About Bitcoin's future

[dryden]

Wondering aloud about bitcoin here. Feel free to chime in and set me straight if my assumptions are bad.

Bitcoin to me feels like the early days of the internet or the Linux kernel. It's buggy and somewhat difficult to use but it works and the community is vibrant and active, and in general, everyone is interested in it when you explain it to them.  Evidence from all over the globe indicates that money is indeed broken.  Even the most callous traditional economists concede that money in the modern age is entirely digitized already.  So why not do it right then?

What happens when a flashy new web 2.0 startup like Etsy or Amazon figures out how to meld bitcoin with commerce in a way that really works?  Eventually it's going to happen. It's only a matter of time.  That's when things begin to really takeoff.  The lack of vendors accepting payment for goods and services is what's limiting bitcoin to being a speculation vehicle rather than a currency (source).  When people can really get stuff and it's easy and fee-less, demand for bitcoin will grow exponentially.  Just like stock for Apple or Google.  Does anyone remember having that conversation back in 2005 about how they wished then they would've invested in Google or Apple, but it's already so expensive?  Look how they have done since then. In the long run, a good idea is a good idea is a good idea.

The 21 million coin cap bugs me.

If bitcoin is ever destined to gain wider acceptance as a general use currency -- which I think it will -- massive deflation is INEVITABLE, at least on the order of 1,000x, but could be as much as 1,000,000x. The bitcoin levels off when 0.00000001 BTC is worth something like a U.S. Penny.  That's the eventual levelling off price.  That's 1 BTC = $1 million.  But then-again, this shouldn't happen for a long time, like 50 years...  The system has other problems too (like fees), but the community seems nimble enough to deal with those eventually.

Btw, I actually see the criminality element as a good thing that bodes well for bitcoin.  The porno industry (for instance) historically have been early adopters of new technologies before the mainstream (VHS/Betamax years before the Hollywood studios, the internet years before tv-networks, etc..). They have to be lean and nimble to succeed with shitty margins and grey-area legality.

What do you think?

[1713576353]

1713576353

[Gabi]

Btw, I actually see the criminality element as a good thing that bodes well for bitcoin.  The porno industry (for instance) historically have been early adopters of new technologies before the mainstream (VHS/Betamax years before the Hollywood studios, the internet years before tv-networks, etc..). They have to be lean and nimble to succeed with shitty margins and grey-area legality.

Ehi, porno is NOT criminality  It's legal.

[dryden]

Btw, I actually see the criminality element as a good thing that bodes well for bitcoin.  The porno industry (for instance) historically have been early adopters of new technologies before the mainstream (VHS/Betamax years before the Hollywood studios, the internet years before tv-networks, etc..). They have to be lean and nimble to succeed with shitty margins and grey-area legality.

Ehi, porno is NOT criminality   It's legal.

A better adjective may have been illicit.  It's certainly not mainstream. City governments give porno studios shit all the time, at least they did in San Francisco when I was living there.

[P4man]

Mostly agreed with your points. A few thoughts however; why would it be bitcoin that succeeds and not some other crypto currency? Particularly one backed by a large company (think apple, MS, amazon,..) , or god forbid, a government (Greece anyone? ). Bitcoin could end up being the next netscape/altavista/icq.

Another issue that debated to death here, is the volatility. I feel bitcoin is caught in a catch 22; rampant speculation determines its price and that limits its growth. Every sign of bitcoin taking off will cause a new bubble and that bubble and the subsequent crash will make it tough to gain acceptance.

As for porn, drugs etc. Yes, its a vouch of confidence and should be a good sign. But it also gives it bad reputation and it might attract regulation.

[dryden]

Mostly agreed with your points. A few thoughts however; why would it be bitcoin that succeeds and not some other crypto currency? Particularly one backed by a large company (think apple, MS, amazon,..) , or god forbid, a government (Greece anyone? ). Bitcoin could end up being the next netscape/altavista/icq.

