Gold collapsing. Bitcoin UP.

[smooth]

constantly switching to newer altcoins, even if they represent true improvements, is destructive to SOV.  thus, the whole concept of cryptocurrency as a SOV fails miserably.  they fail to see this thus their activities are destructive to the SOV concept.

This is one reason I've been wary of the "Bitcoin is shopper's paradise" idea of the past few years where merchant adoption was overemphasized or emphasized before its time, and the premature reference to Bitcoin as "the currency of the Internet" (/r/Bitcoin's sidebar) when it only "has currency," as it were, in a few niche markets so far. This marketing brought in so many people who didn't understand that everything is founded on SoV, and who didn't understand the ledger but rather thought of BTC as "digital tokens you can send through the Internet" (the famous WeUseCoins video with 6M views), with all the second-thoughts and objections that distorted understanding results in.

Well, I agree with your observation about it all being terribly premature but I disagree with your conclusion. In fact my conclusion is exactly the opposite. It is precisely because that focus is premature that Bitcoin has zero legitimacy to claim to be the global ledger of anything other than Bitcoin. You can't be the global ledger of money until and unless you are established -- in reality not just in some supporters' imaginations -- as money.

[1713966838]

1713966838

[1713966838]

1713966838

[TPTB_need_war]

There are factors pushing in the other direction, such as globalization (a larger economy benefits more from a common unit-of-account than a smaller one).

I believe it is not the size but rather the quality of the economy that drives unit-of-account dominance. When you have fixed expenses, salaries, and budgeting then unit-of-account is paramount unless you can afford the carrying cost of hedging to the various units you account in. When the economy moves towards innovation and knowledge then fixed expenses are rather irrelevant. (I spend $1000 a month on myself and personal innovation could spontaneously generate 10 - 100X that). I'm having a difficult time fathoming how we don't move to a bifurcation of the global economy where those people who are unwilling to enter the knowledge age, vest themselves in the old world paradigm and the NWO of old world capital trying to hang on to all that it knows how to do. The only way I visualize it won't happen is if we fail and end up trapped in a horrific Dark Age.

Bitcoin seems to be predicated on the Moldberg unit-of-account dominance theory "there can only be one winner". The more I dig, the more I see in every facet it is morphing into the NWO coin and the supporters here are fixated on the oxymoron of unenslaving humanity by way of global, total dominance with one ledger. Do they not even consider this defies the trend of entropy (they create a very low entropy outcome that is a vacuum that can't be stable long-term). I suppose one can argue that the network effects from this low entropy spawn a lot of high entropy, thus offsetting my objection.

The market must be ripe for altcoin or altcoins that fulfill the knowledge age requirements for meritocracy, fungibility, decentralization, permissionless, adaptability, resilience, etc.. But perhaps if we wait too long, the network efforts of Bitcoin will be too great to overcome.

[rocks]

I think the best argument for one ledger is network effects. Network effects for money are very very strong. In order to enable a switch to a new money, there has to be a significant improvement over the existing money. Network effects are so strong that people continue to use fiat even though it has been inferior for decades. To me this is the main reason why Monero and other alts will not win, even if they offer some advantages (which I think is debatable), the advantages are not enough to overcome the network effects that are already behind bitcoin (which itself may not be able to beat the network effects of the dollar).

This is a better argument than what we usually see here since it focuses on might happen as a result of network effects, rather than you picking a winner and declaring that everyone else should support the winner you picked "because network effect". So, well presented, rocks.

Not sure about fiat being inferior for decades though.

Not sure if this was agreeing or being sarcastic. In case it was that later then I'd respond that I'm not saying Bitcoin will win "because network effect", I'm saying "because network effect" any follower has to be significantly better, not just moderately better.

The network effects for bitcoin vs. alts are very real and already present a significant hurdle for any of them to overcome. For example, in 2014 VCs invested >$300M in Bitcoin firms vs. near zero for any alt. Currently numerous websites, VPNs, etc, that I use accept Bitcoin, none to few accept any alt. The fact is there are already network effects in place for Bitcoin vs. alts. This makes the hurdle higher for things such as Monero.

