Bitcoin adoption slowing; Coinbase + Bitpay is enough to make Bitcoin a fiat

[thaaanos]

A public ledger of transactions if augmented with more info about the transaction will certainly help to have a clearer understanding of where the economy goes. Instant statistics! probably an economist's wet dream.
The transparency of the blockchain will make it more difficult for Politicians to distort the reality. I think it is a great Idea (public ledger) on it's own.
I wouldn't easily discard that notion in searching for anonymity.

Using the example of a business owner, these are probably the most painful words I've ever had shoved in front of my eyes.

/snip/

The next step is real business money. The only way to invite this, I see, is by allowing privacy from competition.

In a networked services oriented economy, getting your business transactions transparent, is IMHO an absolute must for free market to work optimally
Remember you can also see what all your competitors are doing also, are the gains not greater than the loses?.
But that doesn't mean you can easily identify who, all you may know is that he is a competitor if anonymity or pseudonymity is working.
 

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[jabo38]

I have read the post and have reflected some, here are some ramblings.

I think the point that bitcoin has an adoption problem is way over looked.  Bitcoin has a huge adoption problem.  If it was going to be big, it would have already done it by now.  Seriously.  It has been around for 5 years.  In the tech world, it is a grandfather.  

Here is a chart of M-Pesa verses Bitcoin.  This is what it looks like when a successful platform takes off and gains traction.  


What has M-Pesa done then?  For starters, it has appeal to the points of interest that matter.  As mentioned in the original post, bitcoin really only works for white, philosophically slanted, techno males.  In Africa, M-Pesa appeals to all normal consumers.  Furthermore, the governments and the large banks and the businesses all have a reason to adopt it.  M-Pesa has taken over half of Kenya's economy by meeting the needs of the points of interest.  Bitcoin just isn't meeting needs.  

I don't need to explain why businesses and people don't really want to adopt bitcoin.  It is slow, difficult to use.... and current existing systems for the average consumer work pretty well.  For bitcoin to be bigger than Visa, it needs to be better and that simply isn't the case and won't ever be the case.  Case 1: I need an extra computer, need to put special programs on it, need to put bitcoin in cold storage and if I ever spend a bitcoin, then transfer the money to a new account and have that in cold storage.  Case 2: Ask my bank to mail me a credit card.  It does, now I can pretty much make purchases around the world instantly, oh yeah, with insurance.  Are you kidding me?

For bitcoin to become popular, it would need to be a platform that the government likes, the businesses like, and the people like.  In this way, it isn't doing so well.  Governments are weary, they should be.  Governments are legitmized more or less by three factors.  They control the money in that area and help regulate the economy.  They provide security via police and army.  They provide social services.  Take away the money, and now governments aren't nearly as powerful.  

But.... one thing about bitcoin is amazing.  It is the blockchain.  In this way, a much better financial system can be built.  Lets think for a minute.  In a thousand years from now, I gather we won't have money in the way we do know.  Who knows?  But think about 20 or 50 years from now.  Can you imagine anybody using anything but a new and revolutionary technology to pay for things.  It surely won't be what we have now.  It will be digital, it will be safe, it will be instantaneous, it will be efficient and so on and so on.  It will be better than the system we have now in every single way.  The blockchain at some point very well might be a part of that.  

With the advent of the blockchain, governments and banks are being faced with a dammed if I do, and dammed if I don't scenerio.  Changes are coming.  New forms of digital payment will be safer, faster, cheaper, and more efficient and the first one's to adapt will see benefits the first.  But eventually, as I mentioned sooner or later they will be weakened.  

Some people say bitcoin can't be beat, that it has the first mover advantage.  I think that is silly.  I have written about this before.  Visa/Mastercard does more transactions in 5 minutes than bitcoin did in 2013.  Furthermore, The bitcoin market cap right now at the point of writing this is a little less than 6 billion.  That is nothing.  Facebook paid 19 billion for whatsapp.  Whatsapp!!!!!  A free text messaging app has totally outclassed bitcoin in value.  Essentially, what I am saying is bitcoin has a 0.001% market share in the world's economy (not sure on the numbers there, just made them up, but the point remains the same).  Bitcoin hasn't been widely adopted and won't be, but it will lead to a 2.0 platform or 3.0 platform that will be much better than what we have now.  

The 2.0 platform that wins is one that appeals to governments, appeals to businesses, and appeals to the consumer.  For instance, bitcoin needs to beat the credit card model.  Right now my credit card gives me money I don't have!  It gives me insurance if a purchase is bad, and it gives me miles I can use to buy free plane tickets!  And it does it all in seconds.  I pay my balance each month and pay no interest.  It is a big win for me as a consumer.  (Now, I realize that businesses are sticking it to me with higher prices because of this, but that isn't what they average consumer sees).  The government wins with credit cards because now there is a digital trail in which businesses have to pay taxes on.  Businesses ultimately win because some people spend money they wouldn't have had in the first place.  Please tell me how bitcoin can make the consumer, the business and the government happy?  I am guessing it can't or it already would have.  In someways it provides some anonymity, but we all know that isn't exactly the case.  It is good for sending money overseas for sure, but that isn't going to be enough.  

