So heres my newbie post.
please dont flame over grammatics
Ideas on the future of bitCoin.
Here's my two cents and where i see bitcoin and altcoins in the next 90 days and beyond.
~rant begins
The long waited shipment of Dec and Jan ASIC miners hit the grid (er i mean network) and it wreaks havoc on all the users with less than 1.2Gh, [ even on a pool with 2% or less fee, there is basically no way to recoup elect costs (unless your not paying for it.)] meaning i see that many people with drop out of miners game, Why spend months and month to just be in red and pay more for electricity that you would ever make? Esp since diff level [at this time] is ~510929738. If you calculate that 2 7950's will do about 1 - 1.2 GH tricked out, pull no less than 500w with little power it would take just shy of 58 years. Dont think anyone wants to wait to retire before they can make a block, esp considering ~$40 in monthly for power is gonna cost you ~27k in electricity over the span of 58 years.
I see miners dropping the entire aspect of "mining to help grow the network" and go right into the buying game and at that point it become an investment kind of like a bond or note. If i paid $400 right now for a bitcoin, im not going to gamble it on a game, Im not going to spend it cause i see that in the last 2 weeks the value has doubled! and people will not be buying them to spend thus the 10 dollars / 10 chickens example. At which point a bubble is created, any remember tulip bulbs?
Unless there is some hard fork in the code, which takes the asic miners offline, such as a algo change or permutation from sha-256 / scrypt [ even allowing ASIC miners to function a percentage of the time] Even stated at a security panel BitCon - Dan Kaminsky stated that hes predicts that the current proof-of-work function isn’t going to be used by the end of the year and he assigns a 0% probability it’s going to be used. (
http://www.youtube.com/watch?v=si-2niFDgtI)
Unless the grid back is put back into the hands of those who can "casually mine" or use older outdated hardware, the grid will never be on par with the current currency model. Which is 100% flawed but that is another rant. I digress, as a user of crypo why do i want to pay 15k for an asic miner, just to make less than .35% of a transaction? or worse have it be a 15k paperweight over night? Which is why pre-order is bad! I wouldnt want to pay a bank a non-refundable $5000 just to setup an account or use their atm. I dont mind dedicating a few hours here and there on dynamic intensity to help the network, however investing in ASIC miners is not something the "casual user" would want to do. I dont think that bitcoin was meant to be power in the hands of a few, if so it would not have been built on a P2P platform.
I know that ASIC miners are *good* for the network hashrate and it does increase functionality transaction times and confirmations however what happens in the future when a company that has, oh lets say 1 pHash in dedicated ASIC, and they decide that they want to be paid to have their miners online (more so than just the transaction fees? in the last 24 hours it was 0.35% or roughly $34.81 per transaction).
If one company pulls out or decides its going to make "higher trans fees" it would be a domino effect, everyone would start requiring payment for their investment (take banks and the minium balance or fee structure) Since i think companys are thinking forward about this they are moving the model away from the casual miner into a premium service (
https://terrahash.com/terrahash-to-provide-a-hosted-bitcoin-mining-solution-for-6ghash-in-november/) They are now creating a demand for a user service that need to be in the hands of the many and not the hands of the few 10k people. Thus at which point the currency is no longer "deregulated" and its controlled by special interest groups. The exact same thing happened with credit cards and its just history repeating itself
The first credit cards originated in the United States during the 1920s. Enjoying the booming economy of the era and hoping to attract more customers, individual companies began issuing cards to their customers that would allow them to make purchases at the store or company and pay the money back at a later date. While these cards could be used only at the store that issued them, some companies began accepting each other’s credit cards during the late 1930s. This was the first use of third-party payment, where the company that issued the card would pay the merchant that accepted the card. The customer would then pay back the card-issuing company. Third-party payment would later become the primary operating method of bank credit cards.
....
By the late 1950s, many banks and merchants were beginning to recognize the value of plastic credit cards. For merchants, accepting cards resulted in fewer instances of fraud or processing errors, and customers tended to spend more when using credit cards. (Interestingly, this fact is still true today; on average, customers spend approximately 112% more when using credit cards than they do when using cash [Evans & Schmalensee 2005].) For banks, credit cards were a source of constant revenue via interest charges to customers and loan coverage fees paid by merchants.
www.randomhistory.com/1-50/008credit.htmlThe key word here is third-party payments - which is the growing exchanges that we see and why so many emerging "alt-coins".
again i digress, Considering trade volume over the last 24 hours was 0.44 %, people are just hoarding coins. A currency can not stable out unless it is spent, earned and re-integrated back into the ecosystem. If bitcoin and all alt-coin want to compete with VISA, mastercard, they need to become more "integrated into" shopping and spending not seen as a commodity to "flip" which is all people are really doing with bitCoins right now.
What was the last thing you bought with a bitcoin?
~end of rant
