I don't think it represents all purchasing power. The value of all the money does not equal the value of all valuables (stocks, housing, commodities etc.). Rather, I think you should see money as an asset class of its own, whereby all moneys represent only a certain percentage of the world purchasing power.
It's the purchasing power within the Bitcoin panarchy. That is, it's the purchasing power within the community of people who agree to use Bitcoin for trade. (Technically, only insofar as they use bitcoins exclusively, which may be your point.) |
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So what do you guys think: is the idea of a "peaceful revolution and shift of power back to the people through use of sound money" viable? What needs to be done to make it possible?
Absolutely. The Internet has been a peaceful revolution on centralized media so far, despite Hollywood and old media throwing a fit and trying some legal shenanigans. These decentralized, anti-fragile systems simply hollow the establishment structures out little by little, without much fanfare. Bitcoin will incite a much bigger reaction because banks are bigger than media, but there's not a lot that can really be done. No wars will work; centralized power just cannot beat decentralized power. It's too late now anyway, the big-time nerds are jumping aboard the ship: http://www.youtube.com/watch?v=cOubCHLXT6A |
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The only real limits on insane growth are the infrastucture buckling under the traffic, major governments bringing out the banhammer, or some development or mining shenanigans that could happen simply because the defense mechanisms aren't given enough time to adapt.
Because of those upper limiting factors I don't think we can reach mainstream in less than 2-3 years. Probably more like 5-7, or up to 10, for full mainstream adoption. Bitcoin grows exponentially, but infrastructure and best practices don't.
Though arguably, once Bitcoin's totally ready, the adoption could be lightning fast, simply because when fiat money and gold are eyed suspiciously while Bitcoin ascends to royalty, their flaws will be truly frightening. It's not scary to own obviously inferior assets at a time when people see them as superior, but when people actually are recognizing their inferiority as an accounting system it will be genuinely scary to be holding slips of paper and chunks of metal.
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Spaceman_Spiff: You may be right about that. I was wondering the same myself. GDP is right out, but is it X% of all purchasing power or X% of the total "value of the economy" (whatever that really means)? The answer eludes me at the moment.
BitcoinAshley: Even though everything you said is true, there is still a far bigger way governments keep the poor poor. By hampering the economy through all manner of regulations, taxes, patents, inflation, protectionism, and regime uncertainty, thereby radically slowing the development of cheaper, better goods. Every single thing the government does hurts the poor (including welfare, although in the very short term it helps). Without a central government there wouldn't be any poor people in advanced countries, except by choice or disability (but the latter would be more than covered by charity, as it both would take way less money and people would be way richer).
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Mods? Can we keep all the "wave" talk in a single thread?
I'm tired of it sidetracking every topic I read. Thanks.
So am I, but mods moving things around is far more intrusive, albeit for reasons that are harder to see. |
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OP is equivocating between two situations: one where a given person can (practically) opt out and one where even a majority of people can't opt out. The first is possible, but the second isn't. One person opting out would be cut off from most of the division of labor, but a majority opting out would - by definition - not be.
OP is also thinking too vaguely. Identify specific problems before worrying.
However, OP is quite correct in the sense that Bitcoin is going to change the world radically and we have no way of knowing for certain that it will be a positive change on net. Nothing in life is certain. What we can see from history and basic observation is that it is very highly likely to be a very positive change on net, for most people at least.
The fact that there could possibly be some terrible unforeseen consequence must be balanced by a perspective on how the world is now: in many ways and for many people, total Hell. And compared to where we could be without stifling interference - living forever by now perhaps - even the affluent life many live is relatively Hell (we get old and fricking die - that sucks!).
People have identified thousands of ways Bitcoin will make the world way better, but I have never seen a significant plausible way Bitcoin could make the world worse (economic ignorance will produce many fake scares; let's just say I've never seen anyone who understands Austrian economics and natural order mention a significant downside, with the possible exception of being able to track transactions, which isn't an unmitigated bad thing either).