[cypherdoc]

i see this as all positive:

"We are now going to use our name, reputation and global index provider stature to provide bitcoin values that the rest of the market can look to," says Tom Farley, who serves as president of NYSE, the venerable financial institution that has come to symbolize Wall Street and capitalism more broadly."

"New technology does not intimidate us, it excites us," Farley says, effectively summing up the new mindset of NYSE. Bitcoin in particular excited him, both because of the interest in the currency and the blockchain technology behind it, which serves as a transaction database. "It was that curiosity and also... let's not wait for this to fully evolve; let's get a seat early on and see how this matures."

http://mashable.com/2015/05/19/new-york-stock-exchange-bitcoin/

Except the NYSE BTC "index", at least as initially set up, is a joke:

https://www.nyse.com/publicdocs/nyse/indices/NYSE_Bitcoin_Index_Methodology.pdf

The Index is calculated on those days specified as Index business days. Index business days will be classified as any weekday throughout the calendar year.
The Index will be published within 2 hours following 4 PM U.K. time. It will be published with (4) decimals, and will be rounded on the last digit.
There is currently (1) Exchange/Venue whose bitcoin transaction data is included in the calculation of the Index: - Coinbase Exchange

that's ok.  it's the concept that counts.  along with the built in marketing to the masses.

[justusranvier]

Whether you only refuse to answer or also close yourself to new information from others, is certainly up to you.

I am nevertheless grateful for your contributions so far.

There are some questions I want to answer in longer form than what what a forum post allows.

Right now time is the resource in most short supply for me.

How much of it should I allocate to debating economics, how much of it should I allocate to preparing for the next round of OBPP ratings, how much of it should I allocate to describing what a transition plan from the current P2P network to a market-based P2P network would look like, etc. etc. etc.

[Erdogan]

i see this as all positive:

"We are now going to use our name, reputation and global index provider stature to provide bitcoin values that the rest of the market can look to," says Tom Farley, who serves as president of NYSE, the venerable financial institution that has come to symbolize Wall Street and capitalism more broadly."

"New technology does not intimidate us, it excites us," Farley says, effectively summing up the new mindset of NYSE. Bitcoin in particular excited him, both because of the interest in the currency and the blockchain technology behind it, which serves as a transaction database. "It was that curiosity and also... let's not wait for this to fully evolve; let's get a seat early on and see how this matures."

http://mashable.com/2015/05/19/new-york-stock-exchange-bitcoin/

Except the NYSE BTC "index", at least as initially set up, is a joke:

https://www.nyse.com/publicdocs/nyse/indices/NYSE_Bitcoin_Index_Methodology.pdf

The Index is calculated on those days specified as Index business days. Index business days will be classified as any weekday throughout the calendar year.
The Index will be published within 2 hours following 4 PM U.K. time. It will be published with (4) decimals, and will be rounded on the last digit.
There is currently (1) Exchange/Venue whose bitcoin transaction data is included in the calculation of the Index: - Coinbase Exchange

Hardly a leader in tech, we already have 24/7/52 indexes.

[Carlton Banks]

I agree with intangibility [of money] being a benefit, we might have different definitions here though, how are you defining this?

Private keys are the authority to spend your money. And because they're just random numbers, the ability to store your money safely is intangible to both the owner and everyone else. The actual storage itself depends on something tangible (mining & computer hardware), but we're working under an assumption that all the self interest mechanisms built into the satoshi design will protect and preserve the current blockchain from being destroyed or overpowered (and that's worked well so far).

Doesn't this just go back to portability though? One way to phase that is bitcoin is more portable than physical based money (gold) because it is just a bunch of random numbers. You can easily transport random numbers anywhere you can send information. This includes the ability to send money across the world in seconds, or even transport money into your head (brain wallet). Being intangible means something is more portable, including the ability to transport money into your mind, which is impossible with anything tangible.

Hmmm, I would argue that anything that is portable is tangible, and that intangible objects cannot be ported anywhere, because they are both everywhere and nowhere simulatneously   But then again, maybe I'm only saying that because it would mean I'm right  

It's possible that we're arguing about semantics, but from what I remember about good system design, proper analysis (including labelling objects and actors with the best possible description you can think of) is the unimpeachable foundation for getting good results.

