Bitcoin trades the inequity of dynastic power for the inequity of early adoption

[Red]

The idea of 2 complementary currencies with a focused design is very interesting. One could be optimised as a pure transactional with a stable exchange, and the other as a deflationary store of value. And still have the benefits of a decentralised, near-anonymous and non seizable.
Let speculators speculate with bitcoins, and merchants deal with the other one. And let people choose a mix of both according to mood.

Exactly! Like having both a checking account and a savings accounts.

[rpietila]

The idea of 2 complementary currencies with a focused design is very interesting. One could be optimised as a pure transactional with a stable exchange, and the other as a deflationary store of value. And still have the benefits of a decentralised, near-anonymous and non seizable.
Let speculators speculate with bitcoins, and merchants deal with the other one. And let people choose a mix of both according to mood.

Yes, we need a silver to bitcoin's gold. But that one will not be litecoin, sorry 

Another complement to the hard currency (blockchain bitcoin) economy, would be to reinstall real bills. <- It's a technical but fascinating read about the almost-forgotten aspect of the gold standard, without which the gold standard (of the post-WWI world) had no means to operate, and needed to be replaced with fiat standard in the 1930s.

[Xiaoma]

The idea of 2 complementary currencies with a focused design is very interesting. One could be optimised as a pure transactional with a stable exchange, and the other as a deflationary store of value. And still have the benefits of a decentralised, near-anonymous and non seizable.
Let speculators speculate with bitcoins, and merchants deal with the other one. And let people choose a mix of both according to mood.

Exactly! Like having both a checking account and a savings accounts.

From what I see, I suspect is more like a checking account and a stock playground at NYSE. A savings account is not that volatile.

[Red]

From what I see, I suspect is more like a checking account and a stock playground at NYSE. A savings account is not that volatile.

Ssssssh! Don't tell anyone here that... :-)

[Xiaoma]

From what I see, I suspect is more like a checking account and a stock playground at NYSE. A savings account is not that volatile.

Ssssssh! Don't tell anyone here that... :-)

whoops sorry... of course we have a super stable currency that is nearly impossible to manipulate.

Anyway looks like I don't have much more to say about the topic of this thread. Who got hundreds of coins have that, who got a million will be lucky anyway. Not my problem unless it stops bitcoin from going mainstream. Do we still want that?

[Red]

whoops sorry... of course we have a super stable currency that is nearly impossible to manipulate.

Anyway looks like I don't have much more to say about the topic of this thread. Who got hundreds of coins have that, who got a million will be lucky anyway. Not my problem unless it stops bitcoin from going mainstream. Do we still want that?

:-)

It has been my contention since the beginning (almost 4 years) that this thread's topic will be what stops bitcoin from going mainstream.

So let's talk about this...

If there were a value stable COMPLEMENT to bitcoin (something like GEM, EnCoin, et. al.) which was created as stable "swap space" for speculators when the bitcoin market is falling,
Would that stable currency eventually gain dominance because it alleviates the need for bitcoin in the first place?

Specifically, would "stable coin" become the primary "currency" for setting prices, measuring value, making loans and paying off debts. While relegating bitcoin to "scarce commodity" status. Furthermore, would there be any point in speculating in a "commodity" with no particular use except as a currency?

[Qoheleth]

Another complement to the hard currency (blockchain bitcoin) economy, would be to reinstall real bills. <- It's a technical but fascinating read about the almost-forgotten aspect of the gold standard, without which the gold standard (of the post-WWI world) had no means to operate, and needed to be replaced with fiat standard in the 1930s.

Another fascinating bit of information, if presented a bit polemically. If I'm properly understanding the concept of "real bills" (not 100% sure - the PDF seems to assume the reader already knows), they seem to fulfill a similar purpose to the Credit Coins in Grignon's Digital Coin scheme, and by a similar mechanism.

So much eye-opening prior art in this thread.

[rpietila]

Another fascinating bit of information, if presented a bit polemically.

