Anyone got any other testable predictions in line with this reasoning?
If this is it we can dispense with the reasons and just watch bitcoin and, say the top 5 alts and look for alt transaction volume increasing coinciding with a decline or stagnation in bitcoin transaction volume. Dash and litecoin should be on the list, but not ripple I think. Is bitshares even trying to be a currency? What do you guys think are the true top 5 alts?
What about monetary priorities ?
The properties of money are well understood - whether it's a rock, a piece of paper or an uncounterfeitable electronic token. Why do people never hold cryptocurrencies to account against the properties of money ?
[ANSWER: Because nobody has a clue what the properties of money are.]
In answer to your question about Bitshares let me say this to try to
put things into perspective: There are two types of money:
[1] - real money ('cash', 'gold', etc)
[2] - credit money (IOU's)
Bitshares is a beautiful concept that resides in the [2] sphere. It is a decentralised bank and is not even attempting to do what bitcoin or dash is doing. Having said that, Bitshares does for banks what Dash does for gold: i,e, transports them to an electronic platform and decentralises the value proposition. Bitshares and Dash/Bitcoin are in totally different financial spheres. What Bitshares can do is stabilise an elastic currency in the way regular banks do today, except in a decentralised way without a trusted counterparty. I have no doubt that Bitshares (or something like it) is going to mop up the credit market. To see that, just look at how well it has pegged its BitUSD asset to the US Dollar. Although the volume is paultry, the peg has worked and it is a 'real' peg. (In other words, traders value the BitUSD asset at parity with the dollar, even though the BitUSD is backed by BTS shares while the US Dollar is backed by the US government. To me, that is a huge achievement. Almost no-one realises the implications of that achievement. [I do and am invested appropriately] ).
Dash - on the other hand - resides in the [1] sphere. It is a base monetary token as opposed to a credit derivative (as BitUSD is) or derivative collateral (as BTS is). The innovation of bitcoin wasn't to be anything sophisticated, it was to be simply an un-counterfeitable token that could be passed around. That is actually pretty difficult on an electronic platform because of copy-paste capabilities. Anything that could defy copy-paste was instantly going to be a huge candidate for a new monetary medium. So bitcoin was it.
But
what competitors does bitcoin realistically have ?
Only 3: Litecoin, Dash and Peercoin.
I dumped my Litecoin ages ago because it doesn't really have any distinctive economic policy.
That isn't the case for Peercoin or Dash. Peercoin is one of the great manifestations of cryptocurrency IMO. Its designer was far more concerned with the properties of money and economics than any near term valuation. It is a coin way ahead of its time but which may still pull through and fulfil its intended role as a trunk transport for a future decentralised financial system. I thought it was dead after last year's alt-coin carnage but then noticed it had survived the turmoil and decided it now had a long term future. Put it this way. If cryptocurrencies ever get anywhere such that the mainstream economy has to depend on them, you'll be able to retire on one Peercoin.
In Dash's case the monetary case is academic. There is no bitcion compatible clone that is turning delayed transactions into instant, turning unfungible address "lumps" into anonymous ones, and attaching a "rudder" to the rudderless ship that is decentralised money.
Whatever you think about any other cryptocurrency strategically, none of them - even bitcoin- are remotely as adoptable as Dash. In any economy, there is always a space for cash. But cash has to be instant, whether it's $1 million or $1 dollar you're transferring. Would you accept a million dollars with 1 only confirmation ? By definition, cash works independently of the amount being transacted. That 1 fact disqualifies bitcoin and qualifies Dash.
Great post.
I have been using different terms than you(specifically switching debt and credit). This is actually quite involved, and interesting. I will clarify here:
[A] - credit base currency (gold, silver, bitcoin, dash, etc)
[
B] - credit based fiat currency (coins, US notes)
[C] - debt based fiat currency (dollar bills(federal reserve notes), bank deposits)
[D] - derivatives of assets/fiat(bonds, stocks, bitshares, BitUSD)
[E] - derivatives of derivatives(mutual funds)
A dollar bill, or more accurately a federal reserve note, is actually a promise to pay 1 US note. A dollar bill is actually a debt instrument(IOU) whereas US notes are redeemable for gold or silver. We stopped using US notes in 1971. Cash is considered both dollar bills and coins. But the only cash we use that is not a debt instrument is coins because it is made by the US mint(not loaned from the federal reserve).
As you move closer to [E], the risk gets higher. You are more likely to lose money holding a mutual fund(fraud, manager fees, stock devaluing, etc) then holding gold(over the long term).
Dollar bills can be counterfeited. So just like waiting for an extra confirmation, you can get a pen out to see if they are real, or hold to the light to see anti-counterfeit features. Or with gold - use a test solution. You would expect to wait a little longer for a large transaction to make sure it is legit.
The key is that real value is stored in [A] They can't be created from nothing, are limited, and are fungible(probably not bitcoin). The other products will start to lose value as we start hitting global resource constraints or this global fiat debt bubble. We will see markets for certain things fall and seeming unrelated financial failures happen. It, eventually, will be obvious that moving to [A] is necessary to store wealth and even transact in the economy. DASH is already the easiest of this class to use.