Now let me give you a hypothetical 2.0 system.  It would be one that allows the US government to act like coinbase and sell it's dollars into cryptocurrency.  It would be a system that charges no fees so that businesses would like it, and it would have to be one that consumers would like, maybe giving them anonymity and security.  We simply don't have that right now, but I think there are lots of people working hard to make that come true.  If such a platform is made, but with even more appeal to business, government, and consumers, it will be widely adapted.  If that platform can even get a 1% market share, it will be much larger than bitcoin hands down.  
 

[AnonyMint]

Here is all the prior work I did on Bitcoin's adoption curve.

Most of you can't picture in your head as I (and some others here probably) can, so I need to show you chart for you to get that "Ah ha" epiphany.

I lack the math software to do a proper log-logistic curve fit. Here follows my eyeballing and rough fit to the change in slope.

The run from Oct to Jul 2011 had a slope of 2/7mos and from Jan 2012 to Jan 2014 had a slope of 2/24 mos. The cumulative distribution function shown superimposed in blue below is 1/1+(1/x)^0.5. Thus from x=0 to x=0.25 for the Oct to Jul 2011 run has a slope of 1/1+sqrt(1/0.25) = 1/3 = 0.33 and from Jan 2012 to Jan 2014 is from x=0.25 to x=0.50, thus 1/1+sqrt(1/0.5) = 0.41. So 0.33-0 = 0.33 and 0.41 - 0.33 = 0.08. And 0.33/0.08 = 4 and 24/7 = 3.5. So we can see ratios of the slopes match closely. So this is a reasonable curve fit as the proportional vertical heights also match. A quantitative fit would be more accurate. The accurate fit is probably a bit less steep in the early portion and less flat in the latter. So this would be more favorable than the one I overlaid.

Any way, if this theory is correct, then you can clearly see that Bitcoin will stop rising as fast and that it is due to fall down in price significantly before it rises again and more slowly than the past. From here on the slope from x = 1 to x = 1.5 is only 0.05, thus 5/8 of the rate of increase we've on the log 10 chart since Jan 2012. Note that is 5/8 of a rate of increase that is exponential in the power of 10.

It is roughly saying we won't significantly surpass $1000 in 2014. I don't know where the correctly fitted curve would be right now, so I can't project where the price should be now and where it will be nominally. I think the slope projection is more close to accurate, so we can say that if the theory is correct (that distribution of money holders is a power law distribution as the cited research and common knowledge says it always is), then price appreciation will slow down specifically to 0.05 units on the log 10 chart per month where 1 unit is 10X appreciation. So if we bottom at $400, then price after 20 months should be $4000. Again this is a very rough eyeballed fit and would expect the refined fit to have a slightly higher slope maybe 0.06, so make that 16 months instead.

It seems too simple, but on the other hand I cannot believe that the goodness of fit is just coincidence; is there something truly at play here that we haven't fully come to understand?

What is hard to understand? Reed's Law is another way of stating Metcalf's Law. It is quite clear that in a network with N nodes, there arre N^2 possible interconnections. Thus the value of the network interaction is N^2. How hard is it to understand that without communication and interaction, there is no leverage of each other. How can I use your knowledge if I can't interact with you? Why do we become smarter by posting in this forum. Etc..

Apologies I was intending to make following correction and then we had a brown out and I fell asleep.

It is roughly saying we won't significantly surpass $1000 in 2014. I don't know where the correctly fitted curve would be right now, so I can't project where the price should be now and where it will be nominally. I think the slope projection is more close to accurate, so we can say that if the theory is correct (that distribution of money holders is a power law distribution as the cited research and common knowledge says it always is), then price appreciation will slow down specifically to 0.05 units on the log 10 chart per month where 1 unit is 10X appreciation. So if we bottom at $400, then price after 20 months should be $4000. Again this is a very rough eyeballed fit and would expect the refined fit to have a slightly higher slope maybe 0.06, so make that 16 months instead.

The red line below is a power law distribution for B=0.5 which you can see above is the value of B I fitted.



What that distribution says is that the rich hold most of the percentage of wealth, which we know is in fact always true. And the fitting of the cumulative distribution function to BTC price is the theoretical claim that earlier adopters will be more wealthy (by now) than later ones.

The research I cited points out is that the masses use money as a unit-of-exchange, not as a store-of-value.

