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Author Topic: Bitcoin economy: Miners <-> Speculators  (Read 1795 times)
no to the gold cult
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February 22, 2011, 04:25:25 PM
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Is the bitcoin economy mainly just miners selling to speculators in a kind of circular flow arrangement? Miners probably don't buy bitcoins much so they provide no demand, only supply (some of which they doubtlessly hoard). Speculators do provide demand but only as long as they expect something in the future.

How can we change this, because in the long run speculators will buy from miners only until expectation goes flat. Eventually a small group of die-hard speculators and speculator-miners will have most of the bitcoins but nobody else will care anymore. How can we encourage much more g&s trading in bitcoin directly, and how can we make it easier for people that run websites and sell g&s to get started buying and selling from eachother in bitcoin?

I suggest a start would be to stop emphasising mining all the time, everytime I read an article about bitcoin I think way too much is made of the mining aspect of it, which is the geeky/techy/gadget-head introverted heart of the community.

Another thing is I suspect a good barometer of bitcoin success in the world of actual goods and services would be any influx of female interest (I've said this on another thread). The mining angle isn't going to engage female interest at all. In fact I wish I'd added a poll to see how many women even post on here. If we can get more websites that are interesting to wider ranges of people to accept bitcoin donations or discounts and so on... any thoughts?

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AmpEater
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February 22, 2011, 04:36:06 PM
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I suggest a start would to stop emphasising mining all the time, everytime I read an article about bitcoin I think way too much is made of the mining aspect of it, which is the geeky introverted heart of the community. A good barometer of bitcoin success in The World would be any influx of female interest (I've said that on another thread). The mining angle isn't going to engage female interest at all. In fact I wish I'd added a poll to see how many women even post on here.

I expect that the difficulty will grow so high in future months that mining will stop attracting the attention that it does.  Unless the price of bitcoin in USD spikes, that is. 

Besides, these mining nodes now will become the heart of the bitcoin network in the future.  The more GPU power the "good" nodes have the less likely it will be possible for a sufficiently large organization to destroy the network with malicious nodes.

That being said...the best way to stimulate trade is to trade! Sell your car for bitcoins. Make a splash
kiba
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February 22, 2011, 04:38:55 PM
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Is the bitcoin economy mainly just miners selling to speculators in a kind of circular flow arrangement? Miners probably don't buy bitcoins much so they provide no demand, only supply (some of which they doubtlessly hoard). Speculators do provide demand but only as long as they expect something in the future.
The market of goods and services are there. It's just not very visible at this point.

no to the gold cult
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February 22, 2011, 04:39:43 PM
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I suggest a start would to stop emphasising mining all the time, everytime I read an article about bitcoin I think way too much is made of the mining aspect of it, which is the geeky introverted heart of the community. A good barometer of bitcoin success in The World would be any influx of female interest (I've said that on another thread). The mining angle isn't going to engage female interest at all. In fact I wish I'd added a poll to see how many women even post on here.

I expect that the difficulty will grow so high in future months that mining will stop attracting the attention that it does.  Unless the price of bitcoin in USD spikes, that is. 

Besides, these mining nodes now will become the heart of the bitcoin network in the future.  The more GPU power the "good" nodes have the less likely it will be possible for a sufficiently large organization to destroy the network with malicious nodes.

That being said...the best way to stimulate trade is to trade! Sell your car for bitcoins. Make a splash

I have nothing to trade at the moment, but I'm working on it!

1Q1yKUsSXr4KrxriJ4VRxhs6iS1WqBVL93

For your daily bitcoin updates, all you need are these...
http://thebitcoinsun.com/ and http://bitcoinweekly.com
no to the gold cult
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February 22, 2011, 06:10:42 PM
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Actually never mind, the situation will take care of itself. Thinking about it, I see bitcoin in 5 Phases.

Phase 1: Speculator phase.
Speculators, miners and dreamers build up bitcoin value as a commodity by trading among themselves. Puzzled onlookers stare, shrug, wander off. Some onlookers stay, read-up, become miners or speculators.

Phase 2: Currency phase.
As the value of bitcon rises and doesn't fad-out it becomes more generally known on internet forums, social networks and websites of various kinds that you can do alot worse than to own a few bitcoins. As a commodity bitcoin has arrived, more and more content providers decide they wouldn't mind bitcoin donations and to accept bitcoins directly as payment for g&s. Not because they're fans and want bitcoin to succeed (like now in Phase 1) but because they know bitcoins have value and are easy to handle.

Phase 3: Mainstreamification phase.
You'll know this phase has arrived when there's an iPad app for bitcoin or when google has bitcoin listed in its currency converter function. By now it'll probably be possible to have bitcoin addresses bind to a bitcoin domain name, like btc://sumchancer.com/myaccountname, so corporations will start to present such addresses as means by which they may be paid. Eventually banks will want to provide exhange services for bitcoin, rushing to compete with the established bitcoin exchanges in operation since Phase 1. Paypal will probably want to think of ways to make itself useful too.

Phase 4: Major Force phase.
Bitcoin is now a global player, it's traded in financial markets, you see it's value on the ticker in business news programs along with the movements of the Dollar, the Yen, the Euro etc. Economists argue about what it all means, The Economist tries to wrap it's head around the new deflationary paradigm (actually that'd probably happen in Phase 2).

Phase 5: The Ideological Objective of All True Bitcoin Fundamentalists phase.
The system of banking and finance we know of today is on the retreat in the face of bitcoin which now dominates the global economy as the only meaningful measure of wealth going forward. The age of banking (numbered since its complacent fuck-ups pre-Phase 1) is now generally agreed to be over. Dollar bills and Euros etc are now traded among numismatists as antiques. Agorists, anarcho-capitalists, libertarians argue among themselves why if they have 'won', how come things are still more or less the same (because always there is the truism "same shit different day", that's why).

