Monero Economy

[celestio]

Bitcoins been pumped and dumped for 4 years. With each pump giving it a new low, not to mention the record # of companies/websites starting to accept Bitcoin and all this happened in just the last year.. Yup, it's definitely dying...  I'm really starting to think Anonymint has some sort of Agenda, especially against cryptocurrencies.

[AnonyMint]

If I designed a currency, never would I make the initial distribution so much higher than the long-term.

If the currency starts from zero, there has to be a high initial daily inflation to get it going.

If it does not start from zero, it is called "premine"

That is true but what is the second 6 months debasement for Monero? I will be happy to mea culpa if it is not that high?

Or more specifically is the nominal block reward declining?

http://www.monero.cc/index.html#specifications

As you see the block reward is declining. This is the hallmark of dying pump & dump coin like Bitcoin.

It would be much preferrable to have a small premine (say 1% of 10 year coin supply) used to fund development of the coin than to have say 50% of the 10 year coin supply allocated to what is effectively a premine for the early miners at the expense of the funding and adoption of the coin for the latter years.

Much better to get a smaller premine into the hands of the core developers, than using a scattershot approach to get those coins into their hands as Monero does. The problem with donations is they are subject to politics and design by mob consensus, i.e. leaderless and unfocused.

[AnonyMint]

Bitcoins been pumped and dumped for 4 years. With each pump giving it a new lowhigh, not to mention the record # of companies/websites starting to accept Bitcoin and all this happened in just the last year.. Yup, it's definitely dying...   I'm really starting to think Anonymint has some sort of Agenda, especially against cryptocurrencies.

You are fooled as most humans are by confusing nominal growth with rate of growth. Thus you can't see when something is slowing down and dying.

As Bitcoin has become more centralized, they will strangle it, which we can see happening if we look at any metrics that measure the rate of growth, e.g. the market cap rate of growth has slowed which is what I showed that it is log-logistic not logistic as should be normal for technology adoption. (note Risto doesn't accept or agree with my curve fit, so we will have to wait to see if it was correct or not)

It is so tiring (and wasting my time which takes away from doing real work that could help us) to respond to slander by ignorant posters due to their ignorance.

[kbm]

It would be much preferrable to have a small premine (say 1% of 10 year coin supply) used to fund development of the coin than to have say 50% of the 10 year coin supply allocated to what is effectively a premine for the early miners at the expense of the funding and adoption of the coin for the latter years.

Much better to get a smaller premine into the hands of the core developers, than using a scattershot approach to get those coins into their hands as Monero does. The problem with donations is they are subject to politics and design by mob consensus, i.e. leaderless and unfocused.

I can tell from the present publicly viewable donations and whatever else hasn't yet been accounted for, there is not less than .5% of the current supply that has been donated for bounties and development (this includes 3.685 BTC I've priced at .00477 - which would be much more if priced by their actual day of contribution).

This would be a good number to track (roughly of course), and initiatives like the community HoF can help bring to light an approximation of what has been donated.

There are donations that are privately given as well, which I've no way to attest to exact amount (save to say that it would bring that number closer to the 1% ideal mark we seem to agree on). Disclosure has been requested for the funds in the donation address.

The flaw you point out (scattershot approach), while potentially true, hasn't necessarily been fatal as of yet.

To date, I've not seen much in the way of politics emerge with respect to organization. It would be misleading to say political movements are not budding; however, the pull is not strong yet. For a comparison, take a look at the politically motivated attacks Moolah is under with regards to Dogecoin: http://www.theverge.com/2014/7/7/5877131/moolah-currency-exchange-tearing-dogecoin-apart-report

Towards the mob consensus -- I would propose that even with a leader/BDFL, the consensus is governed by a mob (albeit possibly to a lesser extent). If such a leadership were to come about in this situation, it would inevitably be an emergent leadership. Though this 'mob' has already rejected one assigned leader in its recent past -- as such I would say that it will take time for one to replace that, if it were going to happen. Who would jump on top of a horse that just bucked it's last rider? You would want to give it time to cool down -- though the horse is in no way deemed unworthy of being ridden in the future.

