Tim Swanson thinks transactions cost 25 BTC divided by the number of transactions in a block. That's a complete misunderstanding of not just what the block reward does but of what Bitcoin even is. He has gathered some interesting data, but his analysis is unlikely to be of much use as he has no fundamental understanding of Bitcoin in the first place.

I believe the core devs, at least from what I have seen, are not especially astute as far as the economics. They are a lot better than average, don't get me wrong, but not to the level I personally would be comfortable with. I suppose it falls on those who do understand to convey that understanding in debate.

Therefore I wouldn't expect them to take to Justus's proposal at first, as it's quite a big jump conceptually toward a free market approach, but on the other hand I think things become clearer when scarcity actually presents itself. It would be nice, of course, to have that level of clarity in place well before things reach a critical stage.

Identify where the fear presents in your stomach/chest area, then brush it away with your hand for a second and see it flying away. The trick is noticing it when it's just starting to manifest there.

Brandy also helps. Not just being drunk, but drinking a decent amount often, like every other day. There's a lasting effect if you drink on a regular basis. You basically learn some of the lessons of that "liquid courage" state even when you are not drunk. Don't drink too much, though, because getting sloppy drunk will make it unhealthy to do often. I'd say like 3-5 drinks for most people will be about right. Tipsy and confident but still able to look pretty much sober. Brandy is pretty healthy I think, but whatever makes you feel best and has the least hangover effect. Despite what some say, different alcohols do have different effects because of the congeners, tannins, and other cofactors. Of all drugs, alcohol has the most complex and least understood mechanism of action, which is good evidence that humans evolved with it and so it works in very complex ways with our physiology.

Another thing that works really well is Primal Defense or other probiotic formula. I can't recall the details but there was a study where they did something like feed rats a certain type of bacteria (which is in some probiotic formulas) for a while then test if they would jump over a large chasm to try to get some food at the other side. The rats who were too scared to make the jump became able to after the bacteria had taken hold.

Also, stop masturbating so much (unless it's really good; bad sex and bad masturbation drain you and make you socially fearful), and stop eating so much sugar and carbs (bad for both gut bacteria and insulin levels).

Also, watch the first season of Vikings. It's gotta be the best show for learning not to be afraid.

Remember, what you do every day and every week will be what determines how you feel. Consistency and frequency are key. Drink often, eat well, exercise regularly, watch inspiring shows and movies, find good role models, and actually improve yourself. If you want to be socially confident, expose yourself to social situations gradually moving from easy to difficult, and do it as often as possible, using alcohol on schedule. If you want to be physically confident, train a martial art and do weightlifting, etc. But it's all in the mind, so you don't actually need to do any of that physical stuff, though it will help a lot.

Justus's seminal work on incentivizing full nodes will take some time to be assimilated into the mainstream of the community, but I think it will have to be. Either through some high-powered explanatory tool or by the market forcing it on everyone when rubber meets road, which will be unsettling for many.

Speaking of high-powered explanatory tools, it would be great if there were a sort of "hard money wiki/FAQ," for lack of a better term, that explains the economic points often raised in this thread for a general (Bitcoin-conversant) audience. Not just why Bitcoin is replacing gold, though that's a core part of it, but all the points about incentives and economics that are are typically misunderstood in the wider community. Things like Money as Memory, the role of investors ("who controls Bitcoin?"), why Bitcoin is more valuable as a store of value than as a digital currency, how and why to introduce market economics to fee payment, node incentivization, etc. etc. Instead of a traditional wiki format, I'm a big fan of prezi.com's platform for visual explanations. In that format it could serve as a visual background for hundreds of easy-to-produce videos where someone is simply explaining a bite-sized point while using one small aspect of the larger Prezi wiki, effectively narrating it.

Without such a visual communication medium and readily-producible videos, I think the explanatory load to actually educate the larger community about economics and such is just too much. The Nakamoto Institute is doing pretty well, but relying solely on essays is too slow in Bitcoin time for the permeation of understanding that it would be ideal to have.

I'm not aware of any major altcoin (of those deemed useful/promising even by some bitcoiners) that has tried bootstrapping off Bitcoin's ledger. I hear Stellar did a partial, but I wouldn't consider that major since its market cap is grossly inflated. It will have to be tried on a popular altcoin and executed effectively, which by the way is not a trivial problem, before we can know what the market will think of it.

