Author Topic: The unfortunate future of Bitcoin.  (Read 5657 times)

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Offline Rune

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I understand why PoS is better than PoW for a "company", but is PoW better than PoS for a currency, despite the higher waste? Maybe it gives more robustness around supply, and locks out competitors more easily with the network effect.
If "money" is a good in a free market and not enforced on people by a government the distinction between currency and company vanishes. All money then behaves like a company or like the products of company.

And next up are the latest news from the gold shareholder meeting! They've decided to start attack ads against silver.

But I agree with you, and agree that even now bitcoin is basically a company which only exists to keep track of its own shares.

Offline santaclause102

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I understand why PoS is better than PoW for a "company", but is PoW better than PoS for a currency, despite the higher waste? Maybe it gives more robustness around supply, and locks out competitors more easily with the network effect.
If "money" is a good in a free market and not enforced on people by a government the distinction between currency and company vanishes. All money then behaves like a company or like the products of company.
« Last Edit: November 30, 2014, 12:34:01 pm by delulo »

Offline starspirit

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I understand why PoS is better than PoW for a "company", but is PoW better than PoS for a currency, despite the higher waste? Maybe it gives more robustness around supply, and locks out competitors more easily with the network effect.

Offline donkeypong

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I think bitcoin will eventually end up becoming Gold v2.0.  It will be the historical store of value crypto, with value given to it because of its history and the mythology surrounding its creation.  It will eventually be worth a lot more than it is now, but not all the way to the epic amounts that bitcoin believers imagine it will be.

The altcoin or altcoins with the best technology will end up becoming the major currencie(s).  As of right now this picture isn't clear yet.  Ripple? Bitshares? Ethereum?  Coins that dont exist yet?

If even one PoS coin succeeds, then how can it be true that Bitcoin would become the new gold? It depends on a constant influx of new money just to hold the same position.

Offline luckybit

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What advantage does a centralized Bitcoin have over Paypal?
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Offline Ander

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I think bitcoin will eventually end up becoming Gold v2.0.  It will be the historical store of value crypto, with value given to it because of its history and the mythology surrounding its creation.  It will eventually be worth a lot more than it is now, but not all the way to the epic amounts that bitcoin believers imagine it will be.

The altcoin or altcoins with the best technology will end up becoming the major currencie(s).  As of right now this picture isn't clear yet.  Ripple? Bitshares? Ethereum?  Coins that dont exist yet?


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Offline toknormal

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I think BitShares will pass it in value thanks to BitAssets, it won't be the crypto reserve currency though as BitShares is a crypto-equity. So I think there is a market for a crypto-currency Bitcoin replacement too.

I'm quite fascinated to see how the BitAssets thing goes.

It kind of blew my mind when I first discovered it to think of the vast potential. In particular, the capacity that BitAssests have for capitalising BTS indirectly. At the same time, I've got this cynical, kind of "too good to be true" notion bubbling in the back of my mind, so I think I have my feet on the ground about it.

My point about bitcoin isn't that nothing else could surpass it in marketcap, but rather that all alts wlil continue to be priced in BTC which gives it enormous status. For example, oil is a huge market that dwarfs the marketcap of the US dollar, but the dollar is still *the* reserve currency (well, in theory - rapidly diminishing).

I don't know if you stumbled across my other thread where I worked through a notional real world macro-economic application of the BitUSD concept....

https://bitsharestalk.org/index.php?topic=11784.0

EDIT: oops ! I just realised we're already corresponding over on that thread !  ;D
« Last Edit: November 29, 2014, 08:30:26 pm by toknormal »

Offline Rune

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Quote

Unfortunately, markets are fickle things. They don't always do what you expect. If the market decides that it has confidence in bitcoin and not much else then retailers will just have to swallow that, regardless of what "should" be the ideal solution.

I think merchants have clearly shown that they will not swallow bitcoins volatility no matter how much they save on fees, since they are only using bitpay and dumping 100%.

Quote
Thats what makes this whole thing quite exciting IMO. We're watching evolution play out in realtime at a 1000x accelerated rate right in front of our eyes.

What's most exciting about it all is observing the ultimate fate of fiat currencies. It's kind of eerily coincidental that cryptos are evolving into an industrial strength worldwide financial network just at the time when central banks are busy pouring acid into the foundations of the fiat world.

The timing is uncanny.

