Ideas for a Bitcoin 2.0

[mpfrank]

So.............  the OP want a new Bitcoin that would that miners would pump out 950,000 coins every minute = 1,368,000,000 coins a day. And these coins will be sold to bitcoin users who are FORCED to buy them at at least $1 per coin.

I think there's around 100,000 - 200,000 bitcoin users (based on Mt.gox hack last few months revealing 60,000 accounts). Probably, less than half of that is active.

You know what, i'll up that number and give you 1,000,000 bitcoin users, who will be absorbing the coins from your new system. This means each user today will have to spend $1,368 a day to buy the coins popping out from miners. Would you like that? (If they don't buy it, the miners will trade them for $1/coin worth of goods from Bitcoin-accepting merchants anyway)

OK, look, NO ONE would be "forced" to buy any particular amount of coins a day, nor are miners required to sell all coins mined each day (indeed, at these prices they would not need to).  If you normally buy $100 worth a BTC a week today, just continue buying $100 of BC2 a week in the new system.  The miners would be socking away wealth (in the form of BC2) like crazy, but because of this, more miners will rush in, and so over time, the difficulty will increase until eventually miners are only just breaking even again.  But in the meantime, because mining is so lucrative, everyone will be joining the Bitcoin network to mine (hey, free money!) and signing the contract, and so acceptance will skyrocket, and approach 100% very quickly.  Soon, everyone will be accepting BC2s.

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[mpfrank]

This post should be in "Alternate Currencies".
Thanks.

Well, it's not even so much a different currency - it could use the exact same basic technology, with small tweaks to parameters, but those tweaks are not even essential.  It could be implemented as just a different spin on the existing currency - a new contractual agreement between users, and a redefinition of the base unit, e.g., 1 BC2 = 0.000001 BTC.  With this conversion rate, 1 BTC would be worth $1,000,000. 

The only real problem with the existing BTC which is stopping it from attaining such levels is that there is no agreement between the existing users that prevents the value of each BTC from becoming (and remaining) indefinitely small relative to the level that would be needed for BTC to take over the world economy. 

BUT, if all members of the existing Bitcoin community simply signed an agreement that we each would accept 1 BC2 (0.000001 BTC) in place of $1 owed to us in traditional currencies for any purpose, then this would effectively increase the BTC value to a floor of $1,000,000, and instigate a new gold rush of people rushing into Bitcoin, a rush that would make the currency's past growth look tame in comparison.

[Explodicle]

Have you tried pitching NORMAL Bitcoin to ordinary people yet? It sounds like a crazy internet scam enough without financially dangerous legal agreements. What incentive does the lender have to ever denominate in fiat instead of BC2? It would only be used against him.

The secret to Bitcoin success is not more lawyers.

[mpfrank]

What incentive does the lender have to ever denominate in fiat instead of BC2? It would only be used against him.

Then lenders would quickly switch over to denominating all loans in BC2, which would help the new currency to more quickly gain acceptance!

[Explodicle]

What incentive does the lender have to ever denominate in fiat instead of BC2? It would only be used against him.

Then lenders would quickly switch over to denominating all loans in BC2, which would help the new currency to more quickly gain acceptance!

That's quite a commitment. I'm still primarily a Bitcoin user, but what if something better comes out?

[Nesetalis]

Just a small detail... but can I request that we have bitcoin 1.0 first?

Bitcoin 0.5 is due out soon.

I know, I'm already using it with the Qt GUI.

[DeathAndTaxes]

I'm saying the psychological barrier is currently preventing Bitcoin from growing as much as it otherwise would be able to.  If we redefined the standard BTC unit to a smaller one, it might indeed help the situation.  It's the same reason why companies do stock splits - because a stock priced at $200/share looks frighteningly "expensive" to the casual observer at first glance, regardless of whether it is actually overvalued in terms of fundamentals like market cap or earnings per share.

I am saying that is nonsense.  Many people believed that for decades but that have been numerous studies and no indication that splitting stocks helps stock price.

Today many successful companies don't split stocks.

Ever heard of Apple, Google, Amazon, Netflix, Priceline, Mastercard, Blackrock, Goldman Sachs and the company which had a high stock price before it was common Berkshire with a stock price of $112,200.00 per share.

I am sure there are a hundred more companies with high stock prices and no plans to ever split them.

[Nesetalis]

splitting stock prices lowers the barrier for entry.

This may or may not help, but it allows the little guy to buy 2 or 3 shares under 100$ easily enough.