However does the Metcalf's law value of money (which Peter R has shown BTC mcap and thus price is tracking) where the value is proportional to the square of the number of nodes in the network nullify my use of a power law distribution? I.e. do the wealthy not create (proportional to their wealth) more network nodes (e.g. unique active BTC addresses) than the masses?

I see the really diehard power users (e.g. SlipperySlope and Peter R) are both talking about creating a new node every day. Thus this anecdotally supports that the power law distribution applies correctly here.

Thus I think we need to take this theory seriously. It might be the correct growth curve. The linear one with a least squares fit seems really out-of-touch with historical data. It totally ignores the shape of the earliest adoption curve up to July 2011. Risto's explanation was the early adopters were bad speculators and bid the price up too much, but my interpretation is they are the most wealthy now and they were the most powerful because they are early adopters. The least squares fitting of a line to a curved adoption could possibly be (confirmation bias in play as) an (emotional "to the moon") attempt to force a linear projection on a growth curve which obviously was not always linear. Has it become linear since January 2012?

I very much doubt it!

Convince me? Risto how do you analytically defend your linear least squares fit that makes you so sure of everything and gives you the audacity to browbeat all the bears?

Add: why don't stocks follow this log-logistic curve? Maybe they do (?), if we don't compress the early adopters into a single event IPO. Also can a stock issue have network effects, i.e. does Metcalf's law apply to company shares? Seems to me yes if the shareholders network amongst themselves, but much less so than a network of money holders.

Add: Fact is the slope during the runup to July 2011 was 0.33 per month. Since Jan 2012, it has been 1/4 of that 0.08 roughly. Why should we expect the slope to not decline again? Why should the pace of adoption remain constant? Seems intuitively unlikely to me. Pace of adoption should slow as we slog into the less astute demographics. Larger mass with more inertia grows more slowly than smaller mass with nimble inertia.

The beauty of the 5.25-year trendline with exponential fit (R^2=0.93 which is pretty darn good) is that it takes into account every worry of every person who has ever owned or not owned bitcoins. I put more weight on that than the individual worries of a single person.

You put a lot of weight in your humongous pride, as if someone presenting analytical discussion is worried. I am not worried about the BTC price. I could careless because I don't own any BTC nor am I itching to buy any. And you put a lot of weight in arbitrary curve fits.

And people who think they know every thing for sure (and you don't even enumerate the arbitrary assumptions in your model), eventually get a lesson in respecting chaos. Maybe not this time. No one knows. But eventually yes.

I hope you realize the following chart is arbitrary BS.

Which graph can you point me to for the 5.25-year exponential trend line?

Code:

https://i.imgur.com/ycT9ulP.png

And why not drawn like this? A least squares fit is an arbitrary choice of slope, because the curve you are fitting is not very linear. The 2011 outlier is your big problem with choosing this arbitrary fit. And we can't really trust that early data back in 2010.

The green line looks much more accurate to me. It removes that bubble from 2013 and follows a trendline from before the bubble started. Or we stay with the purple trendline, in which case the price is almost down to the purple line.

You need to update your chart. The price is now lower than shown.





Also refer to my upthread post quoted below pointing out that adoption (and thus BTC ≅ adoption^2) is likely log-logistic, not logistic. Thus we see the first slope to 2011 was higher, then the slope from 2012 to 2014 was the purple line, and now we may be ready to transition into an even lower slope, such as the green line.

We should now shift into yet again a lower adoption slope than from July 2011 to December 2013.

What a heck makes you think so at a face of universal awareness that is just achieved?

Math Risto. You can't deny math. Here is the shocking revelation...

Because if you put a ruler on the chart along the bottoms of unique addresses on the log 10 chart, you see the slope was higher before the July 2011 crash, than it has been since 2012.

Also it is very likely that Bitcoin adoption is not logistic where the maximum rate of adoption is at 50% of the adoption as follows:

http://en.wikipedia.org/wiki/Diffusion_of_innovations


Because Bitcoin is not adopted for utility, rather the probability distribution of the adopters is power-law because that is the distribution of money[1] as follows.

http://en.wikipedia.org/wiki/Power_law


Thus Bitcoin adoption is log-logistic as follows. Note that for B=1/2 which is the power-law distribution, that the slope of the log-logistic function gradually declines for the life of the curve. And that is exactly what we are seeing happen thus far as I stated above.

http://en.wikipedia.org/wiki/Log-logistic_distribution




[1] A. Dragulescu and V. Yakovenko. Exponential and power-law probability distributions of wealth and income in the United Kingdom and the United States

[AnonyMint]

[snip]

[snip]

Carrots will continue their downward spiral of relative value. Iron used to be a precious metal. Commodities have trended downward in price for millennia.

[snip]

A more apposite phrase is "inexorable decline" which I employed in my seminal 2010 essay The Rise of Knowledge wherein I first explored this concept. You can find my sources there for the data documenting those claims. Also James A. Donald provided more sources specifically look at copper production since electrical wiring use has not declined.

