P4man
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November 21, 2011, 02:06:58 PM |
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Yes, I did say to assume a 'highly efficient' exchange system - so the assumption is that competition has driven down banking/exchange fees. Heh. Right ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) Even so, if bitcoin reaches a certain level of ubiquity, merchants are going to spend a part of their costs in bitcoin, and consumers will get a portion of their income in bitcoin. Aside from the banking and exchange fees, you will want to keep some bitcoins to protect you from price swings. If I have an internet shop and sell my stuff all over the world, and receive payments in Yen, dollar and Euro, I will want to keep a portion of those currencies proportional to where I buy my goods in Japan, US or Europe. I might also get, say, UK pounds and not buy anything in the UK, then I will only want to sell only all of those. It wouldnt be any different with bitcoins. I don't see how a consumer is paying fees twice for their transaction. Every transaction involves two parties, a buyer and a seller. In the end, as a consumer you pay both, just like we now pay for the paypal/creditcard/currency conversion costs of merchants.
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antoineph
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November 21, 2011, 07:25:57 PM |
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If bitcoin becomes the defacto standard currency of the world,
This idea is based on the assumption that our future economy will be rooted in a currency monoculture (as it has throughout most of history). i.e. that there will be ONLY bitcoins, and not also other alternative currencies. However i see no reason for this to be the case, so I think it's unlikely bitcoins will make millionaires out of early holders ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) But just like in nature, diversity is good for stability so there's nothing bad about it.
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DeathAndTaxes
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Gerald Davis
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November 21, 2011, 07:42:50 PM |
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If bitcoin becomes the defacto standard currency of the world,
This idea is based on the assumption that our future economy will be rooted in a currency monoculture (as it has throughout most of history). i.e. that there will be ONLY bitcoins, and not also other alternative currencies. However i see no reason for this to be the case, so I think it's unlikely bitcoins will make millionaires out of early holders ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) But just like in nature, diversity is good for stability so there's nothing bad about it. What would be the rational for the global economy to accept two crypto-currencies? Say you have currency xCoin and yCoin. xCoin is more secure, accepted by more merchants, used by more consumers. yCoin is less secure, accepted by less merchants, held by less consumers. Why would a new merchant or consumer accept xCoin vs yCoin. Before you say Gold/Silver the reason for Gold & Silver coins to coexist is the difficulty in minting small coins. Bitcoin doesn't suffer from that problem. Even if Bitcoin was worth $1M each trade could be conducted in Satoshis (buy Coke only 120 Satoshis). Before you say look at Yen vs Dollar vs Euro. Those alternative currencies only exist because no (well most) nation would accept using foreign currency for their local economy. Either Bitcoin takes off or something replaces Bitcoin or all crypto-currencies die on the vine but I don't see the utility of multiple "general purpose" currencies. For an alternative to co-exist it would need to be different enough to fill a niche that Bitcoin can't handle effectively.
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P4man
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November 21, 2011, 08:02:27 PM |
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Governments could one day make some crypto currency and make it legal tender.
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antoineph
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November 21, 2011, 08:45:40 PM |
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What would be the rational for the global economy to accept two crypto-currencies?
Well personally I don't see why this is not a possibility. Given the right tools it could become just as easy to adopt two rather than just one. And of course there will always be the allure of being one of the early adopters of a new currency. But back to my main point: There may be many as of yet unimagined currencies and methods of exchange (How many people predicted bitcoin?), and they might not all be crypto-currencies. While in the future bitcoin may or may not be the strongest "alternative" currency, I strongly doubt it will be the only significant one. Additionally, there may also be certain currencies where it is only possible to earn them by participating in a specific economic "ecosystem", lets say for example in peer to peer tutoring. There is already an example of such a currency called the "Dora" which was introduced in Lithuania. I think it's an amazing concept, and I wish I had access to such a system. Pretty much all of us tend to take for granted that there will always be ONE kind of money that you can use for trade (a currency monoculture), but I have a feeling that this assumption may soon be overturned. Obviously this is speculation. But aren't we all speculators who buy into bitcoin ![Grin](https://bitcointalk.org/Smileys/default/grin.gif)
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BTCurious
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November 21, 2011, 08:47:29 PM |
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Can someone fix the typos in the op? They irk me :/
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DeathAndTaxes
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Gerald Davis
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November 21, 2011, 08:52:47 PM |
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What would be the rational for the global economy to accept two crypto-currencies?
Well personally I don't see why this is not a possibility. Given the right tools it could become just as easy to adopt two rather than just one. I think you are still missing the point. The quesiton is CAN YOU but WHY? Why would you accept an inferior crypto-currency over a superior one? You like less liquid exchanges, you less greater risk of double spend, you like less places to spend your earned funds? Also I am not saying Bitcoin is "the coin" the point is that if something is better than Bitcoin it likely won't co-exist it will REPLACE Bitcoin. That is certainly possible (and it is also possible that no crypto-currency flourishes). If the "something" is inferior to Bitcoin it likely will never gain any meaningful acceptance.