Of course, there's no guarantee that this will happen -- but it would be illogical to say it will never happen. My conclusion in this is that the community would likely follow an emergent leader over an assigned one, due to the way in which Monero was introduced to the world (though I have to admit this is just my personal stance - someone please make a comment if you actively want no leadership at all). Logically, I cannot see any other scenarios in which this could have played out.

In this case, you say that it's unfocused. I'd make the comment here that there's really no way to be unfocused right now .. even without an assigned leader. There are quite a few large thorns that tend to stand out amongst the rest of the needed advancements. Considering if one (leader) were in place right now, I would think that the top priorities are already being addressed. Number one priority to me seems to be tackling the database, so the software continues to run on computers that people already use. Apart from that, there are factions that branched out and started looking for GPU miners, gambling sites, and other initiatives like raising awareness. The results of which are brought to the main community, and are accepted or dropped.

Do you have a time-frame in which you see this project becoming unfocused? Do you also have a target date in the future when the 'scattershot' approach will lose all benefit it has so far provided? I recognize this seems far from ideal to you, but I'm trying to see how far from ideal you think it is. Personally, I think it's kept on track pretty well .. but that's only a viewpoint encompassing the last 9 months.

[AnonyMint]

kbm, ty for confirming a 1% number. Is that 1% of the current supply or of the 10 year supply target?

Sometimes spending more doesn't get more in return, and in other cases it does. I guess it depends a lot on who is involved. I think if you have someone like Satoshi, then you want him well vested and hyper-motivated. But you don't want him to own 10% of the world, as it would be ridiculous to put that much control in one person's (or a few core devs) hands, because no one is that omniscient and indispensable (relative to the world of possibilities, not just considering the coin's future). Then again, maybe no coin can ever be adopted by the whole world any way.

On the issue of Bitcoin dying, it is a long way from being used by most people in the world and looks like (to me) it won't get there. Logistic technology adoption (e.g. cell phones, personal computers) is not like that. Can another coin do what Bitcoin apparently can't? I don't know. The unknown and the possibility makes competition exciting. I don't think the goal should be to #2 to Bitcoin, nor even to equal Bitcoin, rather I think it should be to accomplish what (I am postulating that) Bitcoin can't (because it became centralized, has tx Tragedy of Commons, the current version of the longest chain rule can't scale, etc, etc, etc).

Many people say they are annoyed by my posts. Well it is mutual. I am annoyed by people who have no clue how far we are from having a coin that could really scale.

As for the current development effort for Monero, I am not really tracking it too closely. But I am referring to the overall vision and sometimes how paradigm shifts invalidate a lot of work. I think the only way to really compare this sort of thing is to compare real coins in the market. We could waste a lot of time talking theory. Practice is better.

[kbm]

confirming no less than .5%, with an agreed on reasonable goal of 1% of the current supply. Scale that by .1178 for the total supply (.059% of the total supply), with 6.25% of the time in which 80% of the coins will exist already passed. My statement about it tracking closely holds, as the donations are tracking the emission here yielding a possible .944% developer fund, when compared to 80% of the supply.

Nothing less than wild speculation makes me say that it's probably closer to being above .7%, approaching .8% in actuality .. but I can only say for sure that .5% is the absolute lowest.

[AnonyMint]

And your implied point is the % of bounties may continue at that rate as the money supply increases, since it was not taken as a premine then we don't have to compare it to the long-term money supply rather as an ongoing percentage.

My 'scattershot' criticism is about the declining nominal block reward, as this shifts more of the debasement earlier than a constant nominal, which has two theoretical disadvantages:

1. The faster the mining reward declines, the more pressure to mine and pump another coin[2].

2. Distribution is declining faster.

If you took the money for development in a premine, then you don't need to 'scattershot' the money supply in order to get enough coins into the core developers pockets (early on) to make the coin a reality.

There are counter arguments of course, but none that I've found compelling. If anyone can't counter, please do.

[2] https://bitcointalk.org/index.php?topic=600436.0

Here comes the censorship...

A reply of yours, quoted below, was deleted by a Bitcoin Forum moderator. Posts are most frequently deleted because they are off-topic, though they can also be deleted for other reasons. In the future, please avoid posting things that need to be deleted.

Mining is waisting electricity and always concentrates power in those with economies of scale.  

Perhaps not true if home users mine at incomes lower than their electricity cost.