[AnonyMint]

I don't get it.

How do I store value in a brainwallet with just Bitpay & Coinbase if there is no blockchain?

How do you prevent a inflation & a dilution of value without the blockchain?

How do you prevent a government shutdown of a centralized location without the blockchain?

That is the entire point. I don't like what is developing.

Bitpay (a BTC facade on fiat payment) is growing faster than Bitcoin adoption:

https://bitcointalk.org/index.php?topic=400235.msg6015809#msg6015809

Also:

https://bitcointalk.org/index.php?topic=400235.msg6017743#msg6017743
https://bitcointalk.org/index.php?topic=400235.msg6032623#msg6032623

Btw, that is Peter Thiel who also seeded Facebook and Paypal.

Peter Thiel's Tesla Motors depends on government subsidies to survive.

Telsa's Elon Musk proposes to imprison us in steel pipes and transport us between cities inside a vacuum. Massively expensive public works project. And what happens when someone bombs it? It is vulnerable because it is centralized infrastructure. More reasons for Homelust ScrewUrity to insert their hands down on our pants or watch us nude in the observing room.

Dear America, I Saw You Naked

And yes, we were laughing. Confessions of an ex-TSA agent.

I would much prefer my flying car - a decentralized and free market approach. Hey you see it is a reality already.

If we can have highways along the ground, why can't computer guidance systems work for highways in the air for congested regions. Collision avoidance systems can work, because Google has cars that drive themselves all over the USA where there are many more types of obstacles to contend with.

P.S. The TSA was so humiliated by that linked article above, that they have stopped the scanners for those who are Pre-Checked, meaning they can use that as a weapon against our privacy gradually ramping up over time the requirements needed to receive the "we won't harass" status. WTF?! happened to my birth country. Good riddance!

Europeans you may think you are safe, but you are not. It is coming to your shores too. Just wait until the economy turns down after Sept. 2015.

[mgburks77]

With services like these you can't expect Bitcoin to go anywhere anytime soon.

http://www.tested.com/tech/concepts/460601-where-we-went-wrong-buying-bitcoin-atm/

http://www.youtube.com/watch?v=vnm4xFC2xNo

The interface between btc and fiat systems is ridiculous, Not the fault of btc of course, yet it is still a kafkaesque headache due to identification requirements etc.

[AnonyMint]

I said no personal attacks. I should be fair and let you know who I banned and why. You can read his drivel at the following link:

https://bitcointalk.org/index.php?topic=355212.msg6095773#msg6095773

What exactly is he afraid of?

Jabba the Hutt who wastes all my time and doesn't even address the salient point about relative scaling rates between knowledge networking and vertical integration.

http://en.wikipedia.org/wiki/Jabba_the_Hutt

In economics, there is no such thing as intellectual capital. It is work, capital (not money, but tools and commodities and partly produced products) and land factors (resources of nature) that are limited in supply.

Your antiquated indoctrination will be swept away by reality. Maybe you are Jabba's slave-driver assistant pictured above. Perhaps you didn't read the following.

http://esr.ibiblio.org/?p=5558&cpage=1#comment-479742

We will be able to produce all the food, raw materials, and energy we need with robots. There is no reason the price shouldn't trend towards zero, once the robots can build more robots.

The activity that can't be automated is creativity and knowledge creation. Thus it should rise in relative value.

[mgburks77]

I think the centralized infrastructure that is evolving around btc also serves to slow adoption. It has taken on the role of gatekeeper into the new information-based economic model that is developing.

The purpose of a gate is to regulate entry, so this contradiction with the stated purpose of cryptocurrency is another indicator of the purpose that is actually intended.

It has to be a regulatory tool.

The countermeasure is an anti-regulatory solution.

Some of the characteristics I can imagine that would be helpful:

strong anonymity
ubiquitous mining
covert introduction

can anyone think of others?

[AnonyMint]

I think the point that bitcoin has an adoption problem is way over looked.  Bitcoin has a huge adoption problem.  If it was going to be big, it would have already done it by now.  Seriously.  It has been around for 5 years.  In the tech world, it is a grandfather.  

Here is a chart of M-Pesa verses Bitcoin.  This is what it looks like when a successful platform takes off and gains traction.  

Actually that chart is wrong. Here is the correction for Bitcoin transactions:



Here are my prior comments about that. See the bolded words that apply.

