Early speculators' reward

[John Tobey]

Suppose in 2008, in the middle of the credit crunch and bailout talk, an anonymous crypto expert had publicly offered to cure several of the world's monetary problems with a new currency much like Bitcoin.

Suppose, however, that he/she/they had made this offer contingent on a promise to pay US$10 million in tax money if the plan were to succeed.  Leaving aside the unlikelihood of TPTB allowing such a measure to come to a vote, would you have voted for the tax?  As for me, perhaps yes, $10 million seems about right, given the time and effort needed, plus a risk premium of a few hundred percent.

Now suppose the offer had been for $100 BILLION (10¹¹) rather than $10 million.  I don't know about you, but I would draw the line well below that figure.

It is hard to bring this up without being shouted down as "jealous" and ungrateful for the courage of the "early adopters".  So let us make a distinction between the early adopters who developed code and infrastructure and promoted Bitcoin in the hope of alleviating the world's ills, and early speculators who simply accumulated BTC in the hope that the block chain started by Satoshi Nakamoto in 2009 would eventually be worth a fortune.  Granted, some individuals may fall into both categories.

When we offer newcomers BTC at today's price (around $8) or suggest that they start mining at current difficulty/price ratios, we implicitly assign a value of $20 million to the first 50,000 blocks, which were solved at very low difficulty (under 0.001% of today's network strength) and have mostly not entered circulation (based on tracking a sample of block generation outputs through theymos' Block Explorer).  Some suspect that the private keys to much of this wealth were destroyed, but we can't know that, and I consider it unlikely.

As the BTC price rises, so does this implied value, until it acquires the character of an "entry tax" payable to the early speculators who hold large sums of (relatively) cheaply acquired BTC.

Does this mean I hate or envy Satoshi or Bitcoin?  No.  I think the world of Satoshi and would not wish to endanger his/her/their life/lives by pumping the value of his/her/their private keys to a ridiculous level.  Do you believe Satoshi's goal was to become filthy rich?  I rather think he wanted to reform a broken system and spare people from its abuses.  If Satoshi and the early speculators make a few tens of million USD out of it, I'll be happy for them.

So, can anything be done?  Yes, as I outlined, with backing from enough miners, one could start a block chain using more or less the same rules as 2009/Nakamoto/BTC but with a much higher initial difficulty and a genesis block based on the then-current BTC block.

Would such an action hurt Bitcoin?  Not at all, if by "Bitcoin" you mean the system Satoshi designed prior to 2009 and helped promote and debug during 2009-2010.  Would it hurt BTC, i.e., the exchange value of today's "bitcoin" (lowercase "b")?  Perhaps yes, if successful.  It would compete against BTC as an alternative currency with similar characteristics but less of an "early speculator tax".  Of course, those early speculators are probably savvy enough to sell some BTC and invest in the new currency if it bids well to outcompete BTC.

Would anyone like to work with me on software changes to facilitate the creation of "child" block chains as I outlined?

Would any miners run such software?  It would continue to build BTC blocks until it detects a signal of support for a child chain, and then it would devote 25% (configurable) of hashing power to the new chain as long as the new chain has at least 5% of BTC's strength.  I believe this kind of chain could coexist with BTC on the same network and even share BTC's blk*.dat files.

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[Littleshop]

Is there a thread like this every day?

Too bad all of those 'speculators' got all of that Apple stock early.  Let's try to figure out a way to reward those true Apple fanboys like me without rewarding all of those who simply bought shares and did nothing else.  Maybe I can print my own Apple shares and say they are MORE valuable then real Apple shares.  Maybe you all can help me make this work.

[markm]

That could be fun. Like the videogame stockmarket game one of the galactic games sites runs. Fanboys of different things can vote up the "social importance" or even just "rank on the ratings" of whatever they are a fan of merely by sending bitcoins to a who is the biggest fanboy site or something.

-MarkM-

[John Tobey]

Is there a thread like this every day?

Is there a snarky response to every such thread?  If you want to reward the speculators, go ahead and tip them.  Feel free to ignore any new chains and enjoy your BTC, whatever the market thinks of them.

[Littleshop]

Is there a thread like this every day?

Is there a snarky response to every such thread?  If you want to reward the speculators, go ahead and tip them.  Feel free to ignore any new chains and enjoy your BTC, whatever the market thinks of them.

There is no need to try to set up a system to artificially reward anyone.  If early adopters held coin they have been rewarded. You can tip anyone you want such as a latecomer.

[John Tobey]

There is no need to try to set up a system to artificially reward anyone.  If early adopters held coin they have been rewarded.

Exactly!  They have been rewarded handsomely.  For BTC to continue to rise, the market will have to value them more and more.  I think this will hit a wall, or at least hamper Bitcoin's acceptance in a way that would be cured with a currency founded on a stronger block chain.

