No mass adoption because of the One-size-fits-all bitcoin

[Wary]

Bitcoin is good, but it's not good enough.

Internet have won when emai have appeared. Email was so much better than snail-mail, for everybody, that it have become the killer app and the mainstream adoption have happened.

There is no such killer application for bitcoin. Let's face it, Bitcoin's benefits over fiat are currently not big enough to justify switching to it.
Therefore we have to find a more fitting niche market, with specific needs where bitcoin's benefit over fiat are higher.
There are several such markets.

However, the last year have shown that bitcoin is not taking over remittance market or internet-sales market or PESA market or even black market. Bitcoin is not good enough even for a niche markets.

Therefore, to take over one of these markets, it have to be modified, to make a better fit.
For example:

-For black and gray market it have to be much more private.
-For cup-of-coffee market it have to be much more fast. And much more scalable.
-For PESA market it have to be more SMS-friendly
-For bank backbone market it have to be much more secure (compulsory multisign etc)
-For record-keeping market it have to have more fields for information storage
-For smart-contract market it have to have smart-contract language embedded
etc etc etc

The above are just some rough ideas. Undoubtedly, there are much more possible changes that would make bitcoin much better fit for those markets.
What's more, many of these changes have been already invented and even implemented in some altcoins.

All we have to do is to combine these improvement with benefits of mainstream bitcoin: first mover advantage and security, based on powerful mining factories.

There is no guarantee it will happen. But it depends not on whims of some billionaire-whale, but on us. We have to do just two things:

1) Fight hard to overcome powerful interest groups in bitcoin community and put the sidechains BIP into the bitcoin core.
2) Work hard to implement those niche market sidechains.
      -more-secure-than-bitcoin  sidechain for backbone of banks
      -more-private-than-bitcoin sidechain for black-gray market
      -more-scalable-than-bitcoin sidechain for internet shopping
      -more-fast-than-bitcoin sidechain for cup-of-coffee purchases
      -more-sms-friendly-than-bitcoin sidechain to replace PESA
      -more and more of these specialised sidecoins for niche markets


And then - to the moon.

tl;dr; Bitcoin can win only through a niche market. To win a niche market, we need sidechain BIP.

[1715486604]

1715486604

[1715486604]

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[Slark]

People are allergic to any "fork action" of bitcoin. That is why XT failed so miserably, I am not sure if that proposed BIP of yours is not conservative enough for bitcoin purists.
Also I doubt that any changes that will push bitcoin into even more anonymous and private state will ever happen, it will be quite opposite route imo.

[Lauda]

"Sidechains - The Magical solution" propaganda? Even though I don't mind sidechains (I even support them), your post is based on speculation and your personal beliefs. This has zero value in my world. There are possibly better solutions for some of the 'problems' that you've listed.

[NorrisK]

People are allergic to any "fork action" of bitcoin. That is why XT failed so miserably, I am not sure if that proposed BIP of yours is not conservative enough for bitcoin purists.
Also I doubt that any changes that will push bitcoin into even more anonymous and private state will ever happen, it will be quite opposite route imo.

That is not the only reason that XT failed so badly. Their were some serious doubts about the intentions behind the fast push of XT. The main problem that was being tackled was good imo, but all the other stuff they tried to sneak in there should not have happened.

[Wary]

People are allergic to any "fork action" of bitcoin. That is why XT failed so miserably, I am not sure if that proposed BIP of yours is not conservative enough for bitcoin purists.
Also I doubt that any changes that will push bitcoin into even more anonymous and private state will ever happen, it will be quite opposite route imo.

It's not my BIP. I'm not suggesting any specific BIP. I'm suggesting a BIP that would enable sidechains. Because I think that without sidechains chances of bitcoin getting mainstream adoption would be much lower. Why I think so - see OP.

[Wary]

"Sidechains - The Magical solution" propaganda? Even though I don't mind sidechains (I even support them), your post is based on speculation and your personal beliefs. This has zero value in my world. There are possibly better solutions for some of the 'problems' that you've listed.

I would be glad to make detailed answer to your post, but alas. You've gave me nothing to answer to. No facts, no reasoning, just a fountain of emotions. What one can answer to pure emotions? Calm down, take it easy? OK, please calm down and take it easy.

But if, apart from emotions, you have something else to say, if you have found a mistake in my facts or a logical fault in my reasoning, then I'll be glad to discuss it with you.

[Lauda]

I would be glad to make detailed answer to your post, but alas. You've gave me nothing to answer to. No facts, no reasoning, just a fountain of emotions. What one can answer to pure emotions? Calm down, take it easy? OK, please calm down and take it easy.