[TPTB_need_war]

The network effects for bitcoin vs. alts are very real and already present a significant hurdle for any of them to overcome. For example, in 2014 VCs invested >$300M in Bitcoin firms vs. near zero for any alt. Currently numerous websites, VPNs, etc, that I use accept Bitcoin, none to few accept any alt. The fact is there are already network effects in place for Bitcoin vs. alts. This makes the hurdle higher for things such as Monero.

http://www.qhoster.com/clients/announcements/43/QHoster-accepts-all-cryptocurrencies-Buy-hosting-domain-names-Linux-VPS-Windows-RDP-VPS-and-dedicated-servers.html

[smooth]

I think the best argument for one ledger is network effects. Network effects for money are very very strong. In order to enable a switch to a new money, there has to be a significant improvement over the existing money. Network effects are so strong that people continue to use fiat even though it has been inferior for decades. To me this is the main reason why Monero and other alts will not win, even if they offer some advantages (which I think is debatable), the advantages are not enough to overcome the network effects that are already behind bitcoin (which itself may not be able to beat the network effects of the dollar).

This is a better argument than what we usually see here since it focuses on might happen as a result of network effects, rather than you picking a winner and declaring that everyone else should support the winner you picked "because network effect". So, well presented, rocks.

Not sure about fiat being inferior for decades though.

Not sure if this was agreeing or being sarcastic.

It was agreeing. In fact I've made the same argument to Monero people. I'm the Bitcorn in the Monero world.

In case it was that later then I'd respond that I'm not saying Bitcoin will win "because network effect", I'm saying "because network effect" any follower has to be significantly better, not just moderately better.

Exactly

The network effects for bitcoin vs. alts are very real and already present a significant hurdle for any of them to overcome. For example, in 2014 VCs invested >$300M in Bitcoin firms vs. near zero for any alt.

Supposedly some of the Ethereum presale money did come from VC-type investors, but who really knows. Bitshares was also supposedly VC-backed, but I don't know the details of that either. Ripple (not exactly a cryptocurrency, I know) just got $30 million in VC money, and Stellar got VC money last year indirectly (via Stripe, which is VC-backed). So it isn't zero. There are at least two investor-backed Monero businesses (MyMonero and Crypto Kingdom). It's all certainly less than Bitcoin of course.

[79b79aa8d5047da6d3XX]

Hardly a leader in tech, we already have 24/7/52 indexes.

. . . that are not calculated from taking the data from a single exchange.

This has to be temporary, they cannot be so spectacularly dim.

[cypherdoc]

$DJI gone negative.  would be really interesting if it turns out to be a headfake over the top (to a new high).

the Dow Theory non conf is strong.

[smooth]

The network effects for bitcoin vs. alts are very real and already present a significant hurdle for any of them to overcome. For example, in 2014 VCs invested >$300M in Bitcoin firms vs. near zero for any alt. Currently numerous websites, VPNs, etc, that I use accept Bitcoin, none to few accept any alt. The fact is there are already network effects in place for Bitcoin vs. alts. This makes the hurdle higher for things such as Monero.

http://www.qhoster.com/clients/announcements/43/QHoster-accepts-all-cryptocurrencies-Buy-hosting-domain-names-Linux-VPS-Windows-RDP-VPS-and-dedicated-servers.html

The problem I see with most of those services is the same one you see with xmr.to. They're mostly using Bitcoin as a payment rail (and a marketing vehicle to target Bitcoin supporters as customers) and then they're going to dump it to pay their costs of doing business (most of it in the case of domain registration). There is no real circulatory economy there.

There's really not a whole lot of difference between using BTC to pay for a domain name and using xmr.to to pay for a domain name (via an even shorter holding period of BTC), or for that matter setting up a domain registrar that accepts XMR as payment and dumps it to pay upstream registration costs (not hard to do at all, but also not particularly profitable).

[TPTB_need_war]

but we're working under an assumption that all the self interest mechanisms built into the satoshi design will protect and preserve the current blockchain from being destroyed or overpowered (and that's worked well so far).