The market will decide, but only if someone (I'll help!) writes the code and runs their rigs on it.

[Vladimir]

When I first figured out bitcoin I thought that it would be great to create a silver currency as answer to bitcoin's gold. This currency would be slightly different but only slightly. (This was mostly because of, "why o why I did I not figure out bitcoin 6 month ago").

In my view it would be better if new currency while suffering from jonny come second disadvantage would have implemented things on technologically and socially superior level and have a fighting chance in the survival battle. This would also create a healthy competition.

Now let's see how in my imagination such currency would look like:

- something along the lines of what OP said.
- BERT for binary protocol
- no freaking floats anywhere in sight
- YAML for human readable part (but well JSON might win this one and I can live with it)
- erlang or nodejs clients able to handle thousands peer connections on decent hardware
- HTTP based protocol, to take advantage of all the HTTP infrastructure (maybe?)
- inflation/emission function made less steep and maximum number of silver coins issued would be higher than bitcoins 21M in proportion similar to proportion of historical price difference gold/silver
- SHA256(WHIRPOOL(SHA512(Skeynes(GOST(WhateverElseGoodHashOutThere( data ))))) instead of bitcoins sha256(sha256( data ))*

I am sure there are more good ideas to be added to this list. We could design such ideal currency and fork it, why not? As long as no stupidity like permainflation is supported this might just be viable. The trick is to counterbalance second comer disadvantage by superior strategy design and implementation.

And while we at that talk to me about proper DNS 2.0 strategy (as opposed to namecoin).

* sha256(sha256( data )) for me is like a red tag... "made by NSA"

[Timo Y]

It is hard to bring this up without being shouted down as "jealous" and ungrateful for the courage of the "early adopters".  So let us make a distinction between the early adopters who developed code and infrastructure and promoted Bitcoin in the hope of alleviating the world's ills, and early speculators who simply accumulated BTC in the hope that the block chain started by Satoshi Nakamoto in 2009 would eventually be worth a fortune.  Granted, some individuals may fall into both categories.

Just like early adopters, early speculators were key to Bitcoin's success so far.  Without them, the exchange rate and difficulty would have remained low for a much longer time, making Bitcoin more vulnerable.  They also seeded confidence in the value and convertibility of Bitcoin.  

Start your own block chain if you like, but stop pretending that this has anything to do with "fairness".

[John Tobey]

Now let's see how in my imagination such currency would look like:

- something along the lines of what OP said.
- BERT for binary protocol
- [etc.]

Vladimir, I think a lot of these changes are orthogonal to the establishment of a stronger chain.  Though a chain fork might seem like a good opportunity to implement them, I am afraid we'd have to limit changes to what practically everyone can agree on, which may be none of the above.

(Disclaimer: I am Vladimir's customer.)

[John Tobey]

Start your own block chain if you like, but stop pretending that this has anything to do with "fairness".

forever-d,

Thank you for your input.  I will steer away from arguments about what is "fair" and focus on marketability.

[Hal]

Any successful replacement of the Bitcoin block chain will forever undermine the credibility of any successor. How is an investor to know that it won't happen again?

Rebooting now may benefit a few thousand early adopters. What happens when hundreds of millions use Bitcoin 2? They'll be just as jealous and envious of you as you are of others. Given the precedent you want to set, how will you argue against yet another reboot?

[John Tobey]

Any successful replacement of the Bitcoin block chain will forever undermine the credibility of any successor. How is an investor to know that it won't happen again?

Rebooting now may benefit a few thousand early adopters. What happens when hundreds of millions use Bitcoin 2? They'll be just as jealous and envious of you as you are of others. Given the precedent you want to set, how will you argue against yet another reboot?

Perhaps I haven't adequately explained my proposal.  I do not suggest "rebooting" the chain in the sense of persuading everyone to stop working on it.  Maybe "the market" will persuade people to abandon the 2009 chain, but that could happen for any number of reasons beyond competition from a similar currency.  Frankly, I consider even this unlikely.  I don't think anything can drive the value of Nakamoto/2009 BTC to zero in the next decade, and I am not about to short BTC.

If your best counterargument is "united we stand, divided we fall", aren't you at least a bit guilty of hiding the fundamentals from newcomers and non-technical users?

To ME, the value of BTC is running into a limit related to the cost of starting a competing chain.  Therefore, I am less likely to buy Nakamoto/2009 BTC at going prices.  I simply want to find other people who feel the same way.  If there are no such people, I will shrug it off and invest as reason dictates.  If there are many, well, our misgivings are collectively depressing the value of BTC, so wouldn't you like to offer us an alternative in the hope that the Bitcoin concept succeeds?

[Vladimir]

Hal, valid point, about recursive envy.