This is one of the things that always mystified me about Satoshi. It's amazing that he happened to appear right as the old system really started to show that it has reached its limits. If a human hadn't invented the blockchain before a total meltdown, then who knows what would have happened to us. I don't think we're in risk of a total meltdown in the near term though, but we will probably see another "crisis" when it becomes clear that the bankers are behaving just as dumb as before.

Offline Empirical1.1

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What about using bitUSD/bitGLD as a reserve currency? No price fluctuation or price manipulation, pegged to the market value of their "real world" equivalent, no fiat involved, and on top of that the yield will likely cover for inflation (depending on adoption and volume of transactions). Can Bitcoin provide that much?

A pegged currency can't be a reserve currency by definition. The two concepts are in contradiction.

The reason Bitcoin is volatile is because it's *base money*. In other words, seen from Bitcoin's perspective, it's everything else thats volatile and it's static.

Also, when you say BitUSD has no fluctuation, it's not actually true in general - only with respect to a specific, arbitrary fiat currency. In the Bitshares world, it's BTS that is the base money. It could theoretically act as a crypto reserve but it's designed for a specific vertical market. It has its own priorities. That's the beauty of Bitcoin - it's the mothership which is general enough to represent everything else. (Ask yourself this, for example, when you read the price of BTS and draw satisfaction from the fact that is has risen, what are you actually gaining ? Answer: Bitcoin).

Anyway, there is no need for new reserve crypto. We've already got a perfectly good one that's well past its "rights of passage" stage and which has a proven resilience against almost every type of competition that could be conceived.

I don't see that situation ever changing now that the alts have been "seen off". Litecoin came the closest but it's dropped way back from its all time high against Bitcoin a year ago. Ripple maybe has a high market cap but there's not a single market that I know of where anything's priced in Ripple.

Also, look at it this way. We are ants living inside the "cryptocurrency barrel". We are aware of the full spectrum and the subtle differences between currencies. But 99% of the general public - what represents crypto's future market - is outside the barrel. It just sees a single big barrel and the label on it says "Bitcoin".

I really like reading your posts, very interesting!

I don't think Bitcoin is it though, that $5 billion valuation is actually really low imo, considering the shitstorm of fiat collapse that is approaching. I think it can be replaced by something better easily.
I think BitShares will pass it in value thanks to BitAssets, it won't be the crypto reserve currency though as BitShares is a crypto-equity. So I think there is a market for a crypto-currency Bitcoin replacement too.


Offline toknormal

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There are pretty much none that accept bitcoin directly, they all go through processors and these processors could seamlessly begin supporting e.g. bitUSD, instantly stripping bitcoin of its biggest advantage

Well, I'd agree with you there that a pegged crypto (for the moment at least) has the advantage that they don't need to keep dumping and converting in theory. Thats one of the things I liked about the BitAssets.

Unfortunately, markets are fickle things. They don't always do what you expect. If the market decides that it has confidence in bitcoin and not much else then retailers will just have to swallow that, regardless of what "should" be the ideal solution.

Thats what makes this whole thing quite exciting IMO. We're watching evolution play out in realtime at a 1000x accelerated rate right in front of our eyes.

What's most exciting about it all is observing the ultimate fate of fiat currencies. It's kind of eerily coincidental that cryptos are evolving into an industrial strength worldwide financial network just at the time when central banks are busy pouring acid into the foundations of the fiat world.

The timing is uncanny.

What happened in Japan 3 weeks ago was the beginning of the end it seems to me. They basically threw in the towel and Abe said as much when he called an election and challenged anyone else to "see if you can come up with something better because I can't".

Offline Rune

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Without an upgrade bitcoin will have no function other than being the symbolic first blockchain.

 :o

Have you looked around lately ? Australia Bitcoin hearings, Canada senate hearings, Circle, Paypal, Overstock, Dish....

Take a look at this feed every couple of days... it's becoming a deluge of infrastructure development - all around Bitcoin http://www.thebitcoinchannel.com

I'm not saying that other alts like BTS aren't going to be successful as well - if I had thought that I wouldn't have sunk the biggest ever chunk of my BTC holdings into a risk asset. Some of them might even surpass BTC's marketcap at some point.

I'm just saying that, barring some catastrophic disaster like a show stopping hack or bug, Bitcoin's here to stay. It's far too dug in for newcomers with big risk capital to be going against the grain now.

