What I think Bitcoin's MAIN problem is, and how to fix it

[jaywaka2713]

As we know, centralization allows us to receive Fiat money for whatever work we would like to do. That is one of the Pros of government. Our raw work converts into "money". With Bitcoin however, the only way for us to earn it is via Mining. While Mining in itself is great with keeping a solid inflation rate, it doesnt allow for public adoption. The main issue with Bitcoin is acquiring it. Difficulties surrounding converting fiat to Bitcoin (fiat has been described as having an umbilical cord to Bitcoin) are deemed to increase and grow. Unfortunately, changing this is very difficult.

However, another old coin unknown to most has semi-fixed this issue. Anyone heard of Devcoin? It's about as old as Bitcoin somewhat, and allows people to be paid via their "open-source work" and also by mining. Devcoin allows miners to make 10% of each block, while 90% of mining goes to people who actually work for it. The main "product" that people earn Devcoin for is writing, however other projects are available.

Unfortunately, Devcoin has two issues also, or to be more correctly defined, two imperfections. Only "open-source work" is paid, which essentially means that you cannot sell your work. Everyone has your work's core fundamentals. Under deeper inspection, this isn't a really big issue. You just can't continually make money off of one product. Also, you could have a very large project that you have finished, but the payment you can receive is essentially variable. Devcoin's second imperfection is that the payment system IS centralized. Devtome is what handles the payment system, and while payment for writing is automated, payment for projects is not.

You receive payment via a share system. Payments go out every "round" (essentially every 3000-5000 blocks). For writing, every 1,000 words equates to one share. The total amount of shares then allow proportional payment of each round to go out. Each round is roughly 180 million devcoins if my memory serves me right. However, with projects that don't involve words, SOMEBODY needs to determine and assign the number of shares that THEY believe is fair for the project. Due to the way Devtome is built, it can become decentralized. The whole issue is built upon how we go about creating a script that judges how many shares something is worth, or if we need a script at all (Democratic voting).

Something like this needs to be attempted to be added to Bitcoin. Yes, this would require a fork, so around 60% of the network would have to agree with the changes for it to be implemented correctly (theoretically 51% is the requirement, but there is the probability factor with block solving as well). If a system was implemented that would allow us to not only be paid using the share system for "open-source work", one that also allows us to be paid directly in Bitcoin by proof of sales of products would be nice as well. However, such a payment system without government is completely hinged off trust. That is why I have written this thread. We need to brainstorm a way for such a system to work. Essentially, the central question is: "How can someone be paid fairly for sold products without relying on trust and the word of the merchant?" Once such a solution is figured out, and if the network accepted such a change, Bitcoin would be set to go mainstream instantly. Mining alone cannot be the way Bitcoin works. Mining alone ties acquiring Bitcoin directly to Fiat money, which is what I believe personally to be the worst thing Bitcoin is facing right now.

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[empoweoqwj]

Ever heard of paragraphs?

They encourage people to read what you write.

[jaywaka2713]

Ever heard of paragraphs?

They encourage people to read what you write.

I just briefly glanced at the mass I posted and see what you mean. I reformatted it.

[Le Happy Merchant]

I strongly disagree with you.

What you are describing is functionally impossible in practice, and if it was somehow successfully implemented I wouldn't want to touch Bitcoin with a ten foot pole.

[notme]

I must have imagined those times I earned bitcoin for my labor.

[Le Happy Merchant]

I must have imagined those times I earned bitcoin for my labor.

Also this. +1

[jaywaka2713]

I strongly disagree with you.

What you are describing is functionally impossible in practice, and if it was somehow successfully implemented I wouldn't want to touch Bitcoin with a ten foot pole.

Why do you disagree with my point? Provide some basis for your opinion. It is known that Bitcoin cannot be earned any other way other than mining, and acquiring it will eventually become either more complex to near impossible, or very easy. If it goes south, such a system has to be implemented. If you want $500 in Bitcoin, there would be a mountain of fees to pay just to purchase it. Or if you went the mining route, it would take months to get $500 worth of Bitcoin out of $500 worth of mining hardware.

I must have imagined those times I earned bitcoin for my labor.

I also assume you run your own business. Most, if not all of the Bitcoin you earned was bought with Fiat money. My argument encircles the topic of removing Fiat from the equation.