However, there  is space for coca-cola and pepsi, for gold an silver. There might be space for second block chain and if it is good it would significantly limit viability of the third one.

But if it is just str8 fork with the only difference being a new set of early adopters, than I am very sceptical. As a str8 fork I would prefer inflatacoin created. At least we will be able to send all the inflation lovers there 

[unk]

i did predict that calls for this would increase. indeed, they seem to have mounted sooner than i expected. i wrote in mid-may:

i avoid making predictions about the speculative value of a bitcoin, but one prediction i can make is that the notion of alternative block chains will be more prominent by the end of the summer.

even as an early adopter myself, i still think there are very good reasons for them even putting aside the reward to other early miners. i have outlined those in the past and get shouted down as 'jealous' each time, though that couldn't be further from the truth, and i would stand to make quite a lot myself if the price of bitcoins in the current block chain rises. i nonetheless think it's better for the technology to see alternative block chains, however, and would be happy to help such efforts.

update for hal: i'm inclined to think that bitcoin's success at this stage should not depend on 'investment', or it will distort many incentives and very likely lead to significant barriers to adoption. but your argument, i think, may also prove too much: the currently prominent bitcoin block chain doesn't forever undermine the value of gold, for example.

[John Tobey]

But if it is just str8 fork with the only difference being a new set of early adopters, than I am very sceptical. As a str8 fork I would prefer inflatacoin created. At least we will be able to send all the inflation lovers there 

The design I have in mind would facilitate creation of chains with different policies.  Of course, there is some advantage to reusability of infrastructure if the policies are similar.

[John Tobey]

unk, noted, thank you.

[Littleshop]

But if it is just str8 fork with the only difference being a new set of early adopters, than I am very sceptical. As a str8 fork I would prefer inflatacoin created. At least we will be able to send all the inflation lovers there 

The design I have in mind would facilitate creation of chains with different policies.  Of course, there is some advantage to reusability of infrastructure if the policies are similar.

You would really need to add a feature that was very attractive to everyone that could not be easly done to BitCoin for it to do anything.  BitCoin has the 'first mover' advantage in the decentralized currency space.  You really need to have something more then a minor feature to unseat BitCoin.  Just look in the online auction space, lots of others have great systems better then Ebay.  Ebay has the traffic and therefore the users and nobody else comes close. 

[Vladimir]

Warren Buffet calls it moat. For ebay the moat is it's size and domination in large number of regions, but for example in Japan Yahoo auctions rule and ebay is nothing.

Similarly with Bitcoin. there is some moat in form of adoption levels, computational capacity of miners, early adopters who are ready to spend bitcoins to support it etc..., it is not impenetrable but it is getting stronger everyday.

If I was an evil genius planning to install myself as super early adopter of newcoin. I would need some fairly decent capital to get some serious software development going, maybe even implement a few open source clients for bitcoin. Than one day I would spring a well prepared newcoin block chain with some serious mining capacity and well funded marketing effort behind it and make my open source and by now popular client to support both bitcoin and newcoin. Than eventually frogboil bitcoin out if possible at all.

Simple forks IMO are not viable except as reservations for some extreme elements. like inflationastas.

[FreeMoney]

Comparing it the value the early adopters get to a tax is wrong. Most importantly it isn't forced on anyone ever, but leaving that aside it's still way different.

Satoshi and early adopters don't get new users money/goods unless they give up some of their coins, if they do that then they won't get that obscene reward you mention. Now on top of that, when ever they do convert their coins to usable wealth, no one is made worse off. Who ever pays for the coins actually gets coins, they aren't paying to be allowed in, they are trading value for value, voluntarily, meaning that they think it's making them better off.

You are more than welcome to try to monetize some other bits, but I think you underestimate the difficulty of doing that (like it's a super easy million bucks, but no one is doing it) and overestimate the cost of value going to early adopters.

[John Tobey]

@Littleshop @Vladimir @FreeMoney,

Thank you for your comments.  Actually, I believe I have a handle on the challenges to the proposed project.  Had Satoshi and the early team sought funding in the venture capital market, I doubt anyone would have given them the time of day.  New chain advocates are in a similar position, though I don't see it as requiring nearly as much development (or marketing) work as has gone into Bitcoin.  Maybe 10% as much of each.  Not a trivial amount, nor a prohibitive one.

No, I would not expect to make "a super easy million bucks".  I would hope and expect (eventually) to found a stronger currency using mostly existing tools, just as Satoshi and the rest built on OpenSSL, TCP/IP, and C++ in addition to Satoshi's insight.  Notice that I said initial difficulty should be on the order of 5% of the BTC chain's as of when the new chain starts.  Part of the project involves miner buy-in, as I described in the linked thread.

