So... This is how you kill bitcoin.

[Impaler]

Additional protocol layers will be built on top of bitcoin which will provide stable currencies pegged to dollars, gold, oil, or anything else your heart desires. Think about how HTTP is built on top of TCP/IP. That is how we will build new, stable currencies on top of bitcoin.

I wrote a paper about it, and if you are going to the bitcoin conference in San Jose in May, you can come to the "Bitcoin in the Future" panel and hear me talk about it and ask questions.

The take-away is that buying bitcoins now is the best way to bet on the success of those "child currencies"

Huuu?  Your delusional if you think mere 'protocols' by which I take it you mean software can peg an exchange rate between between a digital commodity (BTC) and a physical commodity.  It dose not matter how much security you have over the digital side when you have zero control over the physical side of the peg.  You would need a physical repository with physical access and physical reserves to maintain a peg.

Further more it would be doubly impossible to do this if BTC is still floating against the dollar because you would creating a triangle, lets assume you want to maintain a BTC/Gold peg you now have 3 exchange rates, BTC/Dollar, Gold/Dollar which float and BTC/Gold which is pegged.  This immediately creates potential for an arbitrage if either of the floating rates shifts without a commensurate change in the other.  Take the present massive rise in BTC/Dollar, Gold/Dollar hasn't shifted at all and if your BTC/Gold peg had been in balance before it is now totally out of which and a person can profit hugely by converting BTC->Dollar->Gold->BTC and they will have multiplied their wealth hugely while draining the wealth of the peg maintaining entity.  This is why the original gold standard failed.

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[John Kirk]

My God! You're right! Why didn't I think of this before?

It is obviously a brilliant and nefarious plan devised by an evil mastermind: Destroy bitcoin by making it succeed faster than we ever dreamed possible!

[madmadmax]

Gotta admit, pretty smart - Didn't see that coming, did we?

If you're a central bank, or a government feeling threatened by the rise of a paradigm such as bitcoin, how do you kill it?

Make it illegal? Make it difficult to use? Ostracize the theory's proponents?

Or just simply remove the underlying utility of the invention in question - in this case, bitcoin's use as either a transactional currency, or a useful store of value.

Other than the speculators, who in their right mind would store their worth in something that has no steady, definite value?

Forget the people hurrying to buy bitcoin today (because tomorrow it'll be 25% more!) - Who would dare use bitcoin to purchase a good or service from someone in another country, or at a retail counter?

If you're a central bank, or a government, with massive resources at your disposal, you don't care if you make a few people wealthy in the beginning (or destroy a few fortunes in the end) you've accomplished what you set out to do: "Bitcoin? That was a crazy ride. Who'd ever trust that thing again?"

It's a shame, really - there was so much potential, and yet it's proven so easy to destroy.

The destruction was just not conducted the way that any of us thought it would be done.

Never underestimate the foolishness of the average gullible misguided fool, I bet if bitcoin wouldn't gain momentum rapidly and the economy would expand over time instead they would paint the whole practice in propoganda instead and wage a prohibition era against bitcoin fueled by the fear of the masses.

[LoweryCBS]

Just sayin'

[nameface]

So OP is talking about price correction to $80-100? Gimme a break.

[LoweryCBS]

So OP is talking about price correction to $80-100? Gimme a break.

Volatility.

There are three primary needs and uses that bitcoin can address:

(1) A store of value.
(2) A transactional currency.
(3) Speculation.

But...

(1) If you've got a quantity of wealth you need to safely store somewhere, you're sure as hell not going to pick bitcoin.
(2) If you're a merchant, you're not the least bit interested in swings that will either triple or decimate your margin.
(3) So all we're left with is people buying bitcoin today because tomorrow it'll be double, then selling at a loss this afternoon because by morning it'll be worth half. Basically: tulip bulbs.

Where do we go from here? What do we do to fix these problems?

I don't know. I wish I did.

[nameface]

You're making great points. I think it's early days though, and that solutions will come. It's not about how to keep a 2 billion dollar market from crumbling to a 1 billion dollar market overnight. It's about appealing to bitcoin buyers through innovative applications of the technology.