[AnonyMint]

For a comparison, take a look at the politically motivated attacks Moolah is under with regards to Dogecoin: http://www.theverge.com/2014/7/7/5877131/moolah-currency-exchange-tearing-dogecoin-apart-report

This was predicted by that research paper I footnoted in a prior post[2].

When the nominal debasement rate declines too rapidly, then the miners look for another coin to pump up.

These political fights are probably just an artifact of that "Programmed Design" driven economic decline.

[2] https://bitcointalk.org/index.php?topic=600436.0

Edit: the next block reward halving for Bitcoin is 2016. That could be the straw that breaks the camel's back in terms of making its death rattle more apparent to all.

[kbm]

And your implied point is the % of bounties may continue at that rate as the money supply increases, since it was not taken as a premine then we don't have to compare it to the long-term money supply rather as an ongoing percentage.

My 'scattershot' criticism is about the declining nominal block reward, as this shifts more of the debasement earlier than a constant nominal, which has two theoretical disadvantages:

1. The faster the mining reward declines, the more pressure to mine and pump another coin.

2. Distribution is declining faster.

If you took the money for development in a premine, then you don't need to 'scattershot' the money supply in order to get enough coins into the core developers pockets (early on) to make the coin a reality.

There are counter arguments of course, but none that I've found compelling.

1. This seems to be true with regard to darkcoin, which is showing signs of a declining hashrate for the last few weeks. They hit 5 DRK/block, the low limit (i believe in May sometime). But back in march, there were still around 15-20 DRK/block IIRC. The point I'd try to make is that the value reward takes precedence over the actual number reward, and is showing to be independent of the total coins in circulation/to be in circulation. This falls back on keeping the value of the coin closely tracking the value of the/added by the demographic. The value seems rooted heavily in core development, known competition and apparently a slight bit of speculation (there's more - I believe aminorex addressed fundamental valuation far upthread). Two of three of these points are weighted by external forces to the currency(speculation can be driven by proposals like this: http://www.dfs.ny.gov/about/press2014/pr1407171-vc.pdf), which can lead to an increased value reward from mining.

Furthering the point, the value reward is something that is going to fluctuate based on many things outside the proposed emission and core development - and your point that competition becomes present is one of them. My point is that there will be more than just other competition to worry about (and you've stated it many times as well), and in these cases the value reward can positively correlate to legislation. Whether that will be a driving factor for adoption for a currency(specifically Monero) I think remains to be seen. If these currencies were outlawed in the coming months, adoption may decline (temporarily or permanently) but value reward might just become exponential depending on what is available. I don't think this is entirely compelling, but if a high emission were to be coupled with an event that would require the currency to be capable of handling (and mostly sustaining) a massive influx of both value and adoption in a short period of time, then the two events may be a suitable match. A worst-case scenario type currency. I would consider that a large percentage of the world is on the brink of adopting cryptocurrencies, even if they are unaware of it yet; however, this point does not address debasement (nor do I believe beyond doubt that it's going to happen, only strong belief to this date).

2. Again breaking this down. I'd have to look at many different points of distribution. Value distribution, % held by person relative to total supply distribution, comparisons to other failed distributions. While I would feel uncomfortable with even one person having control over 1.84 million of these, I would feel even more uncomfortable with 1% of the users in control of 18255600 XMR. I'm currently in a position where I can say that that is not happening yet (in that 1% of the people here do not own 2151021 XMR), as I feel confident that there are much more than 21727.5 XMR collectively in the hands of 99% of the people here. This is only taking into view the current distribution compared to the current world distribution of value.

Even if that 1% (in control of the vast majority of wealth) of the world were to currently purchase and hold every Monero from here on until 4-10 years from now, then they would still collectively have less than 90% of all Monero (provided everyone else held). This is currently a favorable outlook to me, even though it may lead to the cycle repeating (In which case I would consider the effectiveness of having a cryptocurrency in the first place nullified .. no matter how far ahead or behind I ended up -- as I would have potentially defined as being in a 1%). I do agree that a high rate of emission will correlate to distribution declining faster -- to which I'd say that 100% penetration (or at least ideal penetration) would likely be impossible, but the extent of distribution still has yet to be completed (and even then, does it yield a 1% in control of 99% of value scenario?). Anything that does not lead to that scenario, has the possibility to serve as a useful method of exchange until something better comes along. I would think the worst case scenario here would be that the cycle repeats for a length of time that can be correlated to how concentrated the value is, until it's done right. My participation will be given to the extent that I can provide in the meantime.