I would expect a new chain to remain a junior cousin to 2009/Nakamoto for several months to years until a critical mass of users saw its key advantage.  And, very likely, it would be surpassed by something else started by someone else building on my/our work.  Very likely, nothing would unseat BTC, but a good effort will cement BTC's position and thus advance the community's purported goals.  This would make for a nice consolation prize, in my opinion.

In case it's not clear, I do not advocate a "chain fork" in the sense of a second chain rooted in Satoshi's genesis block but diverging from BTC at some block N.  I am talking about a new genesis block with Block N's hash in its coinbase script as a timestamp, nothing more.  I would survey interested parties for truly compelling changes (Vladimir listed some candidates) but would tend toward conservatism under the theory, "Why mess with success?"

[FreeMoney]

It's a 30 minute technical job. It's an impossible economic one.

Users are faced with Bitcoin that has a well protected network with 400000 difficulty and hundreds of merchants and some good exchanges and the can get $100 worth of them for about $100. Now we have new coin with tiny difficulty, no merchants, no exchanges, and there is no benefit because you still only get $100 worth for $100.

Same with new merchants and exchangers, which network will protect their payments, which has customers holding value denominated in it, which has a liquid market. The choice is easy.

It's a miracle and it only partly has to do with the code. A lot of it is culture. You can't store value in code, you can only store it in people's minds.

You allude to the other problem, but I don't think you see it fully. Anyone who does choose Bitcoin2 has to think that other people will be coming along for there to be any point. But a person who thinks that people jump from currency to currency when there is no significant difference between them must realize that people are going to be jumping to Bitcoin3. This means people won't hold much value (or any) in your chain and you won't get miners, merchants, and exchangers.

[John Tobey]

It's a 30 minute technical job. It's an impossible economic one.

Let's just say I advocate spending 30 minutes to test your hypothesis.

Obviously, the similarity to BTC would make porting BTC-related infrastructure fairly easy.  I doubt many serious merchants accept only BTC currently.  They added BTC to their list of supported currencies, so adding BC2 won't be any harder.  It will be much easier.  As soon as a few do it, people will see it and wonder what BC2 is.  They will find a website and learn about the similarities and key difference.  They will add some BC2 to their wallet and devote a portion of their mining power to it or inquire about it to their pool operators.

Creating a BTC-BC2 exchange seems like an afternoon's work, if MtGox doesn't beat me to it (or my lawyer talks me out of it).

Thanks
-John

[FreeMoney]

It's a 30 minute technical job. It's an impossible economic one.

Let's just say I advocate spending 30 minutes to test your hypothesis.

Obviously, the similarity to BTC would make porting BTC-related infrastructure fairly easy.  I doubt many serious merchants accept only BTC currently.  They added BTC to their list of supported currencies, so adding BC2 won't be any harder.  It will be much easier.  As soon as a few do it, people will see it and wonder what BC2 is.  They will find a website and learn about the similarities and key difference.  They will add some BC2 to their wallet and devote a portion of their mining power to it or inquire about it to their pool operators.

Creating a BTC-BC2 exchange seems like an afternoon's work, if MtGox doesn't beat me to it (or my lawyer talks me out of it).

Thanks
-John

Maybe I'm wrong, go for it.

[unk]

it's the current block chain itself that has very little 'moat' or, to say it in a less folksy way, very low barriers to entry. i wish those promoting bitcoins in that chain as speculative investments would have been more honest with speculators about that point.

i think other block chains could very easily catch on. call one 'credits' and draw up a nice graphic of the various advantages it offers to the current block chain, then make it public enough that a few people write blogs about it.

one advantage you get for free is, of course, lower seignoirage (in the form of payments to those of us who already have coins in the chain).

there are many ways to vary the technology slightly to offer other significant advantages. for example, you could (by removing two lines of code) keep the block-generation subsidy at 50 instead of gradually reducing it, thereby eliminating the chance of certain economic problems manifesting themselves in the future (see the various discussions about the projected mining equilibrium after the subsidy vanishes and the problems with most transaction-fee schemes). you'd also eliminate one way that bitcoin is dangerously marketed to the public (e.g., the marketing could be something like 'honesty: there's no get-rich-quick promise built in'), and you'd still solve pretty much all legitimate concerns about the sort of inflation we see with fiat currencies. besides, you'd also get around every (wrong but intuitive) concern about how a currency can't work if deflationary - and who knows, maybe one of the hundred people raising that concern has a point.

and there are other economic advantages available for alternative block chains for those with resources. the most significant would be a regulated, transparent group of trusted and/or competitive currency exchanges. the mining technology could be altered not to give gpus an advantage, thereby allowing people with only cpus to mine for a longer period of time (until custom hardware or an unexpected development changed the status quo).

others are much easier: a moderated forum very different to this one, a better user interface, protections against the denial-of-service attacks that are possible with the current version of the client, and so on.

