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It’s no secret that bitcoin miners pay, on average, less than 5 dollars to generate a single bitcoin (that is, of course, if they don’t rely on the legacy mining rigs to generate those bitcoins). We can also expect that speculators will continue to treat bitcoins as GOLD 2.0 investment, thus bidding up the BTC/USD exchange rates well above a miner’s average cost. As you can already see, there’s a great opportunity to explore here, thanks to our passionate speculators. Here’s a best-case scenario:A bitcoin miner decides that he’d like to send flowers to a girl of his dreams (or maybe even to his wife), and luckily for him, there is a local flower shop that would gladly accept BTC as a form of payment. But, instead of relying on the speculative exchange rates, the flower shop decides to price the flowers according to what he feels would be a fair trade, say 10-20 percent above a miner’s average mining cost per bitcoin. This way, regardless of what the going BTC exchange rate may be on any given day, the flower shop will keep BTC-based prices of flowers quite stable. Why would the flower shop be interested in keeping BTC prices stable? It’s simple, really!The flower shop believes that BTC is a better form of currency than the one being provided through the fractional reserve banking system. So, instead of favoring the latter, the flower shop decides to contribute to BTC’s popularity as a currency by slowly transitioning its own operations to a purely BTC-based business, with wages and other operational expenses paid in BTC. But since the flower shop suppliers do not accept BTC just yet, the flower shop would need to keep at least some operating capital in FIAT. This means that some of the earned BTCs would initially be converted into FIAT, but at speculator-driven exchange rates. (Hmm... it seems that the GOLD 2.0 speculators are in fact the VCs of bitcoin economy... Who would have thought? Perhaps there is still hope for a purely BTC-based economy, after all.) Do you see where I’m going with this?... Comments?... Questions?... Concerns? |
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Had an inspiring conversation today, with a Colombian. As it turns out, Colombia isn't as dangerous as the US media and Hollywood love to paint it. People there are very welcoming to travelers... In fact, I could draw plenty parallels between life in Colombia and life in Russia, my home country.
Here's what that conversation had triggered... Could travel to Colombia and other countries become an effective way for this community to promote the use of BTC as money? Imagine a service that provides "curated trips" to the most interesting and fun spots around the world? The best part is that the service would bill strictly in BTC. Would anyone be interested in using such service and take a "curated trip" to a foreign country like Colombia?
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I’ll be honest, the hoarding mania has got to go if bitcoin protocol is ever to support a fully fledged BTC currency. Don’t get me wrong, I do agree that speculators are an essential part in building a bitcoin-based economy, but can we really rely on this trigger-happy group to provide our beloved BTC with the key functions of money: a medium of exchange, a unit of account, and a store of value? Think about it for a minute, how do the key functions of money ever come into existence — what makes them tick, so to speak? In particular, what groups of money users are responsible for sparking and sustaining each of these functions? For example, would BTC have a “unit of account” function if it wasn’t for the miners keeping the block chain alive and intact? It seems to me, the parties responsible for infusing BTC with the key functions of money are: - Unit of account is a product of miners contribution;
- Medium of exchange is a product of consumers contribution;
- Store of value is a product of merchants contribution.
