Topic: Bitcoin adoption slowing; Coinbase + Bitpay is enough to make Bitcoin a fiat - page 19. (Read 67204 times)

I want to encourage everyone to present alternative points-of-view. Groupthink will not serve us well. We need to check and re-check our rationality and supporting data.


Banks' technical capabilities might reach global reach (but I very much doubt that too), but they have an insurmountable problem. The governments are going to institute capital controls in order to trap wealth and tax it to death as the global economic implosion proceeds. Ditto war is rising and trading with the enemies' citizens will not be allowed on the official banking systems (note the recent sanctions against Russia). Here look how bad it is getting already with HSBC.

And I see they have no prayer of supporting the volume of tiny micro payments any time soon (VISA only sales to 6000 txs per second now), nor getting significant penetration into all NICs emerging markets. Here where I am, if someone in the grocery lane is holding a card instead of cash, I run to the next queue because it adds about 5 minutes delay to the transaction. The derelict card readers are only at every 3rd register (some broke or don't work or timeout over and over) and it just isn't well integrated into the POS here. And this is at ShoeMart mall, which is the largest and one of the most modern mall chains in the country which also has malls in China. Hong Kong has a very efficient electronic swipe payment system used by most of the population there. But this is not in every country in the world.

You can argue this doesn't affect the mainstream, but who is left to hold up the F.U.B.A.R. global economy if we rely on the oblivious n00bs who are sucking the tit of social welfare and hdealth systems.

Possibly the only real economy standing will be ours. Or if the banks can keep 80% market share of that demographic which is 20% of productivity = 0.8 x 0.2 = 16% GDP share. We will take 20% market share of that demographic which is 80% of productivity = 0.2 x 0.8= 16% GDP share.

If the socialism overshoots into the abyss, then the banks can take 80% of 0% productivity.

Also I don't assume we can't do transactions better than they can. We have to learn how to play to our decentralized advantage. I think we will find ways, but my logic doesn't depend on it. For example, how will Paypal ever stop fraud wherein someone reversed the charge on 2 BTC I sold them? Banks don't trust each other, and that fragmentation will get worse not better. As the global economy gets worse, fraud and theft is going to skyrocket. Banks are going to be stealing from their depositors with bail-ins. Who the hell is going to trust a bank? Mt.Gox is an early indicator of what is coming to every bank near you.  

As for transaction speed, I think it is technically possible to get to 30 seconds or lower with decentralized proof-of-work crypto-currency. The technical issue is orphan rate.


I also estimate around $10,000 is roughly the top for Bitcoin. Might reach $50,000 at most, but that is less likely.

Short answer: ask the Wiemar subsequently Nazi Germans how it worked out for them.

Longer answer: taxing over the Laffer limit during an economic downturn is not an equilibrium. Capital is hoarded, it spirals downward into an abyss, and everything grinds to a halt. See the prior post I made which had a link to a blog post by Martin Armstrong which elaborates on that. The 47% technological unemployment predicted by Oxford U, can have multiple outcomes.

• Govt dissolves itself, we radically increase knowledge networking, everyone finds a new job. Yahoo!!
• Govt gets involved taxing, we use anonymity to dissolve govt and radically increase knowledge networking, everyone finds a new job. Yahoo!!
• Govt stays involved but not higher taxes, we don't figure out how to accelerate knowledge networking for most, so 47% unemployment.
• Govt gets involved by taxing, capital goes into hiding, the unemployment goes to 80% (other 20% work as thugs for the govt) and we euthanize everyone.

The range of outcomes is some where between those in varying degrees.

Why does the government involvement matter on who finds a new job in high tech? Because for as long as the government will give you everything for free, why should the masses be bothered!

This another reason there aren't more plumbers. No one has to do unglamorous jobs, because Obama and Europe and Canada provide social safety nets. Heck in Europe you only have to work 35 hours a week, you can't be fired, and you get 1 or 2 months paid vacation a year. And in some countries, they sleep in the office lounge chair in the afternoon or go to meetings at a fine restaurant.

Meanwhile lately I'm working 14-18 hours a day, haven't had a shower in 2 months, haven't shaven, wearing the same stinky short pants for past 3 months since my washing machine isn't at this location, and eat tuna fish sandwiches so I don't have to leave the cave. I am a managing to get my jogs and sprints in, and still seem to attract the ladies when I do out to eat looking and smelling like a stinky caveman. Thank God I am in a country where the women love to eat stinky dried fish. I swear it seems they can't even smell it, whilst my odor is intoxicating me while I am trying to move away ("stay back, this cave dwelling beast is not fit for human consumption at this time").

