Bitcoin price increases are just getting started

[marcus_of_augustus]

No one (that I know of) targets price stability in regards to individual items.  It is price stability in regards to a broad basket of goods that is a reasonable target.

I think it is a statistical fact that if you allow individual prices to fluctuate naturally (you seem to be okay with this) then it is unlikely that the general price "target" (whatever that is) will also fluctuate, just less so. There is no proof that "general price stability" is achievable or desirable either. The demand for money and goods fluctuates, get used to it.

Just let it be, the control freaks can't leave well alone. The free market works. Find something else to do maybe ....

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[Demandrel]

To the extent general price stability cannot be achieved when there are no severe shocks to a system then there is a currency problem.  If the relative price of goods to one another is consistent, but the price in terms of the currency is not, then there is a currency problem. 

[benjamindees]

To the extent general price stability cannot be achieved when there are no severe shocks to a system then there is a currency problem.  If the relative price of goods to one another is consistent, but the price in terms of the currency is not, then there is a currency problem. 

Price stability is not a valid goal.  Prices should go down as an economy grows and goods/services become more abundant.  If they didn't, and prices were artificially kept constant, then population would instead grow to match supply until some supply falters and there is no longer enough room on the petri dish for everyone.  And I think you know what happens then.

[Timo Y]

Why does that mean Bitcoin will not survive?  Because there is a strong need for what Bitcoin provides, which is anonymity, near-costless transfers, the ability to transcend borders, freedom from forfeiture, etc.  With the cost of entering the Bitcoin economy high because of the limited money supply, [...]

Your post doesn't make any sense.

How exactly is the cost of entering the Bitcoin economy determined by the USD/BTC exchange rate? Eventually, merchants adjust prices to reflect the exchange rate, so the cost of buying a Big Mac is more or less the same, whether you pay for it in BTC, USD, EUR, or gold doesn't make any difference.  


The costs of buying BTC are

a) Conversion costs - these are completely independent of exchange rate

b) Risks of your BTC losing value before you spend them - surely these are higher in an inflationary p2p currency??

[...]
people will figure out how to take the idea and create an alternative that does not have these issues.  If that occurs, then people will tend to use this new system rather than Bitcoins, and at some point the market penetration of Bitcoins will be such that their value will decline, and you will see inflation, rather than deflation, in Bitcoins until they are worthless.  

How exactly would an inflationary p2p currency outcompete Bitcoin?  Any sane person who has the choice to put some of their cash savings into InflaCoin or Bitcoin, will always chose Bitcoin over InflaCoin, provided the two are equal in all other respects.  

[FreeMoney]

It Bitcoin accepts that it must be limited in economic size in order to achieve price stability (which is fundamentally true), then Bitcoin will not survive.

Hopefully everyone accepts the fundamental basis for why the Bitcoin economy would have to remain limited in size in order to have broad price stability.  For this once again we go back to a limited money supply only allowing for price stability to the extent the quantity of goods traded remains the same.  Without growth in the money supply, growth in the economy will lead to deflation.  Deflation discourages new entrants into the market.  So with the money supply fixed, price stability can only be achieved with a fixed GDP.

Why does that mean Bitcoin will not survive?  Because there is a strong need for what Bitcoin provides, which is anonymity, near-costless transfers, the ability to transcend borders, freedom from forfeiture, etc.  With the cost of entering the Bitcoin economy high because of the limited money supply, people will figure out how to take the idea and create an alternative that does not have these issues.  If that occurs, then people will tend to use this new system rather than Bitcoins, and at some point the market penetration of Bitcoins will be such that their value will decline, and you will see inflation, rather than deflation, in Bitcoins until they are worthless. 

Either the Bitcoin money supply needs to be able to grow with the Bitcoin economy, such that there can be price stability with growing GDP, or Bitcoin will be supplanted by a similar technology that deals with this issue and as a result Bitcoins will become worthless. 

This makes no sense. So people leave Bitcoin, won't this make bitcoins worth less? Tada, now it isn't deflationary and it works again.

Price stability is a crap goal anyway. I want more for less just like you. Companies thrive when they do more with less. You can make more if you can build more with less. You can get through hard times if you can do more with less. It is good to get more, make more, do more, for less time, effort, resources, money.

[Demandrel]

Your post doesn't make any sense.