As I stated before in a private message on this subject, I do not think the majority of people are collectively ready (on so many different levels) to deal with an ideal cryptocurrency (outside of a very small minority). I also don't know if I am. We can't even get New York to say that they don't want the entire world to see the exact amount of money inside of everyone's wallets, along with every transaction that was ever made. I don't think they will be ready for an ideal one within at least my lifetime, as the only way I can see an ideal one taking root and achieving full penetration is with a revolutionary force (can't even get most of them to adopt a non-ideal one without bribery - 'hodl this for me now, it'll be worth a lot some day'). If that does not manifest, then it will be one that is evolutionary.

Here comes the censorship...

A reply of yours, quoted below, was deleted by a Bitcoin Forum moderator. Posts are most frequently deleted because they are off-topic, though they can also be deleted for other reasons. In the future, please avoid posting things that need to be deleted.

Mining is waisting electricity and always concentrates power in those with economies of scale.  

Perhaps not true if home users mine at incomes lower than their electricity cost.

If only we could guarantee the moderation was intended to be used to deter abuse, rather than actively ever using it to abuse, or prevent abuse .. without alerting the abuser in suit.

[kbm]

This was predicted by that research paper I footnoted in a prior post[2].

When the nominal debasement rate declines too rapidly, then the miners look for another coin to pump up.

These political fights are probably just an artifact of that "Programmed Design" driven economic decline.

I hadn't considered that as a motivator, it makes sense; however, they did continue to fund both a nascar and a bobsled after the first halving (where the value did not increase, nor were there political explosions). Why weren't there major political blowups then? I made the point that there would have been less blowups if, instead, they had funded core development (this is the major focus of Monero currently) here: http://www.reddit.com/r/Monero/comments/2akwwx/i_was_having_a_chat_with_moolah_support_when_this/cixfq8k . Perhaps, both the decreasing block reward and lack of core innovation lead to a negative political blowup?

But again, this would lead to the previous points about having an unfocused community. Did they have any type of leadership? I'll have to look that up I guess.

edit: Maybe it's because there was a lack of leadership, and the pull for someone to fill that role became too big? I really don't want to dig all over Dogecoin posts to see if they had leadership, but I'll be doing that now.

another edit: using only Dogecoin as an example (and accepting that decreased block reward (possible value reward) under a leaderless scheme will correlate to catastrophy), we'd expect to have a 'vacuum effect' at least established by the first 'halving' (Monero - April 2016 I think, somewhere around 8.8/block) and then total political failure after the second 'halving' (Monero - April 2017 I think, somewhere around 4.4/block) if the role is not fulfilled.

[rpietila]

As Bitcoin has become more centralized, they will strangle it, which we can see happening if we look at any metrics that measure the rate of growth, e.g. the market cap rate of growth has slowed which is what I showed that it is log-logistic not logistic as should be normal for technology adoption. (note Risto doesn't accept or agree with my curve fit, so we will have to wait to see if it was correct or not)[/b]

It is so tiring (and wasting my time which takes away from doing real work that could help us) to respond to slander by ignorant posters due to their ignorance.

Your log-logistic fit would have been perfect in late 2012, showing the slowing of growth and maturation of the technology. So having this analysis, you would have sold all your bitcoins at $13 or at least never bought any. Right?

So one of us now holds bitcoins at $623, because his model was correct and already has an astounding 94.5% Rsq-coefficient (far higher than any log-logistic fit to the bitcoin 5-year price data).

Bad models have real world consequences to those who choose to follow them. The weakness of yours is that it is obvious that the saturation point of bitcoin is in 100s of millions or billions of users, and you are interpreting random noise to mean a secular slowing of trend at the point when the actual slowing of the adoption rate is still 3 orders of magnitude away!

[FreeTrade]

FreeTrade, competing currencies also means if a parameter of your coin is too messed up (e.g. Bitcoin's debasement will decline asymptotically to 0[1]), users could leave for another coin. And there is a research paper that predicts declining debasement is one factor that might cause miners to leave Dogecoin[2].

