How to Grow Bitcoin

[acoindr]

As promised here is the plan I came up with to grow Bitcoin. Apologies for the length, but it's a complex topic.

http://207.126.48.33/bitcoin-ebook/How-to-Grow-Bitcoin.pdf

http://207.126.48.33/bitcoin-ebook/How-to-Grow-Bitcoin-Text.txt (plain text version)

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[Vod]

As promised here is the plan I came up with to grow Bitcoin. Apologies for the length, but it's a complex topic.

http://207.126.48.33/bitcoin-ebook/How-to-Grow-Bitcoin.pdf

I'm not going to look at it simply because it is a PDF, and has the potential for bad code.  Can you convert it to plain text?

[acoindr]

As promised here is the plan I came up with to grow Bitcoin. Apologies for the length, but it's a complex topic.

http://207.126.48.33/bitcoin-ebook/How-to-Grow-Bitcoin.pdf

I'm not going to look at it simply because it is a PDF, and has the potential for bad code.  Can you convert it to plain text?

Sure, give me a sec and I'll post that version.

[DownloadCoin.com]

Keeps crashing for me, also increases the worry of it being dodgy 

[acoindr]

Keeps crashing for me, also increases the worry of it being dodgy 

I don't know what to tell you. There is nothing wrong with the file as far as I know. If anyone can verify it works fine and contains no threat that would be great; it took a bit of time to set up the nicer formatting. But if in doubt just use the plain text version. (It may contain a couple typos I caught in the formatted version.)

[Serge]

Good job on summarizing natural course of Bitcoin development.
IMO you can take credit for the writing but don't try to take credit for bitcoin development going it's natural and obvious course.
Those topics in the document have been discussed previously.

[Raoul Duke]

VirusTotal report: http://www.virustotal.com/file-scan/report.html?id=ef00ef6feb24f2326446ad509e84958f805147169466466a154036e3af8a8452-1313869135

File name:
How-to-Grow-Bitcoin.pdf
Submission date:
2011-08-20 19:38:55 (UTC)
Current status:
finished
Result:
0/ 44 (0.0%)

[MattscheAN]

Keeps crashing for me, also increases the worry of it being dodgy 

I don't know what to tell you. There is nothing wrong with the file as far as I know. If anyone can verify it works fine and contains no threat that would be great; it took a bit of time to set up the nicer formatting. But if in doubt just use the plain text version. (It may contain a couple typos I caught in the formatted version.)

The file behaves like a normal .txt on Ubuntu. And clamscan didn't find anything @DownloadCoin.com

[acoindr]

Good job on summarizing natural course of Bitcoin development.
IMO you can take credit for the writing but don't try to take credit for bitcoin development going it's natural and obvious course.
Those topics in the document have been discussed previously.

Well, I certainly do hope I can take credit for the writing since I wrote it...

As for taking credit for bitcoin development going it's natural and obvious course I'm not sure I follow you. First, I never said anything about taking credit for anything regarding Bitcoin. All I've done is post the result of my thoughts which have evolved over many months of following Bitcoin. I may not have been posting here, but I have certainly been reading. For all the "natural" and "obvious" wording you use there sure were a lot of threads from members frustrated that Bitcoin growth had stalled, and seeking ideas for what to do next...

Anyway, did anyone have any questions?

[Serge]

to be honest I haven't read it completely word to word.

But, things like these:

TOOLS NEEDED TO GROW

All that's really needed to begin truly growing Bitcoin is some organization. The essential pieces are there. People can already trade the Bitcoin currency, and in this recession people will be interested in ways to save on groceries, not to mention earn money in an alternative ecomomy. Still, there are things which don't yet exist which would really support the plan I've outlined and allow for more expedient Bitcoin adoption.

1. Simple Person-to-Person Pay Service
2. Bitcoin Bank
3. "Bit Market" Website
4. Local Goods & Services Website

are nothing new and you can be assure people already working on these aspects. Your initial thread suggested that you going to introduce plan that will change bitcoin world and will allow Bitcoin growth - that's where I got an idea that in some time in the future you will try to take the credit of bitcoin's natural course of development, but in reality you haven't introduced anything new or what hasn't been discussed before. In my opinion your document is a summary of what's already happening and going to continue, that's why i choose words such as "natural" and "obvious" in my reply here above.  

[acoindr]

to be honest I haven't read it completely word to word.

But, things like these:

TOOLS NEEDED TO GROW

All that's really needed to begin truly growing Bitcoin is some organization. The essential pieces are there. People can already trade the Bitcoin currency, and in this recession people will be interested in ways to save on groceries, not to mention earn money in an alternative ecomomy. Still, there are things which don't yet exist which would really support the plan I've outlined and allow for more expedient Bitcoin adoption.

1. Simple Person-to-Person Pay Service
2. Bitcoin Bank
3. "Bit Market" Website
4. Local Goods & Services Website

is nothing new and you can be assure people already working on these aspects. Your initial thread suggested that you going to introduce plan that will change bitcoin world and will allow Bitcoin growth - that's where I got an idea that in some time in the future you will try to take the credit of bitcoin's natural course of development, but in reality you haven't introduced anything new or what hasn't been discussed before. In my opinion your document is a summary of what's already happening and going to continue, that's why i choose words such as "natural" and "obvious" in my reply here above.  

