Topic: "Blockchain technology will pervade, but not bitcoin." - page 3. (Read 8926 times)

The blockchain technology does not belong exclusively to bitcoin which means anybody can use it

Coinbase is a reputable company. Although I would not personally recommend any advanced user of bitcoin to store any more then modest amount of money in coinbase, I would trust them with a large amount of money during the time it takes to purchase and withdraw funds from them as well as trust what they say.

It is likely that a lot of the coinbase users are not "active" users, and it is likely that the majority of their users only have small amounts of bitcoin. I would also that that for each of coinbase's customers to each purchase one bitcoin would be a lot of money, especially if they do not plan on spending it

That's the way I see it. I get the idea that all these blockchain bandwagon jumpers have this notion that they can create a new blockchain and that all the SHA-256 ASIC owners will joyously switch over their hash to it for free, just because it's cool.

I'll try an analogy...

It's the early 1800s and hot air balloons are getting popular, and the possibilities of air transport begin to blow minds.... annnd you get a section of the theoretically "thinking" classes go apeshit about baskets, (gondolas)  "yay, baskets, imagine what all you can put in the baskets, baskets is where it's at, corner the market in baskets!!!" and you ask if it isn't rather the portable high density liquid or gaseous fuels, the burners of same or the envelope materials that are maybe the most important, as the source of buoyancy, the means of leaving the ground, annnnd they'll be like "No, baskets! Look what you can put in them, we'll drag them around with horses..." ... and you'll be shaking your head and thinking they missed the point, things can be transported, but the medium of transport is the egg laying golden goose, not the damn egg carton.

Engines...

Did a network of railways pre-exist the steam locomotive? did a network of asphalt roads pre-exist the motor vehicle? did the internet pre-exist commercial mini-computer adoption? NO, because all those were not especially fucking useful without the engines that demanded and supported their development and use.

So to me, the vaunted blockchain applications that seem to completely ignore the incentivisation to attract hashpower to secure and enable them, make as much sense as talking about trainless railways, vehicle free roads and computer free internet.


Flash.

You were responding to an author who has a very specific and clear definition of what he calls a "user". He clearly indicates that there are ~250k users who have some bitcoins or > 1 satoshi in their wallet.  Your definition changes the goalposts.


Most people don't have 1BTC. Estimates show that ~2/3rd of users have less than 1BTC and ~1/3 of users owning less than 0.1BTC.

https://www.coinbase.com/about
1.7 million unique users and 1.9 million total wallets.

The reason why we know that a good deal of these wallets have bitcoins in them is because many of these accounts were created because of a free bitcoin giveaway or created because someone with a coinbase account sent a non bitcoin user free bitcoins as a gift where the user has to create an account or the funds get returned.

Both Circle and Coinbase have promotions to give out 10usd in free bitcoins -
http://blog.coinbase.com/post/85758038492/10-of-free-bitcoin-for-college-students  (college students)
https://www.circle.com/en/2014/05/16/10-to-spend (everyone)

Many Bitcoin supporters like myself have given out gifts to all our friends and family members of 20-50usd in BTC with services like coinbase to non-BTC users to get more widespread adoption. Most of my friends and relatives have accepted the funds (if they don't setup a coinbase account I know because the funds are returned to me in 60 days) and are simply sitting on them with intentions to spend part of them when Bitcoin goes up. This is why your definition of user is incorrect and many users are saving with intentions of spending part of their savings every time a bubble occurs as bitpay has proven with spikes in merchant processing during rapid deflation.

I don't see why both can't suceed, but because bitcoin is two things it gives it double the chance to IMO. The only thing that is hampering btc as a currency is the price instability, but it is also this instability which makes it potentially a good investment.

Well, what are all those millions of users doing then? I mean if everyone purchased just 1 bitcoin the price would shoot through the roof. One bitcoin is not that huge money, is it? Where did you get the number that Coinbase has 1.7 million accounts? Is that publicly verifiable? I don't believe in millions using Bitcoin. We also need to define 'use', before we even talk about any numbers. My 50k-200k estimation is people who make a transfer of bitcoins at least once every month, that doesn't seem like a huge requirement is it?

Coinbase has 1.7 million accounts that were setup following KYC requirements in the US alone(1.9 with recent expansion to some European countries). Some of these may be user controlled duplicates individuals and business the same user controlled but a majority of these accounts are probably unique per user. While the US is a hotbed of investment, more transaction activity is shown outside of it and thus one should extrapolate a userbase of at least 3-4 million worldwide now.

Where are you getting your estimates ?

Bitcoin and it's blockchain are inseparable. You can't have one without the other.

Here's the speech:

Bitcoin itself had in the past been vulnerable to very similar things that you now see happen with altcoins these days, but fortunately THAT WINDOW IS NOW CLOSED.

