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Author Topic: Three ways to save Bitcoin  (Read 3573 times)
justusranvier
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October 24, 2011, 09:43:12 PM
 #1

In order for Bitcoin to succeed as a currency people need to use it but unfortunately only about 0.00001% of the population will use an alternative currency for purely philosophical reasons. Everybody else needs a very clear and compelling reason that's sufficient to overcome the switching costs and increased complexity of dealing with multiple currencies. Here are three areas in which Bitcoin could potentially offer the rest of the world sufficient value to cause more people to switch.

1. Superior alternative to Paypal, etc

I listed this one for completeness but I think everybody understands this one and many people are actively working on it already.

2. The remittance market

Anybody who has ever sent money to friends or family members in other countries (or even within the same country) knows how expensive and inconvenient these services tend to be. There's a lot of potential here especially since the Bitcoin network takes care of the transfers itself.

The missing piece that keeps people in the developed countries from using Bitcoin to send remittances back to the less-developed countries is a lack of exchanges in those countries.

People who have sufficient knowledge of international business, local laws, contacts in the recipient country and access to capital can start exchanges there and then put out information campaigns in the developed countries to let the target population know that if they send Bitcoins to their family abroad the recipients would have a way to turn those Bitcoins into local currency (emphasizing the speed and cost aspects of doing so).

3. The informal economy

There are billions of people in the world who are trapped in poverty due in no small part to their inability to accumulate capital. Any segment the banking and legal systems can not or will not serve yet where the participants have internet access is a potential area in which people can benefit from Bitcoin. Any time that technology can be used to bypass legal obstacles to supplying a good or service there's an opportunity to grow the Bitcoin economy and provide the individuals involved in that activity with the benefits that come with having access to the services normally supplied by banks.

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Etlase2
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October 25, 2011, 02:06:52 AM
 #2

So your solution is have bitcoin do what it already does... except make more people use it. hrm.

Until the speculative bubble ends, which it never will as long as huge quantities of coins are hoarded, bitcoin is going to have trouble gaining acceptance. If the hoarded coins get into the supply, the price tanks even further lowering confidence even more. It's a pretty big bitch of a problem at this point.

justusranvier
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October 25, 2011, 02:20:33 AM
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So your solution is have bitcoin do what it already does... except make more people use it. hrm.
I'm just pointing out some constructive things that people can do to make a positive contribution rather than useless, silly pledges to not exchange Bitcoins for fiat and other such nonsense.

I must plead ignorance since I don't read the Spanish section of the forum but can a middle/working class person in Colombia, Peru or Chile go to a physical location and exchange Bitcoins for local currency?
Etlase2
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October 25, 2011, 02:26:56 AM
 #4

I don't know or care, but encouraging poor economies to accumulate their wealth in bitcoin strikes me as devious. People are guaranteed to lose wealth when investing in bitcoin. It is just a matter of who takes the brunt of it and when it happens. The velocity of money compared to the supply is so insanely out of whack. Until people decide they want to lose wealth just to ensure bitcoin gets stable, I don't think you're going to see a very stable BTC economy. Asking those without wealth as it is to take that hit is not very moral in my book.

justusranvier
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October 25, 2011, 02:51:30 AM
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I don't know or care, but encouraging poor economies to accumulate their wealth in bitcoin strikes me as devious. People are guaranteed to lose wealth when investing in bitcoin. It is just a matter of who takes the brunt of it and when it happens. The velocity of money compared to the supply is so insanely out of whack. Until people decide they want to lose wealth just to ensure bitcoin gets stable, I don't think you're going to see a very stable BTC economy. Asking those without wealth as it is to take that hit is not very moral in my book.
I believe you completely missed the point of my post. I'm talking about using Bitcoin as a medium of exchange, not as an investment. I did mention using it as a means of forming capital in point 3 but that's more of a long-term effect than something to aspire to in the immediate future.
cypherdoc
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October 25, 2011, 03:44:40 AM
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as to #3, this is what has made M Pesa successful in Kenya.  i can easily see Bitcoin being used favorably as a means of exchange in 3rd world countries.  the cost advantages are so numerous. 

the remittance mkt is also promising but there are only a certain number of exchanges out there.  mtgox does offer many currencies however.
Etlase2
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October 25, 2011, 07:59:33 AM
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I believe you completely missed the point of my post. I'm talking about using Bitcoin as a medium of exchange, not as an investment.