Oh for Chrissakes would you please read the thing before commenting?

The section you list is NOT the plan. The rest you didn't read is. Yes, of course some of those items are obvious and have been discussed, because they are good ideas. I'm simply writing my views on them. Also the "Bitcoin Market" has not been previously discussed, not the way I propose it. It's not what you think. Again, please read... I'll wait.

[Serge]

so where is this ground breaking, world changing plan?

How to Grow Bitcoin

1. The system has to be stable.

2. The second critical element is having a real economy which accepts the currency

- ON ECONOMICS

- SHIFTING THE DECIMAL

- BUILDING A TRUE ECONOMY

Let's pause for a minute to go over key plan elements we've discussed so far.

1. The plan involve deliberately controlling the Bitcoin money supply (and therefore affecting the dollar exchange rate). This is done by moving the decimal, as a community, at strategic points. To simplify this conceptually, we refer to Bitcoin with terminology like BTC, BC1, BC2, BC3, etc. where the number indicates how many places the decimal has been moved.

2. The way we give people incentive to join the Bitcoin economy is by giving them real value. Anyone who wishes to survive values food. Bitcoin provides the opportunity for people to trade food at a more natural, local level which has health and cost benefits, not to mention how much more fun and personable it would be!

- TOOLS NEEDED TO GROW

1. Simple Person-to-Person Pay Service
2. Bitcoin Bank
3. "Bit Market" Website
4. Local Goods & Services Website

- COMPETING CURRENCIES

- CONCLUSION
Now the Bitcoin community has detailed information to act on for growth, so let's work together to make it happen!

All of it has been discussed many times over and will be continued to be discussed. Nothing new and ground breaking.
In my view, you are simply trying to take credit or put yourself in some kind of leadership position for outlining very common and obvious terms which are already happening or being developed with you writing about them or without. Good luck with that.   If you haven't started your first thread the way you've started it but just presented your writing and asked opinions what others think about it, you would have gotten some good responses and healthy discussion. But you pushed it like your eBook will change the future and increase somehow the value of Bitcoin, not like value would not increase  haven't your doc been introduced.

[acoindr]

@Serge - I'm skeptical you've read every word. You're entitled to your opinion, but I'll skip it and wait for responses from others, thanks.

[Serge]

For the rest wondering what I'm referring to: Secure your positions

[kjj]

As I expected, nothing new here.

[acoindr]

@kjj - You will forgive me for being incredulous. Would you mind summarizing what the plan proposes, then point anywhere it has been discussed?

[Serge]

Google search within bitcointalk.org forum

Bitcoin bank

Shifting decimal

Bitcoin marketplace

Local p2p exchange

Growing bitcoin economy


and many many more and many times over has all about future growth of Bitcoin has been discussed and will continue to be discussed. Nothing new.

[acoindr]

@Serge - What you've done is recall some common topics. We are after all talking about Bitcoin... I didn't say I had a brand new currency, but I've done more than simply recall and rehash (essentially unresolved) topics. It's becoming apparent to me that you don't "get" it. That's understandable,  as it is a very complex overall topic.

[Serge]

sure I don't understand it

everyone talks here about "we got to grow bitcoin based services and businesses to allow mainstream acceptance and use or else bitcoin won't grow the way we want it to grow and it will continue to be instrument of traders and speculators and continue to be the currency of geeks"

so what exactly I don't get?

[acoindr]

so what exactly I don't get?

What I'm proposing.

[Serge]

you are proposing exactly what has been proposed and discussed before many times over.

that everyone needs to build businesses and services based on bitcoin, we need to get to point where you will be able to buy carrots and tomatoes with bitcoin, pay utilities and rent, able to do local exchanges, have some sort of bitcoin bank, shift the decimal point and only this way we can reach true global acceptance. anything missed? anything new?

and somehow your plan is unique and original and because of it bitcoin will grow so you have notified everyone in advance of release of your plan so everyone will be able to secure their positions. all is left is talk more and wait when such glorious time will enter upon us. great plan! what we would do with out it?!

[acoindr]

... we need to get to point where you will be able to buy carrots and tomatoes with bitcoin, pay utilities and rent ...

Wrong. I thought so.

[nmat]

So I assume there isn't a TL;DR version... Maybe I will read it later. I gave a quick look and it seems like a global plan for "the community". You are trying to organize people... Is that it?

[acoindr]

@nmat - Has it occurred to you why the question of how to make Bitcoin gain traction and widespread adoption has been so elusive to the community? Perhaps it's because the solution is something more than an obvious one paragraph answer... What I've posted is the result of my thinking (which has evolved) over months. In a way I'm trying to teach what's in my head, which I believe is a viable way to grow Bitcoin. Once people have digested that we can explore and discuss as a community, but other than that I'd be talking past people.