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I would read the ratio with extreme caution. In my experience, it's useful to a) look at the norm. ratio on bitstamp vs. that of mtgox to look for divergences (up or down) and b) concentrate on the short term only -- how the ratio developed over the past few days. Anything longer than that, as far as I can tell, is noise. Additionally, the ratio both leads price occasionally, but also follows it pretty often, perhaps more often in fact. I only use it as one of many pieces in analysing the price, but it's not completely useless IMO. Example: Both bitstamp and mtgox show a very nice divergence in the ratio before the recent correction from 200+, starting a few days earlier. This could (should) have been a warning sign for those who thought the run-up would continue uninterrupted. (not that it ever does  ) Sounds sound. I had noticed that the ratio sometimes seemed to lead the price, so it was like a "secret" kind of early signal of what would happen, but of course it often follows instead. I also came to the conclusion that it was mildly useful. |
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The relevant figure isn't the bid depth or ask depth, or even the bid/ask depth, but rather the bid/ask depth divided by the price. I wish blockchained.com would show that, though you can sort of eyeball it.
Anyway, enough blabbering: we are indeed on a rocketship to Mars. It's funny though, we have this circus atmosphere and almost no price movement. It almost makes me wonder if we will go down instead, but no, if I imagine looking back on this time as right before a major crash it seems silly. If I imagine looking back on this time as just before an incredible rally, it seems totally obvious.
http://www.coinorama.net/ --> Settings --> 'Normalize bid/ask ratio' Hmm...doesn't look so bullish. Though I'm not sure I'm reading it right.  |
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Anyway, enough blabbering: we are indeed on a rocketship to Mars. It's funny though, we have this circus atmosphere and almost no price movement. It almost makes me wonder if we will go down instead, but no, if I imagine looking back on this time as right before a major crash it seems silly. If I imagine looking back on this time as just before an incredible rally, it seems totally obvious.
I totally agree. The funny thing is that 10 days ago every body was saying "damn the price jump too fast... a correction would be soooo healthy". And now that we have our correction and a one week consolidation, people begin to doubt. It's like the price will only rise once the fakeout is complete. The market always has to surprise people. It will wait out our optimism and only jump when we're sick of waiting and decide to get bearish  And by saying this I'm just making it worse, so I'll shut up now. Or better yet, SELL! SELL! SELL!!! |
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Well the ultra-fast exponential run-up scenario didn't play out like I fantasized here (it was just an interesting possibility). It may have continued for quite a while longer if not for MtGox getting swamped, and it's possible that it's just delayed until now, but considering some other parameters - like how long it will take for infrastructure and user-friendliness to reach the level required for mainstream adoption - it would be impossible to continue at the Spring 2013 pace for very long. I now think what happened was that the 2011 crash burned in people's memories left the price languishing too low for too long, and Spring 2013 was the upward correction of that. There may be more upward correcting to do, but either way I still absolutely believe that Bitcoin is on an exponential growth path. Just a slower one. Tenfold per year seems about right, since that jives with history and also allows 3-5 years for full mainstream adoption to happen, which seems not too unreasonable. Or maybe even up to 7-10 years considering the exponential curve would turn toward an S-curve midway through mainstream adoption. But anyway, within 5 years if Bitcoin is going to do its thing it's going to be a totally different world we're living in, with anyone who has any today-decent amount of coins being very wealthy then (unless they panic sell, and most of course will  ). 10x per year is still a very fast rate that will cause all the things I mentioned in the OP to happen, as can be seen from looking over the history of this forum, even if it's much slower than the 10x per season we had Jan-April 2013. |
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Sell a few coins if you need/want to use the money right away (assuming you can't spend the coins directly instead), but you never, never go full fiat. That shit is dangerous man! It could be taken from you at any time, you can't move around with it, etc. Why would you want fiat??
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Looks like people are mostly hoooooooolding for the longest time. Good strategy.