We need people to buy and hold coins and this is why I like proof of stake (ppcoin white paper http://www.ppcoin.org/static/ppcoin-paper.pdf).

Bitcoin is too often being framed by the media as a "boom or bust" wild wild west quasi-criminal purely speculative trifling absurdity. Bitcoin needs more buyers to think about owning a small amount of coin and holding, and thinking about them as an investment/contribution as well as a trading tool.

Proof of stake would be a great incentive to hold your coins because no matter how high or low the price goes against the dollar, so long as you hold your coin, you end up with more of them.

Further, I think a lot of early adopters who mined a mint or bought in for $0.14-$15 (and geez, I sure wish I was one of them) are now over-exposed. Can you blame them for dropping their positions during a parabolic rise in price? That will all shake out before too long.

[Rampion]

Gotta admit, pretty smart - Didn't see that coming, did we?

If you're a central bank, or a government feeling threatened by the rise of a paradigm such as bitcoin, how do you kill it?

Make it illegal? Make it difficult to use? Ostracize the theory's proponents?

Or just simply remove the underlying utility of the invention in question - in this case, bitcoin's use as either a transactional currency, or a useful store of value.

Other than the speculators, who in their right mind would store their worth in something that has no steady, definite value?

Forget the people hurrying to buy bitcoin today (because tomorrow it'll be 25% more!) - Who would dare use bitcoin to purchase a good or service from someone in another country, or at a retail counter?

If you're a central bank, or a government, with massive resources at your disposal, you don't care if you make a few people wealthy in the beginning (or destroy a few fortunes in the end) you've accomplished what you set out to do: "Bitcoin? That was a crazy ride. Who'd ever trust that thing again?"

It's a shame, really - there was so much potential, and yet it's proven so easy to destroy.

The destruction was just not conducted the way that any of us thought it would be done.

That's obviously the weakest point of BTC. The FED can definitely perform such an attack.

I'm sure (and I always was) that this is the real threat. If they want to fuck BTC, they will exploit its high sensitivity to speculation.

[Dr3AM$cAp3]

That would be good, because next bubble could be much bigger. If it goes down to 1 cent, I'll get a large loan to buy millions of bitcoins. At the next bubble I'll be a billionaire. 

me too
[/quote]
I hope you guys aren't serious.

[tomwoods]

Additional protocol layers will be built on top of bitcoin which will provide stable currencies pegged to dollars, gold, oil, or anything else your heart desires. Think about how HTTP is built on top of TCP/IP. That is how we will build new, stable currencies on top of bitcoin.

Further more it would be doubly impossible to do this if BTC is still floating against the dollar because you would creating a triangle, lets assume you want to maintain a BTC/Gold peg you now have 3 exchange rates, BTC/Dollar, Gold/Dollar which float and BTC/Gold which is pegged.  This immediately creates potential for an arbitrage if either of the floating rates shifts without a commensurate change in the other.  Take the present massive rise in BTC/Dollar, Gold/Dollar hasn't shifted at all and if your BTC/Gold peg had been in balance before it is now totally out of which and a person can profit hugely by converting BTC->Dollar->Gold->BTC and they will have multiplied their wealth hugely while draining the wealth of the peg maintaining entity.  This is why the original gold standard failed.

This is finally the conversation I wanted to see here at bitcointalk.

Help me figure this out: So what if you peg BTC to an index? Call it BTC/Sht, that is, pegged to the price of all the sh*t you can buy with it.

You take the price of gold, the price of gold, food, gasoline, potatoes, dollars, yen, everything.. and take into account fluctuations, so that if one item starts varying, it has less influence on the index, to avoid manipulation.

Then you make the process of entering data and participating in the calculation of this index a new way to mine (that way ASICs miners aren't the only ones who get to participate in the process of generation of new bitcoins).