[kjj]

If someone starts a new block chain, what's going to keep some big miners from switching to it for a few days and taking a couple thousand coins for themselves?

I mean aside from the pointlessness of it all.

[Bimmerhead]

Suppose in 2008, in the middle of the credit crunch and bailout talk, an anonymous crypto expert had publicly offered to cure several of the world's monetary problems with a new currency much like Bitcoin.

Suppose, however, that he/she/they had made this offer contingent on a promise to pay US$10 million in tax money if the plan were to succeed.  Leaving aside the unlikelihood of TPTB allowing such a measure to come to a vote, would you have voted for the tax?  As for me, perhaps yes, $10 million seems about right, given the time and effort needed, plus a risk premium of a few hundred percent.

Now suppose the offer had been for $100 BILLION (10¹¹) rather than $10 million.  I don't know about you, but I would draw the line well below that figure.

This is a perfect example of why central planning by 'experts' doesn't work better than the market.

$100 Billion to fix the meltdown of 2008 would have been a screaming bargain which any number of countries would have been wise to take up.  The U.S. sunk a hundred billion into AIG alone.

And you would have turned down such an offer?  Why?

[amincd]

Suppose in 2008, in the middle of the credit crunch and bailout talk, an anonymous crypto expert had publicly offered to cure several of the world's monetary problems with a new currency much like Bitcoin.

Suppose, however, that he/she/they had made this offer contingent on a promise to pay US$10 million in tax money if the plan were to succeed.  Leaving aside the unlikelihood of TPTB allowing such a measure to come to a vote, would you have voted for the tax?  As for me, perhaps yes, $10 million seems about right, given the time and effort needed, plus a risk premium of a few hundred percent.

Now suppose the offer had been for $100 BILLION (1011) rather than $10 million.  I don't know about you, but I would draw the line well below that figure.

The example is not analogous to rewards earned through voluntary transactions. Taxation involves coercing those who disagree with a particular proposal into accepting it and contributing funds towards the project. In the case of bitcoin, or any other project/venture where participation is non-mandatory, those that invest see a benefit for themselves in doing so.

If during the credit crunch, an insightful fund manager offered investors a way to increase their returns in the midst of the market crashing, and investors moved their money to that fund, he/she would be expected to gain enormously. If the fund manager were able to produce returns of $2 trillion, they would see tens, or even hundreds of billions of dollars in profit. The investors wouldn't be discouraged from investing by the fact that the fund manager is profiting, because that fund offers them the best return on the market.

If bitcoin offers the best return in terms of greater convenience for someone going into cryptographically secured p2p currency, due to having a first mover advantage in creating a network, that is all that matters to someone who wants to use a digital currency.

[John Tobey]

Suppose in 2008, in the middle of the credit crunch and bailout talk, an anonymous crypto expert had publicly offered to cure several of the world's monetary problems with a new currency much like Bitcoin.

Suppose, however, that he/she/they had made this offer contingent on a promise to pay US$10 million in tax money if the plan were to succeed.  Leaving aside the unlikelihood of TPTB allowing such a measure to come to a vote, would you have voted for the tax?  As for me, perhaps yes, $10 million seems about right, given the time and effort needed, plus a risk premium of a few hundred percent.

Now suppose the offer had been for $100 BILLION (10¹¹) rather than $10 million.  I don't know about you, but I would draw the line well below that figure.

This is a perfect example of why central planning by 'experts' doesn't work better than the market.

$100 Billion to fix the meltdown of 2008 would have been a screaming bargain which any number of countries would have been wise to take up.  The U.S. sunk a hundred billion into AIG alone.

Granted.  But putting money into Bitcoin will not recover those dollars.  The interesting question, to me, is how much the market will value BTC versus a hypothetical, similar, fledgling competitor with lower seigniorage (higher minimum difficulty).  I am considering working on changes to the software that would support creating such a competing currency (or more than one).

And you would have turned down such an offer?  Why?

Bearing in mind my caveat about TPTB, in a hypothetical, plutocrat-free world, even $100bn would have been outrageous.  If someone has been flogging me daily, would you berate me for not showing appreciation on the day he merely slaps me?

[John Tobey]

Suppose in 2008, in the middle of the credit crunch and bailout talk, an anonymous crypto expert had publicly offered to cure several of the world's monetary problems with a new currency much like Bitcoin.

Suppose, however, that he/she/they had made this offer contingent on a promise to pay US$10 million in tax money if the plan were to succeed.  Leaving aside the unlikelihood of TPTB allowing such a measure to come to a vote, would you have voted for the tax?  As for me, perhaps yes, $10 million seems about right, given the time and effort needed, plus a risk premium of a few hundred percent.

Now suppose the offer had been for $100 BILLION (1011) rather than $10 million.  I don't know about you, but I would draw the line well below that figure.