Just because you pretend the two are inseparable does not mean they are. If bitcoin became the primary form of money in Kenya or Zimbabwe or whatever, the economies of those countries would be further crushed when Satoshi or whoever decides to drop a load of 50k coins. And they will rightly see that a bitcoin is no better than a zimbabwe trillion dollar bill.

justusranvier
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October 25, 2011, 10:31:14 AM
 #8

the remittance mkt is also promising but there are only a certain number of exchanges out there.  mtgox does offer many currencies however.
MtGox is irrelevant as far as the remittance market is concerned.

Most of the people receiving remittances do not have bank accounts. The are currently served by a network of physical locations where they receive transfers in cash form.

Setting up these physical kiosks is a prerequisite to making inroads into the remittance market.
luv2drnkbr
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October 25, 2011, 11:15:32 AM
 #9

OP is right, Litecoins are the future!

ElectricMucus
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October 25, 2011, 11:21:47 AM
 #10

OP is right, Litecoins are the future!
Lawl

right on towards 0.25 LTC per BTC and beyond  Tongue

First they ignore you, then they laugh at you, then they keep laughing, then they start choking on their laughter, and then they go and catch their breath. Then they start laughing even more.
cypherdoc
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October 25, 2011, 11:52:32 AM
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I believe you completely missed the point of my post. I'm talking about using Bitcoin as a medium of exchange, not as an investment.

Just because you pretend the two are inseparable does not mean they are. If bitcoin became the primary form of money in Kenya or Zimbabwe or whatever, the economies of those countries would be further crushed when Satoshi or whoever decides to drop a load of 50k coins. And they will rightly see that a bitcoin is no better than a zimbabwe trillion dollar bill.

why would you assume early adopters would drop a large load of coins at a given pt in time anymore than a Steve Jobs would dump a large load of Apple stock at a given time which he never did?

early adopters of any company usually have an understanding of not disrupting the share price of their stock and will bleed any stock sale they wish to achieve so as not to do so.  and distributing this stock or coin would be a good thing as this would get more coin into the hands of late comers.

Bitcoin is way to early in its evolution to make wild conclusions either direction as to its future.  i personally see all the right principles, philosophy, and economic incentives in place in the code.
shad0wbitz
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October 25, 2011, 12:22:58 PM
 #12

In order for Bitcoin to succeed as a currency people need to use it but unfortunately only about 0.00001% of the population will use an alternative currency for purely philosophical reasons. Everybody else needs a very clear and compelling reason that's sufficient to overcome the switching costs and increased complexity of dealing with multiple currencies. Here are three areas in which Bitcoin could potentially offer the rest of the world sufficient value to cause more people to switch.

1. Superior alternative to Paypal, etc

I listed this one for completeness but I think everybody understands this one and many people are actively working on it already.

2. The remittance market

Anybody who has ever sent money to friends or family members in other countries (or even within the same country) knows how expensive and inconvenient these services tend to be. There's a lot of potential here especially since the Bitcoin network takes care of the transfers itself.

The missing piece that keeps people in the developed countries from using Bitcoin to send remittances back to the less-developed countries is a lack of exchanges in those countries.

People who have sufficient knowledge of international business, local laws, contacts in the recipient country and access to capital can start exchanges there and then put out information campaigns in the developed countries to let the target population know that if they send Bitcoins to their family abroad the recipients would have a way to turn those Bitcoins into local currency (emphasizing the speed and cost aspects of doing so).

3. The informal economy

There are billions of people in the world who are trapped in poverty due in no small part to their inability to accumulate capital. Any segment the banking and legal systems can not or will not serve yet where the participants have internet access is a potential area in which people can benefit from Bitcoin. Any time that technology can be used to bypass legal obstacles to supplying a good or service there's an opportunity to grow the Bitcoin economy and provide the individuals involved in that activity with the benefits that come with having access to the services normally supplied by banks.