This way
a) You make a stable foundation that people can use to trade and save in
b) You provide a way for more people to participate in the generation of new coins, possibly letting new players in. In third world countries with strong currency control, its just as hard to get your hands on bitcoins as it is to get your hands on any other currency, because who wants your fiat, right?
c) You protect bitcoin and users from manipulation

[cbeast]

Additional protocol layers will be built on top of bitcoin which will provide stable currencies pegged to dollars, gold, oil, or anything else your heart desires. Think about how HTTP is built on top of TCP/IP. That is how we will build new, stable currencies on top of bitcoin.

Further more it would be doubly impossible to do this if BTC is still floating against the dollar because you would creating a triangle, lets assume you want to maintain a BTC/Gold peg you now have 3 exchange rates, BTC/Dollar, Gold/Dollar which float and BTC/Gold which is pegged.  This immediately creates potential for an arbitrage if either of the floating rates shifts without a commensurate change in the other.  Take the present massive rise in BTC/Dollar, Gold/Dollar hasn't shifted at all and if your BTC/Gold peg had been in balance before it is now totally out of which and a person can profit hugely by converting BTC->Dollar->Gold->BTC and they will have multiplied their wealth hugely while draining the wealth of the peg maintaining entity.  This is why the original gold standard failed.

This is finally the conversation I wanted to see here at bitcointalk.

Help me figure this out: So what if you peg BTC to an index? Call it BTC/Sht, that is, pegged to the price of sh*t you can buy with it.

You take the price of gold, the price of gold, food, gasoline, potatoes, dollars, yen, everything.. and take into account fluctuations, so that if one item starts varying, it has less influence on the index, to avoid manipulation.

Then you make the process of entering data and participating in the calculation of this index a new way to mine (that way ASICs miners aren't the only ones who get to participate in the process of generation of new bitcoins)

<snip... >I don't really see the need for a decentralized exchange if we have a Pricecoin that monitors price of Bitcoin (and possibly other fungible commodities) and algorithmically analyzes price fluctuations, then exchanges would be used for trading, but not leveraged speculation and HST. I think it would boost price confidence and utility of cryptocurrencies.

This additional protocol layer could serve this function.

[cryptoanarchist]

I think Ripple is going to be used for decentralized exchange.

[tomwoods]

I think Ripple is going to be used for decentralized exchange.

Do you know if they have even figured out how they are going to distribute Ripples? Or even how one can purchase one?

[gollum]

So OP is talking about price correction to $80-100? Gimme a break.

The price is already 60$ at bitstamp and btce. IT might drop down to 10$ when MtGox opens again.

[nameface]

So OP is talking about price correction to $80-100? Gimme a break.

The price is already 60$ at bitstamp and btce. IT might drop down to 10$ when MtGox opens again.

BRING IT ON!!!!

[dacoinminster]

This is finally the conversation I wanted to see here at bitcointalk.

Help me figure this out: So what if you peg BTC to an index? Call it BTC/Sht, that is, pegged to the price of all the sh*t you can buy with it.

You take the price of gold, the price of gold, food, gasoline, potatoes, dollars, yen, everything.. and take into account fluctuations, so that if one item starts varying, it has less influence on the index, to avoid manipulation.

Then you make the process of entering data and participating in the calculation of this index a new way to mine (that way ASICs miners aren't the only ones who get to participate in the process of generation of new bitcoins).

This way
a) You make a stable foundation that people can use to trade and save in
b) You provide a way for more people to participate in the generation of new coins, possibly letting new players in. In third world countries with strong currency control, its just as hard to get your hands on bitcoins as it is to get your hands on any other currency, because who wants your fiat, right?
c) You protect bitcoin and users from manipulation

Well, you can't peg BTC, but rather something built on top of BTC. But yes, you could peg these "child currencies" to anything you want, including an index. I suspect just about any set of rules you can dream up could be implemented.

[superdork]

If that is the plan, then fucking capitalize on it.

Put in low buy orders
don't have ANY market price sell orders (that could get pulled down in a drop)
buy on the dip
DO NOT FUCKING PANIC SELL

Then if the day traders panic, they can get their asses kicked and we can take their coins on sale and send them running home to mommy crying.

 

[cryptoanarchist]

3 pages into this idiot thread and bitcoin still hasn't been "killed"