Slightly more organization than what currently exists is needed, yes, but only in terms of many believing in the tasks the community should be working toward. Also, the organization is only part of it. It also takes a certain level of comprehension. It's like the one quote about Bitcoin that goes "the first three times you think you understand it, you dont."

[julz]

My first 2 criticisms are little more than nitpicks...

1) You talk of 'current activity',  'near term',  'present day Bitcoin'  etc etc  - but the document appears to contain no date.  Sure.. I know it's 2011-08,  and I guess you'll address this in the eBook format - but if you let something escape as a pdf it should probably also be dated.

2) In the list of monthly expenditures you have:
Utilities (water/electric/trash)

- No specific mention of internet connectivity?  Seems a little odd in the context of Bitcoin where aside from a few experiments like Bitbills that allow offline transactions, it's pretty much a requirement to have a connection.

Topping the list are rent/mortgage and groceries, which makes sense as they address the fundamental
food and shelter requirement. Everything else falls into the category of nice-to-haves, with the
exception of possibly medical/dental care for emergencies

I guess this means the entirety of Bitcoin goes in the 'nice-to-haves' category because of the internet connectivity requirement... whereas fiat cash would be classified as critical to have because you need something to use to pay for the 'fundamental' requirements?

[repentance]

In the part where you talk about Bitcoin effectively operating as a barter token/local currency, you don't really address the issue of how Bitcoin would be superior to other local currencies like LETS and Ripple for this purpose.  Even for those whose philosophical bent is towards supporting their local economy as much as possible, ease of use is still a consideration.

I think you're also not addressing the issue of different Bitcoin users having different agendas - the fact that there is no one united Bitcoin community with a single agenda but rather a range of quite different philosophies, core beliefs about the role of Bitcoin, and especially about whether or not this is even an appropriate time to try to "grow" Bitcoin.

[acoindr]

@julz - I totally agree about the date. I was primarily focused on getting this completed and posted to communicate and start the dialogue, but for historical value you're absolutely right. I'll add the date in (along with some typo corrections).

Regarding the "Utilities (water/electric/trash)", this comes from the On Economics first section of the book. This section is meant to set the stage and get everyone on the same page with my frame of reference for economics. In this context I'm talking about what is traditionally considered core economic needs (in the U.S.). By missing any one of these services a person would be considered poor indeed (again, in the U.S.). That wouldn't hold true for an internet connection (although some, especially around these parts, might try to debate that lol).

I guess this means the entirety of Bitcoin goes in the 'nice-to-haves' category because of the internet connectivity requirement... whereas fiat cash would be classified as critical to have because you need something to use to pay for the 'fundamental' requirements?

Yes, you're actually right here. It sounds ironic doesn't it? Especially from the perspective of users in a "Bitcoin community", but yes, fiat cash would currently be considered more critical to have. Bitcoin is used by less than 3% of the U.S., and although that might change in the future, it's currently definitely just a "nice-to-have".

BTW, congratulations on being the first to actually reply with an intelligent response to text you've actually read. Compared to my experience so far in this thread I'm almost ready to send you a Bitcoin. Almost.  

[julz]

1 BC2 = 0.01 BTC (shift decimal 2 places)

The decimal level should be set so that the dollar exchange rate is approximately .10 cents to 1
currency unit.For example, the current exchange rate is around $10 per 1 BTC. This means the
marketplace should currently be pricing things in BC2, because 1 BC2 is currently .10 cents

Ok.. This is a *verizon math* class mistake.
(http://verizonmath.blogspot.com/)

Either you mean 10 cents   - or you mean .10 dollars   - you don't mean .1 of a cent in this case.

If you don't understand the difference - or don't understand why the way you have written it is absolutely poor communication - you are not the person to be proposing decimal shifts.

I have an admission to make - I've been heavily involved in just one of the *many* previous discussions around decimal points, and had a modest proposal. (which itself was of course just a collation of existing ideas)

This was not to have the whole world do some seizmic 'decimal shift' - but to allow the GUI to be flipped to the appropriate size range for the type of transaction.
( bitcoin unit colour chart: https://bitcointalk.org/index.php?topic=27663.0 )

At the touch of a button you can flip the price to BTC, millis, micros while entering an amount - whatever the merchant has priced in.  
If the merchant priced in micros and you're a bit fuzzy on the maths and don't like those micro thingies..  before paying you can just flip it to the millis (or whatever) which you are familiar with.

Given that right now there are vast wealth differences across the planet - and in some parts of the world, people's daily transactions occur in the order of a few dollars  or less (USD equiv) - it seems pretty presumptuous that we can decide for the whole world when to shift the decimal.
The answer is *don't*.
It's a display issue... and a personal one at that.

EDIT: Recently I saw an example..  the gambling site Dragons Tale.  It already prices in what it calls 'bitmills'.   This demonstrates that because the general transaction size is so small - it's convenient for this merchant to already be working in a different unit.  It simply makes no sense to make this decision at a community level when it's one for the individual markets, merchants, and customers to make.
Even on the big exchanges..   massive traders holding other peoples funds will continue to trade in whole BTC even if the average user is only buying a few millicoins.  There will never be a unit suitable for everyone at once.