But if, apart from emotions, you have something else to say, if you have found a mistake in my facts or a logical fault in my reasoning, then I'll be glad to discuss it with you.

No emotions, you are mistaken and/or confused. I objectively pointed out the flaw in this thread; it has not presented us with anything what I'd call 'evidence' that would back up this theory. You would have to back up your claims that sidechains are the right answer and elaborate why we should focus on them and not on other potential solutions. Then, and only then, is it possible for this thread to enter a sate of (possibly) healthy discussion. Note: I have a good understanding of sidechains and have at least, at 1 point in this year, suggested them and/or discussed them around here.

[franky1]

side chains is not the solution..

for instance.
1. side chains is like saying 'gold is a natural and rare material. but in 2016 it can now be made in lab in infinite amounts' - goodbye rarity
2. side chains are other blockchains... so whether you do a transaction on bitcoin or a second chain.. the data has not changed or decreased, its just moved. but now instead of one blockchain to fill up a hard drive.. now miners have to worry about multiple blockchains bloating a hard drive.
3. by mining more than one chain, will dilute the hashrate/difficulty as the hashes dont just protect one chain, but now have to protect multiple chains
4. sidechains wont just be a problem for miners, but also users wanting to run full-nodes. as explained in point 2. which will cause a dilution of people wanting to run
full nodes because they would have to store X*32mb blocks per 10 minutes. instead of just 1*32mb blocks per 10 minutes.

the only positive of sidechains are only for the creators of these altcoins. who can premine an altcoin and then sell it 1for1 for bitcoin..

[Carlton Banks]

side chains is not the solution..

for instance.
1. side chains is like saying 'gold is a natural and rare material. but in 2016 it can now be made in lab in infinite amounts' - goodbye rarity
2. side chains are other blockchains... so whether you do a transaction on bitcoin or a second chain.. the data has not changed or decreased, its just moved. but now instead of one blockchain to fill up a hard drive.. now miners have to worry about multiple blockchains bloating a hard drive.
3. by mining more than one chain, will dilute the hashrate/difficulty as the hashes dont just protect one chain, but now have to protect multiple chains
4. sidechains wont just be a problem for miners, but also users wanting to run full-nodes. as explained in point 2. which will cause a dilution of people wanting to run
full nodes because they would have to store X*32mb blocks per 10 minutes. instead of just 1*32mb blocks per 10 minutes.

the only positive of sidechains are only for the creators of these altcoins. who can premine an altcoin and then sell it 1for1 for bitcoin..

Even though you're right that sidechains aren't the solution to scaling, you've not quite grasped the idea properly. The whole point of having extra chains linked to the main one is so that not everyone needs to store the extra chains.

[franky1]

side chains is not the solution..

for instance.
1. side chains is like saying 'gold is a natural and rare material. but in 2016 it can now be made in lab in infinite amounts' - goodbye rarity
2. side chains are other blockchains... so whether you do a transaction on bitcoin or a second chain.. the data has not changed or decreased, its just moved. but now instead of one blockchain to fill up a hard drive.. now miners have to worry about multiple blockchains bloating a hard drive.
3. by mining more than one chain, will dilute the hashrate/difficulty as the hashes dont just protect one chain, but now have to protect multiple chains
4. sidechains wont just be a problem for miners, but also users wanting to run full-nodes. as explained in point 2. which will cause a dilution of people wanting to run
full nodes because they would have to store X*32mb blocks per 10 minutes. instead of just 1*32mb blocks per 10 minutes.

the only positive of sidechains are only for the creators of these altcoins. who can premine an altcoin and then sell it 1for1 for bitcoin..

Even though you're right that sidechains aren't the solution to scaling, you've not quite grasped the idea properly. The whole point of having extra chains linked to the main one is so that not everyone needs to store the extra chains.

which was my point number 4.. sidechains will cause even less people to want to run full-nodes

[Carlton Banks]

which was my point number 4.. sidechains will cause even less people to want to run full-nodes

No, you don't get it. Neither miners or users have to worry about sidechains that they don't use, because you don't need to download a chain you don't use. Points 2 and 4 are invalid.

[Wary]

No emotions, you are mistaken and/or confused. I objectively pointed out the flaw in this thread; it has not presented us with anything what I'd call 'evidence' that would back up this theory. You would have to back up your claims that sidechains are the right answer and elaborate why we should focus on them and not on other potential solutions. Then, and only then, is it possible for this thread to enter a sate of (possibly) healthy discussion. Note: I have a good understanding of sidechains and have at least, at 1 point in this year, suggested them and/or discussed them around here.

