This is really aggressive on Gavin's part.  It shows how we've all become dependent on him.  We need to fork him into obscurity, but realistically that isn't going to happen.  He's a criminal and we let him become our king.

Bitcoin isn't designed for micro-transactions, but we shouldn't ban micro-transactions either.  Let gradually increasing competition for space within blocks do that naturally.

I'm at a busy time in my life, otherwise I might tackle forking bitcoin and salvaging the system from His Majesty.

I am very much anti-regulation, but we live in the real world.  Regulation is coming.  Who is going to write it?  Well it won't be politicians, because politicians don't write regulations.  They don't even write legislation.

Special interest groups write legislation which is then approved by legislators.  This legislation creates new goverment offices or expands the scope of existing offices.

These offices are the people who decide what regulation will exist.  Usually they write the regulations, but quite often they allow special interest groups to help write the regulations.

So what does this mean for bitcoin?  It means that the regulations will be written primarily by special interest groups.  The question is whether the banks will be the ones writing the regulations, or whether the Bitcoin Foundation will be writing the regulations.

Thus I would support an effort by the Bitcoin Foundation to aggressively pursue regulation.  This is despite the fact that I am very much opposed to regulation.

Of course the entire point of helping to write the regulation is to reduce the severity of the regulation.  Anything where we help them collect taxes or blacklist addresses is simply unacceptable.

You know how I can be certain that none of these me-too-coins will ever succeed?  The fact that every discussion is about miners.  Miners don't matter.  No one cares what miners want, and no one follows their lead.

2054: Bitcoin has replaced all money, and a satoshi is worth about $40, well it would be if dollars still existed.  The protocol has been updated to add another eight decimal places.  In common usage people use the following units: satoshi (worth about $40), bitpenny (worth about $0.40), and gavin (worth about 0.04).  Prices are commonly shown in satoshis and gavins.  Bitpennies are coins with computer chips in them, each chip has a wallet on it with 0.01 satoshis.  These coins are used by people in poor countries and by children everywhere.

MTGOX.com is a site that allows you to buy and sell magic cards.  There is no need for bitcoin exchanges, because what would you exchange them for?

Economic growth is consistently strong, about 5% per year in most areas and higher in areas recovering from war (such as the European Union after its civil war, and the nations of the former United States).  Prices keep falling but wages stay the same.  Africa is still a horrible place and barely uses bitcoin.

Banks charge monthly fees now and offer far fewer services.  They pretty much just store your money and allow you to access it with your debit card.  Mortgages, savings accounts, CDs, and all that are a thing of the past.  Banks don't have the clout or power that they used to; they're just like any other service.  The idea of bailing out banks seems as absurd as bailing out a fast-food restaurant.

Most people have never heard of bitcoin mining.  They have no idea how transactions are processed.  Most people don't even have a bitcoin client of any sort and have never made a bitcoin transaction.  They keep their money in the bank, or they pull it out as cash (paper wallets).  Survivalists, nerds, libertarians, and the paranoid actually have bitcoin clients and keep most of their savings in cold storage.  They say things like "if you don't have your bitcoins on your hard drive or in a paper wallet that you've made yourself then they aren't your bitcoins".  Normal people laugh at them and say things like "what backwards people, what strange ideas, nothing they say or do will ever amount to anything".

The European Union has a lot of debt from its war against its break-away provinces.  Those bonds aren't going to repay themselves... or are they?  Recently the EU parliment has voted to authorize the creation of a central bank in order to promote fractional reserve banking.  They reassure the public that they will stay on the bitcoin standard and that notes will always be redeemable for cold hard bits.

You're doing the numbers wrong because you're not adding in the value of coins being used as savings.

So where you multiply by the fraction being used for transaction instead multiply by the square.  So let's say that the price is $X and 100% of coins are used for transactions.  Now I move the slider so that it says 50% are used for transactions.  The price should go to 4X, not 2X.  This is because the value of the coins in circulation goes to 2X, but the value in savings is also 2X.

Volume.

I realize that a fully decentralized exchange is not possible due to trust and regulation.  However it would be possible for competing exchanges to work together.  This happens with the internet, utility companies, etc...

Exchanges would compete based on ease of getting money in, customer service, fees, etc... but not on volume.  Volume would be shared and benefit all exchanges.  Since your exchange is the one setting up this network of exchanges you get to charge the other exchanges a small fee to be part of the network.

It might work something like this:  User x on exchange X posts a buy order.  User y on exchange Y decides to sell at x's price.  He puts in his sell order.  Exchange X deducts $ from x and gives him BTC.  Exchange Y deducts BTC from y and gives him $.  X and Y then exchange $ and BTC at the price that the trade was made at.  X and Y can make fewer and bigger trades, so maybe they trade once per hour.