Thanks for almost giving me a bitcoin.. haha..  It's a nice thought - but I need to keep my credibility as an honest whinger and critic

[acoindr]

you don't mean .1 of a cent in this case.

Actually, technically, I do. The word "cent" derives from centum which means one hundred, so saying .1 of 100 is exactly what I want to convey. Now, many countries use "cent" to mean 1/100, but I would suggest it is they that are not being etymologically consistent. But I'm not here to debate that. I do otherwise agree with you when considering common usage for "cent" the way I have it wouldn't be accurate. I disagree the intended meaning is not likely to be conveyed... I wrote this all in my spare bits of time, and it shouldn't be expected to be completely error free. However, that doesn't mean that I don't know what I'm talking about. Don't conflate the two. I'll update the "cent" wording when I get a chance.

Regarding your thoughts about flipping the level of BTC in the GUI that's actually exactly what I advocate. What you're missing, though, is that the coordinated switch/usage of the same decimal level of BTC is a critical part of the growth plan. It produces an economic effect which doesn't happen with people acting independently; they must act together. I'll try and explain more on that in a bit...

@repentance - a reply is coming. Sorry, these things take time.  

[acoindr]

In the part where you talk about Bitcoin effectively operating as a barter token/local currency, you don't really address the issue of how Bitcoin would be superior to other local currencies like LETS and Ripple for this purpose.  Even for those whose philosophical bent is towards supporting their local economy as much as possible, ease of use is still a consideration.

@repentance - LETS is quite close to what I have in mind, but its scope is too small. The entire design is based on serving only a small community, and that's why it has never grown beyond that... Bitcoin doesn't have such limitations built in. Ripple is different, but has the same drawback in that it isn't designed to serve an entire nation and foster truly free trade with growing GDP. Again, Bitcoin is superior because it doesn't have limitations built in. It can be a fully functional currency used for free trade.

I think you're also not addressing the issue of different Bitcoin users having different agendas - the fact that there is no one united Bitcoin community with a single agenda but rather a range of quite different philosophies, core beliefs about the role of Bitcoin, and especially about whether or not this is even an appropriate time to try to "grow" Bitcoin.

That's fine. There are tens of thousands of Bitcoin participants, and that number is growing. What I'm proposing doesn't require the consent or participation of every single user. In fact, just a few people could put into action what I propose and have it begin to grow and catch on. It would take much longer, though, than having hundreds or thousands with the same thing in mind.

As for an appropriate time to try and grow Bitcoin I'm assuming you've been reading this forum as I have. Do you really think that's a common question?  

[acoindr]

@julz - as I said above I'll explain more about shifting the decimal, and why it needs to be done with synchronization among participants.

I'll actually explain the two key parts of the plan, because it appears people are either not reading or else not understanding the eBook and need clarification.

Many in this community have followed the pricing of Bitcoin and know the story. Bitcoin started off at a few cents, and eventualy reached $1.00. Soon it reached around $8.00, then had an explosion to about $30.00. It then proceeded to crash down to about $10.00 before climbing briefly back to $20.00, then down to around $14.00, a most recent crash to around $6.00, and then the climb back to around $11.00 where it is today.

What does all that pricing have in common? It's all based on speculation. That's why there are such wild swings.

There has often been mention of Bitcoins eventually being worth hundreds, even thousands of dollars each, and just wait until we get there. As mentioned by a poster above who misunderstands my plan, people also imagine one day buying groceries, paying rent, and their utility bills all in Bitcoin. The question is, how do we get there? It's as if the Bitcoin community is at the edge of a chasm staring at the other side. They can see where they want to go but are missing the way to get there.

Well, the truth is that speculation alone will never get us there. If the price of Bitcoin was only ever based on speculation then it actually would be a ponzi scheme. There would be nothing to support the price, and it could come crashing down at any moment, just as we've seen.

For Bitcoin to ever grow past the $50 range it needs to actually give value to people. Presently, the actual value Bitcoin gives to people is very small. Bitcoin is currently providing some value to people buying and selling illegal drugs. It's also providing value to people who want to move money in various amounts across various locations without being subjected to rules of the existing financial system. That's about it. For the most part the rest of Bitcoin is being held for speculative purposes. As long as that's the case Bitcoin's price will remain boxed in, growing only by slowly expanding its value to more and more people.

The problem with doing it that way is it will take a very long time for Bitcoin to build itself up. The few people who actually use it for non-speculative purpose will be sparsely separated from one another, which prevents the coalescence of a real economy.

What I'm proposing is a way to get Bitcoin to actually be used as a unit of value not derived from speculation. Further, I'm explaining how once that happens it's possible to ratchet up the beginnings of a fledgling economy so that it expands. As this happens the dollar value of Bitcoin grows naturally, without limit and with stability. This is what is new, what I haven't seen discussed before.

