I know we disagree about the relevance of botnets so I won't belabor that point.
Upthread we disagree on their effect early on (which I posit impacts the long-term), but at least we appear to agree they are less relevant once the coin has scaled to broad distribution, if the coin can do so.
I will also state (and we probably disagree about this too), that miners only matter to the distribution and success of a coin (at least up to the scale of LTC) until the coin achieves good liquidity and tradability. This took a long time for Bitcoin, a shorter time for LTC and an even shorter time for XMR. Once you get to that point, miners become part of the plumbing and no longer matter much to the coin at large.
We agree at least that miners matter less as the annual percentage debasement rate declines. Where we may disagree is I posit that the price of the coin is related to the cost of the mining investment in it annually, modulated by the percentage of the float added each year by mining.
Thus I posit that if you want to drive the price of the coin skyhigh, you need everyone who uses the coin to mine with their sunk costs. And then you need to scale usership to millions or billions. The other route is to allow centralization and sell out to the powers-that-be as I posit Bitcoin has done (and Ethereum also), who then drive the investment in mining higher in an investor pump with their mass media and Congressional hearings, etc.. I posit the latter is log-logistic (did a rough curve fit as mentioned) and the former is logistic (refer to our discussions in the Monero economy thread on the adoption rates of technologies that were not centralized).
As to whether higher prices (i.e. via usership demand) drive more investment in mining, I posit that network effects and the Metcalf law correlation that Peter R showed are driven more by the investment in mining, than vice versa, at least while debasement rates are high early on. Those with the most investment also invest the most (time, effort, and capital) to drive adoption, so when the investors are not also the miners early on then there is a loss of synergy (as you say below many miners just dump the coins to a whale and don't even spend them into the ecosystem to drive network effects such as more merchants).
Thus despite sharing some facets of agreement, yes we appear to disagree fundamentally on how crucial mining and breadth of distribution are.
Crypto-to-crypto markets are largely frictionless, and people who want the coin can just buy it while miners who don't want it can just sell it.
Agreed but that says nothing about why one coin is demanded more than another.
Specialization and trade make an economy stronger, not weaker.
Agreed the maximum division-of-labor and the 51% Rule of Decentralized Consensus are fundamental.
However,
assets can be specialized but currency can not be. Just because we can trade between crypto-currency assets, doesn't mean all of them are currencies.
Why? Even if you ignore the round-trip costs of spread, the fundamental problem is that
when people use one currency as their unit-of-account, then all timing-dependent exchange rate risks disappear.
And this is why Moldberg is correct "there can only be one", and why either we "aim big or go home".
Yeah we could make an anonymous crypto-currency asset that we can use to protect capital in the coming chaos, but if it is not a currency then we will have to trade out to the majority's currency in order to spend this asset. And this is where the powers-that-be have us cornered. When they require everything to be computerized, even including real estate purchases and rentals, then where we will spend our anonymous crypto-asset without being forced to reveal our private keys and the entire trail of ownership??
Open Question: could we end up with two economies?
One the official government edict digital fiat and another the underground economy that goes anonymous because the government becomes unreasonable (as socialism always does at the end stage mega-death mode).
I wrote my logic for why I think this is likely and the underground economy could be largely virtual digital works.
Thus perhaps Moldberg is correct and the government's edict fiat is the one that is dying with the dying Industrial Age and the rise of the virtual Knowledge Age means the winning one could be the decentralized crypto-currency after a battle of chaos interim.
I'd like to try for that goal. Succeed or fail, is it not worthy?
With such a goal, there is enough prosperity to share with everyone. So we should cooperate.
Also, in a 1000 shitcoin crypto space, miners just end up seeking out the most profitable coins to mine and don't really give a shit what they are mining. There is little buy in and building of enthusiast communities the way there was in the earlier days of crypto. Sometimes this gets automated with switching pools and miners don't even know what they are mining, much less care.
Beyond the scale of replacing LTC, we probably agree more about the role of mining. That's another discussion though.
I would like to make mining unprofitable for investors by making it profitable only to those who mine with sunk costs.
P.S. In a
follow up email, I expressed my opinion that it is very unlikely the world proceeds into total collapse 2016ish. Post 2015, I rather place a high probability on an acceleration of:
* economic hardship
* reduction of personal freedom
* loss of private property rights
* war and riots (reduction of personal security)
* disease and pestilence
Those Christians who would urge we do nothing to try to aid prosperity (e.g. with crypto-currency) because as believers they feel they have nothing to fear, appears to me to be the epitome of the laziness that was reprimanded in the Parable of the Talents. Since no one can predict the exact time and extent, we must continue to be productive until the time.