As of that writing, he was already 81! A little respect If I would need to pick one person, who has opened my eyes as regards to monetary economics, it would be Fekete. For anyone with a 130+ IQ, I would suggest to read all of his articles. It only takes a weekend to digest them and at least I have benefitted tremendously from the information.

[Qoheleth]

Another fascinating bit of information, if presented a bit polemically.

As of that writing, he was already 81! A little respect If I would need to pick one person, who has opened my eyes as regards to monetary economics, it would be Fekete. For anyone with a 130+ IQ, I would suggest to read all of his articles. It only takes a weekend to digest them and at least I have benefitted tremendously from the information.

Having now reached the end of the PDF, I withdraw any implicit accusations about its tone - the postscript did an excellent job of explaining it.

I'll try to pencil in some time to read more of his work.

[Xiaoma]

It has been my contention since the beginning (almost 4 years) that this thread's topic will be what stops bitcoin from going mainstream.

So let's talk about this...

If there were a value stable COMPLEMENT to bitcoin (something like GEM, EnCoin, et. al.) which was created as stable "swap space" for speculators when the bitcoin market is falling,
Would that stable currency eventually gain dominance because it alleviates the need for bitcoin in the first place?

Specifically, would "stable coin" become the primary "currency" for setting prices, measuring value, making loans and paying off debts. While relegating bitcoin to "scarce commodity" status. Furthermore, would there be any point in speculating in a "commodity" with no particular use except as a currency?

I don't think it is important if currency A or currency B is the primary one, or if people enjoy speculating on it. What I find important is the fact that in this "double currency system" only one of the 2 can be used as an actual currency and money transfer, and the other one as investment/speculation/protection/whatever. I don't think Bitcoin was ever designed to be just that, but there is no reason why it could not become one. This is topic for another thread.

What I find most agreeable in this thread, is the obvious fact (obvious even if lots of people don't want to talk about it) that the perceived inequity or "ponziness" of Bitcoin is more important for large scale adoption than the actual fact that it is or not a scam. And this was said and repeated over and over in other threads too by a minority of people. It is a marketing failure to ignore something so fundamental as the perceived legality and safety of a product.

I personally don't care how rich the early adopters can become, but I believe Bitcoin (or any alternative) only has a meaning if it goes mainstream. If it stay a niche plaything for a bunch of geeks it is a failure and deserve to disappear. A world changing idea has a meaning only if it has the strength to actually change the world. If not, it is just fulfilling the profecy that it is just a brilliantly executed ponzi schema.

[Adrian-x]

This is true, and the most practical reason Bitcoin may be superseded by a crypto currency that has an adoption curve similar to this.

What mechanisms exactly would appeal to enough people, so that they would trade the guaranteed-less-than-100%-ever-more inflation of bitcoin, for something which cannot markedly appreciate in value over time, due to new creation tied to increase in userbase?

Not sure I am understanding your concern correctly but I will take a stab at what I though you were questioning. 
I don't think the majority of people think a fixed currency is beneficial, I think the majority like bank interest and seeing their investments appreciate in value, and buy the inflation myth they are fed by politicians and economists.  So I don't see them willingly taking part in Bitcoin.

As for those who see the benefits, the early majority will also see the points raised by the OP.  Reportedly some 6,000,000 Bitcoins had already been mined before they started trading, and over 50% are already mined befor Bitcoin is entering the early majority adoption stage. The benefits of partaking in the Bitcoin Economy translate to a huge amount of wealth that must transfer to the" first" Innovators. 

People use early tech stocks to set a president, but the wealth transfer is many orders of magnitude bigger than those stocks.

Other justifications identify risk and the risks involved are not big relatively speaking, I consider myself among the later innovators or first early adopters and would like to see adoption grow to about 1/5th of the world's population, but it can't because of the distribution of over 50% of coins has already taken place, comming back the the OP.

No trolling, but I can't currently see why anyone with a capitalist mindset would go after that with anything more than peanuts.. 

Those with a capitalist mindset tend to be those with the most money and power to make things succeed.