Totally agree with this and have thought about it a little.  You're right, it's a scary thought.  The one thing that's obvious right now is that the bitcoin project is where 95% of the developer interest is.  So for the time-being anyway, it's the one.

It also occurs to me that the Satoshi peer-to-peer block chain may be the real innovation of all of this.   I don't think we've even begun to explore the possible applications.  For instance (free startup idea ) you could use a similar data-structure to implement a twitter-like global messaging system (blocks contain messages instead of transactions). You'd have a permanent record of everything that was said preserved for all posterity forever, and it would be super-searchable, in accurate chronological order, etc.  A very cool idea.

Bitcoin could turn out to be the killer app of the entire internet when thought about in those terms.

[tvbcof]

...
It also occurs to me that the Satoshi peer-to-peer block chain may be the real innovation of all of this.   I don't think we've even begun to explore the possible applications.  For instance (free startup idea ) you could use a similar data-structure to implement a twitter-like global messaging system (blocks contain messages instead of transactions). You'd have a permanent record of everything that was said preserved for all posterity forever, and it would be super-searchable, in accurate chronological order, etc.  A very cool idea.
...

I've always considered any USD I put into Bitcoin to be, at the core, representation in the 'satoshi blockchain' and having the potential to be a thing of value under a variety of scenarios.  I've not really derived any compelling argument that this chain would be chosen as the basis for one effort or another other than that it is the first and has a big head start on work put into it, but it has been a relatively cheap bet considering how much of the value, as a percentage, is available.

[codymanix]

Mostly agreed with your points. A few thoughts however; why would it be bitcoin that succeeds and not some other crypto currency? Particularly one backed by a large company (think apple, MS, amazon,..) , or god forbid, a government (Greece anyone? ). Bitcoin could end up being the next netscape/altavista/icq.

A Crypto Currency backed by a company? The currency would then stand and fall with that company. The big point on bitcoin is that it doesn't depend on anything.
There are no dentral points or servers, just independent p2p clients. There is no company or single developer, it's open source.

There is not single point of access which could provide access to manipulation or surveillance. Even if bitcoin would be declared illegal, nobody could simply shut if off.

[jflegare]

IMO, that cap would help bitcoins situation, seeing it lose value day by day, that cap could someday give the little "push" needed to establish a stable value.

AmIRight?

[Vandroiy]

People like limited things, and valuable things. Lack of modest inflation may be sub-optimal in the late days, but it's not a problem. Hey, who would not like Bitcoins just because they're pricey? If that were so, people should hate gold.

@jflegare: The "push" needed is enough usage. If that's there, just be patient. Markets need time until they are efficient; think of it as a training/learning phase for people and methods to work in the Bitcoin ecosystem.

No financial system was set up from one day to the next. The important part is that the rules are made early; everyone finding his place and filling in all the gaps from the start can't be planned beforehand, it just happens naturally. Actually, it all seems to happen at surprising speed in Bitcoin.

[JRam]

Does anyone know the current rough estimate of bitcoin users? I believe I read about 40,000 users somewhere but I'm not sure how updated that figure is. I'v seen some fairly wild numbers on this subject too.

[Eveofwar]

Does anyone know the current rough estimate of bitcoin users? I believe I read about 40,000 users somewhere but I'm not sure how updated that figure is. I'v seen some fairly wild numbers on this subject too.

http://bitcoinstatus.rowit.co.uk/

[Coinfish]

I don't see deflation as a problem at all - early adopters make money while taking a vacation and new users don't have to be afraid of their new investment losing value. As for individual Bitcoins being too expensive, the exchanges will just switch to tracking microbits or nanobits or whatever. The important thing is that Bitcoin can be subdivided heavily.

I guess J6P might have a little trouble with the SI prefixes, but I would expect this transition to happen so slowly, it would be a non-issue.

[randomusername8236]

I think that crypto-currency is here to stay but I am not sure if Bitcoin will always be the go to crypto-currency.