The ultimate bitcoin taboo topic

[xxjs]

How would you design a cryptocurrency to solve the initial distribution problem? Imagine you are in 2009, when nobody knew that it could succeed as money at all.

Like I wrote in a comment before, I don't know of the solution. I'm just pointing out that bitcoin, by virtue of being attrative for early adopters (deflationary, big rewards for early miners), will also suffer from extreme concentration of wealth. Which ultimately might cause its downfall.

The solution is probably not popular with this group. Bitcoin will pave the way and show everyone what a truly global cryptocurrency can do. Once world awareness/acceptance is obtained create a new coin with a different proof of work that can be mined on a global scale by everyone all at once. Introduce the coin with simultanious sales of the new ASIC type device worldwide that mines this new coin.

In a way this is inevitable. In 3 years 75% in 7 years almost 90% will have been mined. Bitcoin will not replace fiat in that time frame. Cryptocurrency is superior to fiat but do you really expect the powers that be to sit back and adopt it as a world currency. They will try to crush it they will fail but probably will slow widespread adoption. When it is realized that cryptocurrency cannot be stopped attention will focus on replacing bitcoin with something new. If you missed the bitcoin wagon it is far better to reset the playing field then to give 90% of all the worlds wealth to those that happened to mine the first cryptocurrency.

Bitcoin will never die and will always have value probably significant value but I doubt it will be the dominant cryptocurrency of the future. Think about it if you first learn about bitcoin 7 years from now would you support a cryptocurrency that had been nearly 90% premined by a select elite for a world currency or a new coin that everyone had a chance to mine.  

Look at the situation for an indonesian peasant, or an argentinan show owner. They want USD, but from their point of view the USD is premined.

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[JaredPWagner]

I agree that the indonesian peasant and the argentinan show owner are likley to be
bitcoin users especially since their fiat currencies are particularly unstable.

Think of the German Billionare who's wealth is In hard assets. Once he sees bitcoin taking off in Indonesia and Argentina and learns that bitcoin is largely premined do you think he is likely to happily throw his wealth into bitcoin or look to support something new to replace it.

I think the age of crypto currency is upon us. I think it is unlikely bitcoin will be the biggest player in this game long term.

[sgbett]

How would you design a cryptocurrency to solve the initial distribution problem? Imagine you are in 2009, when nobody knew that it could succeed as money at all.

Like I wrote in a comment before, I don't know of the solution. I'm just pointing out that bitcoin, by virtue of being attrative for early adopters (deflationary, big rewards for early miners), will also suffer from extreme concentration of wealth. Which ultimately might cause its downfall.

The solution is probably not popular with this group. Bitcoin will pave the way and show everyone what a truly global cryptocurrency can do. Once world awareness/acceptance is obtained create a new coin with a different proof of work that can be mined on a global scale by everyone all at once. Introduce the coin with simultanious sales of the new ASIC type device worldwide that mines this new coin.

In a way this is inevitable. In 3 years 75% in 7 years almost 90% will have been mined. Bitcoin will not replace fiat in that time frame. Cryptocurrency is superior to fiat but do you really expect the powers that be to sit back and adopt it as a world currency. They will try to crush it they will fail but probably will slow widespread adoption. When it is realized that cryptocurrency cannot be stopped attention will focus on replacing bitcoin with something new. If you missed the bitcoin wagon it is far better to reset the playing field then to give 90% of all the worlds wealth to those that happened to mine the first cryptocurrency.

Bitcoin will never die and will always have value probably significant value but I doubt it will be the dominant cryptocurrency of the future. Think about it if you first learn about bitcoin 7 years from now would you support a cryptocurrency that had been nearly 90% premined by a select elite for a world currency or a new coin that everyone had a chance to mine.  

This makes no sense. How can another crypto-currency come along, and go from nothing to 'everyone can mine' right at the beginning. Any currency is going to have to go through some kind of adoption phase. Everyone can mine BTC now, in fact people are, by the boatload - look at the hash rate! BTC has built userbase, value, recognition, reputation and continues to go from strength to strength. For every person that jumps on board there are several others who heard about it and ignored, dismissed it. So the number of people who know about BTC is some multiple of the number of people who actively have or use BTC. This is the one, this is it. Its TCP/IP happening now, technically not necessarily the best solution, many other alt currencies make claims to better than BTC in a variety of ways. Uptake and momentum set BTC way ahead of the competition.