How exactly is the cost of entering the Bitcoin economy determined by the USD/BTC exchange rate? Eventually, merchants adjust prices to reflect the exchange rate, so the cost of buying a Big Mac is more or less the same, whether you pay for it in BTC, USD, EUR, or gold doesn't make any difference.  


The costs of buying BTC are

a) Conversion costs - these are completely independent of exchange rate

b) Risks of your BTC losing value before you spend them - surely these are higher in an inflationary p2p currency??


How exactly would an inflationary p2p currency outcompete Bitcoin?  Any sane person who has the choice to put some of their cash savings into InflaCoin or Bitcoin, will always chose Bitcoin over InflaCoin, provided the two are equal in all other respects.  

On how the cost of entering the Bitcoin economy is determined by the exchange rate

In order to answer this, let's think instead of what it would cost now to adopt the gold standard.  Adopting the gold standard would have a cost: There would be a requirement to back a certain amount of the money supply with gold.  This would mean that the price of gold, of course, would go up, because government would have to buy gold in order to back the currency.  There are about 5.3Bn ounces of mined gold (http://en.wikipedia.org/wiki/Gold).  US M2 is currently about USD9Tn (http://en.wikipedia.org/wiki/File:Components_of_US_Money_supply.svg).

Let's say the clearing price to cover the US money supply is going to be $6k per ounce (just random numbers here).  So if the US did not have any gold to begin with, they need to buy 1.5Bn ounces of gold.  The economic output of the economy stays the same.  Everything else stays the same, including the total assets and output of the economy, but $9Trn went to purchase gold (and the government taxed the people to get there).  A massive wealth transfer just occurred from everyone else in the economy to those who originally owned that gold.  Current US assets are ~$188Trn (http://rutledgecapital.com/2009/05/24/total-assets-of-the-us-economy-188-trillion-134xgdp/).  At a USD price of $1,500, those 1.5Bn ounces of gold represented 1.2% of economic assets.  Suddenly, instead of having 1.2% of economic assets, the original holders of that gold have 4.8% of economic assets in USD terms.  Total economic output remained the same, and yet there was a massive wealth transfer from one group to another because of the return to the gold standard. 

Okay, so what was the point of that lesson?  The point of that lesson is that one cost of adopting a currency (in the case above adopting a gold standard) is the wealth transfer that goes to the existing holders upon adoption.  Why?  Because total productive assets in the economy stayed the same and their share of those assets went up as a result of adoption. 

Now, if I'm forced to adopt the gold standard because my country goes out and purchases all that gold on my behalf, transferring all that wealth to other citizens, I cannot do much about that.  But if you ASKED me to voluntarily give up a few percent of my assets to other citizens merely because they held onto some shiny metal that wasn't going to produce anything and I did not actually want, there is no way I would do so. 

We can think about Bitcoins in the same way.  The cost of adoption for everyone is the amount of wealth that is transferred upon adoption, in terms of real productive assets, to those who participated in Bitcoin early.  If I am not going to be coerced into paying that, then I must do so voluntarily.  So I must believe that the value of doing so exceeds this cost.  There is supposedly someone who has 340k Bitcoins or so.  And yet the actual output of the economy stays the same.  His spending power must have come from somewhere (someone). 

So the costs of buying BTC are:

a.  Conversion costs;

b.  Risk of losing your purchasing power; and

c.  The wealth transfer embedded in the conversion to another currency.

Those must be weighed against the benefits, which I noted before.  The issue is, there is a way to get those benefits WITHOUT using BTC itself, because the only barrier to entry is the first mover advantage (acceptance of the currency).  So if the third cost becomes too high, someone can just abandon the system and create a competing system with similar properties.  And if that system provides all the same benefits WITHOUT the massive wealth transfer to early adopters, then people will use that instead. 

How would an inflationary currency outcompete a deflationary one?

To a certain extent, you answered the question yourself. 