But what about the speculators, you may ask? Well, as it turns out, speculators merely help to grease the fourth function of money for the money changers (Mt.Gox et al.): a standard of deferred payment. However, as you may have already come to your own realization, when it comes to BTC, that particular function of money would soon be irrelevant, since BTC is truly a global currency. So, unless some of you (and especially miners) are planning on establishing trading agreements with the aliens any time soon, the money changers and their highly speculative worker bees shouldn't be your main focus. So, let's use our speculator-driven bubbles wisely, shall we?... Update a mining equipment, bootstrap a new product/service, etc... BTC is meant to be spent, not hoarded! It's what makes it a real currency. I also hope that some of you will find time to read between the lines, as I wouldn't want a panic to ensue, if you know what I mean... Godspeed! |
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Has anyone here already addressed one very important issue brought up by OP in the Sweft's Law discussion? I'm referring to the claim that "rogue miners can mine the network, charging tx fees and sending the coins to the trash"? Is there a way to prevent this? Because if it can't be done, then BTC won't make it as a currency. |
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Существует две школы экономической теории биткой — та, что была выдумана мною и та, с помощью которой, причём достаточно успешно, пропагандируется вера в GOLD 2.0, с бесконечным количеством её разновидностей. Здесь я постараюсь вкратце изложить, как каждая из школ описывает процесс формирования инфляции и дефляции в биткоин экономике. Надеюсь, что вам, а особенно участникам майнинга, эта тема окажется очень даже по вкусу? Также, хочу вас заранее предупредить, что я впервые делюсь этой выдуманной теорией, которая пока ещё достаточно сыровата. Поэтому, если можно, постарайтесь особо не придираться к подбору слов и предложений. В основе GOLG 2.0 теории заложена идея, которая гласит, что как только все 21 000 000 BTC будут вымайнены, расходы на добычу повторных биткоин (то бишь transaction fees, собранные в эквиваленте ондой повторной биткоины) будут значительно превышать сегодняшние расходы... Ведь тратить биткоины будут достаточно редко (они же золотые, а поэтому будут постоянно расти в цене), в то время как майнинговые машины будут продолжать свою кропотливую работу только ради шанса заполучить маленькую горстку transaction fees, каждые 10 минут. Следовательно и закупочная цена повторной биткоины будет постоянно превышать расходы на её добычу, т.к. для GOLD 2.0 всегда найдётся новый покупатель. В общем, сплошная утопия. В основе моей выдуманной теории заложена идея создания BTC-based экономики, где доходы всех её участников (майнеры, работники, предприниматели, инвесторы и т.д.), а также сбыт производимых этими участниками продуктов и услуг, всегда осуществляется (а не только измеряется) по BTC ценам, которые потом имеют непосредственное влияние на котировки BTC в обменных пунктах, а не наоборот (как это происходит сейчас). Следовательно, если за 1 BTC (до её обратного возвращения к майнерам через transaction fees) предприниматели биткоин экономики будут согласны продать в два раза больше спичек чем сегодня, то можно предположить, что в BTC-based экономике увеличился уровень дефляции и каждая повторная BTC теперь имеет больше веса чем предыдущая, т.к. у добывшего её майнера появилась возможность сразу же приобрести в два раза больше спичек, если конечно они ему понадобились. Ну вот, надеюсь мне хоть как-то, да удалось продемонстрировать вам разницу двух подходов в создании дефляции внутри дефляционной, по её отличительным свойствам экономики? Смело задавайте свои вопросы — я же постараюсь как можно точно на них ответить. Кто его знает, может кому-нибудь из вас посчастливится подобрать более подходящие слова/понятия в описании этих двух различий во взглядах относительно будущего биткоин. P.S. Заметьте, уровень дефляции/инфляции связан с изменением денежной массы, а не денежной базы (которая в биткой экономике составлаяет 21 000 000 BTC). Что касается денежной массы, то с учётом 8 decimal places, она может достигать 2 100 000 000 000 000 BTC. |
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Кто-нибудь знает сколько сейчас в России майнеров? Хотелось бы как-нибудь с кем-нибудь из них пообщаться относительно развития России как популярного местa сбыта BTC — т.е. место, куда можно было бы легко приехать, погостить (ну или как следует потусить), слить накопленные биткоины и уехать (с большой улыбкой на лице). Прост устал я уже от GOLD 2.0 трезвона — хотелось бы заняться чем-нибудь поистине уникальным, ну и конечно же рентабельным.
