This is an oversimplification, really.  It doesn't consider the effects of velocity of money on the trade value.  Bitcoin has the potential to have a very high average velocity, as compared to currency fiat currencies.  The effect of a higher velocity is similar to the effects of expansion of credit, both of which temporarily lowers the trade value by increasing the apparent availability of the currency.

I like glass art.  I live in Louisville, Kentucky; which is a glass art city, having at least five independent glassworks that I know of.

Perhaps I do.

I can agree the profit margin on mining will tend toward zero, and if it drops below zero, miners will drop out and the difficulty will stagnate or drop until it's mildly profitable again.  This is the self-balancing process that I was referring to.
 will influence fees to some sort of equilibrium?

That tiered fee structure does exist already.  It's part of every client at present, and it's why there are 'soft limits' on free transactions.


I don't know why you don't think that it won't exist.  Users are likely to pay the minimum that miners will accept unless they have some personal reason to pay more for speed of confirmation.  This will only be so if there is significant transaction traffic, and so far there isn't enough to force this issue; even though free transactions can already be delayed.

It's irrational to assume that this is the case.  Show me the math that implies this and I'm willing to listen.  If you can't show the math, you don't have a case.

Because you were attacking his character by referencing a Nazi propagandist.  Disrespect for his viewpoints are fine, disrespect for the person is unacceptable behavior.
Notice, if you will, that it was just a warning; and you have not been censored so far.  You have a less than a dozen posts on this forum and you are already sideways with part of the existing membership.  That is not a good sign.

I can't seem to do that either.

That's the ideal outcome.

still broken for me.

I'm saying that the adoption rate of Bitcoin in some locales does not limit it's future success in those same locales.  If Bitcoin is going to succeed, it will do so eventually regardless of how long particular governments might be able to hold back the tide.  The only way that I can forsee such intervention actually preventing Bitcoin from anything, rather than simply delaying it, is if all the world's governments were to agree to use force against Bitcoin users collectively.  I don't consider such international cooperation likely.

Is WPA not widely used by smartphones, then?  Where is the downside to WPA that the EFF makes the complaint without mentioning this?

Only for the moment.  Stability comes with market maturity.

The premise in the first sentence above does not lead to the conclusion in the second sentence.  Certainly Bitcoin adoption will be hampered in nations wherein the powers that be can threaten users with real violence for doing so, but this will do little to prevent adoption in locales where this is not so.

I don't know what you mean by "cost of verification".
I believe that the desires of users to have their transactions processed quickly will drive a market price for fee paying transactions.  Free transactions are charity, and there is nothing that compells miners to include them at all.  When the network is more heaviliy used, the competition for inclusion will drive the transaction fees, and the transaction fees will drive the difficulty.  This is a barely visable effect at present because there is so little traffic on the network compared to it's capacity, but it's already present.  Furthermore, not all transaction fees are voluntary.  Oversized, scripted or other unusual transactions require a fee; for very good reasons.  The -sendtomany transaction used by the mining pools, or something similar, is likely to be used by employers to pay their employees in one action, and a small fee is reasonable.  Any idea how much employers have to pay for those transactions now?  It's a lot higher than .01 bitcoin each week.  I also believe, that at the current rate of adoption and growth of the Bitcoin economy, the transaction fees will compare favorablely to the block reward by the time the first block reward is cut.

Because I understand how it all works, perhaps?  I consider that a silly question, honestly.  Transactions are not a Tragedy of the Commons situation.  Sure, all the other users benefit from the security that your transaction fees pay for, but that is not why users pay for the transaction fees.  If the system required the altruistic commitment of users, I'd agree that the system was broken, and then we wouldn't be having this conversation because I'd have never been here long enough.  But it is not dependent upon the altruistic support of users, but in the rational self interests of users who, for reasons of their own, desire rapid confirmations of a legitimate transaction.  Part of the core complaint, as I understand it, is in a future without a hard blocksize limit; under the assumptions that 1) this limit must be raised or lifted soon in order to facilitate scaling up the Bitcoin network (I agree with this one) and 2) that the raising/lifting of this limit will cause the transaction fees to crash even as the transaction traffic grows.  Yet, we have already seen that transaction fees pop up even long before we approach this limit, even as the very low transaction rates we presently see.  Part of this is likely because there is much more to the transaction fees than just a hard limit.  In fact, the hard limit only exists at all in order to prevent the catastrophic spamming of the blockchain if an attack vector were to be found, and isn't part of the transaction fee schedule at all.

In an attempt to return back to the question posed...

If governments succeed to ban the use of Bitcoin within their realms, as I'm sure that some will, so what?  Has the illegality of contraband actually stopped it's trade in meatspace?  By what method would the government actually be able to stop Bitcoin's trade in netspace?

@robm

This is pushing it.  Don't cross this line.

This will hold true only so long as the value of the bitcoin is increasing at a rate faster than the ROI of the potential home loans.  This will not continue forever.  In fact, it's almost certain to level off to a much more stable relative value by 2020.  That or crash into oblivion.

Not for making copies of it.

Just offer frozen pizza, shipped in a cooler.

Won't be cheap, though.

I think you misunderstood my point.  Even in Bitcoin, trust is gained by direct interactions, but with those same interactions come identities.  A web of trust works well as a means to identify trustworthy counterparties.
No, the Bitcoin system is.  You have made an accusation that something is broken, I disagree.  I am the status quo, so it is your job to prove me wrong or end the libel.  Your opinion on how things might go wrong does not qualify.
You have failed to show how your equilibrium problem is actually an accurate discription, while others have already attempted to highlight errors in your viewpoint.
The cartel problem has been debunked repeately on this forum.
I won't ignore real problems, but nor should we just start freaking out because one guy thinks that he has found the great error in the system.
Again, it's not my problem to show you anything.  And I don't think that it will end up at a nice value, I think that it is a self balancing system that will continuously find it's happy point largely own it's own, and I don't think that it's going to be unmonitored regardless.
There isn't one.   Your problem is that you cannot define why there needs to be one, much less what the minimum dificulty level should be.
Actually, yes.  And that has been pointed out already.  And they are not proposed, they are presently functioning.
Maybe they are, maybe they aren't.  Still adjustable.
And I see no advantage and much potential downside to your proposal.
Really?  You seriously can't see the problem with this proposal?

We could actually add that to the protocal of the running network without much trouble, I think, but depending uon that for the security of the blockchain is far worse than depending upon the hashing strenght of the entire honest network.

Sometimes false.
True.
Wildly false.  Do not use this statement!
Only true if you have Internet access anywhere in the world.
Probably false.