The example is not analogous to rewards earned through voluntary transactions. Taxation involves coercing those who disagree with a particular proposal into accepting it and contributing funds towards the project. In the case of bitcoin, or any other project/venture where participation is non-mandatory, those that invest see a benefit for themselves in doing so.

I maintain the analogy is relevant.  In the example, I did not ask whether you would pay the tax but whether you would have voted for it.  We are now voting on how much to reward Bitcoin pioneers by valuing BTC.

Apart from that, I agree with your comment.  If Bitcoin and the 2009 chain "offer the best return" for something, rational people will use it for that thing.  If something else offers better return, we will switch.

[Bimmerhead]

Suppose in 2008, in the middle of the credit crunch and bailout talk, an anonymous crypto expert had publicly offered to cure several of the world's monetary problems with a new currency much like Bitcoin.

Suppose, however, that he/she/they had made this offer contingent on a promise to pay US$10 million in tax money if the plan were to succeed.  Leaving aside the unlikelihood of TPTB allowing such a measure to come to a vote, would you have voted for the tax?  As for me, perhaps yes, $10 million seems about right, given the time and effort needed, plus a risk premium of a few hundred percent.

Now suppose the offer had been for $100 BILLION (1011) rather than $10 million.  I don't know about you, but I would draw the line well below that figure.

The example is not analogous to rewards earned through voluntary transactions. Taxation involves coercing those who disagree with a particular proposal into accepting it and contributing funds towards the project. In the case of bitcoin, or any other project/venture where participation is non-mandatory, those that invest see a benefit for themselves in doing so.

I maintain the analogy is relevant.  In the example, I did not ask whether you would pay the tax but whether you would have voted for it.  We are now voting on how much to reward Bitcoin pioneers by valuing BTC.

Apart from that, I agree with your comment.  If Bitcoin and the 2009 chain "offer the best return" for something, rational people will use it for that thing.  If something else offers better return, we will switch.

Oh, well if your point was to ask if we would have voted for such a fix, I would say I would not have voted for the $100 billion solution nor would I have voted for the $10 million solution.  That is a completely different matter from what I surmised was the point of your question, which seemed to be that the fixer didn't deserve $100 billion simply because it's a really big number.

You analogy really isn't that relevant because we are not voting on how much to reward Bitcoin pioneers by valuing BTC.  By valuing BTC today, we are voting on the expected future value of bitcoin.  I don't think anybody is paying $9 for 1 btc today because they want to reward the pioneers.  Do you?

[John Tobey]

You analogy really isn't that relevant because we are not voting on how much to reward Bitcoin pioneers by valuing BTC.  By valuing BTC today, we are voting on the expected future value of bitcoin.  I don't think anybody is paying $9 for 1 btc today because they want to reward the pioneers.  Do you?

Good distinction.  But by choosing between buying BTC and starting up a competitor, we implicitly set a value on BTC's first mover position, which is the pioneers' reward.

[marcus_of_augustus]

If the "newbitcoin" had true anonymity (blind signing layer) and was supported by easy exchange with some well-known financial outlets in multiple large countries it might have a fighting chance ... otherwise every day is another day behind the exponential growth curve.

[Steve]

These arguments remind me of people that complain about how much money sports stars make.  Nobody is forcing anyone to buy sports tickets and merchandise and that is what is paying those athletes salaries.  Likewise, no one is forcing you or anyone else to use bitcoins.  Ultimately, it comes down to competition.  If you think the early adopters might become too rich, start a new currency that works how you want it to work and convince people of its merits and that they should start using it.  You'll need to do a lot of work to convince people that it's better than anything else out there and that they should put their money into it, but such is the nature of free market competition.

At the end of the day, if bitcoin is successful, then no matter how rich the early adopters become, the value that everyone else has derived from bitcoin will have been greater.  Only if people were forced through the threat of violence to use bitcoins could that not be the case.

[Bimmerhead]

These arguments remind me of people that complain about how much money sports stars make.  Nobody is forcing anyone to buy sports tickets and merchandise and that is what is paying those athletes salaries.  Likewise, no one is forcing you or anyone else to use bitcoins.  Ultimately, it comes down to competition.  If you think the early adopters might become too rich, start a new currency that works how you want it to work and convince people of its merits and that they should start using it.  You'll need to do a lot of work to convince people that it's better than anything else out there and that they should put their money into it, but such is the nature of free market competition.

I agree with you 100% Steve.  The problem is that the people making the argument on the other side often don't believe in free market competition, but they quite often believe in forcible imposition of what they think is a 'better', 'more fair' or 'more just' position which is derived neither from a higher power or some other externality but really from their own mind.  So appealling to the free market is futile because they don't recognize it as having any type of authority.

