Bitcoin has applications for which it is uniquely suitable. There lies its potential IMO, not in competing with existing currencies and payment systems.  It will enable new business models that could not have existed without Bitcoin and that will depend on Bitcoin.  I agree that it may remain a niche currency, but I don't think it will ever disappear completely. Or a least it will be replaced by another p2p cryptocurrency.

It is very hard for us to imagine today what those business models might be, just like people could not have imagined in 1990 that Facebook is a viable business model.  Perhaps Bitcoin will even evolve into something whos prime use isn't a currency at all.  

As for the dot com bubble, the "new paradigm" did create real added value, this just took a longer time than most people expected, and the added value was grossly overestimated.

If you had invested in the right companies you would have made money.

If the Argentinian government can't even stop a black market running on cash, how is it going to stop a black market running on Bitcoin?

Bitcoin is easier to conceal than cash, and harder to detect.

He was perfectly honest about it, though!

He may be a nihilist but I don't believe he is dishonest. Not until I see evidence that he has broken a mutual agreement of some sort.

Not necessarily. Most Swiss Francs in circulation are held by people who don't live in Switzerland.  Same could happen to BTC if it's perceived as an currency that won't lose its value.

Change in the legal system happens very very slowly, and the internet moves lightning fast. It will take politicians and judges years to even get their head around what a p2p cryptocurrency is in the first place, and by that time their 10-year old daughters will be using Bitcoin as in-game currency for MMOGs.

The major potential I see for Bitcoin are not so much large retailers but small entrepreneurs, freelancers, and the grey market, especially in developing countries where a lot of trade happens off the radar anyhow. Even in richer countries like Italy there is a huge underground economy that the government struggles to tax or regulate.  

It is going to be almost impossible to enforce a Bitcoin ban in this sector. That would be even harder than trying to enforce a ban on cash!

Many of the slums in the world's megacities are a cash-only economy, because a lot of slum dwellers don't even have documents, let alone a bank account.  This isn't a small economy though.  In 3-5 years time every favelado in Rio is going to own a smartphone.  Imagine what an improvement Bitcoin would offer for them compared to cash.  When the Brazilian government  struggles to keep the armed gangs under control, do you really think that enforcing a Bitcoin ban is going to be high on its list of priorities? They've got other things to worry about!
 

Anyhow, I think it's unlikely that Bitcoin will be banned outright in the West. What we are more likely to see are attempts to regulate it, and prosecution of individual users rather than the network as a whole.  

See the history of bittorrent for an analogy.

It's certainly terrible for Mtgox. But is it terrible for Bitcoin?  

If the success of a whole currency can be threatened by something as minor as a DDoS attack on a single website, then it isn't any better than a centralised currency and it has failed to achieve its goals.

I am optimistic and believe that it can't. This community is very good at reorganizing around damage. It arleady proved resilience when mtgox and bitcoin market were attacked for the first time in Oct 2010.

Tipping is not the killer app IMO because there is nothing that Bitcoin does much better about tipping that other centralised tipping services don't arleady do. 

No, it won't make return policies unworkable.

Computer hardware retailers already  operate in a deflationary economy.  The price of their products deflates by about 30-50% every year, yet they seem to be doing fine, even in jurisdictions where a 30 day return policy is mandatory.  

If you buy an Intel processor or external HD it's very likely that 30 days later it has alread dropped in price.

So what is their solution? I guess they already factor in the losses from returns into their prices. Simple as that.

Also, don't forget that even in an inflationary economy, a lot of returned goods cannot be resold for the original price anyhow, because the packaging is damaged.


Anyhow, I doubt that once Bitcoin is a mature currency deflation will be higher than 30-50%

Depends how fast Bitcoin grows and how big it becomes.

If Bitcoin becomes the world's dominant currency by 2020 and most of the world's population keeps their cash savings in Bitcoin, then most of the world's computing power will go into Bitcoin mining.

Not only that, most of the world's electricity will go into Bitcoin mining.

The total computing power will continue halving every 4 years but it would take until 2030-2040 until Bitcoin mining is no longer the world's biggest consumer of computing power and electricity.

Forget power stations. Eventually they too will be uncompetitive.