Although I agreed in No Money Exists Without the Minority, but consider that not everyone on earth has to use the same type of money, e.g. each country has its own independent currency and (hopefully but I doubt it) independent central banks.

I posit a major advantage over national currencies of such a smarter currency used by the smartest who want to opt-opt of the sinking Titanic, is that is straddles all borders, doesn't require the weak to pollute it, and could within years (based on Bitcoin experience) have the same or greater population of a smaller country. Given those differences and the cleverness of those who use it networked on the internet for more powerful network effects than physical currencies, it can I hopefully work as a liquid unit-of-exchange and store-of-value (but not an heirloom, please use gold for that function when you need it).

Cpu-only coin may not suffer from Bitcoin's log-logistic declining rate of adoption and may instead take on the usual technology logistic adoption wherein the adoption rate accelerates until reaching 50% adoption.

Why? Because who doesn't think it is leave your computer on while sleeping and receive some technobabble money. Even Grandad might get a kick out of that. They wouldn't even notice any significant change to their electric bill because other household appliances consume much more than their computer.

However, making a cpu-only algorithm has escaped all those who tried, as far as I know. I have studied many algorithms that attempted to accomplish this and they all fail in some way. The closest I found was the Cuckoo Cycle by tromp. The problem it has it that it only requires memory. And memory can be scaled along with a lower cost processor cores such as the Atom or a custom ASIC that has a DRAM interface for each processing core. Cuckoo Cycle is really only GPU resistant. Also the Cuckoo Cycle white paper admits it is runs faster on multiple threads, even if slightly sublinear when doing so, thus the specialized Tilera CPUs for servers should kick ass on the cpus we use on our computers on a hash rate per $ and per Watt basis. Also I am not confident that some algorithm couldn't subvert the Cuckoo Cycle hash because it is ordered setup. For example, I envisioned using bit strings in place of empty memory locations.

In addition to the explanation at the above link inside the above quote, perpetual debasement is not a problem if there are no taxes as follows.

Your observations are correct and clearly stated.


Yup. We know that. I know I said that before and even recently.

That is why I said anonymity is about opting-out of the collective madness.

I don't expect everyone under the Bell Curve to use a smarter currency (at least not at the start), rather I am expecting the smartest to use such innovations if they come to reality and since the rest will destroy themselves, then eventually everyone who wants to survive and prosper is forced to learn and come over our way (or perish).

I am not sure if bitcoin's adoption is slowing yet, but as cryptocurrency's values seem to follow Metcalfe's it seems sure to do so in the near future. Bitcoin's deflationary nature causes holding not spending. The new tax implications from the IRS and relatively high costs of replacing spent coins on an exchange will further exacerbate this trend. If Metcalfe's law holds this will progressivly slow the use of the currency and thus hold down its value.

The stage seems set for a more nimble competitor to arise solve these priblems and eventually take the crown.

What defeats your rebuttal in this case to me is that the 50-60% implied rate of continued success is still "good enough" based on his original argument.

This is telling me, as part of the masses in this one, that in a decade and a half I'll have a 50-50 shot at losing my job . . so in the very least only half the illusion is fake. Note the wording there . . no pun intended.

Coupling this with the idea that most things (like food) should have a significant loss in relative value (thus becoming more affordable as per prev. discussion in this thread) . . then I would logically conclude that my government would just increase taxes . . successfully allowing our game to continue.

From this standpoint . . I'd need more to be able to agree with you, because if 50% lose their jobs, taxes double, and my ability to get food and live in a home becomes increasingly lower (like to the point where I can afford double taxes) then I'm still missing your point because it still appears as if nothing would be too damning (even though I personally share your opinion).

Maybe we could expand into a more detailed breakdown? Do you have any more examples?

Corazon79 has experience interfacing with established mass media.

Agreed that should probably be adopted as a slogan.

And both posts were astute, eloquent, and added understanding for interested readers.

This is high knowledge (quality) community.

http://esr.ibiblio.org/?p=5558&cpage=1#comment-480286

I'm confused... How can the atomic mass of an atom determine the value of the element? How much is radioactive waste worth? The heaviest atoms in the periodic table are the least valuable...

The argument about food costs in the 1900's isn't an argument at all. Firstly because some food actually is free, secondly because the current methods of food production aren't necessarily an accurate representation for the methods of food production at a future point in time. Modifying variables will alter the product of any equation.

I don't understand the inability to grasp that the world and everything in it is subject to change. When food becomes effectively free; it will be a direct result of decreasing the relative difficulty of obtaining the types of foods that one might want and the difficulty of obtaining the source of those food types... 

Oh well...