To do this it starts with making local food exchange available, using Bitcoin to facilitate this. This is supported by websites which show what is available locally to Bitcoin users in terms of food, and what would eventually grow to include members offering services as well. This is how you start a true fledgling economy. Buying stuff on the Internet is nice, but it's not what people truly value. People live in the real world and really value things which are local to them - a car repair, shoe shine, hair cut, etc.

This is just the start. As I describe in the book these local participants would use a currency I call "BC2". They don't need to know what that means. They don't need to know about BTC, or blockchains, or mining. All they need to know is that they are using a very good thing, something which will turn out to be worth good value for them. I go on to explain how these participants can bake bread for each other, and make other food items available. It's because all humans value food that this is a smart foundation to build Bitcoin upon, and one which will likely gain traction. As the number of participants in this local economy grows so would the goods and services available locally, naturally. Guess what that means? It means the exchange rate for BC2, which would presently be worth $.10 (BC2 = .01 BTC) would likely increase. Each BC2 would eventually grow to $1.00, as more people sought entry into the economy.

At this point, as described in the book, a coordinated shift should occur. Everyone using BC2 should (ideally on one coordinated day) begin using BC3. All they would do is use different wording. If they were selling bread at 1.00 BC2 they would begin selling it at 1.00 BC3. If they offered a hair cut or car wash for 10 BC2 they would offer the same for 10 BC3. In the Bitcoin client they would simply select the new level to use.

Now, why would they do this? What effect would it have? Well, market participants wouldn't lose anything, but they would certainly stand to gain. First, they wouldn't lose because any goods or services they wanted to buy from the economy would be priced in the same way that they sold or earned from the economy. However, something else would have happened, something very key. Each participant would instantly have 10 times more monetary units than they started with. Imagine having $100 in your bank account then one day waking to find it had magically increased to $1,000. Or having $1,000 and finding it increased to $10,000. Would you feel richer? Would you be more inclined to spend money? Of course you would.

This is the effect of a coordinated shift of the decimal. It increases the money supply available to the economy in a very powerful way. It's the opposite of the deflationary spiral many critics of Bitcoin warn will be its demise. It also makes room for more participants to join the economy, so that it grows and thrives naturally. At the same time it's a controlled monetary expansion. It doesn't happen so fast the dollar exchange rate plummets, hurting those that must still correlate some purchases based on dollars. The monetary expansion happens in a way that the exchange rate remains based on the size and health of the new Bitcoin economy.

Soon, as the economy expanded BC3, like BC2, would grow to be worth $1.00 each, and it would be time to shift to BC4. The same effects would naturally happen again. At this point I imagine the economy would be quite large indeed. In dollar terms each original Bitcoin would be worth $1,000. If BC4 reached dollar parity, each Bitcoin would be worth $10,000.

I hope this makes things clearer.

[kjj]

It is really too bad that you didn't read any of the other three thousand threads on this.

Moving the decimal point does not change the value at all.  If it did, Zimbabwe would have had the most amazing economy ever as they shifted their decimal point over something like 13 places.

[acoindr]

It is really too bad that you didn't read any of the other three thousand threads on this.

Moving the decimal point does not change the value at all.  If it did, Zimbabwe would have had the most amazing economy ever as they shifted their decimal point over something like 13 places.

No, simply moving the decimal will not likely change the exchange rate for Bitcoin. The market would simply adjust and figure out the mathematical equivalent. For example, the current dollar exchange rate is approximately $11.40 per 1 Bitcoin. If you wanted to sell your Bitcoins in pieces of .10 at a time how much would you get for each sale? If you said $1.14 you win the prize. This would be the equivalent of simply shifting the decimal to the left by one. There is no great additional side effect, no magical change; as you so correctly point out, simply moving the decimal doesn't itself change market value.

However, that's not exactly what I suggested we do.

Let me break it down further. First, we set it up so that local economies can develop. We use food exchange as the basis. We also make it so that the participants will be using Bitcoin as their trading currency. Here is where the interesting part happens, and one reason you're failing to understand what I advocate. What we give new market particpants to use as money can be varied. For example, we can give them special shiny rocks to trade, even if the shiny rocks might only sell for $.02 each. The reason they don't care about the dollar value of the rocks is because they are only interested in the rocks for what they can trade them for in this new special market. That's the key. What they can get in the market with the rocks is where the value comes from.

So, applying that to Bitcoin we see the dollar exchange rate doesn't make any difference whatsoever to new participants we invited to form the market. My suggestion is we start the market with a currency of BC2. From the book, this means the equivalent of shifting the decimal on the original Bitcoins twice to the left. (I start it here because it's currently equivalent to around $.10) So if Sally, our first member, has never even heard of Bitcoin let alone have any we inform her that she can currently get 100 BC2 for the price of $11.40.

After a while more people join this new local market, each buying in to acquire BC2 since that's the thing goods are traded and priced in. Not all participants have to buy their way in. They might decide to offer a service like giving car washes to acquire BC2. As time went on the market, because of its unique benefits, would attract more participants and grow. If the price for BC2 was $11.40 for 100 when the market started do you think it would always remain that price, given the larger availability of goods and services sure to pop up? If you said no you win the prize. The dollar exchange rate for BC2 would go higher, because participating in the market would become more valuable. That's where the value comes from. It's not moving the decimal point alone that does it. That's what most will miss, and why the question of how to grow Bitcoin has been so elusive.