I think BTC 'banks' will form, they will be the 'NAT' of bitcoin. They will handle processing millions of transactions a second, only transferring stuff out onto the blockchain when they need to deal with other BTC banks. They will solve the issue of instant micropayments without wating for confirmations. This is how BTC can become real money that people are used to. It doesnt stop BTC being used by individuals using the block chain for transactions like they do now, its just an extra layer.

How do you pull the plug on bitcoin, it would be like pulling the plug on TCP/IP!

If the govt(s) start an official crypto currency, how is that going to work. First it has the undesirable quality of belonging to a govt, who of course get the jump on mining from the start, and which govt is gonna do it, and how are all the other govts going to feel about that? Are they all going to try and launch their own. Clinging to the relic of geographical boundaries? Seems somewhat inferior already.

I'm sure there is stuff I haven't thought of, and probably some black swan will come floating along any second to usurp all rationality, but in the meantime you position yourself to take advantage of the most likely outcomes, and you hedge to make sure the black swan doesn't destroy you.

Bon voyage!

[sgbett]

I agree that the indonesian peasant and the argentinan show owner are likley to be
bitcoin users especially since their fiat currencies are particularly unstable.

Think of the German Billionare who's wealth is In hard assets. Once he sees bitcoin taking off in Indonesia and Argentina and learns that bitcoin is largely premined do you think he is likely to happily throw his wealth into bitcoin or look to support something new to replace it.

I think the age of crypto currency is upon us. I think it is unlikely bitcoin will be the biggest player in this game long term.

That german billionaire has so much money compared to BTC that he couldmove the market himself right now. He didnt get to be a billionaire by being stupid though. Softly softly, occasional buying, diversifying holdings...

The billionaires of the world could very well be accumulating right now.

The most likely scenario, is everyone that gets into it is accumulating, according ot their own personal NW, and that those involved follow a normal distribution of NW.

The most boring and likely scenario, is that by the time this thing unfolds, the fiat rich will be BTC rich, and the fiat poor will be BTC poor. There may be a little variance in the 'I mortgaged my soul and put it all into BTC' crowd. They didn't get rich by being savvy though, they took a risk and it paid off.

[Pokerfan]

Fiat currencies will collapse anyway, people will lose their savings. As a result wealth will end up in just a few hands.

Better it be bitcoin than gold or political influence!

[Le Happy Merchant]

In a way this is inevitable. In 3 years 75% in 7 years almost 90% will have been mined. Bitcoin will not replace fiat in that time frame. Cryptocurrency is superior to fiat but do you really expect the powers that be to sit back and adopt it as a world currency.


Think about it if you first learn about bitcoin 7 years from now would you support a cryptocurrency that had been nearly 90% premined by a select elite for a world currency or a new coin that everyone had a chance to mine.  

Disregarding the fact that gold already existed, think about how what you are saying applies to it. Gold is so premined I can NEVER expect to become a well established profitable miner, but that doesn't mean I would begrudge the youkoners who dug it up.

[ElectricMucus]

In a way this is inevitable. In 3 years 75% in 7 years almost 90% will have been mined. Bitcoin will not replace fiat in that time frame. Cryptocurrency is superior to fiat but do you really expect the powers that be to sit back and adopt it as a world currency.


Think about it if you first learn about bitcoin 7 years from now would you support a cryptocurrency that had been nearly 90% premined by a select elite for a world currency or a new coin that everyone had a chance to mine.  

Disregarding the fact that gold already existed, think about how what you are saying applies to it. Gold is so premined I can NEVER expect to become a well established profitable miner, but that doesn't mean I would begrudge the youkoners who dug it up.

With the difference that Gold production rate has been steadily increasing since 6000 years.