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In the first place it was always kind of retarded or economically idiosyncratic to speak of "$100,000" in your bank account. The only reason we'd talk about numbers of "dollars" or "ounces" of gold is simply that we don't know how many dollars or ounces of gold there really are available in the world. There is also the complication that dollars and gold aren't the only moneys; there are also euros, yen, yuan, silver, etc. As a practical matter, therefore, we end up having to speak in terms of monetary units. It's incredibly obfuscating way to talk, though. A world where a single money had taken over, and where we knew exactly how much had been issued, would be different. In that case - if we knew there was exactly $10 trillion dollars out there - we should simply refer our $100,000 in the bank as "a hundred-millionth." That is, 1/100,000,000 (that is, 0.000001%) of all the purchasing power in the world. Instead of this:  We would see this, but without the parenthetical explanation since it would be standard:  Now since this IS the case with Bitcoin - we do know how many coins have been issued - we can easily switch to speaking of 100,000 BTC as "about 1%" and 1000 BTC as "about 0.01%" (eventually to become about half that over the course of the next century). Assuming that Bitcoin does take over the world, the present-day price of 0.000008% ("1 BTC") is around $200. You can own 0.000008% of all the purchasing power in the whole world in the future for just $200 today. Or instead of buying a house now for $240,000, you could own 0.01% (one ten-thousandth) of the global economy in the future, no matter how much huger that global economy may be. Quite a deal. It doesn't matter what the price is in dollars if Bitcoin does become the standard. Chamath Palihapitiya controls a two-hundredth of the future global economy and would like to control a one-hundredth or a sixtieth of it. These are the terms I'm sure he's thinking of it in.  |
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The relevant figure isn't the bid depth or ask depth, or even the bid/ask depth, but rather the bid/ask depth divided by the price. I wish blockchained.com would show that, though you can sort of eyeball it.
Anyway, enough blabbering: we are indeed on a rocketship to Mars. It's funny though, we have this circus atmosphere and almost no price movement. It almost makes me wonder if we will go down instead, but no, if I imagine looking back on this time as right before a major crash it seems silly. If I imagine looking back on this time as just before an incredible rally, it seems totally obvious.
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There are a lot of Chinese in Vancouver. It'd be natural for it to become a thing for Chinese expatriates to send money home to their family using the Bitcoin ATM instead of their usual wire transfer or WU or whatever (does WU even work in China?).
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I voted 'new trend', but it's not exactly representative of my own beliefs: I think we will continue to bounce between various trends, based on both btc fundamentals and market dynamics (i.e. a feedback loop).
I've written the following argument several times throughout the past months, but there seems to be this widespread believe that there is *the one trend* that governs the price. And then, when the price actually deviates from what that trend predicted, people say that before growth continues price first needs to "fall back" or "deflate" back to the price predicted by the old trend.
Nothing like that actually happens. In an already simplified picture, what actually happens that external (fundamentals) and internal (the market) reasons create various trends, and control which trend price follows at which point, and for how long. Those trends are perhaps attractors, so "falling back to an old trend" is certainly a possibility, but what we saw in the post-April period is that price can also just pick up from some point on a new trend, but continue from there on another trend. That is, price didn't need to "deflate" completely, as so many predicted -- it simply dropped a point at which the market concluded that btc is priced reasonably low, and then continued on a slightly more sane growth path than the super-exponential one we saw in April (and perhas now, when we were getting close to the ATH again).
What I'm trying to say is: trends are maybe a useful tool, but I don't think any particular trend will govern price within the next year. I would only say we can describe the boundaries: Barring catastrophic news, the "old trend" will mark the lower bound, while the upper bound is probably marked by what you call the "new trend", barring extremely *good* news re: adoption and awareness. (keep in mind, while the *relative* increase, roughly one order of magnitude, has many precedents in btc history, the *absolute* amount of money needed to enter the market increases -- it's not imossible that this will happen, but it will require some particularly good news, like a large enough online retailer accepting btc, or something like that)
Food for thought. Basically these trendlines are more attractors that tend to reel the price toward themselves based on the happenstantial occurences in the market. |
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I can't believe no one mentioned the fact that WU has already said they're looking into incorporating Bitcoin into their business model.
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I am hoping we go up soon just because I'm bored with this price level, but that probably means consolidation until I (and others) start to doubt the Fall 2013 bull run, at which point it will probably start again. I don't know. If it doesn't go up within another week, I will reconsider the way I view the recent signs, which by all appearances seem to be nothing other than very strongly bullish. But I think it will.
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There is still a possibility that we go to the old trend line again. We go from boom "Bitcoin to the moon" to bust "Bitcoin is dead". Why would it be different this time?
Because last time (2011) the bubble was way bigger. |
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