Rpietila has shown that 5400% annual Debasement (1.1% per DAY) is working to distribute the coin via the normal expected power law distribution of money[3].

Decentralized debasement is the way we efficiently distribute crypto-currency.

Distribution is very important, because Metcalf's Law tells us that usage scales as the square of the number of users. Peter R had even shown that the Bitcoin price is scaling by Metcalf's Law. This is observed fact not just theory.

Dogecoin showed that more liberal distribution works (the community was working very hard to donate and get coins into as many hands as possible). Note there is a research paper that predicts Dogecoin's death due to declining rate of debasement[2].

I agree that distribution is of key importance. One method of debasement of aggregate cryptocurrency, is to create new one with an innovative distribution, as you pointed out happened with Dogecoin. Yet you still speak of a 'dominant cryptocurrency' - I feel this is the source of our different understanding, you think the world will become fixated on a single cryptocurrency. I think the current power-law distribution of crypto will be up-ended.

[NewLiberty]

Many people say they are annoyed by my posts. Well it is mutual. I am annoyed by people who have no clue how far we are from having a coin that could really scale.

Some of us read them with great interest.  Especially when you write something with which I disagree.  Often however I agree, but not always.

Constructive criticism, by someone who is well meaning in that you really want to make the crypto currency project work, is difficult to hear for many reasons. 
People may disagree because they disagree with an assumption, or a conclusion, or because they have a vested interest in the conclusion being wrong.  In any of these, we have the opportunity to learn something.  In a disagreement, typically at least one side is wrong and can get corrected.  The other side, the side that was right, also gets to learn something as they have the opportunity to refine the message and delivery and also have the opportunity to have that discussion in public where the elements of the arguments are made plain.

At a certain point, we run out of time explaining, and need to move past the [problem identification and discussion] and into [problem solution].

[AnonyMint]

Yet you still speak of a 'dominant cryptocurrency' - I feel this is the source of our different understanding, you think the world will become fixated on a single cryptocurrency. I think the current power-law distribution of crypto will be up-ended.

To the extent that a single crypto-currency (one set of features) can't meet the needs of all the people, then there will be fragmentation. But people prefer to have a winner take all, because they like simplicity and the assurance they are with the rest of the herd.

Ideally we would have many competing crypto-currencies, because that in theory could provide the most decentralized scaling. But one would assume that the implementation and feature set quality would be power law distributed, because it requires investment.

We may go through a period of proliferation of experiments, before settling in on the winner. The winner might already be Bitcoin, which in my opinion is not sufficient to scale to the global population (where it is now with a couple of big pools, exchanges, and merchant service providers, it can only scale with the centralization of Peter Thiel which means it can't outscale fiat, because he is a fiat slave[1] and the fiat world is headed for a collapse and global consolidation).

My intuition is the market is hungry for an altcoin with serious quality of implementation and feature set that bests Bitcoin and that is structured to remain decentralized. I believe such an altcoin will quickly dominate.

I don't have a lot of analytical sources to back up my intuition at this point (don't have time to go off on that tangent right now, e.g. could begin reading Moldbug's "there can only be one").

P.S. Thiel is the angel investor of Facebook too, so I assume they can do a social media rollout for their bastardized Bitcoin services integrated with that other app they recently purchased (the name escapes my memory...WhatsApp?). But it is not decentralized, thus it can't scale exponentially as fast as a network (Metcalf's law). As soon as you put a centralized node in the process, the scaling of Metcalf's law is reduced.

[1] Ever tried using Paypal and have absurdly stupid shit happen to you because they are slaves to KYC, AML, and other edicts? Happened to me numerous times. Also his (with Elon Musk) Tesla Motors only made it because of government subsidies.

[AnonyMint]

As Bitcoin has become more centralized, they will strangle it, which we can see happening if we look at any metrics that measure the rate of growth, e.g. the market cap rate of growth has slowed which is what I showed that it is log-logistic not logistic as should be normal for technology adoption. (note Risto doesn't accept or agree with my curve fit, so we will have to wait to see if it was correct or not)[/b]

It is so tiring (and wasting my time which takes away from doing real work that could help us) to respond to slander by ignorant posters due to their ignorance.

Your log-logistic fit would have been perfect in late 2012, showing the slowing of growth and maturation of the technology. So having this analysis, you would have sold all your bitcoins at $13 or at least never bought any. Right?

