in your brain.


But it's not my job to prove Litecoin is less secure. It's Litecoin's job to prove it's more secure and it doesn't. In my personal and professional opinion it's less secure, but I accept that I could be proved wrong. Do you believe Litecoin is more secure?

I'll offer my perspective, I believe the security of the network depends on how widely and evenly distributed the hashing power is on the network. I think ASICs if not quickly distributed to as many people for as cheaply as possible, could actually compromise the security of Bitcoin. Basically what this comes down to is whether or not you think SHA256 or Scrypt is a better hashing algorithm and whether or not you think Bitcoin/Litecoin will be vulnerable to a 51% attack.

I don't think either Bitcoin or Litecoin will be vulnerable to these attacks provided they have enough network hashing power and it's widely distributed.

Well, this is exactly my point. Loosing one cent or an euro cent is not a problem, loosing a bitcent is a big problem. And people need to start thinking in large numbers, and i can tell you that they are not ready for this. This will not help replacing the fiat with crypto-coins. Yes, for some of us is easy, is easy also when are in front of you PC and you do some math before purchasing.

But imagine that you are at a groceries store, and there is line and the clerk tells you that you have to pay 0.0000023 bitcoins, and you start doing the math, because if you don't figure the exact number of zeros, you may end paying 10 time more, or 100. And you start counting the zeros, and the people at line are shouting: "hurry up buddy!". Do you think that the groceries stores will switch from fiat to this?

With crypto coins there can be a future, but not like this. 99% of the world population are not geeks, and they don't want big changes and they don't want to count zeros after the decimal point. They want simple things.

Subject: Block generation speed not so important long-term (and the analogy between future bitcoin payment system and today's central banks, AND what is different (=better) with bitcoin!)

[bitcoin, future vision, long-term, online wallet services, banks, wallet accounts, retailers, stores, payments, block chain size, block size, transaction fee, tx fee, scalability, confirmation time, fiat, central bank, analogy]

Hello again,

it has been talked a lot by alleged mathematicians or psychopathslogists about whether the number of zeros before or after the decimal dot and the value of the nominal cap limit of a coin is important or not, and if yes, in which direction. I am tired of that discussion, there is no more substance added to it.

So today I am writing about something completely different, which is neither "mathematical" nor "psychological", but rather "economical" and "technological". I have thought about how the future may look like, taking into account technical constraints of bitcoin (or actually "anycoin!") and market developments:

Bitcoin block size is limited. There is currently a limit of 250 kBytes ("soft-limit"), and the final hard-limit of the protocol is 1 MByte. There is some speculation whether that limit will be eventually lifted, but this is very unlikely, because this would not only mean a protocol change, it would also accelerate the growth of blockchain size without fundamentally changing anything, because the next limit would be reached soon, and you cannot increase the limit indefinitely.
Today the block size in the blockchain has already increase a lot recently, it is now at around 210 kBytes average, after about 50 kBytes around 1 year ago, as you can see here (http://blockchain.info/charts/avg-block-size?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=). So we are going to hit the 1 MByte in a not very distant future.

This means that the number of transactions that can be carried out over the bitcoin network per every 10 minutes is limited. What will happen (and actually already has started happening) is that transaction fees will start increasing in free competition. If your tx fee is too low, your bitcoin transmission will not make it into the blockchain, because miners will prefer other transactions with higher fees.

This applies for transactions that actually get carried out over the "real" bitcoin network.

Moreover, we have online wallet service providers like "Mt.Gox", "blockchain.info/wallet" and many others. If you make a transfer from your online wallet account to another account of the SAME wallet provider, you do not need to transfer bitcoins via the blockchain! Instead, you just need to know the "address" (username or whatever) of the recipient. It is like in banking today: If you make a wire transfer to another account of the SAME private bank, this bank just changes some entries in its ledgers, but the central bank does not get involved. However, if you transfer the money to an account of another bank, then your bank has to actually transfer "real money" (=central bank money) to the receiving bank. That's how banking works all over the world today. So what is the "central bank" in fiat world, that is the bitcoin network/protocol/infrastructure in the bitcoin world.

So what does this mean in practice for the normal consumer that wants to buy his bread, milk, or new trousers at the retailer around the corner in bitcoin?