Thanks, that's something that we can discuss:

There are possibly better solutions for some of the 'problems' that you've listed.

-I see two problem with this argument.
a)  The "there are possibly better solutions" is not an argument at all, because exactly the same can be said about any solutions of any problem in the world. Correct? This argument is faulty because it is impossible to prove non-existence of something. Non-existence of possible better solution, in particular. In a healthy discussion an objection to a suggested solution should be either: "I suggest another solution, it is better and that's why:". Or "Status quo is better than changes you are suggesting and that's why:". If you have such an argument, let's discuss it. It is quite possible that you are right and I am wrong, but you should demonstrate it. That's how healthy discussions go, in my understanding.

b) You put the word 'problems' in quotes. This indicates that you don't believe that they are problems. Why then you are talking about solutions if there are no problems in the first place? You've said I am confused. Now you can see why  So, could you indicate a bit more clearly which my statement you are arguing with? I'll repeat them here, in more detail:

1. Two years ago it was generally expected among bitcoin community that bitcoin will soon get new niche markets: remittance, internet trade, Wall-street etc. Do you agree?
2. This didn't happen. Do you agree?
3. Bitcoin usage is not growing, at least at such extend that it can be distinguished from speculative rallies/crashes. Here is the proof: https://blockchain.info/charts/estimated-transaction-volume-usd?showDataPoints=false&timespan=all&show_header=true&daysAverageString=7&scale=1&address= (EDIT: I put the graph with comments in OP)
As you can see, for the period from Jan11 to Jan14, i.e. for 3 years it did grow steadily and had gained 4 orders of magnitude. But for the following 2 years, from jan14 till now, it have not gained not a single order of magnitude. We can clearly see 3-year "staircase" and then 2-year flat line. The only conclusion I can make is that bitcoin was gaining new and new markets, for 3 years, but 2 years ago it have practically stopped. Do you agree?
4. Bitcoin have not (yet) replaced fiat from mainstream market. Do you agree?
5. Same is true about niche market. Even drug trade (the most fitting niche market) is still mostly runs on fiat. Do you agree?
6. Bitcoin is not replacing fiat from mainstream market because it' benefits over fiat it not big enough to justify it for customer. Do you agree? (I hope you do, because it's almost an tautology ).
7. Bitcoin is not replacing fiat from niche markets by the same reason. Do you agree?
8. The way for bitcoin adoption goes through niche market. After conquering a niche market it strength grows and it makes easier to enter the next niche. Do you agree?
9. For each niche market there are some feature(s) of bitcoin that can be changed/added, to make it better fit and increase chances of it being adopted. (Scalability, speed, privacy, taxability etc). You may disagree with specific examples, but do you agree that such niches and features exist?
10. Do you agree that making bitcoin better fit for one niche, we can make it worse fit for some other niches?
11. Do you agree that in situation when we have an array of virtual currencies, each one tailored for its own niche market, with their total value fixed (I.e. that total value of all altcoins is never above 21M BTC and you'll never lose on exchanging from altcoin to bitcoin and back), chances of them getting mainstream adoption would be considerably higher than now?
12. Do you agree that sidechains offers such a solution?
13. Do you know any other solution that gives us the same results: array of niche-tailored non-competing currencies?

[spazzdla]

The first computer was invented in 1946.

In 1990, almost no one had one in their home

2000, most people owned one.

2015 everyone has one in their pocket.




Time is a tricky ******.

[ATguy]

11. Do you agree that in situation when we have an array of virtual currencies, each one tailored for its own niche market, with their total value fixed (I.e. that total value of all altcoins is never above 21M BTC and you'll never lose on exchanging from altcoin to bitcoin and back), chances of them getting mainstream adoption would be considerably higher than now?
12. Do you agree that sidechains offers such a solution?

which was my point number 4.. sidechains will cause even less people to want to run full-nodes

No, you don't get it. Neither miners or users have to worry about sidechains that they don't use, because you don't need to download a chain you don't use. Points 2 and 4 are invalid.

But the franky1 point that you split the hashing power remains. This splitting makes every sidechain less secure than if you have one scaled blockchain.

And who decides how many and what properties of the sidechains? You let free market decide like everyone can create one and he will compete to get haspower to get security for his sidechain (aka altcoins, and again, making average sidechain hashpower only lower) or just Bitcoin developers will have the final word?

[Carlton Banks]

But the franky1 point that you split the hashing power remains. This splitting makes every sidechain less secure than if you have one scaled blockchain.

