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

[rpietila]

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.

Compared to world's physical gold storage,
- The actual traded stock of bitcoins is larger
- The bitcoins traded change hands much more often
- Number of bitcoins is increasing at a larger annual rate.

So if you feel velocity is somehow a desirable characteristic for a backbone of a monetary system, at least with bitcoin you get much more of it compared to the current one.

[1714598496]

1714598496

[Red]

Another complement to the hard currency (blockchain bitcoin) economy, would be to reinstall real bills.

This is a fascinating read. (As you said) I'm through about half of it so far.

I'm sure the clearinghouse model is used in big business to this day. One of those magic techniques that make real business men smarter than me! :-)

However, I'm struck by how close it is the the Local Exchange Trading System model referenced above. Had no idea its foundations went so far back!

Thanks for the link!

So if you feel velocity is somehow a desirable characteristic for a backbone of a monetary system, at least with bitcoin you get much more of it compared to the current one.

Velocity is awesome. It mitigates the need for large amounts of actual coinage. But that's really the inverse of my question. The gold in Fort Knox hasn't circulated in my lifetime. However, it has appreciated in value along with the high velocity coins and gold directives in circulation.

I'm asking how many bitcoins are in cold storage? (metaphorical Fort Knox) There was a scandal in the 70's were people started to believe Fort Knox gold had been secretly sold and was circulating. I'm wondering the opposite. What if fewer bitcoins are circulating than we presume are. We don't notice because the velocity of the circulating coins is so high.

[rpietila]

I'm asking how many bitcoins are in cold storage? (metaphorical Fort Knox) There was a scandal in the 70's were people started to believe Fort Knox gold had been secretly sold and was circulating. I'm wondering the opposite. What if fewer bitcoins are circulating than we presume are. We don't notice because the velocity of the circulating coins is so high.

Of all the bitcoins I have ever bought, I have perhaps been "short" maximum 10% of the previous high coincount. So at least in my case, 90% is in cold storage.

Currently bitcoin's value is volatile as the market is trying to figure out whether Bitcoin should replace gold or not. If the answer turns out affirmative, bitcoin's value will roughly stabilize after more and more of the economical activity will be financed through self-liquidating bitcoin-denominated credit, as outlined in Fekete's paper.

(I wonder if Fekete himself realizes that his work will be applied to make Bitcoin the new gold  )

For anyone interested, I think the upper bound for bitcoin's value is therefore the current Gold market cap, about $7,000 billion. So one bitcoin will not be worth more than $300k. Actually the utility of holding bitcoins when that is reached, is about the same as holding gold right now ( = most people think you are a little stupid, no matter how rich you are).

But to get there, the value must increase. Actually we were (in log scale) half there barely a few days ago. With the bitcoin's long term value appreciation of 25%, we can be there sooner than most of us think. Anything over $300k should be regarded as a bubble, even if we are in a "new paradigm", it does not mean everyone will be able to get rich just holding bitcoins, only the early adopters (i.e. every one who buys bitcoins for significantly less than its fair value of $300k).

[Adrian-x]

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

This is true but Royal families failed to see the paradigm shift the industrialists create with fractional reserved banking and new forms of wealth ultimately leading them to there demise.  Bitcoin creates a new paradigm shift of equal proportion.  It may even allow for a solutions to the problems Marx's struggled with - reconciling land as property in Adam Smith's free market.

[revans]

I'm asking how many bitcoins are in cold storage? (metaphorical Fort Knox) There was a scandal in the 70's were people started to believe Fort Knox gold had been secretly sold and was circulating. I'm wondering the opposite. What if fewer bitcoins are circulating than we presume are. We don't notice because the velocity of the circulating coins is so high.

Of all the bitcoins I have ever bought, I have perhaps been "short" maximum 10% of the previous high coincount. So at least in my case, 90% is in cold storage.

Currently bitcoin's value is volatile as the market is trying to figure out whether Bitcoin should replace gold or not. If the answer turns out affirmative, bitcoin's value will roughly stabilize after more and more of the economical activity will be financed through self-liquidating bitcoin-denominated credit, as outlined in Fekete's paper.

(I wonder if Fekete himself realizes that his work will be applied to make Bitcoin the new gold  )

For anyone interested, I think the upper bound for bitcoin's value is therefore the current Gold market cap, about $7,000 billion. So one bitcoin will not be worth more than $300k. Actually the utility of holding bitcoins when that is reached, is about the same as holding gold right now ( = most people think you are a little stupid, no matter how rich you are).

But to get there, the value must increase. Actually we were (in log scale) half there barely a few days ago. With the bitcoin's long term value appreciation of 25%, we can be there sooner than most of us think. Anything over $300k should be regarded as a bubble, even if we are in a "new paradigm", it does not mean everyone will be able to get rich just holding bitcoins, only the early adopters (i.e. every one who buys bitcoins for significantly less than its fair value of $300k).

LOL

If you think the fair value of a Bitcoin is $300k you really have been utterly deranged by avarice.  The hype is dying down, and the Bitcoin market is rapidly running out of 'greater fools'. The fair value of a Bitcoin for most people is zero, because that is the monetary utility it offers them. Whilst the novelty of being able to secure a small number of goods and services with Bitcoin will no doubt sustain the fanatics, it will not maintain the interest of many beyond that group.