Capitalist and speculators are still key in distributing the ease in and ease out model; I think the world has more than a couple of thousand capitalists (currently benefiting from Bitcoin) who could help bring crypto currencies to benefit the world.   The current Bitcoin model can't have more than a few thousand at the moment, by contrast we need 100's of thousands if not millions of early adopters to benefit in the early adoption stage in brining this amassing technology to the world. 

When I look at the number of coins in circulation at the exchanges it does look optimistic as it is increasing, the evidence seems to suggest that early coins aren't held by just a few individuals, but without perfect information you can't make perfect predictions.

[Red]

Xiaoma, I agree completely with everything you've written. But allow me to concentrate on these parts.

I don't think it is important if currency A or currency B is the primary one, or if people enjoy speculating on it. What I find important is the fact that in this "double currency system" only one of the 2 can be used as an actual currency and money transfer, and the other one as investment/speculation/protection/whatever. I don't think Bitcoin was ever designed to be just that, but there is no reason why it could not become one. This is topic for another thread.

That is exactly the conclusion I came to. And philosophically it doesn't seem important which currency is considered primary. But you are correct is only makes sense for a stable value coin to be used as actual currency. If I owe my rent on the 1st of each month, I can't really agree to a 1 year lease priced in volatile coins. Imagine if I agreed to a one year lease priced in bitcoins this past January. WTF!

So if the people who want to use coins to exchange for goods/services have to price and pay in stable coins, what are the volatile coins actually for? They can only be for pure speculation. But speculating on what? It can only be for speculating on how many people want to speculate on volatile coins. But if the only use of volatile coins becomes exchanging for stable coins isn't it fair to call it a (Ponzi, Pyramid, Matrix, Queueing, etc) Scheme?

[Red]

Don't forget that many of the early adopters worked bloody hard on Bitcoin. Some spent thousands of hours writing and testing software; some set up Bitcoin businesses (which was much harder then than it is now). And some spent their own money on promoting it.

For example, Gavin Andresen bought 10,000 bitcoins and gave them away to newcomers at his Bitcoin Faucet site. How many of the whiners are buying bitcoins to give away?

Just to be clear, I consider anyone on this forum today an "Early Adopter". Even if you don't own a single bitcoin yet you have an opportunity that 6 Billion people don't.

This logic only makes sense, right? We are slightly more that 4 years down a timeline that goes to infinity. Because if you consider this "the middle" then bitcoins only has a practical lifespan of 4 more years. If that is the case, why should 6 billion people care?

In fact if you consider the timeline anything shorter that infinite, then the only possibilities are zero or more "next coins". If zero, BTC was a failure. If there is a "next coin" and you grant its "early adopters" the same blessed status..., then isn't it in the best interest of 6 billion people to wait for the next coin?

[Richy_T]

Meh, here's the thing about having a lot of bitcoins. If you don't spend them, there's no difference. If you do spend them, you get cool stuff but you also have less bitcoins (and somebody else has more). It's not like the current situation where the rich can position themselves at the output hopper of the printing presses and fill their pockets at will with the proceeds of your savings account.

bitcoins don't magically multiply on their own. You could invest to make more, perhaps but in the process, you have disbursed bitcoins from your stash (and taken a risk).

If you can generate more Bitcoin income than outgoing, however meager, you can save it and know the government can't depreciate your savings at will. That's a damn site better than how things stand at the moment with fiat. I think the people who have allowed that to happen deserve the spoils.

[rpietila]

When I look at the number of coins in circulation at the exchanges it does look optimistic as it is increasing, the evidence seems to suggest that early coins aren't held by just a few individuals, but without perfect information you can't make perfect predictions.

1 million coins traded over the weekend. How many do you think is enough?! Everybody has their chance to buy, unlike the week before, where every $million invested raised the market cap by more than $10 million. We are in a very healthy consolidation period now, and I see my bids being fulfilled all the way to 82!!

We have had at least 7 flashcrashes taking the price down by 20% or more during the last 7 weeks, sorry I don't have the data it may be last week alone that many. There are lots of opportunities to buy coins, although I am afraid that the rich will get richer, like me, buying coins all the time.