Yes, not every miner will mine every chain, so not every chain will be as secure as the main chain. It's a problem. More complex designs can be used to address the issue (treechains, DAG chains etc), but I'm not sure that the dust has settled on those ideas sufficiently yet.

And who decides how many and what properties of the sidechains? You let free market decide like everyone can create one and he will compete to get haspower to get security for his sidechain (aka altcoins, and again, making average sidechain hashpower only lower) or just Bitcoin developers will have the final word?

No, sidechains will have their own interface, and anyone can design a chain to work with the interface (and Bitcoin network rules, of course)

[Wary]

Updated OP with a multi-colored graph.

[franky1]

which was my point number 4.. sidechains will cause even less people to want to run full-nodes

No, you don't get it. Neither miners or users have to worry about sidechains that they don't use, because you don't need to download a chain you don't use. Points 2 and 4 are invalid.

the way you envision is that coins remain separate..
so say i have walmart coin because maybe a family member works at walmart. gets paid walmart coins and i buy walmart coins from my family, to then buy groceries.

for me to be a proper full node. because MY earnings are bitcoin.. i need to run bitcoin-core AND walmart-core because i want to have both..
but because Walmart do 100,000 tx/s my walmart blockchain is getting huge. so much so that i give up being a node for both walmart and bitcoin...

the other thing about separate chains is.. that its no different to right now.. coins traded on exchanges via SQL databases.. and if you rebutt that there will be a masterchain that see's and regulated all the side chains.. then this masterchain that decentralises the exchanges will BLOAT..



others envision that sidechains will have the total coinage of other alts to meet but not exceed the total bitcoin 21mill.
so lets say walmart has 3million coins
so lets say Amazon has 3million coins
so lets say Apple has 3million coins
so lets say Ebay has 3million coins
so lets say Visa has 4.5million coins
so lets say Mastercard has 4.5million coins

totaling the comparable bitcoin circulation..

lets get one point clear right away it will not EVER be a fair 1walmart sat for 1bitcoin sat swap.

after all apple employee's get paid more than walmart employee's and mastercard employee's get paid more again.. so each coins value will be different. and a second issue affecting the 'supply' of coins would be number of employees aswell as how much they decide to hoard, stumping circulation to create demand.. vs swapping for any relevant price they can grab.

so although sidechains may create more transactions per second. (EG 6*7txps). the amount of usable coins is now 42million.. and some of the sidechains may have lots of supply but little demand or lots of demand but limited supply.. which if everyone converts to walmart coin because everyone naturally wants to eat and they are the biggest employer.. then suddenly walmart coin prices will rise and bitcoins will tank.

and dont get me started on the premine profiteering that is the backbone of sidechains idea
 

[Carlton Banks]

Franky, you still don't get it. Instead of talking about what people "envision", how about what's actually written in the code? Your examples are way off, in too many ways to list.

[ATguy]

the other thing about separate chains is.. that its no different to right now.. coins traded on exchanges via SQL databases.. and if you rebutt that there will be a masterchain that see's and regulated all the side chains.. then this masterchain that decentralises the exchanges will BLOAT..



others envision that sidechains will have the total coinage of other alts to meet but not exceed the total bitcoin 21mill.
so lets say walmart has 3million coins
so lets say Amazon has 3million coins
so lets say Apple has 3million coins
so lets say Ebay has 3million coins
so lets say Visa has 4.5million coins
so lets say Mastercard has 4.5million coins

totaling the comparable bitcoin circulation..

lets get one point clear right away it will not EVER be a fair 1walmart sat for 1bitcoin sat swap.

after all apple employee's get paid more than walmart employee's and mastercard employee's get paid more again.. so each coins value will be different. and a second issue affecting the 'supply' of coins would be number of employees aswell as how much they decide to hoard, stumping circulation to create demand.. vs swapping for any relevant price they can grab.

so although sidechains may create more transactions per second. (EG 6*7txps). the amount of usable coins is now 42million.. and some of the sidechains may have lots of supply but little demand or lots of demand but limited supply.. which if everyone converts to walmart coin because everyone naturally wants to eat and they are the biggest employer.. then suddenly walmart coin prices will rise and bitcoins will tank.

and dont get me started on the premine profiteering that is the backbone of sidechains idea
 

I believe your wrong here. The Amazon sidechain 1 coin, Apple sidechain 1 coin and Bitcoin 1 coin can be exchanged between themselves anytime and without exchange fees (just the transaction fees), thus only 21M coins can exist on Bitcoin+Sidechains.

But I dont think the benefit of sidechains for scaling is huge when everyone has to have full node of every sidechain he uses (analog of everyone has to have full Bitcoin node when he uses Bitcoin...)