Someone mentioned tersely "1 in 3 Kenyans use Bitcoin" in another thread 2 days ago, and two of us requested a citation and the poster did not reply, so I didn't google it. That was the first time I'd heard that claim. Your post incited me to dig:

http://www.economist.com/blogs/economist-explains/2013/05/economist-explains-18

Dozens of mobile-money systems have been launched, so why has Kenya’s been the most successful? It had several factors in its favour, including the exceptionally high cost of sending money by other methods; the dominant market position of Safaricom; the regulator's initial decision to allow the scheme to proceed on an experimental basis, without formal approval; a clear and effective marketing campaign (“Send money home”); an efficient system to move cash around behind the scenes; and, most intriguingly, the post-election violence in the country in early 2008. M-PESA was used to transfer money to people trapped in Nairobi's slums at the time, and some Kenyans regarded M-PESA as a safer place to store their money than the banks, which were entangled in ethnic disputes. Having established a base of initial users, M-PESA then benefitted from network effects: the more people who used it, the more it made sense for others to sign up for it.

So now I see why it succeeded there but failed here in the Philippines. We have SmartMoney and Globe Cash here but it is not widely used. Filipinos prefer cash, even though they are SMS capital of the world and top 3 country in the world for using digital media. There are also vendors here every where for loading your cell phone prepaid balance.

But there isn't a big incentive to move away from cash. Cash works and when you need to send cash money, there are peso padala branches on every other block.

Whereas in Kenya the chaos meant they didn't have these well developed cash markets, so they needed something. And this monopoly by one phone carrier made it possible to get the economies-of-scale whereas we have 3 main phone carriers here.


But whoever says Kenyans are using Bitcoin is smoking dope:

http://www.bankinnovation.net/2014/02/mpesa-is-smoking-bitcoin-in-number-of-transactions/

In spite of the correction to the chart on that page, Bitcoin transactions are not a significant percentage of M-PESA transactions. That is global Bitcoin txs shown in comparison and besides upt 59% of BTC txs were SatoshiDice at some point in the past and many txs are mixers, etc.. Lets try to find some hard data on BTX txs in Kenya? Scientific method.

You fundamentally don't understand relative wealth. This is not a mistake I would expect rpietila to make:

http://www.cgap.org/blog/10-things-you-thought-you-knew-about-m-pesa

4 – You thought M-PESA’s success meant it is now a huge systemic risk The accumulated balance of all the M-PESA accounts represents just 0.2% of bank deposits by value. M-PESA is far from exerting a systemic risk. In June 2010, M-PESA transactions amounted to about 70% of the volume of electronic transactions in the country but were only 2.3% in value. M-PESA’s success means there is a real need for small electronic transactions and storage of value. It was designed with limits on how much can be transacted (no more than 70,000Ksh leaving the account daily) and stored (maximum account balance is 50,000Ksh). Cash-in, cash-out and P2P transfers are limited to 35,000Ksh per transaction.

What has M-Pesa done then?  For starters, it has appeal to the points of interest that matter.  As mentioned in the original post, bitcoin really only works for white, philosophically slanted, techno males.  In Africa, M-Pesa appeals to all normal consumers.  Furthermore, the governments and the large banks and the businesses all have a reason to adopt it.  M-Pesa has taken over half of Kenya's economy by meeting the needs of the points of interest.  Bitcoin just isn't meeting needs.

It is true that Bitcoin doesn't have near the penetration rate of M-Pesa. Bitcoin instead has global distribution.  

I don't need to explain why businesses and people don't really want to adopt bitcoin.

Merchants are adopting Bitpay at 300% month-over-month rate and 15,000+ already signed up. Because they pay no fees, the customer pays through the nose double fees hidden as exchange rates as I explained on the first page of this thread.

It is slow, difficult to use.... and current existing systems for the average consumer work pretty well.

[snip]

For bitcoin to become popular, it would need to be a platform that the government likes, the businesses like, and the people like.

Yup.

But.... one thing about bitcoin is amazing.  It is the blockchain.  In this way, a much better financial system can be built.

[snip]

It will be digital, it will be safe, it will be instantaneous, it will be efficient and so on and so on.

And you really mean Satoshi's proof-of-work solution of the Byzantine General's problem of how to reach decentralized consensus without reputation nor trust required.

[snip]  

Some people say bitcoin can't be beat, that it has the first mover advantage.  I think that is silly.  I have written about this before.  Visa/Mastercard does more transactions in 5 minutes than bitcoin did in 2013.  Furthermore, The bitcoin market cap right now at the point of writing this is a little less than 6 billion.  That is nothing.  Facebook paid 19 billion for whatsapp.

LOL. whodat?

The 2.0 platform that wins is one that appeals to governments, appeals to businesses, and appeals to the consumer.  For instance, bitcoin needs to beat the credit card model.  Right now my credit card gives me money I don't have!

[snip]

Now let me give you a hypothetical 2.0 system.  It would be one that allows the US government to act like coinbase and sell it's dollars into cryptocurrency.  It would be a system that charges no fees so that businesses would like it, and it would have to be one that consumers would like, maybe giving them anonymity and security.

Debt is going to be cursed after 2016. No one will want to see a credit card again in their lifetimes. Ask people who went through the Great Depression how it scarred them and embedded their financial conservatism for life.