[Coincrazy]

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

This is true but Royal families failed to see the paradigm shift the industrialists create with fractional reserved banking and new forms of wealth ultimately leading them to there demise.  Bitcoin creates a new paradigm shift of equal proportion.  It may even allow for a solutions to the problems Marx's struggled with - reconciling land as property in Adam Smith's free market.

In my country IF the Royals still held on to their land and gold, they would be reallllly...reallllly royal.

They could not for a variety of reasons is another story

[Coincrazy]

I'm asking how many bitcoins are in cold storage? (metaphorical Fort Knox) There was a scandal in the 70's were people started to believe Fort Knox gold had been secretly sold and was circulating. I'm wondering the opposite. What if fewer bitcoins are circulating than we presume are. We don't notice because the velocity of the circulating coins is so high.

Of all the bitcoins I have ever bought, I have perhaps been "short" maximum 10% of the previous high coincount. So at least in my case, 90% is in cold storage.

Currently bitcoin's value is volatile as the market is trying to figure out whether Bitcoin should replace gold or not. If the answer turns out affirmative, bitcoin's value will roughly stabilize after more and more of the economical activity will be financed through self-liquidating bitcoin-denominated credit, as outlined in Fekete's paper.

(I wonder if Fekete himself realizes that his work will be applied to make Bitcoin the new gold  )

For anyone interested, I think the upper bound for bitcoin's value is therefore the current Gold market cap, about $7,000 billion. So one bitcoin will not be worth more than $300k. Actually the utility of holding bitcoins when that is reached, is about the same as holding gold right now ( = most people think you are a little stupid, no matter how rich you are).

But to get there, the value must increase. Actually we were (in log scale) half there barely a few days ago. With the bitcoin's long term value appreciation of 25%, we can be there sooner than most of us think. Anything over $300k should be regarded as a bubble, even if we are in a "new paradigm", it does not mean everyone will be able to get rich just holding bitcoins, only the early adopters (i.e. every one who buys bitcoins for significantly less than its fair value of $300k).

LOL

If you think the fair value of a Bitcoin is $300k you really have been utterly deranged by avarice.  The hype is dying down, and the Bitcoin market is rapidly running out of 'greater fools'. The fair value of a Bitcoin for most people is zero, because that is the monetary utility it offers them. Whilst the novelty of being able to secure a small number of goods and services with Bitcoin will no doubt sustain the fanatics, it will not maintain the interest of many beyond that group.

I don't know fair value

Market value is down but NOT dead

Volumes are up (from mtgox weekly chart) http://wp.me/p3o0fk-1c

[Xiaoma]

There are over 7 billion people in the world, and a limit of 21 million Bitcoins. So anyone who can get more than 0.003 Bitcoins is an early adopter. That would cost about 20 cents, so quit whining and go for it!

(Disclosure: I have more than 0.003 bitcoins.)

More realistically, assuming there were about 21 trillion bucks around, that would make an IDEAL top of 1M USD per BTC if and only IF Bitcoin replaced the US dollar. But a more correct assumption is to have around hundred of millions of people adopting it in the next few years. That would make average 0.1 BTC per person more realistic than 0.003 that you quote.

It is utopia to assume all 7 billions people in the world would replace EVERY currency in the world with Bitcoins. It is already very optimistic to imagine 100 million people using it. That would put Bitcoin to the level of a national currency. I personally think that it will take hard work to have more than 21 millions people (average 1 Bitcoin each) but is entirely possible in short/medium term.

Bah.. just feel like throwing numbers at a forum.

[Red]

I started a new directory thread so people interested in a stable valued currency can find each other. I'd also like it to serve as an index to all the ideas happening in other threads.

Posting the link here because lots of interested folks have posted in this thread.
https://bitcointalk.org/index.php?topic=179918.msg1877951#msg1877951

[Etlase2]

It's too late to do anything about it for Bitcoin - we've gotta live with the distribution we got. And maybe it won't be a problem. But for future cryptocurrencies, it's something we need to consider. And we need to watch out and be ready to refine the idea if it looks like the new boss is going to be the same as the old boss.

Memcoin in specific proposed something like adding democratic processes into the coin itself. I think that would be the best way to improve the protocol. The next coin should probably include democracy and voting within the coin itself so that holders can somehow vote as a group.

Problem with such a scheme is how to weigh the votes. By held BTC? By hashpower? None of the solutions are exactly ideal.

It's an interesting proposal, though. Reminds me of "BIP" 2112's proposal to generalize the current "Version"/"P2SH coinbase" mechanisms by embedding the block validation code in the blockchain itself, and letting miners indicate which such algorithms they're willing to endorse.

The Decrits proposal (see sig), among many other fixes for bitcoin's problems, has a section on voting. It was at the very early stages in that document, but I have refined it quite a bit. I think the idea of voting as part of the protocol may be so different that it is shocking to some, but I think it is necessary to avoid the control that the developers would have over the protocol (and perhaps the influence that an exchange, for example, might have over them). Voting power is not determined by held currency or hashpower (though having currency invested is a requirement), but by the people who have provided beneficial and continued service to the network via transferring and validating transactions. Even if there is an Evil Network Takeover (which will take time and lots of money), the network will have the opportunity to split, and the guys on the wrong side will not be allowed to transfer their money to the honest side of the split.