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no shares can't be created out of thin air, at least not with the bitshares DAC concept. The blockchain does not create more shares, it instead destroys transaction fees which in turn acts a stock buy back or dividend if you will for all shareholders. You would never complain about a dividend or a stock buy back, because we understand what gives a stock value and that is the profitability of the company. bitcoin is operating at a loss and as such its equity will reflect that in the future.
if your problem with the pos system is because you do not like that ppl earn capital based on the capital that they already have, what do you think about issuing new forms of capital for which there are varying returns. ppl can exchange these new forms of capital at the market rate given their perceived returns. those that are most informed as is true with any market will earn the most capital in this system. this system rewards accurate information, and the work associated with this system is the accumulation of information not the pointless hashing of alpha-numeric strings.
does this system sound similiar to systems we already have? it is capitalism, it is the free markets.
bitshares bank and exchange leverages the free market consensus to create assets that are market pegged to any real world asset and those that provide the most accurate information to the blockchain through the process of voluntary exchange accumulate the most capital.
is this not the pos implementation you are looking for?
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the whole world is coordinated through proof of stake consensus. the amount of capital you have is your weighted "vote." those who "vote" in accordance with the future consensus of the rest of the group stand to make more capital. that is to say that those who invest their capital to its most efficient ends will realize a gain on that capital. those that do not will lose capital. this is the essence of capitalism and the free markets and is why it is the foundation of our economic system.
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peter i think you misunderstand what capital is. mining equipment is capital. bitcoins are capital. any resource, even labor or information, is capital.
in pos, capital flows to those with capital. and pow captial flows to those with capital and economies of scale. you get the same result but at a much higher cost with pow.
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In regards to you latter point. No the two are not that same. Bitcoin and maidsafe are too different models. You do not use bitcoins in order to use the bitcoin networks. There is no difficulty adjustment as far as I know, so the increase in safecoins would have to be exponential not logarithmic. That is a hyper inflationary model.
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I implore everyone to look at the economics of the maidsafe/safecoin model and understand that it is not possible for the price of safecoin to appreciate over time. It is in everyone's best interests - mastercoin, maidsafe, and investors - that this ipo does not proceed. It is going to cause a huge debacle and may constitute a set back for both development teams. I do not want to see either of these teams fail, but this is a step in the wrong direction.
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can you guys at maidsafe explain how safecoin can appreciate in value if it is constantly being diluted through the por mining process?
it's basically the same as with bitcoin. bitcoin is being constantly diluted however the more people use the network, the more valuable it gets its not like bitcoin. its a not a scarce resource. the more ppl connect to the network the more safecoin there are. you don't have to go on an exchange to buy safecoin. as long as the resources you offer the network are more than the resources you take from the network your use of the network is free. there is a limited number of safecoins. that means it is scarce. It is proposed that safecoin will have a predictable cap (232) with a value that is determined solely by the market. Safecoin will be a virtual currency with SAFE being used to complete transactions. There is no hard set cap on safecoin as there is with bitcoin. I don't approve of bitcoins inflationary model so I find it hard to approve of safecoins hyper inflationary model, determined by moores law. The number of safecoins is correlated with moores law and the value of safecoins is thereby correlated with the cost of resources which will continue to decline. You have to understand this from a pragmatic perspective. Why would I ever pay for this service when I can simply offer the network more resources than I can use. Safecoins are not the same as investing in a companies equity, because companies do not continually dilute the shares in the company. Safecoins are more a way to account for and economize resource on the network. You can only loose money by holding on to safecoin. The price of safecoin will never be determined by the market per se because no one ever has to purchase safecoin as long as they provide more resources than they consume. |
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can you guys at maidsafe explain how safecoin can appreciate in value if it is constantly being diluted through the por mining process?
it's basically the same as with bitcoin. bitcoin is being constantly diluted however the more people use the network, the more valuable it gets its not like bitcoin. its a not a scarce resource. the more ppl connect to the network the more safecoin there are. you don't have to go on an exchange to buy safecoin. as long as the resources you offer the network are more than the resources you take from the network your use of the network is free. |
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can you guys at maidsafe explain how safecoin can appreciate in value if it is constantly being diluted through the por mining process?