As the true economic value of having Bitcoins increased, so would the dollar exchange rate. This gives us another interesting opportunity. Remember how we could vary the currency choice the market used in the beginning? We could choose to use rocks or Bitcoins or whatever. Well, a similar option would present itself as the dollar value of Bitcoins went higher, because we could effectively have the market move the decimal in synchronization without affecting the health of trade occuring in the market. The only thing we would be limited by is how much the shift would correspondingly drop the dollar exchange rate. Well, we know from our earlier example a shift of one place left means a drop in dollar value of 10 times less.

Such a drop wouldn't mean much to market participants because they still buy their bread and other goods priced in the same level of Bitcoins - that's why it's important all market participants honor the switch at the same time. Since it's not currently possible to pay for everything in the world in Bitcoin, however, the dollar exchange rate would continue to warrant consideration and I wouldn't advise shifting the decimal prematurely, or by more than one place at a time (unless the dollar pricing was correspondingly high). Only when the exchange rate rose naturally, based on the actual value being provided by the economy, would I advise shifting the decimal. This is how the exchange rate can grow naturally alongside actual economic value.

I don't know if you're familiar with stock splits but it's a similar issue. For example, let's say you owned 100 shares of a growing company trading at $20 per share. If the company gave a 2-for-1 stock split it means that you would now own 200 shares. How much would your new shares be worth after the stock split? They would be worth $10 per share, because the price would simply be market adjusted to the mathematical equivalent, as I explained above. As a stock holder you wouldn't care because 200 shares worth $10 is the exact same value as 100 shares at $20. However, because the company was growing the stock price per share would probably again reach $20 after not too long. Now you own 200 shares worth $20 each. And that certainly makes a difference. That's essentially the same occurrence I'm explaining is possible with Bitcoin. The difference here, though, is that you're also expanding the money supply, making holders wealthier (so they spend more) both in terms of the Bitcoin economy and the dollar exchange rate as the price regains dollar parity. Again, as you correctly pointed out, simply moving the decimal itself is not what increases value. What we would be doing is capturing the value of the growing, expanding economy.

[kjj]

You've only said one concrete thing, that we should move the decimal.  Everything else that you've said has been vague.

First, we set it up so that local economies can develop.

How do we do this?  How do you convince people to replace the currencies they are already using?

You spend a lot of paragraphs explaining how these local markets will revolutionize bitcoin, but your entire notion of how to start them up is:

We also make it so that the participants will be using Bitcoin as their trading currency.

[acoindr]

You've only said one concrete thing, that we should move the decimal.  Everything else that you've said has been vague.

I've been vague? You're kidding, right? I published a 15 page book and 2 lengthy posts in this thread so far. I would suggest the last thing I'm being is vague. Still, I can see how there might be gaps in understanding. It took me months to develop my thinking on this. I've introduced the concepts to the Bitcoin community in a period of around 24 hours. It's understandable that it's hard for people to wrap their head around.

How do we do this?  How do you convince people to replace the currencies they are already using?

We're not trying to convince people to replace the currencies they're using, not all at once anyway. If you read the book you would see I explain we give people incentive to participate by cutting their grocery bill. That's real money they would be saving so they would probably be interested, especially in this economy. People still need dollars to pay their mortgage/rent, car payment, buy gas, etc. Bitcoin can't help them there yet.

You spend a lot of paragraphs explaining how these local markets will revolutionize bitcoin, but your entire notion of how to start them up is:

We also make it so that the participants will be using Bitcoin as their trading currency.

No, that's not my entire notion of how to start them up. Again, if you've read the book it explains what I call "Bitcoin Markets" and how they are set up by us creating a sort of "National Bitcoin Market" website which anyone can join to propose starting a market in their area. Then vendors and market hosts can sign up on the website and create the market from there. Since we are the ones setting up these as yet non-existent markets we get to pick how they operate and what currency they use, just like the creator of the LETS system (a fairly successful system in its own right) did.

[Fizzgig]

You are so focused on staples of the economy like food, why? Wouldn't a smart entrepreneur first focus on the digital benefits of this new money? The more uses it has online, the more valuable it will become. It makes sense for bitcoin to first take over the internet, then real life.

For example, if bitcoins became the standard for online subscription payments, bam, more people would hold bitcoin, more people would spend bitcoin, bitcoins would go up in value. This will happen thousands of times and bitcoins will become more established, everyone understands that. I just don't understand where your plan differs.

Edit: Oh and somewhere you condemn competing currencies? I would argue that competing currencies will only succeed if people found use for them, and if people are finding use for a competing currency, why condemn it? Would it be because it poses a threat to the value of the currency you (or anyone making the argument) are invested in?