How do you calculate that my fit predicted that in 2012? Here is the crude fit graph I did (notably after 2012). It seems that even if I did that fit before the run-up in 2013, it would be impossible to fit it such that it wouldn't have shown the price was far too low before the run-up in price in 2013. This is because of that spike up in the price in the early stage (which is characteristic of log-logistic).

I didn't try to make the data to fit my model. I was trying to find a math model that fit that data. Logistic doesn't fit, go compare to SlipperySlope's graphs.

So one of us now holds bitcoins at $623, because his model was correct and already has an astounding 94.5% Rsq-coefficient (far higher than any log-logistic fit to the bitcoin 5-year price data).

Please show me the math you claim, because I am lazy (lacking time) to go figure it out myself?

Bad models have real world consequences to those who choose to follow them. The weakness of yours is that it is obvious that the saturation point of bitcoin is in 100s of millions or billions of users, and you are interpreting random noise to mean a secular slowing of trend at the point when the actual slowing of the adoption rate is still 3 orders of magnitude away!

Bitcoin might indeed reach a few 100 million (but only via some Thiel service such as Bitpay, Coinbase, Facebook WhatsApp, etc), but that doesn't mean its adoption rate wouldn't slow on the way there. You seem to be assuming the adoption rate wouldn't slow until that point, and then suddenly so. Continuous curves can't do that. Either you have S logistic curve or you don't.

The global population is 6+ billion and will be 7 - 8 billion by 2020. So Bitcoin scaling to 1/10 or 1/50 of the global population is not the same penetration as cell phones, computers, and internet which will likely reach 80% (8/10) of the population.

Please realize that WhatsApp is more important to most users than Bitcoin. Thiel can do a money transfer service in WhatsApp to address most of Bitcoin's thrust for most users (who don't need some crazy volatile technological thing). He is merely pulling Bitcoin into the fold of his overall control over money transfer globally with his also Paypal in his stable.

If Bitcoin is programmed by design to fall away, it is no big skin off Thiel's back:

Edit: the next block reward halving for Bitcoin is 2016. That could be the straw that breaks the camel's back in terms of making its death rattle more apparent to all.

I view Bitcoin as a Trojan Horse planted to keep us geeks preoccupied while the powers-that-be consolidate the global financial system. In any case, Satoshi out smarted them. He revealed to use the Longest Chain Rule solution to the Byzantine General's problem. And hackers don't need to stand by and let that innovation go to waste.

[Melbustus]

As Bitcoin has become more centralized, they will strangle it, which we can see happening if we look at any metrics that measure the rate of growth, e.g. the market cap rate of growth has slowed which is what I showed that it is log-logistic not logistic as should be normal for technology adoption. (note Risto doesn't accept or agree with my curve fit, so we will have to wait to see if it was correct or not)[/b]

It is so tiring (and wasting my time which takes away from doing real work that could help us) to respond to slander by ignorant posters due to their ignorance.

Your log-logistic fit would have been perfect in late 2012, showing the slowing of growth and maturation of the technology. So having this analysis, you would have sold all your bitcoins at $13 or at least never bought any. Right?

How do you calculate that my fit predicted that in 2012? Here is the crude fit graph I did (notably after 2012). It seems that even if I did that fit before the run-up in 2013, it would be impossible to fit it such that it wouldn't have shown the price was far too low before the run-up in price in 2013. This is because of that spike up in the price in the early stage (which is characteristic of log-logistic).

I didn't try to make the data to fit my model. I was trying to find a math model that fit that data. Logistic doesn't fit, go compare to SlipperySlope's graphs.

So one of us now holds bitcoins at $623, because his model was correct and already has an astounding 94.5% Rsq-coefficient (far higher than any log-logistic fit to the bitcoin 5-year price data).

Please show me the math you claim, because I am lazy (lacking time) to go figure it out myself?

Bad models have real world consequences to those who choose to follow them. The weakness of yours is that it is obvious that the saturation point of bitcoin is in 100s of millions or billions of users, and you are interpreting random noise to mean a secular slowing of trend at the point when the actual slowing of the adoption rate is still 3 orders of magnitude away!