[SebastianJu]

There is no such killer application for bitcoin. Let's face it, Bitcoin's benefits over fiat are currently not big enough to justify switching to it.

I agree. Bitcoin has only some advantages but it is no killer app. It might be difference once governments decide to seize funds or other things happen. But at the moment advantages are rare.

The worse that the blocksize is not raised because when the block is full and constantly a chunk of legit transactions can not get confirmed then bitcoin will become slow, expensive and unreliable on top. I mean who will use a currency where transactions maybe, maybe not, go through?

[SebastianJu]

People are allergic to any "fork action" of bitcoin. That is why XT failed so miserably, I am not sure if that proposed BIP of yours is not conservative enough for bitcoin purists.
Also I doubt that any changes that will push bitcoin into even more anonymous and private state will ever happen, it will be quite opposite route imo.

I see that not a fee people feared the spread fear about a fork but XT failed because Hearn and his stupid ideas. If it would have not been because of that i'm sure they would find more and more supporters.

[maokoto]

I agree that mass adoption has not come because there is not enough incentives for regular people to use Bitcoin. There are few stores, and the ones there are offer their goods/services for the same price in Bitcoin than in Fiat. Why would a regular person go through the hassle of getting educated about Bitcoin, then using fiat to buy some, then buying with Bitcoin? It has no inmediate reward for that person.

People using Bitcoin are mainly those who expect to get a profit from it, so it is more of an investment. But paradoxically, it is an investment that would not work very well if people do not adopt it.

[Lauda]

-snip-

With possibly better I meant that you should explain why we should focus on sidechains, but not for something like Lightning Network (a single example). In order to establish a strong thread you should have listed out potential solutions and argued why sidechains are better. That's why I was aiming at.
1,2,4,5,8,9 : Yes.
3. I don't completely agree with you. This chart is based on the USD price at that time (right?), and thus it would not clearly show if there is an increase of volume or not. The amount of Bitcoin transacted daily would show it a bit better. The amount of transactions per day shows an even better picture.
6. What are the benefits of fiat exactly? The benefits of Bitcoin might not justify it for the average person, but I'm not an average person and thus disagree (for myself, not in general).
7. Somewhat.
10. If we aren't careful, yes.
11. Possibly.
12. They could, yes.
13. I don't want an array of currencies.
However, this still doesn't present sidechains (which are still experimental) as a solution. You haven't even explained what a sidechain is (for those that do not know). I'm asking for more of a technical analysis (if you can provide one).

[spazzdla]

Just going to Ignore the fact that for 56 YEARS computers where thought of never having a greater impact than the fax machine..

FIFTY SIX YEARS

[Lauda]

Just going to Ignore the fact that for 56 YEARS computers where thought of never having a greater impact than the fax machine..

FIFTY SIX YEARS

Fact? Where did you read this? Provide the source.

There are few stores, and the ones there are offer their goods/services for the same price in Bitcoin than in Fiat. Why would a regular person go through the hassle of getting educated about Bitcoin, then using fiat to buy some, then buying with Bitcoin? It has no inmediate reward for that person.

Bitcoin is not about discounts.

I see that not a fee people feared the spread fear about a fork but XT failed because Hearn and his stupid ideas. If it would have not been because of that i'm sure they would find more and more supporters.

One has to be really special to support something like that.

[hayek]

This is a total lie. Bitcoin is gaining new markets as fast as it's losing them. That's why your graph line isn't moving like you want it to.

The great thing about making claims is anyone can do it and they require zero facts! Awesome post!

[hayek]

Just going to Ignore the fact that for 56 YEARS computers where thought of never having a greater impact than the fax machine..

FIFTY SIX YEARS

At least get your quote correct. Krugman said that about the Internet. In, like, the 90s

[qwk]

There is no such killer application for bitcoin. Let's face it, Bitcoin's benefits over fiat are currently not big enough to justify switching to it.

There is no need for a killer application for bitcoin.

In fact, bitcoin itself is the killer application for the internet.
What was email? Just communication.
What was the web? Just media.
What's bitcoin? Money.
What is the most important thing* in the lives of billions of people on this planet?
Communication?
Media?
Money.



* well, there are other things that might be more important than money. Work. Food. Health. But we have yet to find ways to leverage the internet for them.

[spazzdla]

Just going to Ignore the fact that for 56 YEARS computers where thought of never having a greater impact than the fax machine..

FIFTY SIX YEARS

Fact? Where did you read this? Provide the source.

There are few stores, and the ones there are offer their goods/services for the same price in Bitcoin than in Fiat. Why would a regular person go through the hassle of getting educated about Bitcoin, then using fiat to buy some, then buying with Bitcoin? It has no inmediate reward for that person.