[Le Happy Merchant]

Why do you disagree with my point? Provide some basis for your opinion. It is known that Bitcoin cannot be earned any other way other than mining.

You have conflated the term earning with generating. Basically you just said 'the only way to earn USD is to print it' which is obviously wrong.

and acquiring it will eventually become either more complex to near impossible, or very easy.

Why? What makes you think it won't just work like money?

I can provide more specific explanation if you have questions, but as far as I can tell you are missing some part of what Bitcoins actually are.

[halfawake]

Yep, this is one of the main problems - if not the main problem.  (In my opinion, another big one that would deter non-techies is simply the size of the blockchain.  I run a full client and it took me three days to download it, and that's back when it was "only" 7 GB.  I know there are thin clients, but I don't think you can get the same functionality in Electrum as you can in Armory.)

As far as getting paid in bitcoin, there's already one company that pays its employees in bitcoin: the Internet Archive, archive.org.  According to their website, they offered this option to their employees and a third of them said yes.  Pretty substantial number, I'd say for a fairly new technology.  Maybe we should get some people to talk to them and see how they do it, if more companies could jump on the train of paying employees in bitcoins (if the employees are okay with it), it would definitely go a long way towards advancing the currency.

[notme]

I must have imagined those times I earned bitcoin for my labor.

I also assume you run your own business. Most, if not all of the Bitcoin you earned was bought with Fiat money. My argument encircles the topic of removing Fiat from the equation.

Actually, very little to none of the Bitcoin I have earned was bought with fiat money.  Most of the people I have worked for were early miners who are investing their proceeds into creating more services that utilize bitcoins.

The solution to not being able to earn Bitcoin is to go to the Marketplace subforum and offer your goods or services in exchange for Bitcoin.  Quit trying to fix it, it's not broken.  Some of us have been doing it for years.

[johnniewalker]

"How can someone be paid fairly for sold products without relying on trust and the word of the merchant?"

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[bitzox]

"How can someone be paid fairly for sold products without relying on trust and the word of the merchant?"

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+1

[ZephramC]

You can earn bitcoins simply by providing goods or services which are valuable for other BTC owners.
If you want to take fiat out of equation, replace BTC owners with miners. (You can earn bitcoins simply by providing goods or services which are valuable for miners.) Then enlarge this set by everyone who sells something to the miners. Then enlarge this set by everyone who sells something to anyone mentioned in previous sentence. ... Repeat until you are happy.
If you are still unhappy then I guess you ask and yearn for a system of some fair distribution of bitcoins not determined by individual egoisim and greed of above mentioned iteratively growing set (enlarged by people "rich" in fiat). I hope Bitcoin will never becomes such "fair" system, it will be its death.
What you ask for can be theoretically achieved by forking (cloning) Devcoin with "this time the right group of elites". If it can be indeed achieved practically in larger group than a community then Karel Marx was probably right.

Edit: Concerning your

script that judges how many shares something is worth, or if we need a script at all (Democratic voting)

No one have created a script, a program or even formulated an algorithm which would be able to judge worth of humans achievements. (Although philosophers are trying to formulate such principles for over 2000 years. And as cpt. Picard said, there is no greater challenge than study of philosophy. :-])
As for democratic voting... I always wonder that (most) people understand that two wolves and a sheep can not democratically vote "What is for dinner?". But they do not understand that a horde of starving poor (underpayed, exploited, dying children, fairly deserving, etc.) and one rich hoarder of wheat can not democratically vote "What is for dinner?" either.
(I wonder if they understand that ten thousand wolves and one sheep can not democratically vote either.)

[BTConomist]

You can earn bitcoins simply by providing goods or services which are valuable for other BTC owners.

If you want to take fiat out of equation, replace BTC owners with miners. (You can earn bitcoins simply by providing goods or services which are valuable for miners.) Then enlarge this set by everyone who sells something to the miners. Then enlarge this set by everyone who sells something to anyone mentioned in previous sentence. ... Repeat until you are happy.

Well said... concise and precise!

If you are still unhappy then I guess you ask and yearn for a system of some fair distribution of bitcoins not determined by individual egoisim and greed of above mentioned iteratively growing set (enlarged by people "rich" in fiat).