Bitcoin might indeed reach a few 100 million (but only via some Thiel service such as Bitpay, Coinbase, Facebook WhatsApp, etc), but that doesn't mean its adoption rate wouldn't slow on the way there. You seem to be assuming the adoption rate wouldn't slow until that point, and then suddenly so. Continuous curves can't do that. Either you have S logistic curve or you don't.

The global population is 6+ billion and will be 7 - 8 billion by 2020. So Bitcoin scaling to 1/10 or 1/50 of the global population is not the same penetration as cell phones, computers, and internet which will likely reach 80% (8/10) of the population.

Please realize that WhatsApp is more important to most users than Bitcoin. Thiel can do a money transfer service in WhatsApp to address most of Bitcoin's thrust for most users (who don't need some crazy volatile technological thing). He is merely pulling Bitcoin into the fold of his overall control over money transfer globally with his also Paypal in his stable.

Trying to curve-fit "adoption" is really silly at this point. It's probably silly for most tech phenomena as they all have very different, often unpredictable, dynamics that are never going to follow any nice curve, so the fit is really just an exercise in self-indulgence. Furthermore, the playing field is always changing, metrics are very fuzzy, and statistical significance likely goes out the window.

Essentially, if you could run this earth sim a thousand times and drop bitcoin into the world and see what happens, you'd probably get pretty different graphs. Likely the similar t=large end-state most of the time, but the path is tumultuous, *especially* in the beginning (which this likely still is (either that or the end, of course)).

[AnonyMint]

Now I will slam-dunk my point.

Trying to curve-fit "adoption" is really silly at this point. It's probably silly for most tech phenomena as they all have very different, often unpredictable, dynamics that are never going to follow any nice curve...

How do you explain away the following then?

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

The shape of the technology lifecycle is often referred to as S-curve.

Notice that all those that were decentralized have an S-curve (logistic) and those that were not decentralized are more log-logistic. The airplane isn't even log-logistic because it is so investment controlled and thus top-down centralized (regulations, etc), although its curve could be the very early portion of logistic (see the one end of the S at the beginning) which would predicts perhaps that decentralization of aviation is coming, see my blog essay on flying cars.

[smooth]

How do you explain away the following then?

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

The shape of the technology lifecycle is often referred to as S-curve.

Those are quite interesting graphs.

As with all squiggly lines, you can attach a variety of narratives.

One thing that jumps out at me is a division of technologies between those that are adopted in subgeneration time scales (internet, cell phone, etc.), those that are adopted on generational timescales (TV, microwave, etc.) and those that are slower than generational (phones, cars, maybe electricity).

Also, the starting points seem arbitrary to me. The internet was not in 30% of households within 5 years of its invention. I doubt the starting year for PCs as well. I think someone chose some arbitrary starting years to tell a story.

[Melbustus]

Trying to curve-fit "adoption" is really silly at this point. It's probably silly for most tech phenomena as they all have very different, often unpredictable, dynamics that are never going to follow any nice curve...

How do you explain away the following then?

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

The shape of the technology lifecycle is often referred to as S-curve.

Yeah, I've seen that image quite a bit, thanks. Surprise surprise, it's like a bunch of random noise blew differently through all those curves (which, yes, are generated by some sort of similar underlying human phenomena). And yet what you're basically doing is zooming in on the early part of one of them, where there's likely to be especially big noise, trying to fit a nice elegant little curve anyways, and then making investment decisions based upon that. Sometimes what gives the elegance-seeking part of our intellect great satisfaction just doesn't matter. This particular domain is one where qualitative fundamentals analysis actually seems better than quantitative attempts.

[AnonyMint]

One thing that jumps out at me is a division of technologies between those that are adopted in subgeneration time scales (internet, cell phone, etc.), those that are adopted on generational timescales (TV, microwave, etc.) and those that are slower than generational (phones, cars, maybe electricity).

I added to my post that decentralization seems to be the unifying demarcation for those requiring significant capital infrastructure (whereas the internet leveraged the pre-existing phone and cable TV networks, and wireless towers are subleased from smaller entities).

Also note that the internet and cell phone cost nearly nothing relative to our income levels now, as compared to TV and microwave were luxury items for a long time. Also the utility of the microwave is not agreed upon by all people. There are many people today who prefer not to use a microwave, e.g. myself recently on a Paleo diet.