By what metric do you assert it has worked well so far?

I see failure on that point in every measurable facet that can portend a trend:

1. Hashrate and topology of the network is becoming more centralized.
2. Behemoths are driving most of the new wallets (or will soon).
3. Scaling now requires moving to IBLT centralization of mining.
4. Pools have demonstrated the Tradegy of the Commons leads to 50% concentration. You Whack-A-Mole it with concerted political effort while Bitcoin is small, but as the behemoths take over the economics will rule (even if hidden behind a Sybil attack).

The so called decentralization of the pools can't portend anything due to the inability to measure a Sybil attack.

[Erdogan]

I agree with intangibility [of money] being a benefit, we might have different definitions here though, how are you defining this?

Private keys are the authority to spend your money. And because they're just random numbers, the ability to store your money safely is intangible to both the owner and everyone else. The actual storage itself depends on something tangible (mining & computer hardware), but we're working under an assumption that all the self interest mechanisms built into the satoshi design will protect and preserve the current blockchain from being destroyed or overpowered (and that's worked well so far).

Doesn't this just go back to portability though? One way to phase that is bitcoin is more portable than physical based money (gold) because it is just a bunch of random numbers. You can easily transport random numbers anywhere you can send information. This includes the ability to send money across the world in seconds, or even transport money into your head (brain wallet). Being intangible means something is more portable, including the ability to transport money into your mind, which is impossible with anything tangible.

Hmmm, I would argue that anything that is portable is tangible, and that intangible objects cannot be ported anywhere, because they are both everywhere and nowhere simulatneously   But then again, maybe I'm only saying that because it would mean I'm right  

It's possible that we're arguing about semantics, but from what I remember about good system design, proper analysis (including labelling objects and actors with the best possible description you can think of) is the unimpeachable foundation for getting good results.

There is some support for calling them intangible, but i prefer to view them as tangible because you have to store the key somewhere on a non-intermittent storage medium, and that is where the coins are.

[rocks]

how much of it should I allocate to describing what a transition plan from the current P2P network to a market-based P2P network would look like, etc. etc. etc.

When you have time, that would be interesting to understand.

[rocks]

I agree with intangibility [of money] being a benefit, we might have different definitions here though, how are you defining this?

Private keys are the authority to spend your money. And because they're just random numbers, the ability to store your money safely is intangible to both the owner and everyone else. The actual storage itself depends on something tangible (mining & computer hardware), but we're working under an assumption that all the self interest mechanisms built into the satoshi design will protect and preserve the current blockchain from being destroyed or overpowered (and that's worked well so far).

Doesn't this just go back to portability though? One way to phase that is bitcoin is more portable than physical based money (gold) because it is just a bunch of random numbers. You can easily transport random numbers anywhere you can send information. This includes the ability to send money across the world in seconds, or even transport money into your head (brain wallet). Being intangible means something is more portable, including the ability to transport money into your mind, which is impossible with anything tangible.

Hmmm, I would argue that anything that is portable is tangible, and that intangible objects cannot be ported anywhere, because they are both everywhere and nowhere simulatneously   But then again, maybe I'm only saying that because it would mean I'm right  

It's possible that we're arguing about semantics, but from what I remember about good system design, proper analysis (including labelling objects and actors with the best possible description you can think of) is the unimpeachable foundation for getting good results.

Yup we're at semantics at this point, and I'm holding on to the classical properties of money with dear life...

[Zangelbert Bingledack]

Anything else subverts the entire basis of money.

I think you just identified the motive.

Hey guys - you are in my TOP-20 bitcoin theorists. Both. Considering this, the latest replies have been lame.

I have presented a mechanism that may dethrone Bitcoin without asking the majority, the exact same way as it has always happened during monetary transformations in the history (leaving the majority holding the bag), and the same way as Bitcoin gained its valuation, which you and I are not ashamed to enjoy.

I am interested in hearing analytical criticism that could invalidate the theory. What I hear instead is moral criticism that the entire basis of money is subverted if such happens.