Call me crazy, but I think there is a VERY easy way to save bitcoins (well, not easy in scale, but at least in principle):

CHINA!

That's all bitcoin really needs. Because of the inherent financial difficulties in getting money into, or out of china, if there were a lot of local (even clandestine) bitcoin exchangers for hard cash or other goods/values, the chinese people will be ALL OVER THIS SHIT.

Try sending a wire of any significant value to China (that is 10K USD or more). The government controls everything!

Yet, they are at this time the biggest industrial economy in the world, and probably the biggest exporters in the world.

If we could get the Chinese to use Bitcoin instead of, say, Liberty Reserve, that volume alone will make bitcoin not only survive, but also thrive.

My 2c ...

GOX SUX COX!
The true faces of the Bitcoinica / Intersango SCAM! - Bitcoin was born in the shad0ws, for the shad0ws.
Etlase2
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October 25, 2011, 12:23:40 PM
 #13

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why would you assume early adopters would drop a large load of coins at a given pt in time anymore than a Steve Jobs would dump a large load of Apple stock at a given time which he never did?

Bitcoin is NOT A STOCK. It is a CURRENCY that if you invest in it, it is on the HOPE that early adopters DON'T SELL.

There is no PRODUCT. There is no COMPANY. There is absolutely no basis for any value except SCARCITY.

Any RETURN ON INVESTMENT is in the HOPE that OTHER PEOPLE BUY IN and early adopters DON'T SELL.

A STOCK produces RETURNS by INVESTING YOUR MONEY into a COMPANY, thus giving you PART-OWNERSHIP, that works to improve its PRODUCTION. It does NOT require others to buy in to see an investment return, that is called a PYRAMID.


BITCOIN IS NOT A STOCK. It is NOTHING at all like a stock except that it has a limited quantity and an exchange. You do not OWN anything but a digital trash token. No STOCK starts as being worthless.

Dan The Man
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October 25, 2011, 01:20:00 PM
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why would you assume early adopters would drop a large load of coins at a given pt in time anymore than a Steve Jobs would dump a large load of Apple stock at a given time which he never did?

Bitcoin is NOT A STOCK. It is a CURRENCY that if you invest in it, it is on the HOPE that early adopters DON'T SELL.

There is no PRODUCT. There is no COMPANY. There is absolutely no basis for any value except SCARCITY.

Any RETURN ON INVESTMENT is in the HOPE that OTHER PEOPLE BUY IN and early adopters DON'T SELL.

A STOCK produces RETURNS by INVESTING YOUR MONEY into a COMPANY, thus giving you PART-OWNERSHIP, that works to improve its PRODUCTION. It does NOT require others to buy in to see an investment return, that is called a PYRAMID.


BITCOIN IS NOT A STOCK. It is NOTHING at all like a stock except that it has a limited quantity and an exchange. You do not OWN anything but a digital trash token. No STOCK starts as being worthless.

WHY do you use so MANY EFFING all-caps WORDS. It makes your SENTENCES read like something written by a HYPER 4-YEAR OLD that is throwing a TEMPER TANTRUM.

Etlase2
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October 25, 2011, 02:53:04 PM
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WHY do you use so MANY EFFING all-caps WORDS. It makes your SENTENCES read like something written by a HYPER 4-YEAR OLD that is throwing a TEMPER TANTRUM.

Because people around here have a habit of seeing only what they want to see. I figured I'd help out by emphasizing words that shouldn't be ignored.

cypherdoc
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October 25, 2011, 04:27:00 PM
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Quote
why would you assume early adopters would drop a large load of coins at a given pt in time anymore than a Steve Jobs would dump a large load of Apple stock at a given time which he never did?

Bitcoin is NOT A STOCK. It is a CURRENCY that if you invest in it, it is on the HOPE that early adopters DON'T SELL.

There is no PRODUCT. There is no COMPANY. There is absolutely no basis for any value except SCARCITY.

Any RETURN ON INVESTMENT is in the HOPE that OTHER PEOPLE BUY IN and early adopters DON'T SELL.