[kjj]

I've been vague? You're kidding, right? I published a 15 page book and 2 lengthy posts in this thread so far. I would suggest the last thing I'm being is vague. Still, I can see how there might be gaps in understanding. It took me months to develop my thinking on this. I've introduced the concepts to the Bitcoin community in a period of around 24 hours. It's understandable that it's hard for people to wrap their head around.

Yup, I've read it all, which wasn't easy.  You are certainly verbose, but still vague in that you don't explain.  Also, it is your job as the writer to communicate clearly.  Your implication that we (everyone so far) are all simpletons because we don't understand you is misplaced.

We're not trying to convince people to replace the currencies they're using, not all at once anyway. If you read the book you would see I explain we give people incentive to participate by cutting their grocery bill. That's real money they would be saving so they would probably be interested, especially in this economy. People still need dollars to pay their mortgage/rent, car payment, buy gas, etc. Bitcoin can't help them there yet.

I don't see how this would cut anyone's grocery bill.  Bitcoins would be worth the same in the local market as they are worth globally.  Grocery bills would be the same regardless of the currency.  Arbitrage will see to that.

No, that's not my entire notion of how to start them up. Again, if you've read the book it explains what I call "Bitcoin Markets" and how they are set up by us creating a sort of "National Bitcoin Market" website which anyone can join to propose starting a market in their area. Then vendors and market hosts can sign up on the website and create the market from there. Since we are the ones setting up these as yet non-existent markets we get to pick how they operate and what currency they use, just like the creator of the LETS system (a fairly successful system in its own right) did.

By the way, I'm all in favor of helping more markets emerge.  Local, internet, global, whatever.  I just don't think that you've said anything substantial that hasn't been discussed to death here a hundred times before.

[julz]

I explain we give people incentive to participate by cutting their grocery bill.

I've read your document - and my understanding is that you're effectively expecting people(or at least merchants - initially) to ignore (or remain unaware of) the existing exchange rates of BTC to local currency , and price their goods independently of this as if their local market were some isolated little trading ecosystem.

I don't have time to fully respond - but I simply don't see why this step will take place.  If the phone apps are in place that allow easy BTC trading (in whatever units) - then surely these same apps will allow easy lookup of exchange rates and people will not trade at the heavily discounted rate you seem to expect.

I think it's completely unrealistic to expect merchants to discount their offerings in this way.

A more general criticism of your writing style is that it's somewhat incoherent and verbose.  I may try to provide a more constructive criticism on that point in a day or so.

[acoindr]

You are so focused on staples of the economy like food, why? Wouldn't a smart entrepreneur first focus on the digital benefits of this new money? The more uses it has online, the more valuable it will become. It makes sense for bitcoin to first take over the internet, then real life.

@Fizzgig - this is a good question.

So you suggest Bitcoin could take over the Internet. I see problems with that. I've had a merchant account where I had to pay high credit card fees. Even if Bitcoin was available to me I would still pay the fees. Why? Because that's what the customers on my site would use. When it comes to business the customer is king, and Bitcoin doesn't provide benefits from the consumer side, unless you want to obscure your identity. Can you imagine a customer arriving at a checkout page that says they must first acquire Bitcoins to pay, and the exchange rate may make their final price different?

Bitcoin has been around a while now. It reached dollar parity and Mt. Gox has been available for many months. Now there are even more exchanges. Do you really think there are a growing number of sites out there are not interested in Bitcoin for speculation, or ideology, or anonymity that use it for checkout? Is there even one? What would change this?

Besides, the dominant dollar based system is beginning to benefit from technology too. There are micropayments options now which reduce fees, and banks are rolling out systems that let people pay others directly from their checking account, starting with mobile apps and later with expanded options.

But the biggest skepticism I have with this approach is it doesn't give Bitcoin much advantage over competing crypto currencies using the same software. Since none of them are backed by anything except the usefulness the market places in them Bitcoin's value would be subject. The marketplace would be chaotic for which digital currency should be held and accepted where, as people tried to become wealthy by starting their own threads.

Edit: Oh and somewhere you condemn competing currencies? I would argue that competing currencies will only succeed if people found use for them, and if people are finding use for a competing currency, why condemn it? Would it be because it poses a threat to the value of the currency you (or anyone making the argument) are invested in?

As said in the book competing currencies are fine. It's a free market. What I warn to be protective of is siphoning off of the value from an economy we built as described. That could happen if other digital currencies sought to confuse market participants to gain value. As for a threat to anything I'm invested in I could simply buy any newly released currency very cheaply and gain as it gains.

[acoindr]

Yup, I've read it all, which wasn't easy.  You are certainly verbose, but still vague in that you don't explain.  Also, it is your job as the writer to communicate clearly.  Your implication that we (everyone so far) are all simpletons because we don't understand you is misplaced.

@kjj - I agree on the verbosity. Communicating effectively with brevity, especially complex ideas isn't easy, or dare I say a skill most have. I'm no expert there. We'll have to disagree on the vagueness. Some things require more explanation than others. That's what questions are for. The simpleton idea is all yours not mine. Please don't try to assign words to me I didn't use. I said it's understandable people may not fully grasp in a few hours what took me months to work through. Bitcoin itself is an example of this. I saw Bitcoin and had the opportunity to buy in when it was in the cent range, but passed because I didn't understand it then the way I do now, although I had access to the information. I don't consider myself a simpleton at all. Some things require more time to grasp.