Bitcoin is not about discounts.

I see that not a fee people feared the spread fear about a fork but XT failed because Hearn and his stupid ideas. If it would have not been because of that i'm sure they would find more and more supporters.

One has to be really special to support something like that.

The source?!?!

Why is a source needed.. you guys can not possibly be suggesting the creators / users of the ENIAC knew computers would change the planet this much.  You've got to be joking.

[spazzdla]

Just going to Ignore the fact that for 56 YEARS computers where thought of never having a greater impact than the fax machine..

FIFTY SIX YEARS

At least get your quote correct. Krugman said that about the Internet. In, like, the 90s

Okay nothing more than the TV, radio, phone, take your pick of items.  It wasn't suppose to be specific about the fax machine.
You just 100% proved my point......... How can you not see that..

ENICA created in 1946... Krugman in the 1990s... about FIFTY, FIFTY, FIVE ZERO years later says that...
Soooooooooooooooooooooooooooo how am i wrong?  
I added 6 as in 2000 people still had little idea how big it was going to be, change it to 50 if that floats your boat.

No one knew in 1946 what the ENIAC was going to become.  To even suggest someone thought you would have one in your pocket is ludicrous.

[Amph]

There is no such killer application for bitcoin. Let's face it, Bitcoin's benefits over fiat are currently not big enough to justify switching to it.

There is no need for a killer application for bitcoin.

In fact, bitcoin itself is the killer application for the internet.
What was email? Just communication.
What was the web? Just media.
What's bitcoin? Money.
What is the most important thing* in the lives of billions of people on this planet?
Communication?
Media?
Money.



* well, there are other things that might be more important than money. Work. Food. Health. But we have yet to find ways to leverage the internet for them.

one was correct here, about portraying bitcoin as a next natural step among the technology changes in the last century or so

bitcoin can be pictured as the natural step of money system with its decentralization "feature"

but this also mean that there will be an evolution of bitcoin in the future...

[spazzdla]

There is no such killer application for bitcoin. Let's face it, Bitcoin's benefits over fiat are currently not big enough to justify switching to it.

There is no need for a killer application for bitcoin.

In fact, bitcoin itself is the killer application for the internet.
What was email? Just communication.
What was the web? Just media.
What's bitcoin? Money.
What is the most important thing* in the lives of billions of people on this planet?
Communication?
Media?
Money.



* well, there are other things that might be more important than money. Work. Food. Health. But we have yet to find ways to leverage the internet for them.

one was correct here, about portraying bitcoin as a next natural step among the technology changes in the last century or so

bitcoin can be pictured as the natural step of money system with its decentralization "feature"

but this also mean that there will be an evolution of bitcoin in the future...

I agree with this.

What I am trying to say is, what potentials this brings are uttely unfathomable just like when the ENIAC went online.  If you told someone that it would be the size of my hand and I could watch COLOUR videos on it the entire room would burst into laughter.

[Wary]

There is no such killer application for bitcoin. Let's face it, Bitcoin's benefits over fiat are currently not big enough to justify switching to it.

There is no need for a killer application for bitcoin.

In fact, bitcoin itself is the killer application for the internet.
What was email? Just communication.
What was the web? Just media.
What's bitcoin? Money.
What is the most important thing* in the lives of billions of people on this planet?
Communication?
Media?
Money.



* well, there are other things that might be more important than money. Work. Food. Health. But we have yet to find ways to leverage the internet for them.

Yes, money is important. But people already have money system. They need some very strong reasons to discard it and switch to something else. What benefits this "something else" would give to them? Those benefits should be really big, to overcome tremendous inertia and network effect of the current money system. Email did have such a benefit: it delivered mail thousand times faster. What thousand-fold benefit over dollar bitcoin has? For average Joe? In an area that really matters to Joe, like speed of mail delivery mattered?

[qwk]

There is no such killer application for bitcoin. Let's face it, Bitcoin's benefits over fiat are currently not big enough to justify switching to it.

There is no need for a killer application for bitcoin.

In fact, bitcoin itself is the killer application for the internet.
What was email? Just communication.
What was the web? Just media.
What's bitcoin? Money.
What is the most important thing* in the lives of billions of people on this planet?
Communication?
Media?
Money.

Yes, money is important. But people already have money system. They need some very strong reasons to discard it and switch to something else. What benefits this "something else" would give to them? Those benefits should be really big, to overcome tremendous inertia and network effect of the current money system. Email did have such a benefit: it delivered mail thousand times faster. What thousand-fold benefit over dollar bitcoin has? For average Joe? In an area that really matters to Joe, like speed of mail delivery mattered?

