Yes I'm in favor of cryptocurrency. Bitcoin drastically improves over legacy financial systems in transaction time, processing fees, fraud protection, freedom etc. Those are differences that people will notice. Bitshares makes modest improvements over Bitcoin in some areas, which people won't really notice. (Really low fees vs. even lower fees. Really fast transactions vs even faster transactions. If you can accept Bitcoin transactions within a few seconds, as other have argued correctly in this thread, what difference does it ultimately make that confirmations are 10 minutes vs 10 seconds. To the user: none.)
You ignored the price stability and centralization arguments. Also, there is still a non-trivial risk of double spend with zero confirmation payments in Bitcoin. Given any fixed period of time, the probability of double spend is lower in DPOS than in POW. Looking at the difference in risk of double spend between BitShares X and Bitcoin in just a 20 second time period is absolutely amazing. I think this will appeal to merchants, especially since it along with price stability means they can cut out middlemen like BitPay. But fine, let's say you don't think that is a big deal. Fast transactions make the decentralized exchange possible. It would be too slow to run an exchange if the block intervals were 10 minutes. The decentralized exchange makes BitAssets and price stability possible. And of course it will be incredibly useful for later DAC functionality like trading cryptostock (remember BitShares is bigger than Bitcoin).
Also, your argument that the innovations of Bitcoin over traditional financial systems being more significant than the innovations of BitShares over Bitcoin don't make a lot of sense to me. From the perspective of an outsider in the traditional financial system, both BitShares' and Bitcoin's network effect look absolutely puny. I think it's the marginal benefit in the network effect that is going to seem insignificant to the outsider rather than the marginal benefit in the technology. If even a small fraction of outside wealth pours into BitShares (rather than Bitcoin because the technology advantages of BitShares makes it far more desirable to these outsiders), then BitShares can quickly gain network effect that rivals that of Bitcoin. So, I think it makes a lot more sense to target people who are currently outside the cryptocurrency community. And we have the technology to make it palatable to them: BitAssets with yields, TITAN, an exchange, etc.
No you are wrong. Your first point says transaction fees will be lower for BTSX than for BTC. I know that. But BTC transaction fees can still fall with adoption as the price of security is spread out among more people.
The Bitcoin network currently spends approximately $500 million per year for its current level of security (based on current prices, and assuming profit margins from mining tend toward zero). And only about a $1 million per year of that is from transaction fees. This is for a market cap of approximately $5 billion. As the value of bitcoin grows, would we want more or less security protecting the network? If we want to keep the network security the same as it is today (which I think would be a bad idea if it gets really big) then you have a valid point. Eventually, as the coinbase reduces to zero, that $500 million has to come from somewhere. You need it to come from a 500x increase in total transaction fees. This shouldn't be a problem if we assume the total transaction fees accumulated grows with the transaction volume. Right now Bitcoin transaction volume is on average equal to approximately 1 tx/s. Let's say this gets to Visa/Mastercard levels (4000 tx/s). This means transaction fees could be reduced to 1/8 of their current cost (of course this analysis is not including additional costs to the servers for handling this scale, but let's consider that negligible to the cost of POW). But now do you really think it is realistic to keep the security of a potentially multiple trillion dollar network secured by only $500 million per year. If we wanted the security of Bitcoin to scale with its market cap (with the proportionality constant it has today), then at coinbase saturation and Visa/Mastercard levels of transaction volume, the Bitcoin network could only support a $40 billion market cap without needing to increase transaction fees. If it needed to get to a trillion dollar market cap with this level of security, the transaction fees would have to increase by more than an order of magnitude.
But again, maybe you think $4 billion per year of security is good enough for even a trillion dollar network. Fine, then you are correct, transaction fees don't need to increase. But so what. Why settle for mediocrity when they can get lower transaction fees with higher effective security by using DPOS. People will eventually stop being blinded by the Bitcoin delusion and realize this. I generally think people are irrational, but I don't think they are
that irrational.
Facebook is a good example. Google, one of the biggest companies in the world, made it their mission to unseat Facebook. Fail. Because of mindshare and network effects. A social network is only as useful as the number of your friends using it. Same with a currency. A currency is only as useful as the number of people you need to pay and receive payment from who use it. Bitcoin has a huge advantage.
Look. I currently own a greater percentage of total BTSX supply than total BTC supply, so I'd be happy for BTSX to win. (Not only for my financial position but because I believe it is a better system.) I just don't think the arguments put forth for why it WILL win are very convincing.
Network effect is huge with currencies, I won't deny that. But look at the network effect of the US dollar. And yet, Bitcoin has the audacity to challenge that network effect. But you are saying it is unrealistic to expect BitShares to take on Bitcoin? I don't see why not, just like Facebook beat MySpace despite the fact that at one point in time MySpace was
the place to go for a social network. And it is not impossible for a competitor to beat Facebook. Maybe it will be Google, maybe some other company, or maybe it will be a decentralized social network. Just because Facebook has over a billion users doesn't mean we will be stuck using it for the rest of eternity.
Of course, Bitcoin definitely has a huge advantage with their network effect, there is no denying that. But this space is incredibly competitive, and that coupled with the fact that nearly all Bitcoin supporters seem to be blind to the perils of POW means that a competitor like BitShares has IMHO a decent shot of growing quickly, sneaking up behind it, and eventually dethroning it. But of course I am biased.
My understanding of your position is that you believe in the technology of BitShares but are constantly questioning yourself regarding whether BTSX could succeed over BTC. I think a little bit of that doubt is a good thing. This is after all an incredibly risky investment and could blow up in all of our faces. So, as usual, it is important to not put in more than you can afford to lose. And maybe it makes sense to hedge between BTSX and BTC on the off chance that BTC users will all suddenly see the light and clone the BitShares toolkit but allocate to BTC holders. But I personally don't envision things developing that way.