[FreeTrade]

Ever heard of Apple, Google, Amazon, Netflix, Priceline, Mastercard, Blackrock, Goldman Sachs and the company which had a high stock price before it was common Berkshire with a stock price of $112,200.00 per share.

Agreed. It makes even less sense for a Bitcoin which is already designed to be divisible. It's more complicated to own a quarter of a Berkshire share than a quarter of a Bitcoin.

[bronan]

I have one problem with your statement that miners get them for free, most miners do not

To mine a coin you have to invest heavily in not so cheap hardware and last but not the least the energy price and other costs like taxes on that energy
Simply said if i want to break even i have to wait till bitcoin gets a value of 12 $ each minimal so your statement is wrong
Some do however run their rigs on the cost of their parents or boss so they are the lucky ones until the owners find out.

If a boss finds out you are stealing his electricity in such huge numbers i bet he will not be happy.
See the legal papers about this issue, many network admins got fired because they ran distributed computing without asking their boss for permission. The result was instant loosing their jobs and most of them had have been ordered to pay the loss in electricity back to the owners.
I believe bitcoin to have a future and there is in my view no need for a split yet, until the 21 million coins do arrive, the only thing i would like on a sort of split is that you see as a miner faster result from your investment.



 

[error]

The only GOOD idea in here is ... uh...

Anyway, once Bitcoin hits about $271 then it'll be time to move to mBTC.

[mpfrank]

What incentive does the lender have to ever denominate in fiat instead of BC2? It would only be used against him.

Then lenders would quickly switch over to denominating all loans in BC2, which would help the new currency to more quickly gain acceptance!

That's quite a commitment. I'm still primarily a Bitcoin user, but what if something better comes out?

Yes, that's a big problem with Bitcoin - there's absolutely nothing to prevent people from switching away from it in droves as soon as something better comes along.  The fact that a mass flight away from it is possible makes it a very risky investment.

Whereas, with the contractual agreement regarding BC2, even if people switch away from it, they have to still keep accepting it for at least a certain minimum value.  Kind of like how $2 bills are no longer made, but they are still legal tender (and still worth at least $2).

[mpfrank]

I have one problem with your statement that miners get them for free, most miners do not

To mine a coin you have to invest heavily in not so cheap hardware and last but not the least the energy price and other costs like taxes on that energy
Simply said if i want to break even i have to wait till bitcoin gets a value of 12 $ each minimal so your statement is wrong
Some do however run their rigs on the cost of their parents or boss so they are the lucky ones until the owners find out.

If a boss finds out you are stealing his electricity in such huge numbers i bet he will not be happy.
See the legal papers about this issue, many network admins got fired because they ran distributed computing without asking their boss for permission. The result was instant loosing their jobs and most of them had have been ordered to pay the loss in electricity back to the owners.
I believe bitcoin to have a future and there is in my view no need for a split yet, until the 21 million coins do arrive, the only thing i would like on a sort of split is that you see as a miner faster result from your investment.
 

The point of my "free money" remark was simply that, if each BTC had a contractually-enforced floor value of (say) $100,000 or $1 million (corresponding to $1 per BC2, if BC2 were defined as 1/100,000th or 1 millionth of a BTC, respectively), then, right now, mining would be essentially free, in the sense that the costs to mine (for the time being) would be miniscule compared to the value of coins received (assuming that enough people actually agreed to the new contract).

As word of this spread, and millions of new people rushed into mining, obviously the profit margins would quickly fall from near 100% to a much smaller value, but on the plus side, after the rush, millions more people would then be using Bitcoin (or BTC2), and promising to accept it, and so in the end, it would be much more viable as a new currency.

[mpfrank]

Ever heard of Apple, Google, Amazon, Netflix, Priceline, Mastercard, Blackrock, Goldman Sachs and the company which had a high stock price before it was common Berkshire with a stock price of $112,200.00 per share.

Agreed. It makes even less sense for a Bitcoin which is already designed to be divisible. It's more complicated to own a quarter of a Berkshire share than a quarter of a Bitcoin.

The people who trade Berkshire Hathaway stock are plenty sophisticated enough to understand that the fundamentals are what is important, the size of the nominal unit is not.

However, the "man-on-the-street" who first hears about Bitcoin is not that sophisticated.  If you tell him, "Hey I'm using this new currency Bitcoin, and 1 Bitcoin is worth $30!" (Like last June, or worse, $100,000, if it ever got that high), he'll think, "Wow that sounds like a really high price for a currency unit, is that really for real?"

[Explodicle]

What incentive does the lender have to ever denominate in fiat instead of BC2? It would only be used against him.