Eric presented his refutation and I replied. This pretty much cements it for me.

http://esr.ibiblio.org/?p=5558&cpage=1#comment-480217

Looks like i have some reading to do, thanks for your linked posts.

I do think that bitcoin-like exchange of assets represents the future of transactions, however, it is not what makes Bitcoin valuable, primarily due to the very things you bring up. The masses simply won't use it and have no incentive or even easy way to do so.

Bitcoin will always have its primary source of value be in a speculative asset, my opinion here is strongly on the word ALWAYS right now. Again, primarily for reasons you outline. Customers want convenience and speed with their transactions, not just rage-against-the-machine motivations.  

Do we really think that banks won't respond to the Bitcoin phenomenon of instantaneous, secure, low-cost transfers? Nobody that has a reasonable point of view seriously believes that current systems won't respond to the features that bitcoin provides. Yes it will probably include trusted services, but as you have pointed out Bitcoin cannot accomplish any sort of convenience without trusted services, so Bitcoin enthusiasts are again delusional thinking these services are the killer features of Bitcoin.

The ONLY reason Bitcoin has the value it has is because of its scarcity and its untouchable nature. It is the first of its kind and will likely have serious value 50 years from now precluding world war. I don't think anything about Bitcoin tells me it would survive a world war.

There will be some alt-coins that will survive, but again not because they present any sort of transaction-like competitive advantages. Traditional banks will win this transaction war, there is no doubt in my mind that Bitcoin will not win a transaction war. Banks, PayPals, Amazons, Apples all won't sit idly and watch crypto-like currencies eat into their mainstream revenue. In five years, transactions for banks will be good-enough that the average consumer moving into bitcoin won't make sense for their financial systems will be good enough.

Bitcoin will only become mainstream when everyone owns one simply to hedge against their own countries currency, not because they want to buy something fast with it (the exceptions would be niche purchasers like Porn).

So I buy Bitcoin only as a speculative play. I do like its transaction capabilities, I have bought a lot of stuff with Bitcoin, but only because I chose purchasing stuff over selling to reduce my holdings risk.  I have had enough conversations with "normal" people that I know these txn features have limited drawing power. If I ever have had a friend buy a Bitcoin, it has only been because I created a small glimmer in their eye that it might be worth $10k some day.

Bitcoin does not need mainstream adoption, it doesn't need even a fraction of the general population to be wildly valuable. Bitcoin will grow on greed and speculation alone for a long time to come. It is enough for penny stocks, internet boom 1.0, precious metals, and countless other speculative assets, it will be enough for Bitcoin. Transactions only serve as the ultimate excuse for governments to allow it to live. Transactions are only the secret protection that allows Bitcoin to live wave after wave of speculative bubble.

Greed and speculation alone are enough to propel Bitcoin to 250 billion dollars or more. It has happened to countless stocks in companies that hit the speculative mother load, how many people do I know that own Apple stock, or Microsoft, or Cisco, or GE. In all reality very few of my entire circle own any stocks via direct brokerage purchase. Maybe a lot via their 401k or their mutal fund, but they wouldn't even know if those investements used any shares of Apple. Bitcoin will be no different, worth 500 billion and you may know 10 people that own them.

Using the example of a business owner, these are probably the most painful words I've ever had shoved in front of my eyes.

How can you expect that a publicly available and accessible blockchain would ever help me out, or be in my favor?

Excluding the grand talk of governments and elites for the sake of this more targeted argument . . what happens when my competition becomes aware of the other businesses I work with to every minute financial detail? Bedlam is what happens.

To willingly put my competition in a stance that would simply allow them to buy-out my suppliers by tracking their transactions with me, compel my customers to work with them instead (by again discovering what they are buying and sell it to them), or uncover private company information relating to proprietary processes (By introducing yourself, an original competitor, to me as a simple equipment supplier that needs to know about my processes in order to sell me the right things). . you're asking the world to burn. You're putting people in the unemployment line, because I'm losing money.

A public ledger isn't one of the greatest contributions that bitcoin has provided, it's the biggest weakness. It's where Satoshi stopped in my eyes.

Software may be open source, but the processes by which Quaker Oats or Wellbutrin are created are not. It would be insane to ask that it would ever be.

You may use the example of 3d printers to refute this, but there are and always will be processes that are in competition due to something crucial that printers can never provide.

Things like plant seeds or pre-grown plants, bred animals, pharmaceuticals, that specific taste to your food that's not like everything else, and knowledge inside my head (and how it gets there) will never be be able printed by sheer definition of what they are - unique. These are just a few examples, but they're endless.

You can print a fork but you can't print the uniqueness in these examples (though you can still print unique things). You can open source software, but as I read before in this thread -- it's always changing. To this effect, uniqueness is preserved.

