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Author Topic: market effect of a catastrophic design flaw  (Read 5905 times)
Red
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August 24, 2010, 04:18:15 PM
 #21

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Unless you buy into the idea that there is a build in demand for bitcoins just because they exist as a limited commodity. In that case, I've got some things I think you'll be interested in...  
I definitely would be interested, as long as there is a use value for which bitcoin data is superior to any other string of seemingly random 1's and 0's Wink. Edit: Actually, I'm interested either way.  Let's hear it.
Actually that was part joke and part poke at people who think that because bitcoin is designed to be deflationary in nature that makes it the perfect commodity for saving in.

I think bitcoin has already sowed the seeds of it's own destruction by using a fixed commodity/currency model. Blame John Wanamaker. Americans simply don't haggle anymore so we find rapidly varying prices distasteful. Also naive proponents of fixed currency tend to sound like they are promoting a Ponzi scheme.  They have trouble explaining how bitcoin is better than PayPal without analogies that make user sound like neer-do-wells. None of that helps  bitcoin build creditability.

That being said, bitcoin is the best attempt yet in my mind. None of these complaints are in anyway technical limitations so there is still huge near term potential even "as is".

So, I do have some ideas for you.

You've hit on the need for a bitcoin futures market. Been thinking of coding one of those up myself. It is a much more profitable way to speculate in the currency. We can talk about why it has exceptional potential for the bitcoin community.

I have another idea as well but I'll start a new thread.
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GoldRush
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August 24, 2010, 05:29:30 PM
 #22

You've hit on the need for a bitcoin futures market. Been thinking of coding one of those up myself. It is a much more profitable way to speculate in the currency. We can talk about why it has exceptional potential for the bitcoin community.

That's exactly correct.  People are far more likely to buy and use bitcions if there are markets that make it clear what a bitcoin is worth to others.
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August 25, 2010, 12:02:43 AM
 #23

You've hit on the need for a bitcoin futures market. Been thinking of coding one of those up myself. It is a much more profitable way to speculate in the currency. We can talk about why it has exceptional potential for the bitcoin community.

That's exactly correct.  People are far more likely to buy and use bitcions if there are markets that make it clear what a bitcoin is worth to others.


I'm definitely interested in a bitcoin futures market.  Perhaps we should open another thread to discuss how this could be done?
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August 25, 2010, 12:50:17 AM
 #24

I'm definitely interested in a bitcoin futures market.  Perhaps we should open another thread to discuss how this could be done?

+1

It will hinge on being able to execute contracts.  If people make promises they don't keep...


Jeff Garzik, bitcoin core dev team and BitPay engineer; opinions are my own, not my employer.
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November 10, 2010, 09:13:10 AM
 #25

Aside from Satoshi sinisterly building in a back door for his future King Croesus-like wealth, the primary existing design flaw is what to do after 21 million is reached.  Even at a generous 1:1 BTC:USD exchange rate, a small-time chump-change millionaire could buy up the world's supply of bitcoin and dictate prices/transactions.

Now, the only thing that would make this scenario unrealistic is for bitcoin value to go to 1000:1 thereby reflecting a $210 billion supply.  If bitcoin is on that track then maybe the speculators have the right idea. You don't get there right away, but the current design flaw is that successful growth of the bitcoin economy has unavoidable built-in deflation. A solution to the post-21 million bitcoin world would address those concerns now.  Weeee...........this speculating stuff is easy.

Founding Director, Bitcoin Foundation
I also cover the bitcoin economy for Forbes, American Banker, PaymentsSource, and CoinDesk.
Timo Y
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November 10, 2010, 09:29:48 AM
 #26

What happens to the market for bitcoins when/if a vastly superior design is found? What is the probability of an unquestionably superior design being found?

If Bitcoin becomes mainstream to the extent that it takes advantage of the network effect, it would take more than an unquestionably superior design to break it.

There is a point at which people will prefer to use Bitcoin simply because most people are already using Bitcoin.

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November 10, 2010, 04:32:52 PM
 #27

Aside from Satoshi sinisterly building in a back door for his future King Croesus-like wealth, the primary existing design flaw is what to do after 21 million is reached.  Even at a generous 1:1 BTC:USD exchange rate, a small-time chump-change millionaire could buy up the world's supply of bitcoin and dictate prices/transactions.

Now, the only thing that would make this scenario unrealistic is for bitcoin value to go to 1000:1 thereby reflecting a $210 billion supply.  If bitcoin is on that track then maybe the speculators have the right idea. You don't get there right away, but the current design flaw is that successful growth of the bitcoin economy has unavoidable built-in deflation. A solution to the post-21 million bitcoin world would address those concerns now.  Weeee...........this speculating stuff is easy.

$1000/BTC is the best "design flaw" I can even imagine.

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