I agree there is lots good news, but none of it is inherently tied to bitcoin. Every business can and will switch to a different blockchain the second they consider it in their own interest. This especially goes for merchants. There are pretty much none that accept bitcoin directly, they all go through processors and these processors could seamlessly begin supporting e.g. bitUSD, instantly stripping bitcoin of its biggest advantage.

Don't get me wrong though, the symbolic value of being the first blockchain is significant, and I agree that bitcoin will probably never become worthless. But digital assets will be backed by a 2.0 token, most likely bitshares, because that's the only way it can be done in a decentralized manner.


Offline toknormal

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Without an upgrade bitcoin will have no function other than being the symbolic first blockchain.

 :o

Have you looked around lately ? Australia Bitcoin hearings, Canada senate hearings, Circle, Paypal, Overstock, Dish....

Take a look at this feed every couple of days... it's becoming a deluge of infrastructure development - all around Bitcoin http://www.thebitcoinchannel.com

I'm not saying that other alts like BTS aren't going to be successful as well - if I had thought that I wouldn't have sunk the biggest ever chunk of my BTC holdings into a risk asset. Some of them might even surpass BTC's marketcap at some point.

I'm just saying that, barring some catastrophic disaster like a show stopping hack or bug, Bitcoin's here to stay. It's far too dug in for newcomers with big risk capital to be going against the grain now.

« Last Edit: November 29, 2014, 05:52:48 pm by toknormal »

Offline Rune

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What about using bitUSD/bitGLD as a reserve currency? No price fluctuation or price manipulation, pegged to the market value of their "real world" equivalent, no fiat involved, and on top of that the yield will likely cover for inflation (depending on adoption and volume of transactions). Can Bitcoin provide that much?
(Ask yourself this, for example, when you read the price of BTS and draw satisfaction from the fact that is has risen, what are you actually gaining ? Answer: Bitcoin).

BTS is liquid mostly in CNY, not bitcoin. XRP isn't traded much in bitcoin either. Bitassets, the tokens that will actually be used for trade, cannot be backed by bitcoin. Without an upgrade bitcoin will have no function other than being the symbolic first blockchain.

Offline toknormal

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What about using bitUSD/bitGLD as a reserve currency? No price fluctuation or price manipulation, pegged to the market value of their "real world" equivalent, no fiat involved, and on top of that the yield will likely cover for inflation (depending on adoption and volume of transactions). Can Bitcoin provide that much?

A pegged currency can't be a reserve currency by definition. The two concepts are in contradiction.

The reason Bitcoin is volatile is because it's *base money*. In other words, seen from Bitcoin's perspective, it's everything else thats volatile and it's static.

Also, when you say BitUSD has no fluctuation, it's not actually true in general - only with respect to a specific, arbitrary fiat currency. In the Bitshares world, it's BTS that is the base money. It could theoretically act as a crypto reserve but it's designed for a specific vertical market. It has its own priorities. That's the beauty of Bitcoin - it's the mothership which is general enough to represent everything else. (Ask yourself this, for example, when you read the price of BTS and draw satisfaction from the fact that is has risen, what are you actually gaining ? Answer: Bitcoin).

Anyway, there is no need for new reserve crypto. We've already got a perfectly good one that's well past its "rights of passage" stage and which has a proven resilience against almost every type of competition that could be conceived.

I don't see that situation ever changing now that the alts have been "seen off". Litecoin came the closest but it's dropped way back from its all time high against Bitcoin a year ago. Ripple maybe has a high market cap but there's not a single market that I know of where anything's priced in Ripple.

Also, look at it this way. We are ants living inside the "cryptocurrency barrel". We are aware of the full spectrum and the subtle differences between currencies. But 99% of the general public - what represents crypto's future market - is outside the barrel. It just sees a single big barrel and the label on it says "Bitcoin".

Offline Chuckone

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How many people have predicted the death of Bitcoin?

A funny thing to consider is that in 1995 Bob Metcalfe himself predicted the death of Internet for 1996.

I predict 2015 will be the last year where people will still dare to call the death of Bitcoin. By 2016 it will become self-evident that call its death is nonsensical.

It would be premature to predict the death of Bitcoin. But it would also be premature to assert that it will be the crypto currency that will stay on top for several years to come. Bitcoin might prove resilient, it has advantages and a lot of VC funds have invested massively in the endeavor. The market for crypto currency/equity will be huge, blockchains are the future. Bitcoin will survive and probably prosper, as well as many others.