That's what I mean.  Note that if the majority of bitcoin buyers do this, they play a huge greater-fool game.  The question is what will those holders do when they run out of greater fools ?

I'm more and more convinced that bitcoin is nor digital gold, and certainly not digital cash, but is rather like a digital naked derivative speculative asset.

Yup.  These graphs look outright scary:

http://coinmarketcap.com/charts/#btc-percentage

I wonder whether:

1) BTC will soon dip under the 50% market share psychological level
2) if so, whether this will have an impact

or whether the alt coin bubble will pop soon.

ATH of bitcoin's price, and ATL of bitcoin's market share...
63.5%. 

This.  I hope he gets to work now and stops wasting his time here.  He was useful for others (for me, a lot), but it wasn't useful for him any more.  He was wasting value for himself here.

Brilliant and at the same time totally crazy, deluded, paranoid and visionary at the same time, and totally enslaved to BCT, not capable of doing anything else than post here.  So he needs to be cured by getting banned.  It can only do him good.  I hope for him that he gets his thing finally done.

(or maybe Shelby was a group of people, financed by some dark forces   who knows )

This.   It is known since ages by economists, and is called the deflationary spiral. 
Bitcoin (and most emission-limited) crypto is doomed as a currency as you so correctly point out.  Bitcoin is not a currency.  It is a speculative asset, nothing more, nothing less.  The higher it goes, the less people will use it as a currency.  You don't use famous paintings as a currency either.

However, on the other hand, that means that crypto is not playing in the "real world usage" market, but in the speculative bubble/investment market of derivatives and so on.  Now, that market is HUGE as compared to the fiat market. 

http://www.investopedia.com/ask/answers/052715/how-big-derivatives-market.asp

It is estimated to be at least 10 times the world's GPB: 1200 trillion, or 1 200 000 billion.  Crypto's 30 billion are tiny minuscule compared to that.  We're on the 3 parts per million level (like impurities in water).

Of course.  Monero has such an algorithm for instance.  It is maybe not the best possible, but at least it solves the issue in a specific way.

https://monero.stackexchange.com/questions/35/is-there-any-block-size-limitation

I have to say I never understood the priorities in the worries expressed in this debate, and I think it is because people start from some pre-conceived dogma to which they think they have to cling, and adapt all the rest around it.  I know that what I'm saying is considered controversial, and that I'm called a shill for that sometimes (I'm not), but I have posted it several times, I've been arguing over it several times, and I have never heard any convincing argument to the contrary.  It is this, in my eyes quite obvious, statement:

"the amount of non-mining full nodes is absolutely no measure for the decentralization of a coin." (at least, with a PoW coin).

I already explained several times why I'm convinced of that statement, and that is because the only *source* of data, of block chain, is a consortium of miners, which these nodes can simply copy, and put at disposal, like a proxy server.  It would entirely matter if mining nodes were totally distributed in the network, and pop up and disappear in the P2P network.  If non-mining nodes were potential mining nodes, but just decided, for the moment, not to mine.  In that case, the number of nodes WOULD be a measure of decentralization.  But with a consortium of miner pools, that are made up, at most, of, say, 20 nodes (5 are sufficient for >50% of the hash rate), and with the immense difficulty associated to mining (so that you just don't invent yourself a significant solo miner), non-mining nodes have only 2 options:
- copy faithfully the data that those few miner nodes produce
- refuse to copy it and come to a halt.

The miners having invested huge amounts in their mining equipment, the network equipment is only a small fraction of their investment, and as such, these miner data centres are totally capable of serving the whole user base with light wallets ; the few thousands of non-mining full nodes that serve the light wallets of many users are only providing a proxy service, but don't add any *decision power*.

When I write this, I always get remarks about the *users*.  Yes, the users are important economically, but if there are millions of users, and only a few thousand of full nodes, these full nodes are in no way representative of these users. 

So, the actual situation, which will not improve, is that the only entities keeping miners in check are other miners, and as long as the consortium of miners comes amongst their members, to a consensus of a block chain, that's the only chain that exists and that full nodes can copy, whether they like it or not: it is the only source of block chain data that can provide a block chain with all that PoW in it.  As such, the current architecture of the network is not P2P, even though on paper it looks like it: it is a few central nodes (the pools) that are the "backbone" and the collective source of block chain ; they are the only true "guardians" of the protocol rules and keep one another in check ; and they produce collectively a block chain, which is the only one available for you to use, or not to use.  This block chain is then diffused through a P2P network that helps "serving" the light wallets of users, but these light wallets could get the block chain information just as well directly from the miners.  The non-mining full nodes can just copy, or not copy, this block chain, that's their only options.