You can, at some point, make the processes open source due to their relative value decreasing, but the mind through which they were introduced can never be open sourced. New uniqueness will eventually replace the old. It can never be a completely open door though, because for every one mind . . there is another with different ideas about the same thing.

You telling me that these types of things don't matter and are actually a good thing -- by having a public blockchain -- is totally wrong. To say otherwise is piercing holes in anything that can, or ever has, held value. Without some form of privacy . . the value just leaks out. There's no incentive to adopt. Provably so, with the three main parties involved with bitcoin today being a small consumer base, one man shops that are desperate for an edge, and investors. The former two are not particularly concentrated sources of value, so this leaves little for investors to play on.

The next step is real business money. The only way to invite this, I see, is by allowing privacy from competition.

I've spent the time to read all six pages - but I do not claim to understand more than 20% of it.  I reserve the right to modify, post more, or retract some off the cuff thoughts.


This is my favorite practical quote of this entire thread.  Most of the population owes 50% of their paycheck to central control (Home loan + car loan) not to mention taxes.  Debt is a form of slavery.  Centralized forces are able to create debt with little to nothing and enslave those who owe them.  The amount of wealth (energy) that is generated from middle class is put directly into the debt system is probably close to 50% (& this is outside of taxes).

Separating the ego, the postulating, the theoretical, the practical, the political out of this thread is intense enough to outright depress me in even trying to create a legitimate response on some of my thoughts.  But as someone with an average IQ, average knowledge and reasonable gut senses I'd like to make a few statements that I reserve the right to retract / modify.

1.)  The masses care less than you think they do.  They are perfectly happy to donate 50 - 75% of their life force (energy\time) to the powers that be (debtors they owe + taxes) in exchange for a lifestyle they have been trained to think they want.  My ex gf had a 12% car loan, payed 30% of her salary in rent for a place she didn't need.  And credit card debt to boot.

2.)  The masses are less intelligent than you give them credit for.  Trying to explain the idea of financial independence - or that you'd be happier with a less nice car and less nice house - and two weeks off of every month a year to the AVERAGE person is like trying to explain math to a cow.

3.)  The masses are less creative than you give them credit for.  They WOULD RATHER make Xerox copies all day than innovate.  Innovation involves risk, fear, unknowns that a 9 to 5 job doesn't.

4.)  The masses are not competent enough to take control of their banking.  My first experience with bitcoin was getting scammed.  Second was wasting money on GPU hardware I gave up on because it was a pain in the a$$.  Third was getting my computer hacked and my BTC-E account taken over for two weeks.

If I could summarize.  One of the biggest reasons the government / financial system is able to oppress or enslave the masses.  The reason coinbase + bitpay is taking over is because they take into account the apathetic, unintelligent, uncreative attributes that make up 70 - 80% of the masses.

To further my point - there was a lot of talk about Linux.  Comparing it to Windows - Linux is probably better than Windows in a million different ways.  But because it didn't take into consideration the lack of intelligence, lack of creativity and total apathy of the masses.  Windows succeeded where it did not.  Windows will always be inferior to Linux - but it focused on being a crutch for the masses.  Where linux was unwilling to substitute power for simplicity, security for ease of use, stability for ease of adoption.

Linux/unix probably contributes more to wealth when you look at the servers running it as a back end make up most of our internet.  But that wealth went to those who focused on adoption for the masses (Apple, facebook, Google, etc)

I see the Coinbase/Bitpay as the same situation.  My BTC-E account was hacked because I was a moron - Coinbase didn't let me be a moron so my account was safe.  Until decentralization can take into account the attributes of the masses - which is what centralized forces do - they will not be able to productively harness the energy that comes with controlling their time & energy.  Which in the end - is wealth.

quite so!

that's catchy, I like it

I agree with this.

Bitcoin was a great leap in the right direction, but it's never going to live up to solving the problems it was invented to solve. Sure, it did solve some important issues, but anonymity and decentralization are key pillars that Bitcoin failed to preserve. The Bitcoin community isn't just following Bitcoin for the name...

If a new protocol is written to incorporate true decentralization and real anonymity then the migration from Bitcoin to the new protocol will be swift. Obviously Bitcoin will be propped up by big money, they have an interest in Bitcoin. Bitcoin is the most powerful tool for financial tracking ever invented. If other tools are developed to assist in tracking the flow of Bitcoins then it could be used to single out and isolate individuals based on parameters that would be defined by the authority who monitors the network. Bitcoin was invented as a tool to enhance personal freedom; it looks as if it can only serve as a tool to enhance oppression.

Anonymity is protection for the individual, decentralization is protection for the network...