As for gold and silver, sure it's in the Constitution, but why? Presumably because of limitations in sizing, like you don't want to use teensy gold dots to pay for a loaf of bread, and you don't want to lug around a kilo of silver to pay for a business suit. It's a hard trade-off: gold was too valuable for small transactions, while silver was too heavy for large transactions. Similarly, in Bitcoin there will only be a persistent fork if there is a hard trade-off that must be made. For example in the blocksize limits.

Whether or not this requires a protocol fork, it doesn't require starting a bran new ledger. At the time of the fork, every BTC holder will have their coins in both ledgers. They can sell one for the other if they way to take sides, but they can simply sit tight and have the value of their money fully retained whichever fork wins, or however their market shares split.

There is no problem with alt-protocols. The problem with altcoins is that they are not just alt-protocols, but also alt-ledgers. That's a no-no from the market's perspective. To make an alt-protocol, you fork Bitcoin as it stands, not fork it and start all over with a new ledger.

As for Tower of Babel hubris, you'd need to show specifically how a market-chosen standard has any of the ill effects of a monopoly on power. That sounds like arguing that gold is a monopoly so we need silver and platinum as well or something bad will happen. As a backup in case gold becomes counterfeitable, sure, that makes sense, but anything beyond that seems pointless (excepting some niche uses, which may be your point).

On incentives...

If you take seriously Daniel Krawisz's point here, it starts to become clear that none of the parameters in the Bitcoin protocol are anything more than first approximations. As the protocol runs up against real world use cases and limitations, some things will have to change. It sounds scary, thinking that even the coin limit could change..."What about hard money?" Here's the thing: Bitcoin is always at the mercy of the market, it is always controlled by the market, always shaped by the market. Sure the presets matter, they function like Schelling points and the market is wont to change them lightly. But it will if absolutely necessary.

As gold's price history shows, "hard money" is still always subject to the market. If the market decides Bitcoin needs 23 million coins instead of 21 million, it will be done. You can keep your coins on the original 21M fork as their price plummets because, ex hypothesi, the market only endorsed the change if it was absolutely necessary, meaning the old fork is pretty useless. Most like this will never happen, and for the very reasons that we wouldn't want it to happen. But it could, if and only if circumstances are so dire that it *should*. None of this should be disturbing, though, because almost everything in our lives already depends on the market. People don't push you into traffic, even though they could. The free market doesn't price for your daily necessities at tens times more than usual, at least without a damn good reason that you would ultimately agree with.

Bitcoin will be restructured as necessary to make it work, to preserve the value of the Universal Ledger of Civilization at all costs. Because that's what the market wants. Insofar as that means no change, it will undergo no change; insofar as it means change, there will be change.

Every classic document of Voice and Exit references this reality. In the Declaration of Independence it says, "Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes." This is analogous to the fact that the market will not readily deviate from what was set in stone by Satoshi at the start, but that this should not be mistaken for an absolute guarantee. The market simply guarantees that changes will only be made when they are beneficial, according to the wisdom of the entire investing population weighted by those best understand it, which has the legendary accuracy of a prediction market (for example, in 2012 the Intrade prediction market correctly predicted 49 out of 50 electoral outcomes in the US states).

Hence really taking Krawisz's point seriously, considering all its ramifications, we find that Bitcoin is solely controlled by the market, and will be whatever the market deems most useful, with the initial presets as only one factor, albeit an important one. We haven't seen this come to the fore yet simply because the limits of scarcity and so forth have not yet been approached. As rubber meets road, more and more this way of thinking will become critical to adopt. It will confuse and disturb many, but really we have all been at the mercy of the market all along, and this is just the full revelation of the extent of that reality.

In the case of full nodes, for instance, any changes that may be necessary to incentivize them will be made, if and only if needed. Nothing is really set in stone: it is better than set in stone; it is maintained by the wisdom of the market, even the wisdom to guard against the vicissitudes of temporary market swings by reacting with appropriate ponderosity, except in a true emergency when the change can be lightning fast. There only need to be infrastructural changes to enable fork arbitrage on exchanges so that the market can work with minimal friction when the time comes. And probably these infrastructural changes will not be made until a small crisis has forced them. Antifragility works in this way.

It is true that we can't simply rely on charity for full nodes. There has to be an incentive structure.

