Bitcoin Forum

3 years ago bitcoin did not exist.  What about three years from now?  What will the next one be?  Has it already been born?

The next new currency is likely to be the new Drachma, when Greece gets kicked out of the Euro.  We're likely to see new pesetas and new liras soon too :-)

Sea shells.

north & south sudan need one, urgently.

I would bet my money on a currency that would replace mining with something less wasteful.  This probably cannot be fully decentralized.  Bitcoin showed that the time for independent cryptography based currencies has came - but I am not comfortable with the rate at which bitcoin is spending money.

If bitcoin was not paying for itself, in terms of the services it is providing, value information transfers, storage, etc, then it would not be profitable.

Money costs. (Gold digging, fiat confidence defending, etc)

Decentralization is very important. Without it Bitcoin would not had even taken off.

Here are a few possibilities:
- BitcoinMG (for MtGox crowd)
- BitcoinTH (for TradeHill crowd)
- ... (fill in the blank)

The best part is that Bitcoin will power them all.

Non limited Bitcoin  ;D

I am pretty sure that bitcoin is not paying for itself and it will not for a very long time.  Silk Road transactions cannot support even the half a million dollars  a month electricity bill (a very rough estimate - but the only one so far - see http://forum.bitcoin.org/index.php?topic=28780.0) - what else there is to pay that bill?  And this is now - what will be the cost of it when the security of the system will be much more important?

The 'electricity bill' is voluntary. It's almost like short-circuiting a wall socket. Bitcoin would run fine on a couple dozen mining machines. We don't need 20 - 30k, except to prevent theoretical attacks on the block chain.

Have you just said that security of the bitcoin system is optional?

It might be. If it is actually necessary, then the cost scales with the size of the Bitcoin economy.

I don't get it. You say in your own post that the cost is about $1,000/hr. But at the same time there are 300BTC produced every hour, with a current market value of $4109.88. Since the price is stable right now (demand = supply) seems like there is profit to me. Infact it should be profitable right down to a price of $3.33

Have you heard about Ripple (http://ripple-project.org/), the generalization of LETS (http://en.wikipedia.org/wiki/LETS)?
I wouldn't say that Ripple is a currency because it uses many denominations and each user issues its own currency, but I would say is money. Of course that depends on your definition of money. The USD and BTC aren't money for some people.

Anyway, when distributed Ripple is implemented, it will be more decentralized than bitcoin (the block chain is an "issuing center" in some sense) and is cheaper (operational costs) than bitcoin if costs are your concern.
I don't think bitcoin is proportionally more expensive than gold or the USD though.

I have been following Ripple for quite some time before bitcoin - I like the concept, but it might be a bit too complex for a mass adoption.

As to the cost of the bitcoin system - the computing power used for hashing will need to grow with the growth of the value stored in the system.  The question is what are the coefficients, but I am rather pessimistic with this because it is a kind of arms race situation.  

This is very different from the situation with gold and the role of the cost of digging new gold.

Bancor?

Bitcoin could become the incentive for a push to manufacture low cost solar panels. Money talks.

What solar panels have to do with the IMF ?

Besides their both having nothing to do with Bancor? Actually, I hit quote instead of reply. I knew about SDRs, but never heard of Bancor. Bancor is a theoretical fiat currency, right?  So how can it be better than any other peso?

I see, it was a mistake, sorry. But the IMF have also proposed a fiat currency called Bancor (although probably is not like what Keynes proposed).
Not saying that Keynes's bancor was a good idea but IMF's bancor is probably worse.

A gold backed blockchain.....

I think storing things to "back" the medium of exchange (http://www.community-exchange.org/docs/Gesell/en/neo/part3/4.htm) is stupid.
But someone claims it can be done without any gold (http://forum.bitcoin.org/index.php?topic=31032.0).
If it were possible, I would prefer a stable currency (http://forum.bitcoin.org/index.php?topic=11614.0) through a basket of contracts representing different commodities.