Well, the retailer has the following signs sticking at the entry door:
  VISA ACCEPTED
  MASTERCARD ACCEPTED
  AMEX ACCEPTED
  Mt.GOX ACCEPTED
  BLOCKCHAIN.INFO/WALLET ACCEPTED
  XYZ WALLET SERVICE ACCEPTED
  DIRECT BITCOIN TRANSFER ACCEPTED

So you as the customer have the choice. Maybe you do not have an account at "MT.GOX" or "XYZ", but you do have a "BLOCKCHAIN.INFO/WALLET" account (and the corresponding app on your smartphone), and you may also own some "real" coins accessible via your smartphone app "bitcoinspinner" or "android wallet".

When you go to the checkout to pay your bread and the liter of fresh milk, the cashier asks you: "How would you like to pay?"
You say: "blockchain.info, please".

Alright, so you pay with your blockchain.info app to the retailer's "local" blockchain.info-address, and the payment will be confirmed almost instantly by the blockchain.info server at the retailer's blockchain.info wallet account. So you can walk away with your bread and milk quickly.

This transaction was free of tx fees, because you did not pay via the bitcoin network. You could have payed via the bitcoin network ("DIRECT BITCOIN TRANSFER"), but then you would have been required to wait, or you would have had to buy a voucher of this store in advance and would have paid with the voucher now. Another disadvantage of the direct bitcoin transfer method is of course that you would have had to pay transaction fees to get your transaction into the network in the first place. By that time (depending on how long we are looking into the future), the tx fee might take a considerable part of the purchase, if you just bought a small bread.

So the big idea is that all the retailers will have (free) accounts with all the major wallet service providers, such as to make sure that every possible customer will be accommodated.


This is my vision of the future, and I think it is not just a possibility, but a bare necessity that we have exactly this kind of development of the bitcoin (or any "non-niche-coin") ecosystem, given that bitcoin succeeds. And this is not at all enforced by the 10 minutes long transaction times of the Bitcoin network, but by the pure scalability problems, as explained in the beginning (block chain size, block size limit and resulting increase of tx fees).

Now some Q&A, to prove wrong the statement "but I don't like this, then I can equally well stay with today's fiat money":

Q: But this means that I, as a customer, have to have my bitcoins in my XYZ wallet provider's account (or another wallet provider) if I want to pay in retail stores. I don't like this. I do not trust any wallet provider. I want to keep my bitcoins locally, in my own wallet, with my own private keys.
A: Don't worry. You do not need to (and actually should not) move ALL your bitcoin savings to your XYZ provider's account. Instead, you are advised to move just as many bitcoins as necessary to your XYZ wallet as you need for your next shoppings (maybe for 1 week or 1 month). Then, if XYZ gets hacked (or claims so), your loss is limited - it is just as if you loose your wallet with your cash today (or rather... 20 years ago, because today you have cards, not cash, in your wallet ;)). You may also carry some "true bitcoins" with you in your smartphone's "bitcoin wallet (or bitcoinspinner)" app, in addition. Then, if you find out during your Saturday's shopping tour that you run out of bitcoins on your XYZ wallet's account, you can just recharge your XYZ account from your bitcoin spinner during your coffee break (of course with some tx fees), just like you had to go to an ATM in "pre-credit-card-accepted" times to continue your shopping tour.

Q: In this "vision of the future", it looks to me as if the wallet service providers act like banks: The customers open a (bitcoin-)bank account called "online wallet" and deposit (some of) their bitcoins, and then payments are carried out via these bank accounts. Isn't this a mere copy of our current banking system?
A: There are indeed parallels, exactly as you describe it in your question. And you can take the comparison even further: Like the money that you have on your bank account today, also the bitcoins that you have on your wallet provider's account is not actually true money, but just a liability of the bank/wallet provider to you, the customer. True money is only "central bank money" that the private banks have in their accounts with the central bank, or money bills and coins. In the bitcoin analogy, one owns true money when one is in sole control of a bitcoin private key. A major difference between today's money system and the bitcoin money system is this: In today's money system, private persons or companies cannot open electronic "true money accounts" at the central bank. This is a privilege of the private banks. If a private person or a company wants to store some true money, this can only be accomplished by hoarding bills or coins. This entails some risks of loss or theft, which is the main reason why most people still have their money at the banks today (despite almost zero interest rates). Instead, in the bitcoin world, "true electronic money" is accessible by every market participant ("banks=wallet services", companies, private persons) alike, they just need to own a private key and have some bitcoins sent to the corresponding address. This makes safe storage easy, simple, safe and cost-free, and nobody needs to fear to loose a big fraction of money due to a bank run or bankruptcy of a bank.