[Littleshop]

These arguments remind me of people that complain about how much money sports stars make.  Nobody is forcing anyone to buy sports tickets and merchandise and that is what is paying those athletes salaries.  Likewise, no one is forcing you or anyone else to use bitcoins.  Ultimately, it comes down to competition.  If you think the early adopters might become too rich, start a new currency that works how you want it to work and convince people of its merits and that they should start using it.  You'll need to do a lot of work to convince people that it's better than anything else out there and that they should put their money into it, but such is the nature of free market competition.

At the end of the day, if bitcoin is successful, then no matter how rich the early adopters become, the value that everyone else has derived from bitcoin will have been greater.  Only if people were forced through the threat of violence to use bitcoins could that not be the case.

+1

[John Tobey]

These arguments remind me of people that complain about how much money sports stars make.  Nobody is forcing anyone to buy sports tickets and merchandise and that is what is paying those athletes salaries.  Likewise, no one is forcing you or anyone else to use bitcoins.  Ultimately, it comes down to competition.  If you think the early adopters might become too rich, start a new currency that works how you want it to work and convince people of its merits and that they should start using it.  You'll need to do a lot of work to convince people that it's better than anything else out there and that they should put their money into it, but such is the nature of free market competition.

I agree with you 100% Steve.  The problem is that the people making the argument on the other side often don't believe in free market competition, but they quite often believe in forcible imposition of what they think is a 'better', 'more fair' or 'more just' position which is derived neither from a higher power or some other externality but really from their own mind.  So appealling to the free market is futile because they don't recognize it as having any type of authority.

I, too, agree 100% with Steve's post.  (By the way, I stopped following pro sports around 1990.)  If you are referring to me (the OP) as one who prefers "forcible imposition" over free market competition, I suggest you read more carefully.  Nothing could be further from the truth.

If my squawks come across as complaints or whines, go away!  In fact, I am expressing demand for a new product in the hope of gauging such demand among the broader market and finding people capable of assisting in such product's creation.  If you can suggest a better (less intrusive, cheaper, or more effective) way for me to find interested parties, I will gladly listen.

[dayfall]

I say try it.  But, I don't think I will switch.  What would be my incentive?  My incentive for promoting Bitcoin is obvious.  But, if I switch then my money looses value and Satoshi et al doesn't get "unearned" money.  BC2 may also divide the movement such that neither never takes off.

The solution is simple, make it worth my while to invest in your alternative (which will most likely fail) and I'll join.  Others will too.

Now, can we all just switch to Ido and leave Esperanto and it's orthography (ĉ, ĝ, ĥ, ĵ, ŝ, ŭ ) once and for all!

[JohnDoe]

If my squawks come across as complaints or whines, go away!  In fact, I am expressing demand for a new product in the hope of gauging such demand among the broader market and finding people capable of assisting in such product's creation.  If you can suggest a better (less intrusive, cheaper, or more effective) way for me to find interested parties, I will gladly listen.

You should talk to unk. He proposed a chain with a block reward of 50 coins forever and said he would create it himself if no one else was interested. I think that would still create heavy deflation and wouldn't stop the whining about early adopters so I proposed a chain in which the reward grows with difficulty. I was just mocking unk evidently since that would produce hyperinflation but if you added diminishing returns to my method then I really think you could have a viable chain which solves both "problems" of deflation and late adopter jealousy.

[Bimmerhead]

These arguments remind me of people that complain about how much money sports stars make.  Nobody is forcing anyone to buy sports tickets and merchandise and that is what is paying those athletes salaries.  Likewise, no one is forcing you or anyone else to use bitcoins.  Ultimately, it comes down to competition.  If you think the early adopters might become too rich, start a new currency that works how you want it to work and convince people of its merits and that they should start using it.  You'll need to do a lot of work to convince people that it's better than anything else out there and that they should put their money into it, but such is the nature of free market competition.

I agree with you 100% Steve.  The problem is that the people making the argument on the other side often don't believe in free market competition, but they quite often believe in forcible imposition of what they think is a 'better', 'more fair' or 'more just' position which is derived neither from a higher power or some other externality but really from their own mind.  So appealling to the free market is futile because they don't recognize it as having any type of authority.

I, too, agree 100% with Steve's post.  (By the way, I stopped following pro sports around 1990.)  If you are referring to me (the OP) as one who prefers "forcible imposition" over free market competition, I suggest you read more carefully.  Nothing could be further from the truth.

If my squawks come across as complaints or whines, go away!  In fact, I am expressing demand for a new product in the hope of gauging such demand among the broader market and finding people capable of assisting in such product's creation.  If you can suggest a better (less intrusive, cheaper, or more effective) way for me to find interested parties, I will gladly listen.