In fact, early email was pretty slow, when you had to deliver over a chain over uucp-relays etc. It could literally take days for an email to reach its recipient. Fax, on the other hand, was pretty much instant. At the same time, fax was not for the average Joe, but email wasn't either.
But, quick email and fax were available to businesses. And boy, did they use it.
Now, about bitcoin, it might not necessarily be available to your average Joe and also not offer him much of a benefit.

But for the business user, bitcoin ist pretty much the fax / mail for money.

[Mickeyb]

OP I see what you are trying to say. And I somewhat agree with you. We do need to clarify different use cases and to polish Bitcoin for those use cases that we find them suitable. But I am not for bringing any hasty decisions. For example, if we polish Bitcoin for black market activities, we have just closed ourselves 3 other use cases on the other side.

I still think that we should be conservative and keep developing in conservative way until we don't see where is this boat headed to in the next year or two. There are some people and some devs that claim that everything is very develop able and doable, so let's see this as well. It takes time to change people's habits, especially when it comes to their finance usage.

Then I think we will still have enough time to make such a huge decisions.

[Wary]

With possibly better I meant that you should explain why we should focus on sidechains, but not for something like Lightning Network (a single example). In order to establish a strong thread you should have listed out potential solutions and argued why sidechains are better. That's why I was aiming at.

Lightning Network is important. But it is for resolving other problem: scalability, to increase it on many orders of magnitude. It is not needed yet and if the problem I was discussing won't be solved, it will never be needed. If we won't be able to conquer new niche markets, we'll never need more than 8Mb blocks.  As for other solutions, I'm not aware of them. There are some projects aimed at some specific niches, but there is no project that would enable to attack them all. The sidechain is the only one, there is nothing to compare it with.

3. I don't completely agree with you. This chart is based on the USD price at that time (right?), and thus it would not clearly show if there is an increase of volume or not. The amount of Bitcoin transacted daily would show it a bit better. The amount of transactions per day shows an even better picture.

I believe that transaction volume in USD prices is the best measure to see bitcoin market penetration. People use bitcoins to transfer value. If price of bitcoins halves, they would need twice as much of bitcoins to transfer the same value. That's why number of bitcoin transacted is bad measure of market penetration. The amount of transaction is even worse in this respect, since the same value can be send by one transacton or by 1000 transactions. USD volume is the best measure. (I agree that inflation-adjusted USD would be better, but so slightly better, that we would need a magnifying glass to see the difference between adjusted and non-adjusted graphs. Because the graph shows growth in many orders of magnitude, while $ value have changed on some % for the period). When bitcoin was gaining new markets (i.e. new groups of people were switching from fiat transactions to btc transactions) we saw the USD volume was jumping new step on the staircase. There were six steps so far. I cannot exactly identify for which market which step was responsible, but I can name following markets: drug trade (thanks Silkroad), gambling (thanks SatoshiDice), trading (thanks Gox), trading in China (thanks Chinese exchanges). Each of these markets gave us usd transaction growth in range of order of magnitude. But for the last 2 years nothing of the kind happens. There is some growth, but nothing comparable to the previous staircase. We have stopped gaining new niche markets, and to resume it, we have to change Bitcoin somehow. Sidechains is the only solution of this problem I'm aware of.

6. What are the benefits of fiat exactly?

The major benefit of fiat is network effect. You can use USD at any place over whole country. Everybody accept them. While to earn or spend, say, Mongolian Tughrik in New York you would have a lot of hassle. The same is true about bitcoin. To justify this hassle, you would need some really good benefit of bitcoin over fiat.

The benefits of Bitcoin might not justify it for the average person, but I'm not an average person and thus disagree (for myself, not in general).

You already have bitcoin. You are old market. While we are talking about entering new markets. So we need to find a new market, i.e. a category of people that don't use Bitcoin now and change bitcoin in such a way that they would want to use it. If this would work, we should repeat it again, for some other and larger markets. Or we can introduce sidechains and do it simultaneously, for many markets at once, in a hope that at least one of them would fire. It would improve chances and speed of the mainstream adoption.
 

13. I don't want an array of currencies.

You not only want it, you are currently using at least 3 non-competing currencies. I mean 3 forms of dollars: change, bills, electronic accounts. Each form is good for some purposes, but bad for others. Dimes are not convenient to buy a car with, but are good to pay to a street musician. Electronic account is good to automatically pay rent/mortgage, but not good to pay "under the table". And so on. That's why we have those different "avatars" of dollar. Sidechains will create the same system for bitcoin, only better one: more forms of bitcoin, better tailored for each purpose.  