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what is the difference to new bitshares approach? - read their (new) whitepaper and for it sounds like a very smart system of implementing prediction markets
Just from glancing at it now, it seems that BitShares would be for a continuous price/time-series on an asset that we expect to never be removed from popular exchanges such as the DJIA, Oil, Gold, whereas Truthcoin is for binary (settling in finite time at 0 or 1) events which do not have to exist anywhere else. From what I can tell, BitShares is actually not a prediction market. How I can use BitShares to bet on the Election of Hillary Clinton as US President in 2016? How do I collect money if I am correct? etc. Instead it appears (and claims) to be a fully collateralized bank for paper assets, using a custom currency they can suck away from you. Debt seems to be created with every transaction so it will be interesting to see how stable these markets are. The way that it forms the consensus on the prices of assets and thereby how to collateralize these assets is based on the same underlying premise as any prediction market. |
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1. IT'S A DECENTRALIZED CURRENCY
Does this even require any explaining? Do you honestly think that the current financial system that controls Trillions of dollars in the current global economy, is going to give up their power to some guy Guatemala because he ran he's 1990's computer the first year of Bitcoin.
Let's all open up our history books and see when the 99% won against the 1%? Almost never, and even when they did “win” it was basically the 1% handing off power to another form, and still running it behind the scenes just to appease the people.
Even if they allowed Bitcoin to become successful, they will regulate it so heavily, that it will pretty much lose any “benefits” that it had, (Europe is preparing to tax and regulate Bitcoin) and pretty much becomes centralized and just like anything else.
The current system will stay in power with centralized control, hence why they will create their own digital fiat currencies replacing their paper, to even gain more control.
2. CENTRALIZED MAIN DEVELOPMENT
Basically the “official” releases come from the Bitcoin Foundation. The development is pretty much centralized. Even if people fix everything wrong with Bitcoin, the foundation makes the final decision on what to include in it's next version on it's own priorities. This is basically all run by “Gavin” who caused Satoshi to disappear after he decided to meet with the CIA. The same guy who has not addressed any of the issues going to be discussed below for the whole time he has been in control. Whether by accident or on purpose is not the point. The point is the main trusted Bitcoin client is controlled by one entity, and everything they say, do, or don't do goes.
3. FLAWED ARCHITECTURE
Size
11 GB today.
100 GB 1.5 years from now
1 TB 3 years from now
10 TB 4.5 years from now
100 TB 6 years from now
1 PB 7.5 years from now
10 PB 9 years from now
100 PB 10.5 years from now
You think average people will store a 100TB worth of data? No. The solution cut the blockchain into pieces and store the whole blockchain only on specialized nodes, kind of defeats the purpose of decentralized than doesn’t it?
Double Spends
Double spends are already occurring, and have occurred since over 1.5 years ago, and it will only get worst as time goes on, and bigger merchants and higher ticket items come online the then you will really see the “bad pool operators” start to take advantage of this.
Nobody is going to double spend on a cup of coffee, nobody is going to commit fraud for small amounts, well at least not in person, but they will for big ticket items.
Slow Speed
Waiting for a transaction to fully confirm, is not feasible for day to day transactions. Yes let's hear the Credit Cards take 180 day confirms. One no they don't they confirm instantly, the money is just on hold for 90-180 days if the merchant sells a crappy product and refuses to honor warranty or remedy the issue. If it's fraud, say someone uses someone else card to buy something, the money does not come out of the merchants account, the credit card company takes the hit. Secondly, most important the buyer pays and gets his goods immediately, unlike Bitcoin where they have to wait for a few confirmations to be sure.