Since the long-term viability of Bitcoin rests in the delicate balance between value appreciation and usage growth, I currently feel that my greatest priority is to distribute coins to new strong hands. If I buy them up, it is not good. I try to net distribute 10x more coins than I buy for me, and that is achieved by having a 10% margin after expenses. I would help with the bitcoin services economy if I could.

[Red]

Meh, here's the thing about having a lot of bitcoins. If you don't spend them, there's no difference. If you do spend them, you get cool stuff but you also have less bitcoins (and somebody else has more).

It's not like the current situation where the rich can position themselves at the output hopper of the printing presses and fill their pockets at will with the proceeds of your savings account.

This argument has gotten repeated on this site since its founding. That doesn't make it logical or correct.

Suppose Satoshi had decreed that their shall forever be only 10,500,000 bitcoins instead of 21,000,000. And instead of deciding to spread the generation over multiple 4 year periods he decreed that all coins would be distributed in the first 4 years. Or in other words, what if the initial distribution of bitcoins was already finished. Everyone in the world had to work with the bitcoins that already exist today.

Now what mathematical law will forever dictate the value of each bitcoin? It's pretty simple and not at all rhetorical. Each bitcoin's value becomes proportional to the total value of external goods/services that humans wish to exchange among themselves using bitcoins to facilitate that exchange.

Current bitcoin owners want to exchange a certain amount of external goods/services among themselves right now. These same people likely have the potential to exchange more external goods/services among themselves. (They could sell each other their cars and houses.) But that group has a finite upper bound. Taking the group of bitcoin owners as a whole, they only own so much stuff. All the upside comes from people who DON'T currently trade their external goods/services using bitcoin.

So say I have 1,000,000 BTC today. That's $100 million today. Say I want to spend $1 million a year. That doesn't mean my BTC will be exhausted after 100 years. The more noobs I convince to use bitcoins the more value my coins have. If the value of BTC goes up exponentially then the number of BTC I have to part with is reduced from linear to logarithmic. In other words, I couldn't spend them all if I wanted too.

That is why with Gold as a currency and land a property Royal families could say Royal for generations.

[Red]

1 million coins traded over the weekend. How many do you think is enough?

This is not a troll. Just really curious.

The premise of this thread is dependent on the inverse of the statistic you give above.
We know exactly how many bitcoins currently exist. Does anyone regularly calculate how many bitcoins DIDN'T trade over any given period of time. I'm sure may of your $1 million coins traded hands multiple times.

Someone crawled the transaction graph a while back and found that a huge number of coins had never traded EVER. They still sat in exactly the same outpoint they were "mined" into. I guess the question is, does anyone graph the total coin age of the system?

They might. I've been gone a while. It's not fool proof. People often move their coins from one personal address/outpoint to another. But it would show what percentage of the coin base is in cold storage.

[Qoheleth]

1 million coins traded over the weekend. How many do you think is enough?

This is not a troll. Just really curious.

The premise of this thread is dependent on the inverse of the statistic you give above.
We know exactly how many bitcoins currently exist. Does anyone regularly calculate how many bitcoins DIDN'T trade over any given period of time. I'm sure may of your $1 million coins traded hands multiple times.

Someone crawled the transaction graph a while back and found that a huge number of coins had never traded EVER. They still sat in exactly the same outpoint they were "mined" into. I guess the question is, does anyone graph the total coin age of the system?

They might. I've been gone a while. It's not fool proof. People often move their coins from one personal address/outpoint to another. But it would show what percentage of the coin base is in cold storage.

There's a Bitcoin Days Destroyed graph, but I don't know where to find a Bitcoin Days graph.

[Richy_T]

That is why with Gold as a currency and land a property Royal families could say Royal for generations.

Gold was once a useless yellow metal that wouldn't keep an edge. Just saying.

[Red]

There's a Bitcoin Days Destroyed graph, but I don't know where to find a Bitcoin Days graph.

That's a nice derivative. Especially the filtered versions. Obviously people are already trying to figure out when the coins in "cold storage" start to move.