I know that things get more involved when miners disagree amongst one another, but they don't.  The large majority hash rate produces only one single block chain, to be taken or to be left.  If ever miners disagree, and they make two or more block chains (forking), then the P2P network of nodes can copy one or the other and chose ; but in the end, it are not these nodes, but rather the users, with their light wallets, and exchanges, that will vote with their money.  Even if 99% of all P2P nodes pick chain 1, if the richest users and exchanges want to pick chain 2, they can, by pointing their wallets to those miners (pool nodes) that produce chain 2, and the market will evaluate chain 1 and chain 2, independent of how many non-mining nodes copy chain 1 or chain 2.  So even in a case of disagreement between miners, and having several alternative chains available, what the non-mining  P2P nodes do, have no importance in this decision.

As I said, this would be totally different if just any node could start mining all over the P2P network, but these days are gone.   There are 20 source nodes of block chain and that's it (and 5 have a majority).  Whether there are 5000 copy cats or not doesn't really matter.

Once this dogma has fallen, the discussion becomes totally different.  Big blocks are mostly no obstacle to the 20 data centres of the miner pool nodes.  Everyone who really wants to, can obtain a copy of the block chain, but that's a bigger investment than having your home PC run as a node ; however, as that running home PC doesn't really matter in the decentralization of the network, one shouldn't care about that.  A big exchange might like the idea to have a full node.  People hung up to the privacy of their transactions might like to invest into the network capacity and processing capacity to set up a full node.  But for far most users, it doesn't matter.  Most of them can use electrum or other light wallets, and connect to the few full nodes that are around, like those of exchanges, and, of course, the miners themselves.

This means that the main argument against "everything on chain" actually holds no water.  Bitcoin, at this moment, is an affair of ~20 mining nodes, that's all.  All the rest are at their mercy anyhow, and can play copy cat and proxy server, or shut up.  These 20 nodes can handle big blocks.   
The only argument that *does* hold water against shutting down all non-mining full nodes, is just a matter of privacy.  If everyone has to connect directly to the 20 miner nodes, you're much easier identified than if you propagate your transaction through a P2P network.  One could continue to use a P2P network for transaction propagation, though.  No need to have a block chain on disk for that.  Or one can use tor or a VPN.  This has nothing to do with  "checking the block chain".

But of course, it is not because only 20 miner nodes can handle big blocks, that one needs to go for that solution, if a better solution is available.   LN is maybe a good solution, but it seems rather evident that LN will not be different, in network structure, than the 20 miner nodes.  We may have the 50 LN hubs.  However, what I don't like about LN, is that you are way more dependent on your LN hub than you are dependent on your miner node.  With miner nodes, a transaction is a transaction.  You can send it to miner 1, and if he wants to ask you things, you can then try miner 2 at no cost.  When you are hooked up to hub 1, however, you need to settle and open a channel to hub 2, if ever hub 1 puts conditions. 

So it seems to me that LN is more centralized, and is less permissionless than the 20 miners that make bitcoin now, unless it is easy to settle and re-connect, but that means that you can actually do your thing on chain.

I think that the chain capacity should never be much lower than the projected LN capacity, or you are locked in to your LN hub (because of costs, and difficulty to have access to the chain).

Indeed, usually his girlfriend's mother is younger than him (president)

That's the essence of the difference between a block chain on one hand, and a hash chain, a hash list and a database on the other.

You're right.  That's why banking never worked, and why nobody's using facebook, amazon or google.  Sorry for my verbiage, your argument is crystal clear.

Indeed.  Block chains have a lot of hassle, exactly because they need to be trustless and permissionless and the brilliant idea of Satoshi was a way to solve this almost impossible puzzle: how can we make a common database that can be trusted, if nobody trusts one another and just any wolf can join us in trying to screw up the database ?

Most businesses don't face such problem, so they don't have to live with the cryptographic hassle of a block chain. 
And in as much as different business that don't trust one another, need a common data base, they don't need to open it up to just anyone, and they don't need their untrusted partners to be anonymous.  So there are then easier ways than block chains to do the thing, although you can always call them block chains if you want to hype it.

How can that be ?  If it is purely technically more efficient, that's what determines the (open or hidden) cost.


Mmm.  That's hard logic 
This must be the reason why people don't use facebook.

Seriously, your "argument" doesn't hold water.  If you agree on the fact that technically, the centralized option is cheaper, then that's all that matters, because that is the real cost.  The hidden cost for the decentralized users will make them ready to pay a fee of the height of their hidden cost, and that fee can, as per technically lower cost, largely finance the centralized option.  Running an online node at home all the time, or having to pay a fee of $20 a year, almost all people will go for the fee.

