You ignored the price stability and centralization arguments.
No I didn't. I already answered them in a previous post in this thread. To recap: mainstream adopters do not care about centralization regardless of how upset libertarian cryptonerds feels about it. Circle, Coinbase, etc are planning to offer pegged balances. For most people a balance denominated in USD on Circle is the equivalent or even better than BitUSD.
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.
Merchants are already using Bitcoin. How many of them are experiencing double spend problems by accepting zero confirmation transactions? Almost none? If they end up losing 0.05% of income to double spend attacks do you think it's that big a deal? No. What they are excited about is not having to pay 3% transaction fees, and losing 5% in charge backs. 7% improvements are a big deal. 0.05% improvements hardly even register.
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).
User doesn't care about any of that. They just go to Circle and click the "peg to USD" button.
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.
You overlook what is keeping Bitcoin so far in the lead despite its technical inferiority: all that outside wealth you are hoping will close that gap is thinking the same thing I'm arguing here, i.e. Bitcoin is way ahead on network effects and none of the altcoins offer anything truly compelling to users. They are overwhelmingly betting on the leader. Also as far as developing infrastructure Bitcoin is 1-2 years ahread of Bitshares. That is a long lead time.
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.
$500m is plenty of security for a trillion dollar network, given that the benefits of attacking are so limited. All it really gets you is the ability to perform a denial of service against the network. Nobody would spend that kind of money to double spend small transactions, and double spending large transactions will just land you in jail. Furthermore it will shatter confidence in the network and destroy your astronomical investment in specialized mining hardware. The numbers just don't add up for a criminal organization. For a hostile state... well what keeps them from printing a 100 trillion dollars worth of USD and dumping it on the world? There are other incentives not to attack the world financial system...
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.
*I* wouldn't settle for mediocrity. But mainstream users don't give a shit about the technical details of the security, and even if they cared, they wouldn't have the capacity to make an informed decision.
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?
Bitcoin offers HUGE advantages over dollar denominated systems in terms of transaction fees, speed, security, etc. If it has a chance, which is debatable, it is because of these paradigm shifting advantages. Bitshares doesn't really offer much of any user tangible advantage over Bitcoin.
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.
That's right. I want Bitshares to succeed because it's really similar to a system I designed on paper 3 years ago but didn't bother to make. That is what got me excited about Bitshares. Its technical superiority. But the more I think about it, the less it seems to matter.
Topic: mesh networking, last mile problem, and BTSX (Read 21039 times)
