The Startup Curve

[guruvan]

Forget Gartner's Hype Cycle ... Bitcoin is following Paul Graham's Startup Curve!

Huh. Nice post! I just said most of this in a thread today, really just from my own experience - the startups i've been in and the ones I've watched all do this, and bitcoin certainly is now. Nice to see my observations about startups are on the mark according to someone with more experience than me. I mostly made the case based on the current level of investment (mining, forums, banking, lending, exchanges, etc) vs. the current market valuation. In most case when I've seen a startup get to this level, with this much investment, no one is willing to lose their investment, and so they hunt down and find an influx of additional cash. Most startup investors wouldn't settle for less than a 20:1 return, so I wouldn't be surprised to see the basic chart play out, and then more on to what ElectricMucus said above.

[disclaimer201]

That creation of an artificial lifeform video: perhaps it really is Skynet? ;-)

Would love to see an updated version from October to April!

[Crypt_Current]

So I conclude a direct relation between adoption and difficulty.

Most mining is done in seeking profit.  Right now there is profit (though at a fairly small degree) for mining using off-the-shelf hardware (GPUs).  If the exchange rate (price) goes up, the amount of mining will go up as there is greater profit available.   If the price drops and mining turns unprofitable, eventually the amount of mining will drop.

This does not work the other way around.  7,200 BTC (approx) are produced every day, regardless of how much mining occurs.   So the miners are all competing for those same 7,200 BTC.  More mining does not increase the supply and thus push down the price.  And more mining (in aggregate) does not make bitcoin "more secure", at least not at these levels.

I'm not saying miners aren't an important part of Bitcoin's success -- but I am saying that bitcoin mining only needs to occur at a level sufficient to protect the value of the payment network.   And to paraphrase a term someone else used once, bitcoin is currently protected (in terms of difficulty in attaining 51% control) as if it were Fort Knox with a sniper every ten feet, except inside there are only a few bags of pennies, nickels and dimes.

As far as bitcoin adoption reflecting the startup curve ... if the exchange rate reflects the amount of faith in bitcoin, and that faith is correlated to adoption of the technology, then this can show the trend of bitcoin's adoption chart:




i.e., not that much different from Paul Graham's chart!

I'm seeing a lot of "promised land"-ish posts popping up on this sub-forum... implies we need acquisition of more liquidity?  And THEN... mhmm. 

[Crypt_Current]

It is something entirely different.  

We all know this.  We can feel it inside.

What words will help to explain what this is?

Actually, Linux had a very similar development model, and it was the first truly novel open-source ecosystem (not just project).  I remember clearly when professional service companies started springing up to support Linux in the enterprise, offering 24/7 phone support and next-day on-site support; and these companies were being profitable and expanding. It was at that point that I knew Linux was going to fly.  So far, I see some consultants around Bitcoin forming, but it's still too new to support many professional consultants, nor is there any need for 24/7 support when there are almost no shopping carts that use Bitcoin.

And instead of bitcoin exchanges, Linux had different programming languages and support groups/magazines, like Perl, Perl Mongers (regional in-person groups), and the Perl Journal, respectively.  These were tangentially related to Linux and dependent upon it, very much like exchanges and Bitcoin.  I've been to an in-person Bitcoin meetup with 5 people, which is similar to the starting days of Perl.  And I hear there's a new Bitcoin magazine...

One thing that I'm happy to observe is that Bitcoin has avoided forking so far.  BIP16/17 was the first real fork test I've observed, and it appears to have been settled without someone taking their ball and going home (or to a different playing field).

Awesome analogy.  This is one of my favorite posts of yours that I've read.  Totally agree with your forking observation.  Our beloved Bitcoin dev team is FUCKING dedicated and seemingly determined to keep the project as close to the original vision as possible while implementing changes that are necessary for the network to be more robust in general, and in particular give Bitcoin more value by allowing for multisig, which (as far as I can tell) will enable Bitcoin to be used for future ground-breaking, world-changing concepts such as smart property.