What do you mean government act like coinbase?

[mgburks77]

Debt is going to be cursed after 2016. No one will want to see a credit card again in their lifetimes. Ask people who went through the Great Depression how it scarred them and embedded their financial conservatism for life.

I hadn't previously considered this, but wow.

Yeah. This is true. I've observed this effect personally on many occasions.

[AnonyMint]

Debt is going to be cursed after 2016. No one will want to see a credit card again in their lifetimes. Ask people who went through the Great Depression how it scarred them and embedded their financial conservatism for life.

I hadn't previously considered this, but wow.

Yeah. This is true. I've observed this effect personally on many occasions.

They didn't have credit cards back then, so I can't be sure the same attitudes will result. And the developing world doesn't have much personal debt so will still be ready to adopt credit cards. So it is a mixed bag.

[AnonyMint]

Let's discuss about Mastercoin tomorrow. I need to sleep first.

[DieJohnny]

Banks' technical capabilities might reach global reach (but I very much doubt that too), but they have an insurmountable problem. The governments are going to institute capital controls in order to trap wealth and tax it to death as the global economic implosion proceeds.

This is an extremist point of view, and for you to be right requires financial implosions, which has not happened yet and all things remaining as they are today, Banks will adapt.

I think Bitcoin is most valuable with some global financial chaos, but not too much because then you have war and Bitcoin won't survive real world war. I don't believe in a goldilocks view that we will see the perfect storm of financial chaos to drive Bitcoin adoption, but not so much that world war won't destroy the opportunity.

And I see they have no prayer of supporting the volume of tiny micro payments any time soon (VISA only sales to 6000 txs per second now), nor getting significant penetration into all NICs emerging markets. Here where I am, if someone in the grocery lane is holding a card instead of cash, I run to the next queue because it adds about 5 minutes delay to the transaction.

While micro-payments are interesting, again i would say lets revisit this in 10 years when Bitcoin has viable solutions for the unplugged and unbanked. Bitcoin is 10 years from having a mainstream usable solution to any of this IMHO>

Also I don't assume we can't do transactions better than they can. We have to learn how to play to our decentralized advantage.

Maybe some day we'll "learn", but for now bitcoin is merely a speculative asset. Again I think any txn adoption curves and any talk about taking over global payment systems is not relevant to short term pricing.

The ONLY thing driving short terms pricing is speculation. That is all. I think this will remain the case for at least 5 more years. The most you will see in value on speculation alone is 10k-50k because there will be other opportunities that represent a bigger return than Bitcoin after $10k.

That only changes if bitcoin miraculously navigates the payment minefield and become a true alternative to the credit card, pay pal, and the coin or printed dollar. 

I do think it would be miraculous for Bitcoin to evolve its txn ecosystem fast enough to compete with a world that is already responding. How can a distributed organization compete with decisive actions of orgnanized actors in the existing txn world? Distributed systems are great for functioning without central authority but they are terrible at creating killer-app type strategies. You basically have to hope existing systems collapse for Bitcoin to have any chance of ever taking over as a mainstream transaction system.

[mgburks77]

In reference to the article "Zero Marginal Thinking: Jeremy Rifkin gets it all wrong" excerpted from the blog "Armed and Dangerous":

The book is full of other errors large and small. The particular offence for which I knew Rifkin before this book – wrong-headed attempts to apply the laws of thermodynamics to support his desired conclusions – reappears here. As usual, he ignores the difference between thermodynamically closed systems (which must experience an overall increase in entropy) and thermodynamically open systems in which a part we are interested in (such as the Earth’s biosphere, or an economy) can be counter-entropic by internalizing energy from elsewhere into increased order. This is why and how life exists.

http://esr.ibiblio.org/?p=5558&cpage=1#comment-479716

Self organization seems counter-entropic at first glance but it is not:

Thus Schneider believes that nature will create complex systems whenever it can: it will use any means available to achieve equilibrium.

The "actor" that pushes systems away from equilibrium is a gradient (a difference of temperature, pressure or other). Whenever a gradient is applied, the system is no longer in equilibrium. Schneider believes that the reaction to a gradient is internal reorganization aimed at reducing and eventually neutralizing the external gradient. Gradient neutralization is a fundamental property of Thermodynamics, a fact already proven in 1993 by the US physiologist Don Mikulecky.

"Exergy" is the amount of energy that one can extract from a system in the form of work. When the system has reached a condition of equilibrium, its exergy is zero. Exergy is thus also a measure of how far from equilibrium a system is.

An equivalent way of describing this phenomenon is to talk of "gradients", because the gradient is what can be used to generate work: heat, for example, can be turned into work because there is cold, otherwise it would be useless.

Living beings are non-equilibrium systems, so they have high exergy.