Then lenders would quickly switch over to denominating all loans in BC2, which would help the new currency to more quickly gain acceptance!

That's quite a commitment. I'm still primarily a Bitcoin user, but what if something better comes out?

Yes, that's a big problem with Bitcoin - there's absolutely nothing to prevent people from switching away from it in droves as soon as something better comes along.  The fact that a mass flight away from it is possible makes it a very risky investment.

Whereas, with the contractual agreement regarding BC2, even if people switch away from it, they have to still keep accepting it for at least a certain minimum value.  Kind of like how $2 bills are no longer made, but they are still legal tender (and still worth at least $2).

I'm not disputing that having people locked into it, even if obsolete, would keep up Bitcoin prices. What I'm not seeing is an incentive for individuals to opt in and be forced to subsidize those prices no matter what. It's scary. You first.

[mpfrank]

What incentive does the lender have to ever denominate in fiat instead of BC2? It would only be used against him.

Then lenders would quickly switch over to denominating all loans in BC2, which would help the new currency to more quickly gain acceptance!

That's quite a commitment. I'm still primarily a Bitcoin user, but what if something better comes out?

Yes, that's a big problem with Bitcoin - there's absolutely nothing to prevent people from switching away from it in droves as soon as something better comes along.  The fact that a mass flight away from it is possible makes it a very risky investment.

Whereas, with the contractual agreement regarding BC2, even if people switch away from it, they have to still keep accepting it for at least a certain minimum value.  Kind of like how $2 bills are no longer made, but they are still legal tender (and still worth at least $2).

I'm not disputing that having people locked into it, even if obsolete, would keep up Bitcoin prices. What I'm not seeing is an incentive for individuals to opt in and be forced to subsidize those prices no matter what. It's scary. You first.

Point taken.  But, if there were some way to declare, as a community, "After such-and-such date, only people who agree to such-and-such price floor will be allowed to continue to use Bitcoin AT ALL going forwards," that could be a good thing.  Everyone who thinks that Bitcoin should grow would then be forced to put their money where their mouth is.  Put up or shut up.

If no one agrees to take that risk, then Bitcoin will die, but at these prices, one could say it is dying anyway (in that the total value of all Bitcoins today, at this price, is only a tiny, insignificant fraction of the world economy, and declining).

One way to implement such a declaration would be if bitcoin.org distributed a change to the reference client to cause it, after a certain date, to only approve a transaction to or from any address if a contract agreement (agreeing to a certain minimum price floor, or higher) that is digitally signed by the address's owner is on file (included as an attachment to the transaction).   If the major pools adopted this protocol change, it would become the new de facto standard for lengthening the block chain, and so effectively Bitcoins would become unspendable by anyone who didn't agree to the new contract.

However, the signed contract would only have teeth, legally speaking, if the address was traceable to a real-world identity - so the contract would have to include real-world contact info. 

Of course, this would kill whatever shreds of anonymity Bitcoin has left, but such a sacrifice might be worth it to help Bitcoin expand from the tiny status it has today into a true global phenomenon.

[tysat]

@OP

It sounds like you want to change bitcoin to not be what it was meant to be just so you can make money.  Go to the alt crypto sub-forum if you want to try to get your own one started up.

[mpfrank]

@OP

It sounds like you want to change bitcoin to not be what it was meant to be just so you can make money.  Go to the alt crypto sub-forum if you want to try to get your own one started up.

As I said in an earlier post, these changes could be implemented within the existing Bitcoin framework (and even on top of the existing block chain) by making small tweaks to the standard client that automatically take effect after a certain block number - so it would not necessarily even need to be a new currency, just a new release of the existing one.  As long as the changes were accepted by the major pools, they would become the new de facto standard as to what Bitcoin itself is.

As I see it, without some way of enforcing a price floor in terms of existing currencies, Bitcoin will remain too risky for most people, and too small to have much of an impact on society - unless, of course, all the existing currencies collapse on their own.  (This might still happen, but I'm not as worried about that happening in the near future as I was a few months ago.)

[BitterTea]

It sounds like you want to create a fork of the block chain with different rules. Why do you think it necessary to call your rules Bitcoin while the original rules (what is essentially Bitcoin)
 die or go by a different name? If it is not necessary, then all you have to do is say that at some block in the future, you will create a fork of the block chain. This fork will enforce the rules you propose, but will go by a name other than "Bitcoin".

[error]

Be sure to name it Ripoffcoin so that everyone knows what they're getting into in advance.