You haven't even explained what a sidechain is (for those that do not know).

You are right. I assumed everybody here knows it. OK, for the purpose of this discussion it's enough to know what sidechain would let us to develop new forms of bitcoin, interchangeable into each other, like physical 100-dollar bills can be always changed to dimes and back, without losing it's value. There is no limit to number and variety of possible bitcoin forms, so they can be precisely tailored to each market. The switch between them can be handled by your wallet, you may not even need to know about it. You just take from your wallet item you currently need, be it a dime or $1000 bill. When needed, the wallet will break your $1000 bill into dimes or merge the dimes back or convert them to any other form you would need.

I'm asking for more of a technical analysis (if you can provide one).

There are already technical threads, dedicated to it. This thread is about market analysis. My goal was to demonstrate that to significantly increase bitcoin's market share we need to transform it into an array of non-competing currencies. Sidechains is the only project aimed at it.

Anyway, I'm glad that our positions are closer than I thought.

[Lauda]

This thread is about market analysis. My goal was to demonstrate that to significantly increase bitcoin's market share we need to transform it into an array of non-competing currencies. Sidechains is the only project aimed at it.

Then you have created the thread in the wrong section. It would be more fitting in Economics if it is about the market. I will reply to the rest soon by updating this post.
Update:

It's market analysis of a technical solution. That's why I think it fits better not to Economics or Technical, but to General section. Maybe I should put a link to this thread in Economics section?

Because it is a mix it is hard to find the most suitable section for it (threads of similar character appear from time to time); I'm not really sure. You could if you wanted to.

[Wary]

We do need to clarify different use cases and to polish Bitcoin for those use cases that we find them suitable. But I am not for bringing any hasty decisions. For example, if we polish Bitcoin for black market activities, we have just closed ourselves 3 other use cases on the other side.

You are right. Making bitcoin better for one case would make it worse for some other cases. That's why we need several forms of Bitcoins, each one is polished for its own use case, with ability to convert these forms into each other, like $100 bills can be converted to dimes and back. Sidechains would let us to do it.

[Wary]

Then you have created the thread in the wrong section. It would be more fitting in Economics if it is about the market.

It's market analysis of a technical solution. That's why I think it fits better not to Economics or Technical, but to General section. Maybe I should put a link to this thread in Economics section?

[ATguy]

There is no such killer application for bitcoin. Let's face it, Bitcoin's benefits over fiat are currently not big enough to justify switching to it.

There is no need for a killer application for bitcoin.

In fact, bitcoin itself is the killer application for the internet.
What was email? Just communication.
What was the web? Just media.
What's bitcoin? Money.
What is the most important thing* in the lives of billions of people on this planet?
Communication?
Media?
Money.



* well, there are other things that might be more important than money. Work. Food. Health. But we have yet to find ways to leverage the internet for them.

Yes, money is important. But people already have money system. They need some very strong reasons to discard it and switch to something else. What benefits this "something else" would give to them? Those benefits should be really big, to overcome tremendous inertia and network effect of the current money system. Email did have such a benefit: it delivered mail thousand times faster. What thousand-fold benefit over dollar bitcoin has? For average Joe? In an area that really matters to Joe, like speed of mail delivery mattered?

The benefits of decentralized money is clear, no single entity (ie government) have control over your money. Maybe you dont remember but Greek government used capital control to say how many Euros can be cashout daily by every person. The real and anytime ready to be spend Bitcoins is true benefit over fiat aka debt based money. The majority of current and probably next generation will probably not appreciate decentralized money, but this might not be the case forever...

[johnyj]

Do not understand what OP want to say, mass adoption is obviously happening if you consider the price was basically in a down trend during last 2 years

And money is a one-size-fits-all thing, just like USD is suitable for any kind of transaction, so does bitcoin

[Mickeyb]

We do need to clarify different use cases and to polish Bitcoin for those use cases that we find them suitable. But I am not for bringing any hasty decisions. For example, if we polish Bitcoin for black market activities, we have just closed ourselves 3 other use cases on the other side.

You are right. Making bitcoin better for one case would make it worse for some other cases. That's why we need several forms of Bitcoins, each one is polished for its own use case, with ability to convert these forms into each other, like $100 bills can be converted to dimes and back. Sidechains would let us to do it.

Everyone keep mentioning these sidechains like a miracle that will save us from all! This problem that we have, sidechains will solve it, that problem that we might encounter, sidechains will solve it.

I sure hope that will be possible. I guess we will see everything in the near future!