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To bitcoin miners: You’ve already made the headlines... It’s time to make history!I’m hoping to join forces with a number of bitcoin miners in a large-scale effort to create/develop a flourishing BTC-based economy, where the value of a freshly-mined bitcoin is not determine by some arbitrary pump and dump scheme, but by the value of goods and services that can be purchased with BTC directly, around the world. Unlike many members of the bitcoin community who had already reduced bitcoin’s value proposition to nothing more than a medium for transfer, I’ve always been and continue to be an avid proponent of BTC becoming a reserve currency of the future. Yes, I know this sounds somewhat unrealistic, considering the very scale of such undertaking, but unless you approach the inner-workings of bitcoin from a perspective that's different from the one offered by popular economic theories, you will not appreciate the true beauty of Satoshi’s creation. If you are a bitcoin miner and not excited by the idea of bitcoin’s future being reduced to nothing more than a “medium for transfer” or even a GOLD 2.0 trust fund, I'm keen to discuss with you the prospects of us working together on bringing back to reality this somewhat "unrealistic" vision I've summarized above. P.S. This project will eventually involve us setting up and running a number of formal business entities around the world, with a parent company to be established in the United States from the start. |
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There seems to be only two types of bitcoin miners: those with BIG PLANS (a.k.a. Investors) and those with BIG BALLS (a.k.a. Speculators). As can be expected, the ones with BIG BALLS are usually the loudest of the bunch, always chanting GOLD 2.0, GOLD 2.0, GOLD 2.0!!! But let’s face it, if it wasn't for these highly specialized gold diggers, bitcoin would have not become anything more than an intricate web of programming code.
Unfortunately, these same BIG BALLS miners can just as easily become the downfall of bitcoin, especially as we get closer to reaching the "21 million bitcoins" landmark. Perhaps as early as 2016 we can expect an exodus of BIG BALLS miners as there won’t be anything worthwhile left for them to mine (other than the alternative crypto-currencies, of course).
Fortunately, there’s still hope, and it involves building a BTC-based economy from the ground up. That’s where the BIG PLANS miners come in. They are the ones who want to see bitcoins used primarily as a currency rather than a speculative commodity/asset. However, for that to become a reality, miners must begin to actively commission projects/startups that transact solely in BTC (without converting BTC back to USD, etc). It is the only way to increase BTC money supply beyond the initial monetary base of 21 million bitcoins.
If you are a BIG PLANS miner who wants to save the BIG BALLS miners from extinction, feel free to suggest a project/startup that’s worth commissioning... Viva la BTC!!!
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Sergei Mavrodi, the founder of MMM, didn't pimp bitcoin, he ponzied it. As these blog posts seem to suggest (in Russian), Mavrodi wants to become a market maker for BTC <--> FIAT trading. But unlike Mt.Gox, Mavrodi would not use bid-offer spreads -- he would just specify an initial price for each share of MMM-2011 (i.e. his version of BTC), and then keep increasing that price at a steady rate (high enough to provide attractive returns to current investors). |
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Is it technologically possible to swim in BTC?
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tl;dr: let the merchants decide what BTC is worth, not the market makers (e.g. MtGox, TradeHill, etc.)
I’m not saying that buying fiat currencies is a bad idea. All I’m saying is that each purchase of a fiat currency should be—in the very spirit of bitcoin—handled as a purchase (confirmed by the bitcoin block chain), not as a trading transaction in some BTC exchange’s private (read: hidden from scrutiny) database. Who cares what you want to buy with your bitcoins? In fact, that’s the whole point of bitcoins anyway—to be able to buy anything you want without having to worry about some 3rd party invalidating your transactions.
But what useful purpose do the market makers have in the bitcoin economy? Do you really think that USD/BTC exchange rates on Mt.Gox reflect the bitcoin supply and demand trends? Keep dreaming!!!
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Many of bitcoin supporters measure BTC’s value in fiat currencies (e.g. how many USD can BTC buy). I, however, think that the true measure of BTC’s value is in BTC total money supply (not to be confused with BTC monetary base = 21,000,0000). Hence, more bitcoins in circulation = greater bitcoin’s value.
Essentially, I see 1BTC having a potential value of 100,000,000BTC (based on 1BTC’s divisibility to 0.00000001). However, this can only occur if bitcoins are used to buy bitcoin-denominated goods/services, not currencies. Therefore, it’s safe to say that current USD/BTC rates are simply the result of market makers (i.e. those who run the most popular BTC exchanges) successfully manipulating the herd mentality of the masses.
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