First, if you want to HOLD cash, you would rather HOLD it in a deflationary currency.  But what if you want to spend it?  I don't want to SPEND my deflationary cash... I can buy more goods in the future if I just hold onto that cash now!  If everyone has the incentive to hoard, that leads to deflation and a decline in spending.  This limits economic growth; we know this from the real world.  Too much hoarding; not enough purchasing.  What will it do to Bitcoins?  Well, the real value of Bitcoins is not in the coin itself (it's just data), but rather in the fact that you can use them to buy real goods and services.  And if you don't want to use them because you would rather hoard them, then there isn't much value to them, is there?  Seems like a conundrum, but then you add competition to the mix.  Someone else comes out and offers the same concept of a digital currency that is untraceable, that cannot be seized, that crosses borders, but there is no deflation!  People spend their coins freely.  They don't have to worry about losing out because they are not long the currency.  And so everyone who wants to use an untraceable, seizure-proof, transnational currency switches to that one.  And no one wants your Bitcoins anymore.  And suddenly Bitcoin inflation is infinite, because there is no market for them.

Second, this new currency avoids the massive wealth transfer to early adopters (let's just say they have a solution for it; I don't know what the solution is).  So there is no cost of adoption of the currency?  And people will spend it freely?  And I don't have to worry about speculating when holding it because prices are relatively stable?  Count me in!

Third, it's tough to make loans in a deflationary currency, and as a result the money supply cannot grow through the fractional reserve process (it can theoretically, but I am saying in practice it will not).  Why is it tough to make loans?  Because you will only make loans that are risky enough to still require someone to pay you for lending.  If the currency is appreciating relative to goods (there is deflation) of 20% per year, then someone has to be a risk of greater than 20% in order for me to charge them interest.  Otherwise I'd rather just get my currency appreciation (deflation) earnings. 

Price stability is not a valid goal.  Prices should go down as an economy grows and goods/services become more abundant.  If they didn't, and prices were artificially kept constant, then population would instead grow to match supply until some supply falters and there is no longer enough room on the petri dish for everyone.  And I think you know what happens then.

Price stability, excluding changes in productivity, is a valid goal.  I don't think that price stability affects population growth or total world output.  Price stability, when excluding changes in productivity, is a monetary policy and currency issue. 

[MoonShadow]

@Demandral

I reccommend that you do not put anything in to Bitcoin, and take the source code and try this.  If you are correct, then you could do very well for yourself.  If you are wrong, the rest of us will learn from your example.

[Timo Y]

Demandrel:

Yes, a wealth transfer occurs in Bitcoin, but with time this wealth transfer declines sharply, percetage wise, and tends to zero.    I don't understand why you say that there is an increasing wealth transfer. Perhaps in absolute numbers, but it's the per capita wealth transfer that matters.  Once Bitcoin has matured, deflation is likely to be only a few % a year, reflecting aggregate economic growth.  Is that small amount really enough to put off new users? Also, anyone who holds on to a fixed supply currency for long enough will eventually experience a reversal of wealth transfer, as long as the world economy keeps growing for ever, as it is likely to do, since there are no limits to productivity gains.  

The way I understand it, under Bitcoin there will be a few extremely wealthy early adopters.  Some of these will stop contributing productively to the economy, but still compete for products with all their wealth. This will drive up prices higher than they would have been under InflaCoin*.   But even these super rich will eventually run out of money if they just spend and never produce. The wealth transfer is not a permanent problem of Bitcoin, only a bootstrapping problem.  I'm not even sure if the wealth transfer is detrimental. Maybe one of those super rich early adopters will invest in some awesome new technology that will make all of us 10 times wealthier, who knows?  You are making the assumption that wealth is a static quantity.

Anyhow, under free market competition, it's not the always macroeconomically most optimal system that wins. It's the system that is most optimal for each individual (Bitcoin), not for the collective as a whole (InflaCoin).  
Bitcoin wins over InflaCoin, despite the wealth transfer, because a) merchants prefer to get paid in Bitcoin, and b) customers prefer to buy Bitcoin. Even if they intend to spend them immediately, InflaCoins offer no advantages over bitcoins. In the real world, you always need to store cash for some amount of time before you can spend it. InflaCoins would offer only disadvantages in this case.

Also, it's not clear to me at all how excessive savings would depress the economy. Savings allow people to make sounder investments, which are likely to offer higher returns.  A practical example I can think of is education:  In an economy where people are encouraged to save, more parents will be able to pay for their children's university education, but they may not have the newest gadgets at home. This will eventually lead to a more productive workforce that can afford more gadgets AND an education. And so on...
  

*InflaCoin is what I am calling an inflationary version of Bitcoin.