Polymer solar cells can be made extremely light and thin (100 nm) and are potentially very cheap to manufacture.

Their biggest disadvantages are low lifetime, quick degradation when exposed to oxygen (requiring expensive coatings), and low yield (3-5% in commercial applications).

But those disadvantages don't matter in space.

I envision square kilometer nanofilm sheets, each sheet weighing no more than 100 kg.  A single Atlas V rocket could launch 200 square km worth of these fragile soap bubble thin collectors  into low earth orbit, where they begin the slow process of unfolding.

The sheets have nano-tube based circuits integrated into their entire surface.  

Bitcoin generation doesn't happen a few meters from the electricity source, it happens a few atoms from the electricity source.

No need to transmit electricity back  to Earth, only low bandwidth data.

After they reach their end of life they simply disintegrate in the atmosphere, but replacement is continuous.

Eventually those sheets could become so numerous that they block a couple of % of sunlight reaching the Earth.


Bitcoin not only saves the world from central banking but global warming too!  

Bitcoins are not issued by anyone. Not even by miners. Miners merely confirm transactions. Even a block award is nothing more than a confirmed transaction.

Patriarch Act thus not applicable.

I must admit he has a point there.

DDoS attacks do not violate the non-aggression principle, so in an anarchy they are fair game.

But just because you're not violating the non-aggression principle doesnt mean you are not being a huge asshole.

DDoS attacks are an exploitation of the website owner's generosity and violation of the good faith principles that keep the internet running. (the tragedy of the commons that allows spam and DDoS  is an inherent design flaw of the internet but that is a different topic)


This attack was a minor inconvenience for the community, but his ruined reputation is real autoregulation in action.

Does it matter? If Namecoin reaches critical mass, most people will stick with the system that came first and simply ignore ICANN's conflicting .bit or .web assignments.

Remember, ICANN can't force anybody to use their root nameserves.  Even for a non-geek user all it takes to circumvent ICANN is a browser plugin, and I assume that this type of plugin would be turned on by default on a Firefox download, if Namecoin were ever to become mainstream.

The real question is, should the bitcoin wiki allow links to  Christian DMT Users?

Even when it's legal in Brazil  (well only if you are a Christian that is)?

Bitcoin will decimate the banking industry for the same reason that the internet decimated the travel agent industry.



Yes, they are good at securely handling currency, but only with big overheads.

It won't stop being a valuable service, but securely handling BTC is a lot cheaper and less labour intensive than securely handling USD or EUR.

A bitcoin vault service run by computer security experts would probably only need need 1/10th of the employees as an equivalent sized bank, and it would probably offer superiour security at that.

Great idea.

I like the speed and simplicity of the whole thing.

It's bit like keeping some cash hidden under the doormat for emergencies.

To me it looks more like a bohrble.

The potential for non-criminal activity is even greater.  Bitcoin enables all sorts of innovative new businesses that were not possible before. It will boost free trade and empower a new generation of freelancers and small entrepreneurs. It will give the world's poorest people access to a "bank account". I could give you many more examples how it will make most of us better off if it succeeds.

Most technological advancements facilitate certain crimes. The automobile facilitated kidnappings and drive by shootings. The internet facilitated credid card fraud.  Chemistry facilitated the holocaust.

But try to see the bigger picture. They also bring huge societal benefits that far outweigh the detriments.

If your aim is to stop criminals by denying yourself the technologies that might help them to commit crimes, you have to reject other technologies too, not just bitcoin. And don't forget that Bitcoin can also be used to combat crime.


Sit back and enjoy the ride.

See bitcoin for what it is - just a tool.

The 21st century will be scary but wonderful.

Well maybe we should expect them to learn about it.

Basic computer literacy should be considered just as important as the three Rs these days.

I've not saying that Joe Sixpack should be expected to understand the mathematics of encryption, but he should have a conceptual notion of what comprises a good password, the most common attack scenarios, what a firewall does, backup strategies, redundance, etc .

Almost everybody can learn those basic concepts if they want to.  The problem I see with a lot of older people especially is not a lack of ability but a lack of motivation to deal with computers.  If a computer is suddenly more than just a novel way of shopping and mailing letters, and a big part of their savings is at stake, I bet that the motivation will appear.