As I said higher-up, I remember in the 90-ies, internet being exactly such kind of distributed system, where some people had some hardware at their homes, and connected to others through leased telephone lines, serving as a meshed network of decentralized hubs for the internet.  Others could connect to them.  That quickly got replaced by centralized bigger data centres to which people were connected in a wheel-and-spokes way, and that's now the general structure of the internet.  Simply because one data centre with a few racks of electronics and 3 employees, is way more efficient and cheaper than the decentralized model.

So when his wife is used up, he can switch to his step daughter (finally) 

Never sell an election before it is over, but it seems indeed that Macron, the socialist banker, the poor elite's child, the a-political former minister, will win hands up over Le Pen, putting an end to the conspiracy theory that Le Pen's election would bring the Euro down, and that this would result in the cataclysm of world fiat banking, putting bitcoin finally as world currency, and a few bitcoin whales as owning a few countries.
So that can be filed as a dream (or nightmare) now.

I'm not.  Try to build logical arguments instead of trying to make a trial of intentions on my back, and try to understand what I'm writing instead of thinking I'm ill-intentioned.

I'm telling you that a centralized but eventually distributed communication system is always, purely technically, more efficient and more performing than a decentralized one, simply because the centralized distributed one can in principle take on exactly the same TECHNICAL topology as the decentralized one, but it has more possibilities than the decentralized one.  So the set of possible technical configurations of a decentralized system is a SUBSET of the set of possible configurations of a centralized system ; as such, any technical metric on the whole set will never reach a maximum in the subset, that will not be reached in the overall set.

You claimed otherwise, that centralized systems are fundamentally limited in their capacity, while decentralized systems aren't, which is in obvious contradiction to the above, rather simple, observation.

I illustrated two forms of a centralized system: one with a bank office serving a million of customers (A), and one with boxes for every 1000 customers (B).

I compared that to two forms of decentralized systems: one where each node is doing processing (C), and one where only one out of 1000 nodes is doing processing (D).  (considering "decentralized" systems where only one out of a million nodes does the processing, begs the question of decentralization, although we could do the exercise, and the result wouldn't change).

In all cases, the centralized system can largely be financed by the hidden costs of the decentralized system.  The lowest cost system is (A).  It can be financed with the hidden costs of (C) (the 20 dollars per year times a million).
But as you weren't happy, I showed that (B) and (D) are technically equivalent and that (B) can be financed by the fees for (D) - which is the essence of my "theorem" (the subset).   Although most probably, (A) is cheaper than (B), so the bank will most probably go for (A) - which the decentralized system cannot do unless it becomes de-facto centralized.

I think that if RSA and ECDS is broken suddenly, bitcoin's security would be the least of our worries !  About all public key cryptography would be broken, https, certificates, your banking application, ....

Well, there's apparently M-PEX or what is his name, too which is not very far from a million coins either.   So we are already at about 30% - 40% of the coins in the hands of just a few people.  When people shout about the DASH scam, in fact, bitcoin is not better distributed.

I would like to add something else:
I'm a believer in the (EMH) efficient market hypothesis (at least in its weak form).  I don't think it is possible, in a fair market, to find out "how to gain systematically more than the average value production of the market".  Yes, you can be lucky and win.  But next time, you might just as well lose.

Now, with bitcoin's dominance, and the obviously growing crypto market, it seems to me that the "deterministic" growth of bitcoin is in contradiction with the EMH: it would be dead-easy: place money in bitcoin, and reap in huge benefits 10 years from now.  Too simple.  If that were somehow true, all smart money would already be in bitcoin.  It isn't.  Ideally, bitcoin's price is always such, that the probability of it going down equals the probability of it going up (even in the long term), unless there is a systematic value production of the whole crypto market, which there isn't really.  So something is wrong.

If, however, the whole crypto market becomes more uniform, and every coin can rise or fall, without a clear and evident domination of one over the other "for eternity", then the crypto market becomes much less predictable, and we close in on the EMH: even though the crypto market *as a whole* can rise spectacularly, if you have been betting on the wrong horses (coins), you may just as well lose as win.  There were crypto was "bitcoin, and some noise from altcoins", and the gain was obviously to be had in bitcoin, with an open, non-dominated market, what is rising one day, may drop to oblivion the next day and one gets a much more opaque (that is EMH), risky, random and totally open market.  The certainties are then over, and I would think that this is a natural evolution of a free market.

This is maybe what we are witnessing: the complete "randomisation" of crypto, where no simple predictions hold, like in a normal gambling stock market.

That said, bitcoin (and yes, also LTC) contained this in its initial design anyhow.  This is why I claim that bitcoin's design wasn't set up to do what was claimed it would do.  Whether that was clumsiness or on evil purpose, I leave in the middle (though I tend to think the former).