[Demandrel]

Creighto:

I have no need for the benefits provided by Bitcoin at the moment, and so regardless of the size of the "first adopter" wealth, I have no reason to take this kind of action myself.  My argument is essentially that I like the benefits offered by Bitcoin, but I think there are economic flaws that will limit adoption.  I would like those economic flaws to be resolved at some point because I think it could change the world for the better. 

Forever-D: 

Regarding the potential for a decline in the impact of the wealth transfer.  The higher the exchange rate USD/BTC, the greater the wealth transfer.  I mean aggregate transfer, not flow, although flow would also increase so long as adoption was growing.  Could you show me mathematically how this declines sharply over time and trends to zero?  I am not saying that you are necessarily wrong, but that does not make sense to me.  As per the gold example, if total assets in the US doubled, and M2 doubled as well, then you would need more gold, or higher-priced gold, in order to back the currency.  With double the M2 and the same finite supply of gold, I would expect the wealth transfer to actually be MORE severe, rather than less severe, because gold would have represented a smaller portion of total original assets.   

Is the small amount of deflation enough to put off new users?. Given the value accrues to people holding the existing currency, and the currency can be avoided, and the benefits of the currency can be replicated, I think this, and the wealth transfer, will be a sufficient put-off.  This could be limited if the effective money supply could grow because of fractional reserve lending, but with deflation this seems unlikely to me. 

On the wealth of early adopters.  The wealth transfer is a permanent problem under Bitcoin, especially if deflation continues.  The total amount of loss to deflation, and therefore everyone who adopted before the next person, continues to grow. 

Maybe one of those super rich early adopters will invest in some awesome new technology?  Sure, that's possible.  But the wealth they have was not CREATED by their investment in Bitcoin, but was rather just a wealth transfer.  The productive output of the real economy stayed the same.  So you are merely shifting wealth between people, not creating wealth, unless you argue that the service itself, being extremely valuable, is what they are being paid for.  But I am arguing against that because it is replicable.  I am not making the assumption that wealth is static, but I am assuming that Bitcoin itself is not affecting wealth.

On what people will prefer.  If InflaCoin worked as I suggested, whereby the total amount grew with the size of the economy, then people would prefer InflaCoin to Bitcoin.  Why?  People prefer to spend and earn in a relatively stable currency.  Customers would not prefer to buy in Bitcoins, because they would not want to make purchases; they would rather hold onto their coins.  People also will prefer to save in a stable currency.  Earnings from deflation must come at the expense of someone (as a saver), as must earnings from inflation (as a borrower).  Saving in a stable currency where you earn return for actually lending your savings to people, rather than just holding onto it yourself, is preferable.  I do not want to have to speculate on changes in currency value when I just want to buy and sell things.  Yes, I have to speculate on the change in relative value between goods or services (such as the value of my labour versus the value of a cheeseburger), but I do not want to have to speculate on currency changes on top of that. 

Generally I am not a huge fan of the paradox of thrift concept, because most of the time an increase in savings by one group represents an increase in loanable funds to another group.  So long as the market is efficient and there is loan demand, this should not cause a problem.  Where no one wants to borrow because there is a significant minimum rate because of deflation, however, I think the paradox of thrift has greater validity.  Where people are just going to hold the "cash" themselves, this becomes an issue. 

[tubro]

1. I still can't see how newcomers pay any price for getting into the new BTC economy. This is markedly different from adopting a gold standard, since nobody is forcing anybody to back anything by anything or to buy anything. It is true that the early adopters gain, but who loses? Maybe the people who hold $, EUR, etc., because their value should (slightly) decrease. But this effect should be minimal and would occur just the same with InflaCoin.

2. One problem that I can see with the huge rally in prices that so many of us are expecting: At current BTC prices, about $50,000 a day are given away in mined coins. Were 1 BTC to cost $7000, this would be $50,000,000 every day. Mining is profitable until that much money is burnt every day in electricity and other mining costs.

2.a) It will take a while until that much money can be burnt - especially since unfortunately it does not pay for normal users to just mine on their CPU. So I think it will take a while for the BTC/$ price to rise.

2.b) Do we really need to burn $50,000,000 every day on electricity? Is there a plausible scenario where this "protection cost" is spent in something else, like buying special hashing devices for every user (or, preferably, not at all)? IMHO these are the real social costs of bitcoin. Has anyone tried calculating (bounding) comparable social costs for other currencies (banks, military ...) per unit? I have no idea if this is a bargain (which would be a great argument for bitcoin) or a terrible waste.