Un-Scalable
Bitcoin can barley handle a few hundred thousand transactions a day, what happens if the transactions grow to 10 Million, 50 Million, 100 Million which are all still relativity small transaction numbers compared to the 6 Billion people in the world. It simply can't handle it.
51% Attacks
51% attacks which don't have to be 51% of the network, as they can do it with far less hashpower, such as ghash.io 29% the two biggest pools combined make up over 51% of the network and can literally destroy Bitcoin at any second. It doesn't even need to be the pool operators, it can be hackers who take over the pools.
Unstable Exchange Rate
It can never be used as a sole currency to replace all other fiat currencies. Why? Because it's price is unstable. It must always rely on another fiat currency to have any sort of monetary use, no merchant is going to transact when the price of the currency fluctuates 50-200% a day. The only way to stop this is to have actual control of the currency and adjust creation.
4. NO BENEFIT OVER FIAT
With everything mentioned above it shows that Bitcoin has no real advantage over fiat for 99% of the people in the world. You can't pay your bills or general living expenses in it, can't buy much with it. It's slow, not consumer friendly, as once a payment is sent there is no charge back method. Guess what 90% of the world are consumers not merchants. If Bitcoin doesn't appeal to the regular consumer who buys goods from merchants it will never succeed. Even if it succeeds it's doomed by it's very architecture which can't handle the success.
The only use it has, is sending small internationally pretty quickly, which then again gets converted to fiat for people to actually use. What market is there for small international payments 5-10% of the world?
No entity would trust high sums of money to be transferred with Bitcoin with all of it's flaws. Want to know how right I am and how wrong you are? Bitcoin has about 3 million users in a 5 year period. Facebook in that same time had what? 600M-1 Billion users.
Not to mention by the time, I have opened 10 accounts just to buy and convert Bitcoin, I could have swiped my credit/debit card 1000 times.
5. CONCLUSION
Even if Bitcoin or another crypto currency fixes all of these issues, they are still doomed to fail because of reason #1.
With zero advantages and quite a few disadvantages over fiat, centralized incompetent development, and inhert flaws Bitcoin is doomed. So next time you get excited about Bitcoin growing, and can't wait for it's mass adaption, just know it's own growth is another nail in it's coffin. Bitcoin is digging it's own grave.
Before all the geniuses on this forum come and give your wonderful flawed opinions, and say how wonderful it is, and it's going places, and I am wrong, and Gavin will fix everything, and Bitcoin will take over the world as a currency and payment system. Please refer below to get a reality check:
Bitcoin users in 5 years: 3 Million
stop thinking of this technology as only being applicable to currency. now for the first time you can exchange financial assets without an intermediary. it also means that you can create derivative assets that retain their value even if the underlying currency of the network loosing collateral. through this you can create an investment and banking platform for the unbanked people of the world. there is an economic imperative for this technology to succeed. bitcoin isnt the end but the beginning. |
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Everyone's expectations after 2013 were just way too high. This is the year of FUD! Mark my words, we're gonna be riding a shit storm all the way through the end of 2014.
This is the year that's gonna test your will and shake off the weak hands. This year will weed off the people who jumped into bitcoin thinking they will earn a quick buck, those who thought bitcoin's price just goes up every year like it's a pattern set in stone. I'm sure a lot of them jumped off by now thanks for mt. cox (btw-- the price is $635 right now... imo a good buy even if we go down further). The ones who remain will be the ones who believe in bitcoin for the longterm.
Let's be honest here... 2013 was the year of bitcoin. 2014 not so much... I think 2015 might be the next "year of bitcoin" ...Wrinklevoss ETF and Wallstreet might trigger the next rally, and that won't happen this year.
Did you expect everyone to safely ride the train to 10k? No. Only the ones who take the risk and hold on might enjoy the ride to $10K.. and even that is not a surefire bet anymore.