I don't see how this would cut anyone's grocery bill.  Bitcoins would be worth the same in the local market as they are worth globally.  Grocery bills would be the same regardless of the currency.

This is because you have a misunderstanding of what I propose. When your trading remains within a currency there is no concern for the exchange rate.

By the way, I'm all in favor of helping more markets emerge.  Local, internet, global, whatever.  I just don't think that you've said anything substantial that hasn't been discussed to death here a hundred times before.

So you've said, repeatedly. But just because you fail to see any new information doesn't mean there isn't any. And even if you're right, which I say you're not, what's the big deal? If there are hundreds of discussions what's one more? If people agree with you they will lose interest in this thread and it will die away. Don't worry, I won't make another one on this topic. This is my one chance to convince the community I'm right on this, and I'll either succeed or I won't.

[acoindr]

I explain we give people incentive to participate by cutting their grocery bill.

I've read your document - and my understanding is that you're effectively expecting people(or at least merchants - initially) to ignore (or remain unaware of) the existing exchange rates of BTC to local currency , and price their goods independently of this as if their local market were some isolated little trading ecosystem.

I don't have time to fully respond - but I simply don't see why this step will take place.  If the phone apps are in place that allow easy BTC trading (in whatever units) - then surely these same apps will allow easy lookup of exchange rates and people will not trade at the heavily discounted rate you seem to expect.

I think it's completely unrealistic to expect merchants to discount their offerings in this way.

@julz - this shows a deeper understanding of what I propose. Excellent question. I thank you.

You've also hit on what I feel is the most challenging part of the plan. However, I believe it is workable. To illustrate strip Bitcoin away for a moment and say participants traded food directly. If you have orange trees and therefore plenty of oranges would you be willing to trade them? Same with having chickens and plenty of eggs, etc. I think it has been shown people would indeed trade. Adding a currency to facilitate trade simply makes trading easier.

From what I propose participants would start at BC2 which is currently worth about $.10. If I could bake bread or give apples, etc. for eggs I needed I certainly would do it. Have you seen egg prices lately? The currency exchange rate wouldn't be of concern because the value I could get from the market would be commensurate.

What you're suggesting is that people wouldn't want to accept/acquire BC2, but I say demand for it would grow. You mention an "isolated little trading ecosystem". Yes, but keep in mind I expect these things to start popping up everywhere, and because it's the same currency you could buy goods (and increasingly services) from anywhere. Last, I expect the low exchange rate to be temporary, not stagnant.  My only concern is for people relying on dollars in any way for their business, as they might temporarily lose in dollar terms until things grew.

On the flip side, people on the buying side would of course love buying such goods at a low exchange rate. Again,  I expect this to be temporary and movement toward dollar parity. This is when the decimal would be shifted as the increasing unit value could make deflation a threat (people holding not spending). After the shift existing participants would be 10 times wealthier, making prior investments well worth it. As the new level again increased they would be richer in dollar terms too.

A more general criticism of your writing style is that it's somewhat incoherent and verbose.  I may try to provide a more constructive criticism on that point in a day or so.

All I can say on that is it is what it is. I'm using the writing skill I have against my time constraints. Please see my acknowledgement of my writing shortcomings to kjj above. However, I would say in my defense that I do seem to be communicating at least somewhat effectively as the dialogue is advancing and not stalled. I might add I once had an English professor say my writing was very clear and coherent. Go figure.

BTW, have to say I love your name. Pulp Fiction is one of my favorite movies.  

[acoindr]

EDIT: Recently I saw an example..  the gambling site Dragons Tale.  It already prices in what it calls 'bitmills'.   This demonstrates that because the general transaction size is so small - it's convenient for this merchant to already be working in a different unit.  It simply makes no sense to make this decision at a community level when it's one for the individual markets, merchants, and customers to make.
Even on the big exchanges..   massive traders holding other peoples funds will continue to trade in whole BTC even if the average user is only buying a few millicoins.  There will never be a unit suitable for everyone at once.

@julz - I just noticed you added this edit to your earlier post.

You don't fully understand how this would work. Anybody, like Dragons Tale, is perfectly free to use any denomination they choose. It's only the market which is participating in the shift that needs to honor the new level price wise.

For example, let's say 10 of these "Bit Markets" I describe exist. They know the deal, and will cooperate with the shift for their pricing. They sell their goods in BC2 then one day they switch wording and sell the same goods in BC3. Dragons Tale misses the memo; they are no where near these markets in fact. They are perfectly free to continue operating as usual. However, because of what was happening in these far away markets, especially if there were more and more of them, the "bitmills" Dragon Tale held and continued collecting would gain a higher dollar value. I'm sure that would suit Dragons Tale just fine.

[acoindr]

Nobody thinks this has merit?