[SgtSpike]

tubro, good point about the protection cost.

Bitcoins really have no initial "printing" cost, as traditional currency does.  USD costs approximately $0.096/bill, regardless of denomination.  So, taking that into consideration, let's look at bitcoins.

If we WERE using $50,000/day in electricity (which isn't possible at the moment, but I agree, could be a possibility down the road if BTC value and mining difficulty were to even out), then it would be costing approximately $0.001 per $1 USD worth of bitcoin to protect the currency.  Or, put another way, it would cost 0.001 BTC per 1 BTC to protect the currency.

At that rate, it would only take 96 days to "catch up" to the cost of printing a single dollar.

Again, I don't believe that our collective electrical costs are anywhere close to $50,000/day... I would guess around $10,000, based on a slightly higher average electrical rate than my own.  So say it is $10,000.  That still means just 480 days to catch up to the cost of printing a $1 bill instead.  And I am certain that most bills stay in circulation much longer than a year or two.

So I would agree, it does seem like a terrible waste compared to printing USD at least.  I do not see any practical fix to this though - hashing and securing the network takes power, and there's just no way around that.

[kiba]

\
So I would agree, it does seem like a terrible waste compared to printing USD at least.  I do not see any practical fix to this though - hashing and securing the network takes power, and there's just no way around that.

They need people to protect the vault, electricity to run the bank wiring system, somebody to transport the money, somebody to secure the money from counterfeiting, etc.

Bitcoin mining follows the most energy efficient or at least cost effective route to mining.

[markm]

Some people seem to assume that having multiple "competing" (why not "co-operating") blockchain-based currencies would be a bad thing.

I do not really understand why it would be bad.

Aren't a lot of these people the very same "types" of people who are pro-free-market, even pro-competition? In almost any other commodity do not these same people argue that competition is good? If free market competition is good for {all|most} other commodities, why not for Bitcoin / cryptocurrencies / blockchain-based currencies???

Even though gold has a long history of use as currency, weren't silver and copper and maybe even bronze used a lot too?

Why wouldn't it make sense, as Bitcoins grow in value, to introduce new blockchains that we might even *hope* will trade at least initially at lower value, much as one might use a bunch of copper coins as a handy way to "divide" the value of gold coins?

-MarkM-

[Timo Y]

Some people seem to assume that having multiple "competing" (why not "co-operating") blockchain-based currencies would be a bad thing.

I don't think it's a bad thing at all.  We already have a competing currency: Namecoin. And I bet it won't be long until the anti-deflation crowd starts their own variable supply block chain.

What would be a bad thing though is a splitting fo the existing community into factions. One big chain is harder to attack by a Bitcoin antagonist than many small ones.

[markm]

So where are the attackers going to spend their resources: attacking the big original chain or running around chasing an endless proliferation of decoy chains trying to find out which if any it actually anything more than a decoy?

A lot of small ones could be small enough that loss of their chain would not really be a problem since they all know what all the transactions and balances were anyway so can simply pour the same balances into yet another new chain...

The imagined "attackers" would probably do beter to start their own rival chain than to attack some other rival chain. So maybe it'd mostly come down to do we spend our resources trying to attack the original bitcoin or spend them on starting up our own rival. Why bother attacking rivals if you are powerful enough to do that surely you are powerful enough to rival them with one of your own?

I suppose one could put some of one's resources into one's own chain and some into attacking various rivals at random or something. But wouldn't having lots of them make for some lovely trading/arbitrage/exchange opportunities at least a few people who have piles of real bitcoins might get into, maybe some of them also having lots of processor power on hand they could throw into any "penny chain" (analogy to "penny stock") they are currently playing in?

-MarkM-

[marcus_of_augustus]

1. I still can't see how newcomers pay any price for getting into the new BTC economy. This is markedly different from adopting a gold standard, since nobody is forcing anybody to back anything by anything or to buy anything. It is true that the early adopters gain, but who loses? Maybe the people who hold $, EUR, etc., because their value should (slightly) decrease. But this effect should be minimal and would occur just the same with InflaCoin.

2. One problem that I can see with the huge rally in prices that so many of us are expecting: At current BTC prices, about $50,000 a day are given away in mined coins. Were 1 BTC to cost $7000, this would be $50,000,000 every day. Mining is profitable until that much money is burnt every day in electricity and other mining costs.

