I am pretty confident we are the new wealthy elite, gentlemen.

[frycicle]

I'm fairly on the fence of this, but I have to ask: What standard are we using for BTC's enormous momentum? Its market price? The size of its goods and services economy? The amount of processing power committed?

I'm optimistic about bitcoin because of two metrics:

1. Lots of people are interested in it, all over the world.

2. There are lots of interesting, innovative projects being built around bitcoin.

It is still VERY early days, and I'll say it again:  expect growing pains.

No way, Gavin!  It's gone up, so it will continue to go up.  Everyone's gonna be trillionaires!

I have some other interesting predictions:

This morning it was 72 degrees.  It's 100 degrees only 8 hours later!  In 10 days, we can expect temperatures of 840 degrees!  Invest in snow cones!

In 1970, Hispanics made up 4.7% of the population in the US.  In 2010, they made up 15.5%!  At current rates by 2050, 51% of the population will be Hispanic, and in 2090, 170% of the US population will be Hispanic!  Start learning Spanish!

Great statistics.

[1714117032]

1714117032

[justusranvier]

What makes you think speculation on stocks and currencies is not making society better?

It's entirely neutral - neither adding nor subtracting wealth from the economy. All it does is move it from one person to another person. Wealth is only added when someone in the world increases his output.

Wealth that comes from speculation comes from Option 3. If you take out a loan to buy bitcoin, and bitcoin goes up in price, you are snatching wealth from the bank, because the bank could have just bought bitcoin and earned a much higher return. You are also snatching wealth from the people who put their money in the bank, because they too could have used that money to buy bitcoin. The total wealth in the world hasn't changed; you have just changed the proportions in your favor.

I believe that we are in agreement.

[Gavin Andresen]

What kind if growing pains are you speaking of?

Technical growing pains like the ones we're dealing with right now-- IRC channel filling up so new people are having trouble connecting, BTC/$ going up so the 0.01BTC transaction fees are too high, etc.  There will be more of these as transaction volume increases, some in the core bitcoin code and more affecting bitcoin-running websites (who will find they have to upgrade their servers to handle increased volume/users, etc).

Legal growing pains.  I expect somebody doing something illegal and using bitcoins to help do it will get caught, put in jail, and that will be mis-reported as "bitcoins are illegal!"  I'd say there's a 1 in 5 chance of bitcoin being made outright illegal in the USA, but I also know that I'm terrible at accurately predicting stuff.

Security growing pains. My biggest worry is what to do about non-technologically-savvy people running bitcoin on a virus-infested personal computer or mobile phone and losing all their bitcoins the first time they enter their password (I'm assuming their wallet will be password-protected) to send a couple coins to their friend.

And just plain new-technology growing pains. Expect some (maybe most) bitcoin-related companies to fail, because most startups fail. Some people will lose money when they do.

Again, I'm optimistic because there are, and will be, lots of motivated people working to solve all of these problems, and because I believe the core technology is solid. But I don't expect smooth sailing.

[Timo Y]

What makes you think speculation on stocks and currencies is not making society better?

It's entirely neutral - neither adding nor subtracting wealth from the economy.

This is incorrect because money ≠ utility.

True, commodity speculators are not adding or subtracting the commodity from the economy.

But they are adding utility to the economy by giving more people access to that commodity at a time when they desire it.

That is also a form of added wealth.

[justusranvier]

This is incorrect because money ≠ utility.

True, commodity speculators are not adding or subtracting the commodity from the economy.

But they are adding utility to the economy by giving more people access to that commodity at a time when they desire it.

That is also a form of added wealth.

You're still talking about negative economics. At best speculation removes a negative rather than adds a positive.

An ideal system would not need any speculation therefore if you want to improve the system you should move it closer to the ideal state.

[Frozenlock]

This is incorrect because money ≠ utility.

True, commodity speculators are not adding or subtracting the commodity from the economy.

But they are adding utility to the economy by giving more people access to that commodity at a time when they desire it.

That is also a form of added wealth.

You're still talking about negative economics. At best speculation removes a negative rather than adds a positive.

An ideal system would not need any speculation therefore if you want to improve the system you should move it closer to the ideal state.