Maybe because we have all lived our entire lives in an inflationary paradigm and most people thus think that stocks will generally appreciate in value over time.
[/quote]

Yep.  Simply holding BTC is equivalent to investing in the bitcoin economy as a whole; it is better than an index fund.  Only invest in a specific stock if you think that you have more information about that stock's future performance than the market does.  If you don't have a "tip" then you are better off not investing at all.

This property of non-inflationary currencies is a good thing.  It means that simply saving your money is investing.  People who don't want to actively invest get all of the benefits of index funds without paying people to manage their money.

The network effect means that litecoin will never have value.  Litecoin has no fundamental advantage that would allow it to succeed in place of bitcoin.  If you are going to invest money in a crypto-currency by far the best investment would be to simply buy BTC.

Fungibility is an essential property for money to have.  If this idea is implemented bitcoin will no longer be money.  It will be worthless.

I am not surprised that this fatal idea is still around, because there are always more newbies picking up bitcoin every day.  I am surprised that an established bitcoiner would have this idea.

Mike Hearn, next time you have an idea please post under a pseudonym.  That will allow people to judge your ideas on their merits.  Posting under your main account is irresponsible.

This poll is really biased in that there are are no positive options.  SD is a huge positive force in bitcoin.

Nothing should change.  If people want to cut back on SD activity then they should create transactions with higher fees.  Miners will process those transactions instead of the SD transactions.  If they aren't willing to do that, then they should keep their mouths shut.

mBTC is obscure and would drive away new users.  Bitcent is intuitive and would attract new users.  To some extent this is a development discussion because in order for this change to happen the standard client needs to be altered to show bitcents instead of bitcoins by default.

Note that changing the settings on our clients is not the solution.  Everyone in this forum has the kind of brain that can handled decimal points.  The change wouldn't be for us, it would be for them.

Once the standard client is changed everyone else would change too.

Bitcoin's niche is that you have control of your money.  It is a gold replacement/complement, not a paypal replacement.  Anyone who does not understand this is simply not going to be able to produce a solution that works.

In order for bitcoin to survive the blockchain needs to fit comfortably onto the hard drive of a 5-year-old desktop.  So in 2030 the blockchain needs to fit on a computer built in 2025.  It doesn't need to fit onto phones, xboxes, microwaves, etc... but the requirement that it fit onto a mediocre desktop is non-negotiable.  Failure to meet this requirement means that the chain can no longer be audited.  This is the #1 requirement.  Nothing else matters if this is not true.  All confidence will be lost, and furthermore bitcoin will have no competitive advantage over its rivals.  Any competitive advantage due to ease of use will either be destroyed by regulation or adopted by rivals.

So basically... miner-manipulatable limits are out of the question.

Organofcorti,  that's a cool and well-done blog.  Where do you get the information?

Szuetam, those are really good questions.  I'll look into the blockchain a bit this weekend and see how feasible they are.

FreeMoney, thanks for the tip.  Satoshi's Dice seems to post every bet and the results, and there are a lot of bets.  If I were to do something on this I would be doing a project on betting.  I would need to try to find patterns in who is betting, how much, when, etc.... if wins/losses affect future bets.  I am not really sure that I want to do something on betting, but this is a contender.

Kiba, I have had bad luck with trying to get data (or as they like to call it, trade secrets) from companies before.  My new motto is: if it isn't publicly available, it isn't available.  I suppose I could try to offer some sort of data mining service to maximize their sales through market segmentation.  So maybe we would be conducting experiments to see how to squeeze more money out of people.  My local grocery store just started doing this and now each customer gets unique prices.

Cbeast, I think that what you are describing is... trying to determine prices using non-market methods...but I am not sure.  Statistics is about looking at a lump of data and making mathematically-sound conclusions.  It is more like science than engineering.  So creating a new system to do something wouldn't be acceptable as a project.  Evaluating systems given their historical performance data would though.

Thank you everyone for the ideas so far!

I need an interesting problem, but more importantly I need data.  Relevant citable sources are somewhat important.

Last year I did a couple of semester projects on various topics and I kept hitting the same problem.  I would pick something really interesting and then be unable to find data (or people who said that they would give it to me didn't come through), or I would pick something original and nothing had been written about it by researchers (and thus I wasn't able to cite anything).  So then I would switch topics and I was already behind the rest of the class.  I don't want to be in this situation so I want to make sure that I have the data before I commit to a topic.

First of all, about me:  I am a grad student in statistics.  I am not actually that good at statistics but I am good enough.  I know how to program but I am more familiar with old-timey stuff (C++, x86) and the theory (turing machines) than web programming.  So writing a webcrawler is probably out of the question, but once I get the data onto my harddrive I will have no trouble processing it.