Bitcoins been over for a while, 2014 is the year of crypto coin 2.0 bitshares is the best emerging exchange network |
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I don't agree with this at all. We need to understand that these networks and the protocols represent real world phenomena. In respect to bitcoin, the network is a virtual representation of the gold mining process. Gold mining in the context of the gold rushes in America, just like bitcoin mining when the software first came out, was a very democratic process in which almost anyone could attempt to search for gold. As the more easily reachable gold became collected it meant that miners needed more expensive equipment to acquire the gold beneath the earths surface. This transition lends itself to the monopolization of gold mining, in the same way that there is a monopoly in the bitcoin mining today. There are two mining pools that already comprise more than 50% of the network hashrate. This does not augur well for the security of the network, which is why I am more of a proponent of the ppc network.
Looking at peercoin we also see a similar phenomena of unfairness, as the network ostensibly stands as a virtual representation of our current economic system. The network protocol uses POS to both encourage saving while simultaneously encouraging spending through the 1% inflation. If our societies, particularly developed nations such as the US where economic systems of this sort have traditionally been implemented, are becoming more an more stratified through these systems, what would make someone think that in the virtual realm this phenomena would not also hold true?
With these network protocols we have the means by which to implement fully automated economics systems that achieve the re distributive properties that are attempted through taxation and welfare. Perhaps if coin age and the number of coins saved did not equally factor into stake, there would be a more equitable system.
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rKbQKj9svSCqPPS9dqtFJfkfLmjPu2tu19
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The Twins are extremely capable and with 1% of the Bitcoins, I think they will be likely to succeed and give Bitcoin a huge boost.
I don't know how "capable" the twins are. Just because you have money doesn't mean you are capable of being a figure head for an entire emerging industry. If you've ever seen the twins interview or their presentation at the previous bitcoin conference you wouldn't be so keen on them representing the bitcoin community. I don't however believe that they have some sort of malicious intent against the currency. I think they truly want it become widely adopted and more accessible to the american public. Nevertheless, the introduction of this ETF will probably be one of the worse things to happen to the currency. If it doesnt get approved, the price of bitcoin will go down. If it does get approved the price of bitcoin will go down as major wallstreat investors will maninpulate the price of the ETF and short it, ultimately devaluing all bitcoin in the long run. Although the number of bitcoin in the fund will only constitute a little more than one percent of all bitcoin, it will still represent public sentiment for the currency since it will seem to the vast majority of americans as the most legitamate marker for bitcoins price. The ETF will most likely not get approved. But if it does it will probably bring about bitcoins end and open the door for another crypto currency to emerge as the most popular. |
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While I do agree that an ETF will help with hedging investments in bitcoin, it doesn't make the price more stable which is necessary for widespread adoption and a subsequent increase in the value. People on wallstreet are not going to invest in bitcoin just because it is packaged as an ETF. For them it would be tantamount to investing in penny stocks since the ETF itself doesnt bulster the underlying value of bitcoin and there is no metric for how bitcoin should be valued.