If I foresee a catastrophic famine and consequently buy loads and loads of grain, I am a speculator and I am:
- Increasing current price (diminishing current consumption, or at least making farming more attractive)
- Making more grain available for when the said famine happens, lowering its effect.

If it's not adding a positive, what is? 

[justusranvier]

If it's not adding a positive, what is? 

Actually growing the extra grain that will be required is adding a positive.

In your example you're correcting the misallocation of resources causes by imperfect information. If the knowledge of this upcoming shortage was widespread the farmers and the retailers and wholesalers would preemptively change their behavior just like you did and achieve the same result.

I'm not calling speculation wrong; I'm just pointing out that in an optimal economy it is not necessary so people who want to make a positive change will work towards making it unnecessary.

If you want to think of it another way consider it to be overhead. Some amount of overhead is always necessary but we all know that efficiency is improved by removing the need for it.

[FreeMoney]

I'm fairly on the fence of this, but I have to ask: What standard are we using for BTC's enormous momentum? Its market price? The size of its goods and services economy? The amount of processing power committed?

I'm optimistic about bitcoin because of two metrics:

1. Lots of people are interested in it, all over the world.

2. There are lots of interesting, innovative projects being built around bitcoin.

It is still VERY early days, and I'll say it again:  expect growing pains.

No way, Gavin!  It's gone up, so it will continue to go up.  Everyone's gonna be trillionaires!

I have some other interesting predictions:

This morning it was 72 degrees.  It's 100 degrees only 8 hours later!  In 10 days, we can expect temperatures of 840 degrees!  Invest in snow cones!

It's been like 4 minutes, some might get burned, but not for another few hours (and probably not by trading paper for snow cones at any price)

[tomcollins]

What makes you think speculation on stocks and currencies is not making society better?

It's entirely neutral - neither adding nor subtracting wealth from the economy. All it does is move it from one person to another person. Wealth is only added when someone in the world increases his output.

Wealth that comes from speculation comes from Option 3. If you take out a loan to buy bitcoin, and bitcoin goes up in price, you are snatching wealth from the bank, because the bank could have just bought bitcoin and earned a much higher return. You are also snatching wealth from the people who put their money in the bank, because they too could have used that money to buy bitcoin. The total wealth in the world hasn't changed; you have just changed the proportions in your favor.

I believe that we are in agreement.

If you move wealth from a non-productive means to a more productive means, you are increasing wealth.  When people speculate, they are making resources available toward more productive (at least in their opinion) means, and removing it from less productive means.

[gigabytecoin]

I have never seen a boom and bust that wasn't perpetuated by government involvement. Bitcoin is immune from such things.

I would triple it if OP had finished high school yet...

[Littleshop]

What are you going to do with your Bitcoin wealth once your coins hit upwards of $10,000 a pop?

Pay of my debts, all denominated in nearly worthless FRN's, and then retire to the first libertarian seastead if the 'launch loop' isn't yet ready to take me to my ranch on the Moon.

Just buy a cruise ship and park it in international waters.

It may take a few bitcoiners pooling their resources for that.  Now that sounds like a good idea for next year. 

[justusranvier]

If you move wealth from a non-productive means to a more productive means, you are increasing wealth.  When people speculate, they are making resources available toward more productive (at least in their opinion) means, and removing it from less productive means.

It's still overhead. Eliminating the need for overhead will always be beneficial for the system as a whole.

[nazgulnarsil]

putting aside the rhetorical games, the point is that the wealth you'd like to have dumped in your lap needs either to come from somewhere else or to be created. those are the only two choices.

Exactly. A person wanting to gain wealth has three ways to do so:

1) Do more work
2) Do more productive work
3) Get wealth from someone else

Option 3 isn't necessarily immoral or illegal (receiving charity is an example, so is winning a bet) but it certainly isn't sustainable for everybody to do it.