So, there we have it. 5 Phases. Competitor cryptocurrencies will probably come and go in phase 1 and 2. Government opposition will never in my opinion really make an appearance beyond media-badmouthing, at least not in the West. This is my humble opinion.

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For your daily bitcoin updates, all you need are these...
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AmpEater
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February 22, 2011, 07:46:24 PM
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Actually never mind, the situation will take care of itself. Thinking about it, I see bitcoin in 5 Phases.

Very interesting.  I'm no expert, but I don't see any flaws in your thinking.

I see the current trend as falling squarely in-between 1 and 2.....with 3 not that far behind (the Internet moves fast, not like we need one currency to die out before bitcoin can be listed....just add some code!)

kiba
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February 22, 2011, 07:54:25 PM
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Quote
Agorists, anarcho-capitalists, libertarians argue among themselves why if they have 'won', how come things are still more or less the same (because always there is the truism "same shit different day", that's why).

Lady and gentlemen, we won the cryptocurrency war, just like our cypherpunk predecessors won the encryption war. The world did not stay the same, but changes dramatically.

For one thing, it allows all of humanity to efficiently conduct global trade with everybody on the planet. It does not matter if you're in china or in Africa. A bitcoin is a bitcoin!

That's my prediction.


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February 22, 2011, 08:19:58 PM
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For one thing, it allows all of humanity to efficiently conduct global trade with everybody on the planet. It does not matter if you're in china or in Africa. A bitcoin is a bitcoin!
+1
Well said, that is the single most important reason I stick with bitcoin regardless of risk and uncertainties.
no to the gold cult
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February 22, 2011, 10:08:47 PM
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Agorists, anarcho-capitalists, libertarians argue among themselves why if they have 'won', how come things are still more or less the same (because always there is the truism "same shit different day", that's why).

Lady and gentlemen, we won the cryptocurrency war, just like our cypherpunk predecessors won the encryption war. The world did not stay the same, but changes dramatically.

For one thing, it allows all of humanity to efficiently conduct global trade with everybody on the planet. It does not matter if you're in china or in Africa. A bitcoin is a bitcoin!

That's my prediction.



I agree to an extent. But.

Despite this it will be seen that it does matter where you are, it matters because of what has gone before. This is not something I'd expect a distributed cryptocurrency to be able to solve however. I think I look forward to Phase 5, but I am one that beleives that the state can be useful to society (when properly under the control of informed democratic power). So I hope Phase 5 doesn't wash away some things that currently do depend on the current finance system.

1Q1yKUsSXr4KrxriJ4VRxhs6iS1WqBVL93

For your daily bitcoin updates, all you need are these...
http://thebitcoinsun.com/ and http://bitcoinweekly.com
genjix
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February 22, 2011, 10:36:04 PM
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Lady and gentlemen, we won the cryptocurrency war, just like our cypherpunk predecessors won the encryption war. The world did not stay the same, but changes dramatically.

Satoshi won the war Smiley

Bitcoin has appeared on the world stage at the right time. Our world is at the correct stage for the people to seize their destiny!
kiba
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February 22, 2011, 10:52:16 PM
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I agree to an extent. But.

Despite this it will be seen that it does matter where you are, it matters because of what has gone before. This is not something I'd expect a distributed cryptocurrency to be able to solve however. I think I look forward to Phase 5, but I am one that beleives that the state can be useful to society (when properly under the control of informed democratic power). So I hope Phase 5 doesn't wash away some things that currently do depend on the current finance system.
[/quote]

Do you not understood the implication of bitcoin? It's impact is beyond wealth and money, but also on the very structure of governance!

If we are able to develop a polycentric system of law needed to keep internet commerce flowing, the democratic supporter of the world will either have to fight it or abandon their ideology.

So what if democratic society benefit humanity? You have to face a new order that have very different assumption about how things work.

no to the gold cult
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"Godshit"


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February 22, 2011, 11:00:06 PM
 #12


I agree to an extent. But.

Despite this it will be seen that it does matter where you are, it matters because of what has gone before. This is not something I'd expect a distributed cryptocurrency to be able to solve however. I think I look forward to Phase 5, but I am one that beleives that the state can be useful to society (when properly under the control of informed democratic power). So I hope Phase 5 doesn't wash away some things that currently do depend on the current finance system.

Do you not understood the implication of bitcoin? It's impact is beyond wealth and money, but also on the very structure of governance!

If we are able to develop a polycentric system of law needed to keep internet commerce flowing, the democratic supporter of the world will either have to fight it or abandon their ideology.

So what if democratic society benefit humanity? You have to face a new order that have very different assumption about how things work.
[/quote]

Well, we're still reeling from the effects of the industrial revolution, so who knows what changes current technologies might have going forward. Smiley

I assume a long period of transition even after Phase 5.

1Q1yKUsSXr4KrxriJ4VRxhs6iS1WqBVL93

For your daily bitcoin updates, all you need are these...
http://thebitcoinsun.com/ and http://bitcoinweekly.com
TheHoboHarvester
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February 23, 2011, 01:46:04 AM
 #13

When the coin bonus for verifying blocks is gone, fees will most likely rise as the few miners left would need to have some incentive to keep running the quad-5970 boards. I don't know how high fees will go in the future, but it may not even pay the electrical bill.

I hope more locations begin accepting bitcoins in order to provide the market with something other than speculators.
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