This isn't a moral criticism, but a practical one, as argued in the post. Stores of value can change, but this cannot be a fast process as that contravenes the very definition of "store of value." Not unless it absolutely has to happen (facing catastrophe), as I also mentioned. Or let me make it more clear: I do not think the market will accept changing the store of value except as an absolute last resort.

FWIW, I don't agree with Justus's suggestion that altcoin investors are attempting to subvert the basis of money.

[justusranvier]

I don't agree with Justus's suggestion that altcoin investors are attempting to subvert the basis of money.

Not all of them.

Some of them, and they do as much as they can to encourage others.

Many of the others could be considered unwitting participants.

[smooth]

Anything else subverts the entire basis of money.

I think you just identified the motive.

Hey guys - you are in my TOP-20 bitcoin theorists. Both. Considering this, the latest replies have been lame.

I have presented a mechanism that may dethrone Bitcoin without asking the majority, the exact same way as it has always happened during monetary transformations in the history (leaving the majority holding the bag), and the same way as Bitcoin gained its valuation, which you and I are not ashamed to enjoy.

I am interested in hearing analytical criticism that could invalidate the theory. What I hear instead is moral criticism that the entire basis of money is subverted if such happens.

This isn't a moral criticism, but a practical one, as argued in the post. Stores of value can change, but this cannot be a fast process as that contravenes the very definition of "store of value." Not unless it absolutely has to happen (facing catastrophe), as I also mentioned.

Well, again, there is no fast process at work here. <0.1% of the store-of-value from gold, fiat, etc. has shifted to Bitcoin. In fact the real number considering all store-of-value asset classes is probably far less than 0.1% but that's an easy number to use. If 0.2% moves to some other cryptocoin next year that will still be an extremely slow process, but Bitcoin will likely be left behind at that point.

[TPTB_need_war]

This isn't a moral criticism, but a practical one, as argued in the post. Stores of value can change, but this cannot be a fast process as that contravenes the very definition of "store of value." Not unless it absolutely has to happen (facing catastrophe), as I also mentioned. Or let me make it more clear: I do not think the market will accept changing the store of value except as an absolute last resort.

Do you approach all your investments as lifetime or multi-decade HODL?

I thought investing into stores-of-value was a process of buying low and selling high?

If you bought gold in 1980 and I bought bonds or stocks, you'd be a relative pauper by now.

Changing stores-of-value is the normal mode. The abnormal mode is HODLing too long. September is the time to prepare to sell bonds (and in 2017 sell stocks).

I assume your point is bounded on stores-of-value that compete directly with Bitcoin for the same exact market as Bitcoin. In that case I agree with you that the chances of an upstart overtaking a market leader with Bitcoin's momentum are nil. And the chances of a negative wealth efffect on Bitcoin at this juncture are nil.

That is why put my sentence in red, bold that the only real chance for an altcoin to obtain escape velocity is to uptake markets that Bitcoin can't touch.

Monero's problem is there  is no real ecosystem (circulatory, network effects) use for its anonymity that doesn't also involve Bitcoin. So any network effects tend to accrue more to Bitcoin as the dominant market leader.

Edit: one very important point I have learned from this discussion is that the worst thing an altcoin can do is allow too many coins to fall into the hands of indifferent speculators, because they will surely sell to arbitrage back into Bitcoin. Your whales will need to understand how you intend to generate a long-term superior return over Bitcoin and that trading in and out is more risky.

Well, again, there is no fast process at work here. <0.1% of the store-of-value from gold, fiat, etc. has shifted to Bitcoin. In fact the real number considering all store-of-value asset classes is probably far less than 0.1% but that's an easy number to use. If 0.2% moves to some other cryptocoin next year that will still be an extremely slow process, but Bitcoin will likely be left behind at that point.

That window is quickly closing. The Circles, Paypals, are preparing to close it, at least in Bitcoin's current market as a speculation on the potential for a global ledger and money transfers without being tied to one behemoth (e.g. Paypal). Bitcoin is really a way of scaling Paypal to everyone while pretending it isn't (obfuscating that is) owned by Peter Thiel et al. Bitcoin is a reverse takeover of global banking by pretending it is open and fair. Bitcoin is the way you force national governments to accede to an international banking regulation.