Too many new coins, not enough new Bitcoiners

[allten]

Deleted Post: Sorry Wrong thread

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[KeyserSoze]

Bitcoin is like electric cars. Most people think they are a great idea, but nobody will buy one because they don't want to get stuck somewhere.

http://green.autoblog.com/2011/10/17/nissan-leaf-outselling-15-plus-vehicles-in-u-s/

[cbeast]

Bitcoin is like electric cars. Most people think they are a great idea, but nobody will buy one because they don't want to get stuck somewhere.

http://green.autoblog.com/2011/10/17/nissan-leaf-outselling-15-plus-vehicles-in-u-s/

7200? Lemme know when it's 100x that when it begins to approach SUV sales.

[Rassah]

Bitcoin is like electric cars. Most people think they are a great idea, but nobody will buy one because they don't want to get stuck somewhere.

http://green.autoblog.com/2011/10/17/nissan-leaf-outselling-15-plus-vehicles-in-u-s/

7200? Lemme know when it's 100x that when it begins to approach SUV sales.

I see a Lincoln Navigator (5,626) and a Hyundai Veracruz (6,836) on that list...

[amencon]

Seems to me that one of the cornerstones of confidence in the currency is a set rate of currency creation up to a point.  If that were changed mid way through, I'd think people would lose confidence in bitcoin altogether and bail much faster than they are now.

If this is true, then the only thing that could have been changed is the bitcoin creation rate from the beginning.  Had, instead, 10x more bitcoins or 10x less bitcoins been planned (500 or 5 bitcoin block rewards) into the system, I would think that bitcoins would be worth 10x more or 10x less per coin, netting us roughly the same market cap regardless of coin generation rate. 

In conclusion, there is as much money in the bitcoin market as people are willing to put into it.  Less coins would likely mean more USD value per coin, but there would be less coins and we'd end up in the exact same situation we are in now, more coins would just mean the opposite.

I haven't thought this all the way through so please point out the flaws in my logic.  Things might not have ended up exactly proportional due to psychological barriers or hangups, but I don't think this would have a great effect on the total amount of money people would invest in bitcoin overall.

If I'm right in the above, that would mean that changing the creation rate at all now that bitcoin is launched and has a market would be disastrous, and bitcoin being designed with a different creation rate would be essentially meaningless.  So moaning about current creation rate seems utterly pointless.

The only thing that will make the "value" of bitcoin rise is if it's useful to and adopted by people.

[the founder]

In conclusion, there is as much money in the bitcoin market as people are willing to put into it.  Less coins would likely mean more USD value per coin, but there would be less coins and we'd end up in the exact same situation we are in now, more coins would just mean the opposite.

Though technically what you are saying is accurate,  in reality it NEVER works that way.   The price goes up,  people start reading about it, start investing, starting bitcoin companies,  etc etc..

Price goes down and less people enter the market and it starts going down faster.

It's called a positive or negative reinforcement cycle.  Currently we're in a negative.

It's how it always has been,  it's how it always will be.

[amencon]

In conclusion, there is as much money in the bitcoin market as people are willing to put into it.  Less coins would likely mean more USD value per coin, but there would be less coins and we'd end up in the exact same situation we are in now, more coins would just mean the opposite.

Though technically what you are saying is accurate,  in reality it NEVER works that way.   The price goes up,  people start reading about it, start investing, starting bitcoin companies,  etc etc..

Price goes down and less people enter the market and it starts going down faster.

It's called a positive or negative reinforcement cycle.  Currently we're in a negative.

It's how it always has been,  it's how it always will be.

Hmm ok, so by your estimation had bitcoin been planned with only 2.1million coins ever existing it would be hugely more successful since each coin would have a greater USD value?

You may be right, but if we extrapolate that at some point the theory stops holding true.  What if 1 coin was ever planned and the whole time we just mined parts of it?  That way the USD value of a single bitcoin would always be greater than the total market cap of bitcoin.

If we believe that too many or too little coins would hurt bitcoin's future market cap value then there is a "sweet spot" somewhere in between.  What do you believe that spot is?  5m coins? 1m?

Of course even if you do have that magic number and it does have the impact you think it does, it's too late to implement it and forking bitcoin with that generation rate will likely prove to disappoint.  My point being, even if everything you say is true, you'd need a time machine and influence to change the bitcoin protocol before it began, to get any value from your knowledge.

[the founder]

you are right.

I don't have a time machine, and forking it won't help either.

I just wish that one day production was tied to spot price or something along those lines.. that would even it out.

If the price is crashing (like today at 1.xx)  then miners rewards would be 1.xx per 10 minutes...  if it was booming at 35 dollars, then 35 coins per 10 minutes...  that would stabilize the price.

The problem is that doing that it would tie it directly to the US dollar, and would defeat the entire concept.

I don't have a solution.

[amencon]

Unfortunately I don't either.  It seems to me that the only thing that will cause bitcoin to be a success is if continued development leads bitcoin to be held in such regard that it spurns wide adoption.  Hats off to the people hard at work trying to make this a reality, sometimes makes me wish I was a developer to help or work on my own bitcoin related projects in my free time.

Spot prices driving generation rate of bitcoins is something that might work, but honestly I don't know enough about the concepts involved to competently comment on the idea.  Also as you pointed out it would be in contrast to what some value as an attribute of bitcoin.

[Rassah]

OP, are you worried that Bitcoin will die, or just that it may take a lot of time and patience for it to get anywhere?

[slothbag]

As long as the Bitcoin network continues to be secure and is not banned by governments it will definately survive.

Like everyone else, I adopted bitcoins because of the current rules in place regarding coin generation etc so I would not like to see that changed.

My point was that for the dwindling interest in bitcoins combined with the high price and inflation, prices looked to fall further (which they have).

I see two paths to success for Bitcoin that are easily achievable in the next 6-12 months..

1.
We need grass roots support, mom and pop stores accepting bitcoin in their stores. Its easy for them to setup and saves them merchant fees, the only reason they don't is because most dont know about bitcoin.  Once the major chains see the little guys winning with bitcoin they will adopt it for sure.

2.
A mini bitcoin economy where someone wants to live solely on bitcoins. Then they can earn bitcoins for work, spend them on food, rent, beer etc and of course pay their taxes.  It would only take 5-10 merchants to provide these services (in Australia you can already pay your bills and taxes via bitcoin through spendbitcoins) and someone could live "off the grid" with bitcoins.  Not needing to cash-out to dollars would mean more people saving their bitcoins and demand rising substantially.

Interesting fact, there's about 3 million btc to be mined up until Dec 2012 before the reward drops to 25btc.  BitcoinStatus shows about 48k bitcoin clients running and i'm assuming each client = one person.  At the current price of $2.15usd it would only cost each person $140usd to buy up ALL those coins.

[LokeRundt]

As long as the Bitcoin network continues to be secure and is not banned by governments it will definately survive.

Even if it is banned by governments it will still survive, and the price per coin will go up