What? There is no metric for how any commodity should be valued. What is the metric for the correct price of gold? Yeah no shit, but its bitcoin. Not gold. Gold is valued by a historical and global consensus. If you go anywhere in the world they will know and accept gold. The same can't be said about bitcoin. There's no reason to invest in bitcoin over gold for a normal investor. For bitcoin to gain the same notoriety that gold has, it has to be used by people first; in the way that gold was primarily used as medium of exchange and not solely a store of value as it is today. To package bitcoin as an ETF is premature because it misses the necessary steps for bitcoin adoption and development. People need to interact with bitcoin in person first not through a trading mechanism. Well I would argue that Bitcoin is accepted more place than gold. Let me know where I can buy a domain name with Gold. Still since you are clinging to the value as a medium of exchange which has nothing to do with proper price (your claim) lets use copper instead. What is the metric for the proper price of copper. Is copper properly priced right now according to your magical pricing metric. If not then how/why are there copper financial instruments. Without knowing what the proper price is nobody would buy it, hence there is absolutely no volume on any copper instruments. Er wait yes there is. i dont think you understand how commodities are traded. copper is completely different than gold and bitcoin. gold isnt like most comodities because it doesnt really have an industrial use, only 10% of it is used in such a way. the price of gold is based on historical prices of gold in the context of the global econonomy. the historical price trends are used to predict future prices of gold, from which the current price is derived. there are mechanisms to valuing gold. you essentially value gold based on how you believe other people will perceive the importance of gold compared to other investments. copper on the other hand is valued by its current and future industrial usage. its pretty easy to evaluate that. bitcoin is like gold, in so far as it is a safe haven when other stores of value loose their value. this is why the price went up with the cyprus crisis, which is comparable to the price of gold going on a steady upward trend after the global economic crisis of 2008. the problem with valuing bitcoin is that you dont know how people are going to perceive its future value nor do you even know if they will adopt it as a currency. bitcoin is not the same as commodities. also bitcoin is not accepted more places than gold, thats a completely fallacious statement |
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While I do agree that an ETF will help with hedging investments in bitcoin, it doesn't make the price more stable which is necessary for widespread adoption and a subsequent increase in the value. People on wallstreet are not going to invest in bitcoin just because it is packaged as an ETF. For them it would be tantamount to investing in penny stocks since the ETF itself doesnt bulster the underlying value of bitcoin and there is no metric for how bitcoin should be valued.
What? There is no metric for how any commodity should be valued. What is the metric for the correct price of gold? Yeah no shit, but its bitcoin. Not gold. Gold is valued by a historical and global consensus. If you go anywhere in the world they will know and accept gold. The same can't be said about bitcoin. There's no reason to invest in bitcoin over gold for a normal investor. For bitcoin to gain the same notoriety that gold has, it has to be used by people first; in the way that gold was primarily used as medium of exchange and not solely a store of value as it is today. To package bitcoin as an ETF is premature because it misses the necessary steps for bitcoin adoption and development. People need to interact with bitcoin in person first not through a trading mechanism. The "normal" investor has a much wider range of options to invest in and it's clear that they're looking for alternatives. Look at the VIX for example, the average investor can speculate on volatility. Something doesn't have to be tangible or have a long standing history in order for it to be investable by the masses. yeah precisely investors have a wide range of options to invest, which is why they wouldn't put there money into bitcoin. honestly i am bitcoin enthusiast and I think that crypto currencies can actually change the global economy as we know it, but if i were a portfolio manager i wouldnt put money into bitcoin even if i were looking for alternative investments. there are so many other things you can invest in. in this stage we shouldnt be thinking of crypto currencies as investments we should be thinking of them as currencies that is where there inherent value comes from, its derived from the fact that they can and will progressively improve as mediums of exchange, transcendent modern banking systems. |
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While I do agree that an ETF will help with hedging investments in bitcoin, it doesn't make the price more stable which is necessary for widespread adoption and a subsequent increase in the value. People on wallstreet are not going to invest in bitcoin just because it is packaged as an ETF. For them it would be tantamount to investing in penny stocks since the ETF itself doesnt bulster the underlying value of bitcoin and there is no metric for how bitcoin should be valued.
What? There is no metric for how any commodity should be valued. What is the metric for the correct price of gold? Yeah no shit, but its bitcoin. Not gold. Gold is valued by a historical and global consensus. If you go anywhere in the world they will know and accept gold. The same can't be said about bitcoin. There's no reason to invest in bitcoin over gold for a normal investor. For bitcoin to gain the same notoriety that gold has, it has to be used by people first; in the way that gold was primarily used as medium of exchange and not solely a store of value as it is today. To package bitcoin as an ETF is premature because it misses the necessary steps for bitcoin adoption and development. People need to interact with bitcoin in person first not through a trading mechanism. |
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