[JaredPWagner]

This makes no sense. How can another crypto-currency come along, and go from nothing to 'everyone can mine' right at the beginning. Any currency is going to have to go through some kind of adoption phase.

You don't right now. You wait and let bitcoin succeed. Once bitcoin is established as a currency, one that is accepted everywhere worldwide and one that everyone knows about that will be the moment of opportunity for a younger cryptocurrency to surpass it.

You solve the early adoption problem by a worldwide roll out of a complete package one that is advertised heavily to a world that has been educated about crypto currency and has seen it in action with bitcoin. You sell a mining device worldwide. It would take multiple millions of dollars to do.

Such a system would not kill bitcoin but would provide competition and limit its upward rise. It would be well received by the larger masses who by that point would largely feel they had missed the bitcoin train. 

I agree with your thoughts about bitcoin banks. I believe bitcoin has tremendous growth potential but to argue that just because its is first that it is destined to become the dominate world currency is in my opinion overly optimistic.
 

[JaredPWagner]

In a way this is inevitable. In 3 years 75% in 7 years almost 90% will have been mined. Bitcoin will not replace fiat in that time frame. Cryptocurrency is superior to fiat but do you really expect the powers that be to sit back and adopt it as a world currency.


Think about it if you first learn about bitcoin 7 years from now would you support a cryptocurrency that had been nearly 90% premined by a select elite for a world currency or a new coin that everyone had a chance to mine.  

Disregarding the fact that gold already existed, think about how what you are saying applies to it. Gold is so premined I can NEVER expect to become a well established profitable miner, but that doesn't mean I would begrudge the youkoners who dug it up.

True there will always be a demand for bitcoin. I think the future price will be significantly higher then the current price.

However, significant premining means that new miners several years from now can never expect to mine with anywhere near the returns of earlier miners. Think about what that means.

There will be tremendous pent up demand for another chance by those who missed the early bitcoin mining days. They will be looking for a viable alternative. We see it already with all of the alt-coins.

The stage will be set by bitcoin itself for a newer cryptocurrency to surpass it. I think this will be several years from now. Bitcoin being the first cryptocurrency will always have significant value.

[Xiaoma]

Actually, it is most common for the second entrant to get mainstream, wiping the first niche product that believes in the "advantage of being first". So much that most of world population never really know there was a first one before.

Not saying this will happen to Bitcoin, it may be one of the cases where later products, even vastly superior to the first, cannot gain any market share. But usually there is a huge barrier there, while BTC position is still fragile.

We will see in the next years if this is the "chosen one" or not.

[NewLiberty]

Bitcoin has been replaced,  by Bitcoin. 
At some later time it will likely be replaced by Bitcoin 1.0

[ElectricMucus]

Bitcoin has been replaced,  by Bitcoin. 
At some later time it will likely be replaced by Bitcoin 1.0

No it will be replaced by Brettcoin.

[donjoe]

I don't believe Freicoin solves the problem.

Why would Freicoin not be able to solve the problem? Simply because you're not currently seeing it gain enough popularity to rival Bitcoin in any relevant measure?

[Anon136]

There are an infinite number of possible crypto currencies.   Bitcoin's share of the market is already shrinking.  With an infinite supply, I'm not sure why people expect crypto currencies to be deflationary for the long run.

economies of scale produce oligopoly in markets

i believed this same thing for a very long time, it held me back from becoming a market anarchist for a very long time. it is a flawed analysis however because it fails to take into account the counter force called diseconomies of scale. http://en.wikipedia.org/wiki/Diseconomies_of_scale

[oda.krell]

I don't believe Freicoin solves the problem.

Why would Freicoin not be able to solve the problem? Simply because you're not currently seeing it gain enough popularity to rival Bitcoin in any relevant measure?

I can be corrected on the fundamental of Freicoin, but it solves the problem by introducing inflation, wait, sorry "demurrage", right?

Yes, that solves the concentration part of the problem. But the spontaneous wealth creation that we see with bitcoin is not just fluke: it's taking place precisely because of bitcoin fundamentals -- early adopter rewards, and deflationary. Every hoarders wet dream. How do you plan to get people equally excited about Freicoin?