A STOCK produces RETURNS by INVESTING YOUR MONEY into a COMPANY, thus giving you PART-OWNERSHIP, that works to improve its PRODUCTION. It does NOT require others to buy in to see an investment return, that is called a PYRAMID.


BITCOIN IS NOT A STOCK. It is NOTHING at all like a stock except that it has a limited quantity and an exchange. You do not OWN anything but a digital trash token. No STOCK starts as being worthless.

but there hopefully will be a substantial ECONOMY that will use it to trade one day.  this would then drive demand and eventually the price.

also why do ppl invest in gold?  do you understand the fundamentals behind that?
SgtSpike
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October 25, 2011, 04:41:56 PM
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4. Greatly reduce the possibility of people getting scammed/hacked and losing money from it.

And IMO, that is the most important one.  You can scream "be smart" until you're blue in the face, but that won't stop people from doing stupid stuff, and it won't stop Bitcoin from continuing to receive a bad image because of it.
Etlase2
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October 25, 2011, 05:00:08 PM
 #18

but there hopefully will be a substantial ECONOMY that will use it to trade one day.  this would then drive demand and eventually the price.

wish in one hand, sh** in the other... not that this has any bearing on the problem of early adopters, it only makes it worse if they continue to wait to sell.

Quote
also why do ppl invest in gold?  do you understand the fundamentals behind that?

I'll pretend this is an honest question: to protect themselves from the machinations of fiat.

In bitcoin, you trade the fed for the early adopters. Early adopters are already machinating. They are controlling the economy to benefit themselves. Withholding currency to drive up demand; placing huge bid walls to manipulate the falling price. Except now the people are nameless and faceless and answer to no authority.

cypherdoc
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October 25, 2011, 06:09:51 PM
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but there hopefully will be a substantial ECONOMY that will use it to trade one day.  this would then drive demand and eventually the price.

wish in one hand, sh** in the other... not that this has any bearing on the problem of early adopters, it only makes it worse if they continue to wait to sell.

Quote
also why do ppl invest in gold?  do you understand the fundamentals behind that?

I'll pretend this is an honest question: to protect themselves from the machinations of fiat.

In bitcoin, you trade the fed for the early adopters. Early adopters are already machinating. They are controlling the economy to benefit themselves. Withholding currency to drive up demand; placing huge bid walls to manipulate the falling price. Except now the people are nameless and faceless and answer to no authority.

i asked you before and you never answered:  why do you begrudge the early adopters who put up their hard earned USD's to buy hardware, pay for electricity, spent time and effort to build and secure the blockchain from scratch, and verify tx's when Bitcoin was worthless with the only hope of getting paid off for doing so by a rising price?
Etlase2
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October 25, 2011, 07:05:12 PM
 #20

i asked you before and you never answered:  why do you begrudge the early adopters who put up their hard earned USD's to buy hardware, pay for electricity, spent time and effort to build and secure the blockchain from scratch, and verify tx's when Bitcoin was worthless with the only hope of getting paid off for doing so by a rising price?

I never answered because it is a pointlessly rigged question. They didn't have to buy hardware, they paid an absolute pittance in electricity, and a computer spent time and effort to build the block chain and verify tx's, not people. They're not delivering mail in a war zone in the Congo. The only one who had any claim to profit from actual work was Satoshi for coding the software. But it is open source, a type of software that millions of people work on everyday with absolutely no intent in profiting.

I've never said early adopters don't deserve a profit. I've always argued that early adopters sure as shit don't deserve to control the economy. Even if they "trickle in" coins over years, with the hordes accumulated from early adoption, one could potentially INDEFINITELY support themselves, their children, their grandchildren, their great-greatchildren, and so on without ever doing a single thing for the economy once it reached a minimum amount of stability.

Early adopters could have said that they plan on stabilizing the price, could have been completely transparent about it and taken a one-time profit (which would have been in the millions, quite a fair payment imo). But Satoshi especially went to immense lengths to remain totally anonymous and then disappeared. These are not the actions of a rational actor. These are the actions of someone who is looking to pump and dump. And probably already did. Problem is, he still has hundreds of thousands of coins to do it all over again many times.

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