I am referring to that type of person who thinks the government should step in and "do something" about "obscene athlete wages".  You sound like you want to start a competitive league with lower ticket prices.  I commend you and wish you well.

I'll probably stick with watching the pros, though.

[John Tobey]

You should talk to unk. He proposed a chain with a block reward of 50 coins forever and said he would create it himself if no one else was interested. I think that would still create heavy deflation and wouldn't stop the whining about early adopters so I proposed a chain in which the reward grows with difficulty. I was just mocking unk evidently since that would produce hyperinflation but if you added diminishing returns to my method then I really think you could have a viable chain which solves both "problems" of deflation and late adopter jealousy.

Thank you, yes, I have read many of unk's posts, and I like him or her.  I favour conservatism when it comes to changing features.  For everyone who supports New Feature X, two may oppose it, and three may not care but would rather stick to what they know.  But I won't be surprised if there are a few compelling changes to be made, possibly even in the area of inflation policy.  In the end, miners and users determine what works, but coordination before a launch seems useful.

p.s., your use of the term jealousy suggests to me that you don't really understand the argument.  It is not jealousy that makes me ride a bike rather than drive.  It is a personal preference and a reasoned judgement of the relative merits of both.  Anyway, jealousy and ambition (or inspiration) could be two facets of a single phenomenon.

[casascius]

You should talk to unk. He proposed a chain with a block reward of 50 coins forever and said he would create it himself if no one else was interested. I think that would still create heavy deflation and wouldn't stop the whining about early adopters so I proposed a chain in which the reward grows with difficulty. I was just mocking unk evidently since that would produce hyperinflation but if you added diminishing returns to my method then I really think you could have a viable chain which solves both "problems" of deflation and late adopter jealousy.

A few months ago I lobbied for the exact same thing, which was derisively referred to (and still is) as "inflatacoin".

I was successfully persuaded that that's not a good idea, and for an unexpected reason.  Although "inflatacoin" may make sense from an economic perspective, one thing that is critical to the success of cryptocurrency including Bitcoin is getting the whole world to take a serious look at it.  And the 21 million limit and the "ponzi scheme" aspect help to give it a significant level of virulence - people are motivated to spread it and entice people to toy with it, who ordinarily wouldn't be geeky enough to ever consider such a thing.

What I feel I didn't realize while promoting "inflatacoin" is that the 21 million limit is an important part of that virulence.  I am persuaded that if you take that element out, it becomes much less enticing to the person hearing about it for the first time.

When people hear about Bitcoin, I believe they think, "that's stupid, how could that ever work?  if it's on a computer, no one can stop people making counterfeits any more than they can stop people from trading MP3's".  Then when they are told there is a hard limit to the number that can be created, and that it actually works it almost provokes them into arguing why they think they're right, which leads to them learning why they are wrong.  It is essentially a gimmick that helps overcome the hardest hurdle: learning the damn thing.

I have indeed bitched and moaned about the "ponzi" nature of Bitcoin.  But there is one huge bright side for the world.  If as a Ponzi scheme, it spreads to ubiquity, and if Bitcoin grows exponentially to the point that its "pyramid" collapses due to the inevitable end of potential participants, what this will mean is we'll have a world full of people who know about cryptocurrency and nobody who hasn't heard of it yet to sell it to.  In spite of some big winners and some big losers in the so-called "pyramid", in the end, we'll have a world familiar with Bitcoin with faith in cryptography, and a society empowered to create and willing to adopt a new cryptocurrency that is perhaps not so unfair (relatively speaking), but still is enough for the world to tell the Federal Reserves and other central banks of the world (not to mention PayPals, MasterCards, etc.) to jam it up their rear end and that they're not needed (or at least need to be far more competitive with the public)... a feat which as of today is impossible.

So... from an advocate of "inflatacoin"... I would suggest that for the good of the spread of the cryptocurrency concept, inflatacoin be shelved.  For the time being, with the first block halving a ways away, it won't even make any difference now.

[marcus_of_augustus]

casascius: you are right on two really good points there ... the 21 million limit works really well as a 'hook'. I do not know if the number was intentional or not but it works.

The decimal point could have been put in any number of places, e.g. now it is proposed to moved so that 21 million number will no longer be strictly true. To the first glance a number like 210 billion would have been "forget about it" ... it is purely psychological but if the number is low enough a second look is warranted. The fact that it is a hard limit is more important than the actual value but the value of that limit is psychologically effective as a hook.

Second good point is that if nothing else, bitcoin will create a wide debate about what money is and how it is the bankers have screwed society over for so long by hiding behind the ignorance of the wider population. A widespread debate and people just re-evaluating what has value in their lives will be disruptive enough. After 15 years of trying to tell people why gold is important to their economic freedom, a wide debate on nature of money and why control is the hands of the powerful few would be mana from heaven.