I don't know much about the Bancor proposal; just came across a mention of it the other day.  It was supposed to be a currency only used in international trade, and its purpose was to prevent trade and currency "wars" by discouraging trade deficits and surpluses.  It was supposed to be backed by barter (whatever that means), and it's value would've been expressed in gold.  It's kind of hard to find much information about it, but here's two Wikipedia articles:

http://en.wikipedia.org/wiki/Bancor
http://en.wikipedia.org/wiki/International_Clearing_Union

China seems to like the idea of it, so it may be the next new currency.

What the IMF has proposed (http://www.imf.org/external/np/pp/eng/2010/041310.pdf) doesn't have a clearing union or anything like that. It's just like the dollar but issued by the IMF instead of the Fed.
" From SDR to bancor. A limitation of the SDR as discussed previously is that it is not a currency.[...] One option is for bancor to be adopted by fiat as a common currency (like the euro was),[...]"

This is exactly right. The cost of security, if necessary, scales with the size of the economy. This is also very worrisome. Current expenditure on security is 37% of bitcoins in existence per annum. About 37 million dollars per year. Currently, it is paid for by inflation and the inflow of new speculators. In the future, the plan is to have the users pay for it. 37 million USD at 14 USD per coin. 74 million dollars per year at 28 USD per coin. Divided by a user base of 30k, this is an average payment of about 1000 USD per user per year. You better hope the security isn't necessary. Otherwise, the currency will be fucked.

It won't be long before the user and miner base goes beyond 30k. Also, the value of BTC will go much higher. If these two things don't happen, then bitcoin will become an expensive hobby or fail completely.

The cost of hashing needs to grow with the value of bitcoin - because the bigger value the bigger incentive to attack the system.  The question is how much.

As a startup currency bitcoin needs a business plan - an analysis of the system costs and benefits and a realistic plan for reaching a positive balance.  Without such a plan the current $500K a month cost (this is a rough estimate - but the only one I have now) is rather extravagant.

Yup, the syatem is either way too secure and thus wasting a lot of money (more like 2-3 million a month) or it will become highly insecure in the future. What is needed is a new design which makes use of.proof of stake for security. This can either be a forked version of bitcoin or an entirely new cryptocurrency.

I firmly believe that the next crypto-currency will not be a replacement for bitcoin, but an extrapolation of bitcoin. Lots of people are very invested in bitcoin and have a huge motivation to make it better.

I believe that bitcoins will be extrapolated to please people who want a stabilized currency for use in commerce and as a stable store of value while also pleasing people who want to bet big on bitcoin's future. This will happen by transferring the risk of price volatility from the former group to the latter group by setting up contracts within the protocol.

I introduced the concept here: http://forum.bitcoin.org/index.php?topic=30741.0
It is currently being discussed here: http://forum.bitcoin.org/index.php?topic=31032.0

I think this is so important, I am actually paying people to post intelligent comments in the latter thread (see thread for a link to the rules).

It seems that Ben Laurie latest proposal (http://www.links.org/files/distributed-currency.pdf) is exactly what I was thinking about (but maybe it is purely my subconscious playing with the names Laurie gave to the central timestamping servers - mintettes :)

Wow. I looked at the abstract. #3 took me back. A central authority? Really? Who would run it, The Fed?

It is distributed.  In fact what he proposes is that everyone can run one of the timestamping servers - the difference with bitcoin is only that such a server needs to be registered.  The assumption is that more then 50% of these servers will be honest (similarly to bitcoin) - and the registration process needs to prevent the case where someone registers more then 50% of all servers.  The registration is the weak point of the article - but I think it is doable.

It assumes 50% of the nodes (in numbers, not computation power) are honest? Wow... that makes Sybil attacks super-attractive.

Having a registration process that prevents someone registering more than 50% of the servers without central authority is neigh-to impossible. And adding a central authority destroys the whole idea IMO and is backwards.

Bitcoin certainly has a few drawbacks but it's still the "least worst" in my eyes...

Yeah - this is the weak point.  What he proposes is that establishment of new servers requires consensus of all current servers, and later speculates that it will all depend on the initial set of servers - but indeed this is very sketchy.