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antoineph
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November 21, 2011, 08:54:21 PM |
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What would be the rational for the global economy to accept two crypto-currencies?
Well personally I don't see why this is not a possibility. Given the right tools it could become just as easy to adopt two rather than just one. I think you are still missing the point. The quesiton is CAN YOU but WHY? Why would you accept an inferior crypto-currency over a superior one? You like less liquid exchanges, you less greater risk of double spend, you like less places to spend your earned funds? Also I am not saying Bitcoin is "the coin" the point is that if something is better than Bitcoin it likely won't co-exist it will REPLACE Bitcoin. If something is inferior to Bitcoin it likely will never gain any meaningful acceptance. Cool, I understand your points. One reason is that you'd lose out on business from customers who use the inferior coin.
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DeathAndTaxes
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Gerald Davis
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November 21, 2011, 08:57:25 PM |
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One reason is that you'd lose out on business from customers who use the inferior coin. Of course that assumes some consumer feels the need to acquire (via one method or another) the inferior coin to begin with and that those sales would actually be lost (many consumers aren't ideologically tied to their currency and thus would be willing to pay in a variety of methods). 2000 years ago a merchant "could" potentially have lost some sales by accepting gold and not accepting granite as currency however I doubt many were concerned about the potential lost sales.
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antoineph
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November 21, 2011, 09:01:28 PM |
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One reason is that you'd lose out on business from customers who use the inferior coin. Of course that assumes some consumer feels the need to acquire (via one method or another) the inferior coin to begin with and that those sales would actually be lost (many consumers aren't ideologically tied to their currency and thus would be willing to pay in a variety of methods). 2000 years ago a merchant "could" potentially have lost some sales by accepting gold and not accepting granite as currency however I doubt many were concerned about the potential lost sales. Ok, but it still leaves the possibility. Like I said, we tend to assume a currency monoculture under all conceivable circumstances, but this may not always continue to be the economic reality.
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P4man
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November 21, 2011, 09:46:50 PM |
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I think you are still missing the point. The quesiton is CAN YOU but WHY?
I can think of a thousand reasons. At least ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) . Seriously, different currencies could have different properties that appeal to other users. different technical features and economic rules. Some might be backed by precious metals, others could be issued by google/facebook/microsoft/sony and be the only crypto currency accepted on their app stores/wallet services, yet others could be marketed at specific niches or with some, I dont know, maybe an embedded loyalty scheme or whatever. And lets not forget at some point government sanctioned crypto currencies. I think its a bit naive to assume bitcoin will be the one crypto currency to rule them all. In the short/medium term that seems reasonable, but once the concept gains acceptance, I expect fierce competition and some of alternatives may prove to be superior and/or become more popular.
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DeathAndTaxes
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Gerald Davis
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November 21, 2011, 10:00:15 PM |
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I can think of a thousand reasons. At least ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) . Seriously, different currencies could have different properties that appeal to other users. different technical features and economic rules. Some might be backed by precious metals, others could be issued by google/facebook/microsoft/sony and be the only crypto currency accepted on their app stores/wallet services, yet others could be marketed at specific niches or with some, I dont know, maybe an embedded loyalty scheme or whatever. And lets not forget at some point government sanctioned crypto currencies. I think its a bit naive to assume bitcoin will be the one crypto currency to rule them all. In the short/medium term that seems reasonable, but once the concept gains acceptance, I expect fierce competition and some of alternatives may prove to be superior and/or become more popular. I think maybe we need to define crypto-currency. I was speak of system devised by Satoshi a peer to peer distributed currency that requires no trusted 3rd party for validation. No company like Sony is going to ever use a Sony p2p currency only for use in Sony land. There is no advantage of using a p2p currency in a centralized system. It is massively inefficient to do so (there is significant overhead in blockchain that can be easily handled by a trusted 3rd party = Sony). Simply put Bitcoin is HORRIBLE inefficient it just happens to be the only way to handle commerce without a central trusted 3rd party. If you have a central trusted 3rd party you don't need Bitcoin or any p2p currency. e-currency backed by precious metals can't be decentralized. Some one needs to issue it (the mint) and hold the physical metal. Building a p2p network on top of a completely centralized entity (i.e. if that party defrauds everyone they can walk away w/ gold) makes no sense. If you trust the entity to not run away with the gold you already have a central trusted 3rd party. They can validate transactions without the massive cost and complexity of a block chain. No government is going to embrace crypto-currencies for the exact reason they left the Gold standard. It is likely no currency will ever re-adopt a gold standard much less handing all control over to "the people" in the form of p2p networks. If you broadly consider any mechanism of online payment (to include e-gold & Paypal) no matter how centralized and closed as a "crypto-currency" then yes there will be hundreds maybe thousands.Also I would like to clarify that I never said it is impossible for a second currency to co-exist just that it would need to be different enough to provide utility in an area that Bitcoin fails to deliver.