Q: I see, but I still don't like this future, because these "wallet services" could run a fractional reserve system, just like today's private banks (legally) do, thereby inflating the amounts of bitcoins.
A: True, the wallet providers could run a fractional reserve system. But there are two big differences to today's fiat money system:
(1) First, they would have to be much more cautious than today's banks, because they cannot be bailed out by the central banks (who can "print" as much "true"(!) money as they need) to keep up liquidity. Instead, in the bitcoin world, the amount of "true" money is limited to 21 Million, and that's it. So you cannot create money bubbles by printing more "true" money. Instead, the "bank" (=wallet service) would crash in due time, with some (limited) damage to the customers (which is why they should keep their big savings in their own private keys, not in online wallet accounts), but after such a thunderstorm the air is clean again, without an ever-growing money bubble poisoning the economy.
(2) Secondly, there is a mechanism by which any wallet service provider can reasonably convincingly prove that he is NOT running a fractional reserve system. I have described this method here (https://bitcointalk.org/index.php?topic=185959.msg1926170#msg1926170) (note at the time of writing this the whitepaper in version 0.1 is published. I soon want to publish another whitepaper with some additional improvements). Of course, no wallet service provider can be obliged to do this, but if the community is sufficiently aware of this problem and the method to prove it, it will hopefully become a competitive advantage.

Q: What would be the business model of these wallet services ("bitcoin banks")?
A: There are many possibilities. One idea is that they act as exchange services (like MtGox) and payment processors (like bitpay) and offer the wallet service as additional free(!) service to both businesses and private persons.


Conclusion:
After all, I pointed out that on the long term, if a crypto-coin succeeds and gets used at large scale, the main "business" is going to take place outside the block chain, with bitcoin accounts of wallet service providers. This evolution is unavoidable due to scalability issues (blockchain size and amount of transactions per time) that any crypto-coin would face. Also, the tx fees of the bitcoin network will grow considerably compared to today, due to the competition of the transactions trying to get into the block chain.
With "main business" I am mainly referring to purchases at retail stores or online stores, but also micro-payments or small donations over the internet, i.e. all payments that are small relative to the tx fees.
Bitcoin payments on the blockchain will still be used for example to load or withdraw funds to/from an online wallet, or to make greater transactions were tx fees do not matter. Also payments between wallet providers (that may happen once per day, e.g. like payments with central bank money between private banks today) will still use the block chain of course.

Given this, it becomes evident that confirmation time (i.e. block generation speed) is not very relevant for the successful long-term development of a crypto-coin, and for sure the 10 minutes confirmation time of bitcoin is not too long to be a problem. 10 minutes is just as good as 1 or 2 minutes or 10 seconds, because the main business is anyway going to take place outside the block chain. Note that anyway also a 1 minute average(!) confirmation time is too short to be practical for retail stores.

A 10 minute confirmation time, like for bitcoin, combined with a reasonable block size limit, even gives an incentive to the community to develop wallet services, as outlined above, in due time, especially to circumvent the pain of increasing tx fees. Such wallet services will first predominantly be used online, as usual, but once such services exist, they are likely to ACCELERATE the more wide-spread introduction of bitcoin payments in retail stores. So after all, the slightly "longer-than-actually-necessary" confirmation time (10 min), combined with a "tighter-than-perhaps-needed" block size limit (1 MByte), could even turn out to be an accelerator of the evolution of bitcoin infrastructure and wide-spread bitcoin adoption.

I would not be surprised if Satoshi has carefully thought about all this well in advance and designed the system parameters accordingly.

They ought to tell you you owe 2.3 microBTC or 230 satoshi. It's easy; no one's going to be using a huge string of leading zeros.