So what kind of data can I get?  I know that the blockchain is public information but I am guessing that it isn't in a user-friendly format.  I know that exchanges have historical information, but I know that bitcoin prices fluctuate and are often influenced by major events (mtgox hacked, pirate40, news coverate).  Apparently silk road does 2 million in business per month?  Do they release this information or are people checking out the block chain?  What about miners?  What kind of information is available on them?

As for my topic, that would mostly depend on what kind of data I can get my hands on.  I am thinking that it might be interesting to try to categorize addresses by their transaction behavior.  Remember that this has to be on statistics, so I have to study this from a data-centric perspective.  Talking about the protocol or the economic model using logic isn't an option, I have to focus on data.


If you can help me I would appreciate it, and maybe interest a few people in bitcoin.  Thanks.

The Catholic Church used to dominate everything.  The Church was controlled by bankers and controlled the kings and other governments, just like Wall Street bankers control everything now.  Then an invention came along: the printing press.  The printing press freed speech.  That was the turning point.  Once speech was freed the old order was swept away and the power of the elite greatly reduced.  The elite was never completely eliminated and sought to get their power back.  They have it back.  However we have a new invention: Bitcoin.  Bitcoin is free money, not free as in "free beer!" but free as in free speech.  Money is speech, it is the way that we ask strangers to give us stuff or do stuff for us.  Right now the money is controlled by the elite and so they control the dialog, they control what happens.  With free money we control the dialog.  People use bitcoin to support wikileaks and occupy NYC.  With free money we can support causes without being censored.  We can buy things that we want to buy, whether it is contraception in Saudi Arabia, a banned book in China, a dildo in Texas, or a joint in NYC.

Remember that most of these people have communist sympathies.  So instead of "centrally-planned" put "centrally-controlled" and instead of "fiat" put "corporate".  Completely remove any reference to the federal reserve.  Ending/obsoleting the Fed is Ron Paul's signature issue.  Many of the other republicans have started parroting him.  Perry said that the Fed is treasonous.  These people associate anti-fed = republican = wall street.  Yes, some of these people will read "obsolete the fed" and interpret it as "pro-wall street".

Hmm, yes.  Bit-pay it is.  I'm not sure how they can do it though, since they aren't an exchange and thus would have to pay exchange fees.  Perhaps they have a special rate, or perhaps they are owned by an exchange.

Here's what we need: Merchants need to be able to allow customers to pay in bitcoin without ever having to have bitcoin.  Here is how it would work:

A merchant would get an account with an exchange.  He would put a little bitcoin icon on his website.  The customer would see it and click the button.

Clicking the button would query the exchange for the current price and calculate a price in bitcoins, possibly with a markup, and an address to send them to.  The customer would then send the coins.  The exchange would then sell the coins and credit the merchant, minus a small fee.  The merchant would never at any point own a bitcoin.

Things to think about: when are the bitcoins sold?  The price fluctuates.  The exchange has to quote a price to the customer and then stand by it.  If it sells at that point it can be sure that it won't lose money when the price suddenly goes up.  However that is risky for the exchange because it has to sell some of its bitcoins simply in response to someone clicking on a button.  Someone could click the button hundreds of times, forcing a massive sell-off.  Not good.

Perhaps the exchange should wait until the money has been sent, when there are 0 confirmations.  In this case it is still vulnerable to attacks, but they would have to be more sophisticated, involving broadcasting false transactions.  Additionally now the quote will be slightly out of date.  There is a risk of the exchange losing money due to rate changes, though of course it could gain as well.

The next option is waiting for confirmation before selling the coins.  This makes it harder/impossible to manipulate the market but exposes the exchange to some risk if the currency fluctuates.

For an exchange this could be a major source of revenue.  It would get money from the merchant.  It would create more demand for people to buy bitcoins on exchanges so it would get some of that traffic (all exchanges would benefit).  There would be some risk due to fluctuating exchange rates but if that were a concern it could charge a little bit of a markup, like maybe just by quoting a price 2% higher than it should (so if the item should cost 1 btc the customer would have to pay 1.02 and the merchant would only get 1 btc worth of usd (well actually a little less, because he is paying a fee too).

Actually another way that this could work is that there would be no merchant fee.  No merchant fee?  Merchants would love that.  It means pushing the cost onto the bitcoin consumer.  I think that nearly all of us would pay 1% more if we could pay in bitcoin.

Guys... did you read that Verizon phone call transcript?  Do you not realize what world we live in?  Regular people will NEVER understand mBTC and all of that nonsense.  Metric prefixes, decimal points, etc... is far beyond the ken of the common man.  I had been an advocate of moving the decimal place 2-3 places (though place would be kind of cool right now, dropping it right between the dollar and euro) but now I think that we need to move it 8 places or whatever it is to get it so that 1 BTC = 1 satoshi.  There would not be decimal points or subunits or whatever.  Just "how many bitcoins can you get for a dollar?"