Any idea what is accounting for this very steady transaction growth? Shopping? Dark markets? Gambling? Some kind of game?

$1163 was the new $32, but if we go up 100x from the new $10 like we did before, if we assume $700 is the new $10, the next bubble peak would be in the $70,000s. Not a bad place to take some profits.

I can sort of see the logic. If the bottom is already in at $150, then it doesn't make sense to spend the next year before the halving right above the bottom. The bottom should have been overdone, meaning that actual steady-state consolidation price is more unemotional, so a few times higher.

In 2011 the bottom was $2, and there was half a year of hovering around $5, then another half year of oscillating around $10 or low teens. $750 is 5x the bottom at $150, as $10 was 5x the bottom at $2. The idea being that "$150 is the new $2. $700 is the new $10." Here's the chart for the two years 2011 and 2012:



Here's the past two years (up to today) compressed to show the similar pattern to the above:

        

Same timespan of two years in both charts, but the second one is compressed about 2.5x. Some almost uncanny similarities in the shape of that downtrend, no?

History never quite repeats, and the downtrend this time has continued about three times as long, so who knows. But OP is suggesting a kind of rhyme ("history never repeats, but it rhymes") that makes some sense to me.

Last time I showed up someone said that, heh, but the price kept going down. However, venture capital took off like a rocket, so maybe that's a proxy for price for now. After enough of that, price should get its next turn. Money has never stopped flowing into the Bitcoin space for the past 2.5 years, but when those money flows decide to go into price and when into mining or VC is hard to predict. I'd like to see a chart showing all three and somehow show a kind of sum of all three. We might see a much smoother upward trend.

I think it will be a sort of temporary situation until people figure out the benefits of having their own storage scheme. I suppose there is a danger of somehow being able to pull off a 100x fractional reserve scheme, which is scary, but it seems pretty untenable.

Good to see you posting, too. I've been mainly in cypherdoc's thread, posting every few days or so recently. I post a lot of little stuff on reddit though.

Auditing Bitcoin is fairly easy. Auditing gold is very, very hard. A Bitcoin ETF can simply put a bit of data on their website to all but prove their reserves to everyone. Besides relying on a third-party audit, which can be gamed if the government is involved, all a gold ETF can do to persuade people is to put things like gold bar serial numbers up, which of course can be gamed in many ways easily. It's also much easier and much cheaper to take delivery in BTC than gold. I see no reason why people would allow fractional reserve, especially once BTC is easier to hold, and also given all the people who want to hold it in other countries, don't want US juridictional risk, etc.

Even assuming the worst case scenario where no one ends up caring and the ETFs operate on 10x reserve, it can at most reduce "the moon" by tenfold. $100,000 per coin instead of a $1 million. Realistically it's quite a bit less, since it's not like everyone in the world is going to buy the ETF instead of actual coins. But an ETF accounting for a huge amount of the base BTC supply itself implies a great jump in adoption, from which we could already expect a 10x in the price easily.

So I think worst case, with the assistance of corrupt auditors and government complicity, they might be able to hold back a year or two of gains. After that, fractional reserve has its limits, especially as Bitcoin gains more market uses so that people actually need to withdraw it.

I tend to assume it would. It just wasn't initially clear what you meant by "identical to Bitcoin" but "with a peg."

However, I'm not sure they'd feel comfortable about having China possibly incentivized to perform a 51% attack just to mess with them. The rest of the world also may not like the Fed having coinbase transaction privileges (or a massive premine, whichever way they did it), so I imagine there'd be a big fear of forking.

Basically, if you look at all the features Bitcoin offers: uncensorable transactions, predictable and limited supply, etc. The Fed could create a halfway coin that removes some (or all) of these features. The problem is that this fails to recreate some or most of the allure Bitcoin has. The more features they remove, the more market share they leave for Bitcoin.

On the flipside, the more features they keep, the more they artificially boost the advancement of Bitcoin's goals, though not necessarily such a great outcome for current investors. The Fed trying to imitate Bitcoin at all is a humongous boon to public perception, though, which is of course good for current investors. To illustrate it concretely:

Scenario 1: The Fed just buys Bitcoin as a reserve asset.
Result: Wonderful. Bitcoin adoption is turbocharged and everyone now holding BTC becomes very wealthy.