Schneider believes that the universal tendency towards equilibrium is driving evolution, that Nature is building more and more complex systems in order to erase exergy ever more efficiently. Living beings are only a cog in the machine built by Nature to destroy all exergy and achieve equilibrium. Life is only a way to break down concentrations of energy and turn it into diffuse waste heat. And we are an accidental by-product of such a universal process. Animals, for example, degrade the exergy of plants when they eat them. Furthermore, they do so in a way that is more efficient than other physical processes (burning the plant, for example, would radiate energy, while a cow eating grass radiates very little energy). In a sense, Nature created animals because they are the most efficient way to erase the exergy of plants, and it created plants because they are the most efficient way to erase the exergy of sunlight, and so on. Ecosystems have evolved from systems that emitted a lot of exergy to systems that emit little exergy. Metabolism is simply a way to degrade energy, and today's animals (such as mammals and birds) are a lot more efficient at it than the first forms of life. Evolution has been progressing towards more and more efficient systems to destroy exergy. Genetic information is simply information about how to destroy exergy.

Ecosystems as a whole can also be viewed as efficient destroyers of gradients, destroyers that are built and driven by energy flows. The thermodynamic study of ecosystems carried out by the British zoologist Evelyn Hutchinson, the Spanish biologist Ramon Margalef, and the US biologist Eugene Odum showed that ecosystems progress towards increased production of entropy and increased reduction of gradient (a different way of saying that biomass, species diversity and energy throughput all increase). The dynamics of ecosystems, in turn, drives evolution. It is the second law that selects the systems that are best at reducing gradients. Natural selection is, in a sense, an afterthought: the most important selection has already occurred, driven by the second law of thermodynamics.

Darwin created a bridge between humans and other forms of life, and explained how one descended from the others. Schneider attempts to do something similar for living systems and non-living systems. Non-living complex systems play the same role that living systems play: they are just a bit less efficient. But they too are driven by the same phenomenon (ultimately, a "gradient"). They too spontaneously organize due to the energy flow caused by the gradient. Thus any non-living complex system appears to be a predecessor of a living system. It is "born" and it "grows" and it "evolves" in a way similar to how life does, except that it is not alive (for example, it does not reproduce).

Schneider summarized his universal principle as "Nature abhors gradients". Whenever there is a gradient, Nature responds by creating the most efficient way to erase it. One such efficient way is life, and us.

In the end, the second law of Thermodynamics turns out to be responsible for both processes of living beings: both their growing and their decaying, both their non-equilibrium (peaking with progress and civilization) and their equilibrium (death).

In the end, the purpose of life turns out to be death: Nature invented life on Earth as the most efficient process to reduce the gradient created by the Sun heating the Earth. The ultimate goal is to reestablish an equilibrium that will, incidentally, destroy all life when life will no longer be needed to reduce a gradient that life will have erased. The meaning of life is, ultimately, suicide.

http://www.scaruffi.com/nature/biology.html
The most efficient destroyer of exergy is the human brain.

Conclusion: Transition to knowledge/information capital economy serves the higher purpose of destroying exergy and thus degrading energy differentials.

(also that argument is invalid)

[mgburks77]

Other ramifications of this conceptualization are that I doubt it is possible for human being to eradicate themselves or run out of energy/resources

We are part of a natural process and will remain extant until there is no longer any need for that physical process to occur ie the heat death of the universe

humankind will go to the stars, and in the process, destroy a lot of exergy 

The inevitable social and economic processes we are starting to uncover by exploring some of the items in this, and related, threads is merely one small step along the way.

Another ramification is that most of the stuff we think we know about reality is wrong. But thinking about it and finding objective truth is going to also burn up a hell of a lot of exergy as well. Everything serves this ultimate purpose. Entropy is the spring that powers the movements of this "swiss watch" we call the material universe.

[thaaanos]

I personally feel that gravity-life-Intelligence follow some common entropic law
That states that if there is an Energy/informational potential systems will arise that maximize the entropy production.
This is how they escape the 2 Law, be producing more entropy in the system to balance their structure.
So a common way to produce more entropy is to
Get things together to react/collide as much as posible (gravity)
maximize the systems interface, by fractal "surfaces", (life)
Or break into a new dimension (intelligence)

Regarding an your Coin you might be interested in an Idea I had discussed here
https://bitcointalk.org/index.php?topic=398389.msg4348065#msg4348065
https://bitcointalk.org/index.php?topic=382204.msg4375345#msg4375345
about using a rolling blockchain that invalidates older blocks as it creates new blocks

The benefits could be
1. Early adopters get a fair share of value without becoming parasites and Late adopters have a chance in the economy
2. Wealth accumulation is discouraged (Hodling)
3. Blockchain database size is bounded
4. Lost/forgoten/orphaned coins are eventualy reclaimed
5. Will be easier to get accepted by goverments
6. It is Forward looking as those who actively participate in the economy get rewarded
7. Users would have  incentive to shuffle their wallets as much as possible to minimize loses but at the same time increase their anonymity
 

[AnonyMint]

A public ledger of transactions if augmented with more info about the transaction will certainly help to have a clearer understanding of where the economy goes. Instant statistics! probably an economist's wet dream.
The transparency of the blockchain will make it more difficult for Politicians to distort the reality. I think it is a great Idea (public ledger) on it's own.
I wouldn't easily discard that notion in searching for anonymity.