Or if you prefer the mothership, you start working on the vaccine against the GOLD 2.0 bug.

[jaywaka2713]

You can earn bitcoins simply by providing goods or services which are valuable for other BTC owners.
If you want to take fiat out of equation, replace BTC owners with miners. (You can earn bitcoins simply by providing goods or services which are valuable for miners.) Then enlarge this set by everyone who sells something to the miners. Then enlarge this set by everyone who sells something to anyone mentioned in previous sentence. ... Repeat until you are happy.
If you are still unhappy then I guess you ask and yearn for a system of some fair distribution of bitcoins not determined by individual egoisim and greed of above mentioned iteratively growing set (enlarged by people "rich" in fiat). I hope Bitcoin will never becomes such "fair" system, it will be its death.
What you ask for can be theoretically achieved by forking (cloning) Devcoin with "this time the right group of elites". If it can be indeed achieved practically in larger group than a community then Karel Marx was probably right.

Edit: Concerning your

script that judges how many shares something is worth, or if we need a script at all (Democratic voting)

No one have created a script, a program or even formulated an algorithm which would be able to judge worth of humans achievements. (Although philosophers are trying to formulate such principles for over 2000 years. And as cpt. Picard said, there is no greater challenge than study of philosophy. :-])
As for democratic voting... I always wonder that (most) people understand that two wolves and a sheep can not democratically vote "What is for dinner?". But they do not understand that a horde of starving poor (underpayed, exploited, dying children, fairly deserving, etc.) and one rich hoarder of wheat can not democratically vote "What is for dinner?" either.
(I wonder if they understand that ten thousand wolves and one sheep can not democratically vote either.)

I have changed my opinion. Your post makes perfect sense and has brought me into greater understanding of Bitcoin and basically how it can only operate. Miners will be the only audience who will directly earn Bitcoin as it is the only way for the network to stay decentralized permanently outside of the event of a 51% attack.

I can provide more specific explanation if you have questions, but as far as I can tell you are missing some part of what Bitcoins actually are.

Well its taken time for me to come to the understanding that I have, and the above quote pushed my understanding even farther. My opinion is now different and I believe the current system works. My ideology wasn't there when GPU mining was going on. I guess progression of technology will dictate who can mine, but really, in the long run, ASICs are much cheaper than operating a rig farm, and they are more dense.

[Stampbit]

i think bitcoins main problem is too many people talking about and not enough spending it.

[jaywaka2713]

i think bitcoins main problem is too many people talking about and not enough spending it.

For the actual amount of people using Bitcoin, there is a very extremely large amount of merchants accepting Bitcoin in comparison to the userbase. The main issue is mass adoption of Bitcoin. We need more people.

[bitzox]

i think bitcoins main problem is too many people talking about and not enough spending it.

personally I just transfer my money into BTC and buy with that for most things I would have bought online anyway. I'm going to buy them anyway might as well do it with btc. This has the double impact of helping growth the BTC economy and also my BTC balance since most of the time I have to transfer in a little bit more than I need to make sure and cover transaction costs etc. I'll take the hit on transaction costs in exchange for adding to my balance and doing my small part to help BTC grow.

[halfawake]

i think bitcoins main problem is too many people talking about and not enough spending it.

personally I just transfer my money into BTC and buy with that for most things I would have bought online anyway. I'm going to buy them anyway might as well do it with btc. This has the double impact of helping growth the BTC economy and also my BTC balance since most of the time I have to transfer in a little bit more than I need to make sure and cover transaction costs etc. I'll take the hit on transaction costs in exchange for adding to my balance and doing my small part to help BTC grow.

That's a good approach.  In some cases, it may even save you money to do this.  I've been eying buying a 16 GB RAM chip (my motherboard only has slots for two RAM chips), and the price of a 16 GB RAM chip on bitcoinstore.com is actually $40 cheaper than on Amazon.com.

[anaikh]

If you would like to make more people to have bitcoin, you can design a new method by using CPU only. and you can set the distribution method by sorting the whole hashing power and giving the people in different segmentation the same reward, which means, for example, to the top 5%  people they will enjoy the same reward.

I know bitcoin depends on finding the solution, but imagine the whole world is a mining pool. I am not a technical guy but I think this may solve the arms race problem in bitcoin now and involve more people.