Scenario 2: The Fed endorses a completely identical Bitcoin started with a new genesis block today.
Result: Early adopters would lose most of their investment advantage, but otherwise wonderful. Bitcoin adoption is turbocharged.

Scenario 3: The Fed creates identical Bitcoin minus limited supply (i.e., a giant premine to enable "monetary policy").
Result: Great because uncensorable online transactions are turbocharged with all that entails, yet Bitcoin retains its unique appeal as an inflation-proof asset, plus the concept has a very effective endorsement from the Fed so adoption of Bitcoin will take off as well, even if they ban Bitcoin. Whatever percentage of people choose Bitcoin vs. Fedcoin, this is a big boost overall.

Scenario 4: The Fed creates identical Bitcoin minus uncensorable transactions.
Result: Great because they still can't inflate so hard money gets turbocharged, and Bitcoin still maintains its unique appeal for uncensorable transactions. The concept has a pretty effective endorsement from the Fed so adoption of Bitcoin will take off as well even if they ban Bitcoin. Whatever percentage of people choose Bitcoin vs. Fedcoin, this is a big boost overall.

Scenario 5: The Fed creates Bitcoin with neither limited supply nor uncensorable transactions (perhaps something like Ripple)
Result: Pretty good (assuming for the sake of argument that it actually works) because global friction is reduced and it's a fairly effective endorsement of the concept of Bitcoin, while Bitcoin retains all the rest of its allure (uncensorable transactions and unmanipulable supply) and people become accustomed to dealing with digital security. Whatever percentage of people choose Bitcoin vs. Fedcoin, this is a fairly nice boost overall.

None of these scenarios end badly for Bitcoin as a movement, though Scenario 2 wouldn't make current investors happy (but it also seems quite unlikely). In fact, of these only Scenario 5 seems likely in the near term, with Scenario 1 being of course the endgame. There are bunch of variations on Scenario 5 as well that are more likely.

I don't see how they could be identical while maintaining the peg, unless the Fed used its financial power to buy 99.9% of the coins and continue to mine almost all of them, then sell them onto the market if the price got too high. They can raise the price if it gets too low, but they can't do anything about it being too high unless they own most of it. In which case they could save a lot of money by just doing it Ripple-style and premining almost all the coins.

Of course in that case I suspect a popular fork would arise where the Fed's balance is set to zero Or actually, people would sell their Fedcoins off for bitcoins, insofar as they wanted an asset that couldn't be inflated at whim - same as people do now from fiat to BTC. Except now Bitcoin has the Fed's endorsement as a concept so the title of this thread will be validated in spectacular fashion. It would be an awesome result for the Bitcoin price.

You need only look at his claimed results, up thousands of percent every single month, to know this is a scam.

If you had started with $1 and invested it with him for the past 8 months, you would have roughly $1 trillion now according to his numbers. Think about it. It's not mathematically possible, and he sure as hell wouldn't need to bother offering a 0.5 BTC/week subscription service. He'd be the richest man in crypto.

It looks like additionally this guy has mastered the sockpuppet game and even has "contrary opinions" that talk about how he "shouldn't be allowed to get away with his amazing pumps." Designed to make it look like the only opposition he has is that people are jealous of his gains.

The altcoin space is dominated by the idea that someone's out there making more money than you. Just relax, find good assets yourself, buy and sit tight for a few years. I recommend Bitcoin

As cypherdoc says, despite the historic bull market of adoption, most people will lose money in this space. There are so many ways to get fooled if you're looking to get rich quick. You have to be willing to get rich slow. Over several years, not months.

If any hard trade-off actually does arise in Bitcoin, it will simply fork into two, with all holders having the same amount of coins in each. If, for example as the article suggests, there ever turns out to be a hard trade-off between scalability and Bitcoin's core property of "unimpeachability of transactions," we will have BitcoinScalable (not completely censorship resistant) and BitcoinClassic (absolutely untouchable money, but not shopper's paradise - other things like maybe OT will be necessary for more trivial transactions).

I don't see any need to worry. Once any such trade-offs encounter Fork Arbitrage (FA) on the market, the path will be clear enough. If both survive and have value, it really was a hard trade-off and there will be two. Governments can at most control one, never both.

And it is only those who understand this will make the really big bucks

Everyone else will be off chasing rainbows and other ethereal things.