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slush
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November 21, 2011, 10:06:50 PM |
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I agree with DAT. There's no reason why centralized company or government should run it's own blockchain. P2P currency is good only for P2P audience.
I can imagine that two projects of p2p cryptocurrency can live together only if their features will be completely different. However I don't see any point in those aternative scamcoins or coins which are different only in technical details (like only cpu mining).
Also Bitcoin has huge advantage because it is first p2p currency. Every new project, even with significantly better features, will fight with "why xxxcoin when we already have bitcoin".
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DeathAndTaxes
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Gerald Davis
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November 21, 2011, 10:16:58 PM |
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Also Bitcoin has huge advantage because it is first p2p currency. Every new project, even with significantly better features, will fight with "why xxxcoin when we already have bitcoin".
Sometimes called the ebay effect. Is ebay perfect? Of course not yet but it retains the lions share of online auction traffic simply because it moved first and was "good enough" to kill upstarts. IMHO is Bitcoin is "good enough" it will survive challenges. If something else is overwhelmingly superior it wouldn't co-exist w/ Bitcoin ... it will KILL Bitcoin. The only area that you have seen any traction against Ebay has been niche markets * penny (gambling) aucitons (swoopo) * fixed price stores (i.e. fullfilled by Amazon) * no cost / no control listings (i.e. Craigslist) they were niche enough to not direclty compete w/ Ebay and gained traction. It is likely that a similar dynamic will evolve in crypto-currency. Coins which try to directly compete w/ Bitcoin (or be silver to Bitcoins "gold") like SolidCoin, or LiteCoin will be marginalized and never gain an effective economy. Coins which do something different like Namecoin or a micropayment currency will be able to carve out a niche to flourish.
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antoineph
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November 21, 2011, 10:34:59 PM Last edit: November 21, 2011, 10:52:37 PM by antoineph |
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If something else is overwhelmingly superior it wouldn't co-exist w/ Bitcoin ... it will KILL Bitcoin.
Does that mean Bitcoin could never co-exist with conventional currencies? That one must kill the other?
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DeathAndTaxes
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Gerald Davis
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November 21, 2011, 10:38:46 PM |
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If something else is overwhelmingly superior it wouldn't co-exist w/ Bitcoin ... it will KILL Bitcoin.
Does that mean Bitcoin could never co-exist with conventional currencies? That one must kill the other? Bitcoin is superior (IMHO) to fiat currencies for a variety of reasons. If Bitcoin isn't superior to USD it will fail (at least for users who lives are denominated in USD). Fiat currencies have the backing of the law ensuring they are not required to battle for survival in a free market. No matter how crappy the US Dollar is it is the only currency which is legal tender in the US and that obligates its continued existence no matter how inferior. Bitcoin has no such "crutch" or protection meaning IT must be superior or it will be displaced.
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antoineph
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November 21, 2011, 11:19:11 PM |
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Bitcoin is superior (IMHO) to fiat currencies for a variety of reasons. If Bitcoin isn't superior to USD it will fail (at least for users who lives are denominated in USD).
Fiat currencies have the backing of the law ensuring they are not required to battle for survival in a free market.
I see. Though if Bitcoin is truly superior, I'd expect protection of the dollar to be unsustainable in the long run. No matter how crappy the US Dollar is it is the only currency which is legal tender in the US and that obligates its continued existence no matter how inferior.
This is far from proven (and I'm no economist), but I am under the impression that what you say here is the real reason we can generally use only one currency in any given country. In other words, governments enforce currency monoculture. Admittedly there are few precedents for parallel general purpose currencies. Though there is the outstanding example of the WIR in Switzerland.
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Kilmyos
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November 22, 2011, 12:02:56 AM |
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Personally, I feel Bitcoin will become the de facto trading currency, whilst gold becomes the dominant "saving" currency. But I could be wrong.
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Rockford99
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November 22, 2011, 12:15:44 AM |
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I could easily envision that the worldwide transaction demand for BTC could easily reach $2 billion or more. Given that there are less than 8 million bitcoins out there, that would equate to $250 per coin. Bitcoins is the perfect instrument for small ticket item transaction ecommerce and people will have to hold a bitcoin inventory to transact, so I'm very optimistic.
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cbeast
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Let's talk governance, lipstick, and pigs.
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November 22, 2011, 01:45:26 AM |
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Personally, I feel Bitcoin will become the de facto trading currency, whilst gold becomes the dominant "saving" currency. But I could be wrong.
There are so many wonderful uses for gold that will improve the quality of life for mankind. I hope one day we are not still hoarding it like Magpies.
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Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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