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Author Topic: How to Grow Bitcoin  (Read 3921 times)
acoindr
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August 22, 2011, 06:20:44 PM
 #41

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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.  Grin
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August 22, 2011, 08:33:47 PM
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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. Wink
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August 24, 2011, 12:22:14 AM
 #43

Nobody thinks this has merit?
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