Using the example of a business owner, these are probably the most painful words I've ever had shoved in front of my eyes.

/snip/

The next step is real business money. The only way to invite this, I see, is by allowing privacy from competition.

In a networked services oriented economy, getting your business transactions transparent, is IMHO an absolute must for free market to work optimally
Remember you can also see what all your competitors are doing also, are the gains not greater than the loses?.
But that doesn't mean you can easily identify who, all you may know is that he is a competitor if anonymity or pseudonymity is working.

My gosh are you really still trying to convince us to put lipstick on a pig.

This will be the third or fourth time we've refuted this from you in this thread.

We don't want our private life on no public ledger for society to track us with. Period.

It is an asymmetric weapon for Max Weber's canonical definition of governance as the entity that holds a "monopoly on the legitimate use of physical force" to use against us. It will not give us any information we can use against those who capture the power vacuum of governance, because since the dawn of mankind they own the regulators and enforcers. This is an Iron Law of Political Economics.

The police have been fighting crime since the dawn of mankind even though cash was anonymous and they didn't have a public ledger of all transactions.

Europe has a very low incarceration rate. Why? Because the people are well fed with debt. They were happy. But now this will all change as their debt levels are too high. Violence and crime will return.

A public ledger has nothing to do with the level of crime and deterrence. The police are in fact always the last to arrive on the crime scene.

Please don't raise this point again, unless you have some reasonable counter-point. This isn't a marketing thread as a repetition contest. It is an analytical analysis thread for smart people to figure out the truth.

I am not discouraging you from posting. But you don't win arguments by repetition. You win based on the validity and acuity of your analysis. I do change my mind when someone presents me with a superior logic.

[AnonyMint]

about using a rolling blockchain that invalidates older blocks as it creates new blocks

Money that expires is a non-starter. No one wants money that suddenly expires. It adds another thing to worry about in their already hectic lives.

Each of the benefits you enumerated either are illusionary or can be achieved in other ways.

Btw, the problem in Greece now is that the strong Euro enabled Germany to keep your tourism and labor priced too high, while they could undercut your industry with their more efficient industry. So your country added debt to compensate for a lack of revenue. Bankster predator Goldman Sachs helped your corrupt government hide this and keep the data off your government's public ledger. And you tell us to use a public ledger which they will always find a way to game theory using financialization instruments?!!

http://armstrongeconomics.com/2014/04/06/inflation-is-not-always-caused-by-change-in-money-supply-deflation-is-engulfing-europe/

This is reaching chronic levels in Spain, Portugal as well as Ireland not to forget Greece and Italy. These nations did not benefit from joining the euro for their previous debts stopped being automatically depreciated in real terms by inflation. Instead, their debt rose in real terms and that became unbearable in Greece as will be the case throughout Europe. This is what happened to the USA during the Great Depression for the dollar rose in value increasing the Debt-Deflation.

I don't want to have an off-topic discussion about European economics in this thread. Post a link to another thread if you want to discuss that topic further.

[mgburks77]

This is an extremist point of view, and for you to be right requires financial implosions, which has not happened yet and all things remaining as they are today, Banks will adapt.

In 2007 there was a major financial implosion. The reason it happened hasn't changed. The solution was to print up a bunch more cash and distribute it so the whole thing wouldn't topple.

So not only are we not out of the woods yet, all we've actually done to address any of the reason for this implosion is put a band aid on it.

It won't stop the hemorrhage.

[AnonyMint]

http://armstrongeconomics.com/2014/04/06/inflation-is-not-always-caused-by-change-in-money-supply-deflation-is-engulfing-europe/

If you really want to stop the violence, legalize drugs, tax them, and regulate them as they did with booze. That defunded the Mafia more than anything and the gun battles in Chicago ceased (like the song the night Chicago Died). As long as there is a tax-free profit to be made, you will never stop the violence.

Martin Armstrong is wrong on this point. It is important to refute him, because he arguing against anonymity.

Indeed legalizing drugs would lower their cost, make them more widely available, and thus through competition defund those Mafias that control distribution now. The taxing part has nothing to do with it! He conflated.

When drugs are illegal, non-criminals are unwilling to risk it to distribute them. Thus the criminals takeover the business.

I would prefer drugs weren't available, but the above is the economic reality. And it is not my right to impinge upon and judge for others what they want to do to themselves.