2.a) It will take a while until that much money can be burnt - especially since unfortunately it does not pay for normal users to just mine on their CPU. So I think it will take a while for the BTC/$ price to rise.

2.b) Do we really need to burn $50,000,000 every day on electricity? Is there a plausible scenario where this "protection cost" is spent in something else, like buying special hashing devices for every user (or, preferably, not at all)? IMHO these are the real social costs of bitcoin. Has anyone tried calculating (bounding) comparable social costs for other currencies (banks, military ...) per unit? I have no idea if this is a bargain (which would be a great argument for bitcoin) or a terrible waste.

It is a bargain .... we have no idea how much waste is going into keeping the current corpse of a monetary system barely breathing. It is on the order of U$D trillions.

[FreeMoney]

1. I still can't see how newcomers pay any price for getting into the new BTC economy. This is markedly different from adopting a gold standard, since nobody is forcing anybody to back anything by anything or to buy anything. It is true that the early adopters gain, but who loses? Maybe the people who hold $, EUR, etc., because their value should (slightly) decrease. But this effect should be minimal and would occur just the same with InflaCoin.

2. One problem that I can see with the huge rally in prices that so many of us are expecting: At current BTC prices, about $50,000 a day are given away in mined coins. Were 1 BTC to cost $7000, this would be $50,000,000 every day. Mining is profitable until that much money is burnt every day in electricity and other mining costs.

2.a) It will take a while until that much money can be burnt - especially since unfortunately it does not pay for normal users to just mine on their CPU. So I think it will take a while for the BTC/$ price to rise.

2.b) Do we really need to burn $50,000,000 every day on electricity? Is there a plausible scenario where this "protection cost" is spent in something else, like buying special hashing devices for every user (or, preferably, not at all)? IMHO these are the real social costs of bitcoin. Has anyone tried calculating (bounding) comparable social costs for other currencies (banks, military ...) per unit? I have no idea if this is a bargain (which would be a great argument for bitcoin) or a terrible waste.

It is a bargain .... we have no idea how much waste is going into keeping the current corpse of a monetary system barely breathing. It is on the order of U$D trillions.

Seriously, someone solves a trillion dollar problem for a cost 6 orders of magnitude smaller at absolute most and there are still haters. Sheesh. It's like if I invented a teleporter that ran on one 9volt battery. EPA would probably shut me down. Much better to use 10,000,000 shipping containers I'm sure.

[enmaku]

I know the thread has shifted topic slightly but I just thought I'd mention that I've emailed InTrade and suggested that they accept BTC as a currency option, made some good sound arguments about risk vs profitability and I suggest that anyone else who was previously decrying the lack of a BTC prediction market do the same. Their general-purpose email address is help@intrade.com but if anyone knows of a more appropriate one, please post it. 

[dacoinminster]

I know the thread has shifted topic slightly but I just thought I'd mention that I've emailed InTrade and suggested that they accept BTC as a currency option, made some good sound arguments about risk vs profitability and I suggest that anyone else who was previously decrying the lack of a BTC prediction market do the same. Their general-purpose email address is help@intrade.com but if anyone knows of a more appropriate one, please post it. 

Hmmm. I should probably mention the bitcoin futures experiment I am running: http://forum.bitcoin.org/index.php?topic=10008.0

[FreeMoney]

Some people seem to assume that having multiple "competing" (why not "co-operating") blockchain-based currencies would be a bad thing.

I do not really understand why it would be bad.

Aren't a lot of these people the very same "types" of people who are pro-free-market, even pro-competition? In almost any other commodity do not these same people argue that competition is good? If free market competition is good for {all|most} other commodities, why not for Bitcoin / cryptocurrencies / blockchain-based currencies???

Even though gold has a long history of use as currency, weren't silver and copper and maybe even bronze used a lot too?

Why wouldn't it make sense, as Bitcoins grow in value, to introduce new blockchains that we might even *hope* will trade at least initially at lower value, much as one might use a bunch of copper coins as a handy way to "divide" the value of gold coins?

-MarkM-

It isn't 'bad'. It's just that the value of bitcoin is it's difficulty and it's acceptance. A new incarnation won't have those things. Anyone coming in and deciding between Bitcoin and Bitcoin2 rationally chooses Bitcoin. Now if something totally different with new/different properties is created then maybe it has a chance.