If you want to improve your own economic situation and build a better society focus on 1 and 2 and forget about 3. (hint: speculation on stocks or currencies is not 1 or 2)

Wealth that comes from speculation comes from Option 3. If you take out a loan to buy bitcoin, and bitcoin goes up in price, you are snatching wealth from the bank, because the bank could have just bought bitcoin and earned a much higher return. You are also snatching wealth from the people who put their money in the bank, because they too could have used that money to buy bitcoin. The total wealth in the world hasn't changed; you have just changed the proportions in your favor.

no.  if you take on *risk* that the bank wasn't willing to take on and it turns out you were right you have directed wealth from less productive ventures to more productive ventures as judged by the market.

speculation is what brings the market toward equilibrium in supplying people's wants optimally.

[Terpie]

Bitcoin speculation is entirely productive, anyone saying otherwise does not understand price signaling information. When you speculate on a commodity like Bitcoin, you are in effect increasing demand for that commodity, which raises the price, which signals to ALL market participants that there IS economic demand for this commodity. You are in effect telling the world that 'yes, you believe in this technology' and are effectively paying the miners that maintain the network for their work. This also encourages enterprise developers, increases mining activity, etc. This is critical for any tech in its infancy.

[tomcollins]

If you move wealth from a non-productive means to a more productive means, you are increasing wealth.  When people speculate, they are making resources available toward more productive (at least in their opinion) means, and removing it from less productive means.

It's still overhead. Eliminating the need for overhead will always be beneficial for the system as a whole.

How is it overhead?

Yes if there was perfect knowledge, speculation wouldn't be valuable (nor profitable).  But knowledge is not perfect.

[Paperweight]

Adding a positive and removing a negative are the same thing, last time I checked.

[nazgulnarsil]

they are different psychologically and philosophically.

[gigitrix]

What kind if growing pains are you speaking of?

Technical growing pains like the ones we're dealing with right now-- IRC channel filling up so new people are having trouble connecting, BTC/$ going up so the 0.01BTC transaction fees are too high, etc.  There will be more of these as transaction volume increases, some in the core bitcoin code and more affecting bitcoin-running websites (who will find they have to upgrade their servers to handle increased volume/users, etc).

Legal growing pains.  I expect somebody doing something illegal and using bitcoins to help do it will get caught, put in jail, and that will be mis-reported as "bitcoins are illegal!"  I'd say there's a 1 in 5 chance of bitcoin being made outright illegal in the USA, but I also know that I'm terrible at accurately predicting stuff.

Security growing pains. My biggest worry is what to do about non-technologically-savvy people running bitcoin on a virus-infested personal computer or mobile phone and losing all their bitcoins the first time they enter their password (I'm assuming their wallet will be password-protected) to send a couple coins to their friend.

And just plain new-technology growing pains. Expect some (maybe most) bitcoin-related companies to fail, because most startups fail. Some people will lose money when they do.

Again, I'm optimistic because there are, and will be, lots of motivated people working to solve all of these problems, and because I believe the core technology is solid. But I don't expect smooth sailing.

Nothing makes me more comfortable about Bitcoin to hear you, as lead project developer, acknowledge each and every potential shortcoming with the bitcoin software! I'd help out if I could, but for now I simply thank you for the work you and your fellow contributors have put into the bitcoin client already.

[Bitatoes]

... I'd help out if I could...

You can, there are so many openings for PR reps it is not even funny, we need as many people to learn about btc as possible so we can have as many on board as possible, and all you need is a love for the coin to be qualified for the job. Seriously, tell people in line at the store, the bus driver, the goddam funeral director, and if you don't want to talk to people, leave notes, allow for people around you to 'over-hear' fake bitcoin [edit] phone [edit] conversations, just to get them wondering! The % that actually take, however small, has got to be bigger than 0. Think about it this way, a year from now btc could be completely squashed by strong opposition and a lack of support, and you will be left wondering if maybe if you had done more, maybe then btc would still be around.



[edit] the word phone above was added


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The First Homemade Simpsons Bitcoin Episode:
http://www.youtube.com/watch?v=duoyacLJpKI or http://www.myvideo.de/watch/8167443/Simspons_Climb_Mt_Gox

[justusranvier]

Adding a positive and removing a negative are the same thing, last time I checked.

I guess it's time for a car analogy.

The various lubricants in an automobile reduce friction but they don't actually drive the car forward.