Part of the definition of the bitcoin protocol includes the checking of the proof of work put into various block chains, and then choosing the one with the most work. Bitcoin has more proof-of-work in its blockchain than any other competing cryptocurrency, and so by definition it must be the one chosen, and all others ignored.

Altcoins are all very similar to Bitcoin: there is a block chain to store transactions, a consensus mechanism to build the block chain, and a cryptographic protocol to register transactions. Some prominent examples are PPCoin, Primecoin, Litecoin, and Freicoin.

Some altcoins incorporate interesting new ideas, but there is an essential feature of Bitcoin which they all lack. It is not a matter of its technology, but rather of history and community. Quite simply, a medium of exchange that is more widely accepted on the market is more useful than one which is not. This is known as the network effect. An initial imbalance between two nearly equal media of exchange will benefit whichever is more widely accepted until a single one overwhelms the rest. There is no limit to this effect: ultimately one would always expect a single currency to overcome all its competitors.

Because it was started earlier and has had a greater opportunity to grow and attract users, Bitcoin has a market larger by a wide margin than all the markets of all the altcoins put together, and this makes it vastly more useful as a currency. To defeat Bitcoin, an altcoin would require not just superior technology, but such vastly superior technology as to be an advance over Bitcoin comparable to the advance Bitcoin represents over fiat currency. Furthermore, a truly great innovation would much better serve people by being incorporated into future versions of Bitcoin rather than by requiring them to switch to something else. Indeed, the people who have proposed new ideas that are actually good, such as Zerocoin and mini-blockchain, did not develop their own currencies around them, but have simply described their usefulness as features.

The Bitcoin community is not just overwhelmingly larger but of overwhelmingly better quality as well. Bitcoin is surrounded by real entrepreneurs working hard to create new and useful services for Bitcoin. Altcoins are surrounded by loud-mouthed pretenders with irrational hopes of duplicating Nakamoto's success. This does not mean that there is anything intrinsically wrong with altcoins: the problem is simply that once Bitcoin exists, then there is no additional value, from a monetary standpoint, of creating knock-offs. Can anyone really expect to create something of value by rereleasing Bitcoin under a new name and with a few tiny changes to its source code? What makes Bitcoin great cannot easily be duplicated. Thus, while the Bitcoin community matures and grows as more and more entrepreneurs are attracted to its potential, the altcoin communities can only whine for attention.

For a new currency to take bitcoins place it would have to represent a significant improvement over bitcoin, or bitcoin would have to first FAIL before this could happen. So the question is not will bitcoin become obsolete, but will (your proposed new coin) overtake bitcoin? I don’t see any reason to believe that Altcoins represents a fundamental new innovation with meaningful improved functionality.

In physics, we learn about the concept of entropy. Entropy is often described as “chaos”, “randomness”, or “disorder”. To simplify quantum mechanics as much as possible, imagine a basket with a line drawn down the middle, and throw some balls into the basket. If all the balls are on one side of the line, that is an ordered state and has low entropy. If the balls are spread across both sides then it has higher entropy.

Now, let us take the concept of entropy and apply it to cryptocurrencies. We can imagine each cryptocurrency created has a possibility that some value can be placed within it. If all possible value is placed in bitcoin, and none in litecoin or altcoin, then this is a low entropy state. The laws of thermodynamics dictate that entropy in a system should always increase. So we should expect the total cryptocurrency value to be spread among all the possible altcoins.

Going back to our example of balls in a basket, one can easily get all the balls onto one side of the line simply by tilting the basket. This represents the concept of enthalpy, or energy within the system. Just as gravity pulls the balls onto one side of the basket, enthalpy can pull things into a higher entropic state. The most proof-of-work has been put into bitcoin, and so it takes higher energy to put any value into an altcoin.

From an entropy standpoint, there will always be alternate currencies, and the value assigned to them will always be greater than zero. But from an enthalpy standpoint, bitcoin is favored over altcoins, so the total value of each altcoin will remain very low compared to bitcoins.

Note: Concerns about mining:

All being worked on now while Bitcoin is still young.....three very good recomendations being evaluated:

https://bitcointalksearch.org/topic/multi-pps-281180

https://www.youtube.com/watch?v=QN2TPeQ9mnA

https://bitcoinfoundation.org/2014/07/mining-decentralisation-the-low-hanging-fruit/

Blockchain is basically a distributed ledger that is maintained
in decentralized and trustless fashion. A company could potentially
save by doing their accounting on a chain.

Some of the processing power could come
from the employees machines - reward tokens mined could
be turned to company options for instance.

(Of course that would make the company finances transparent,
which might not be a desirable outcome. )

Without incentive, the blockchain is useless, without any one adding hash power into the network, the network will be attacked easily and you can never trust the transaction of large amount of value with it

I still hope bitcoin will succeed like everyone else's hope.

Usually the ones that say this are Keynesians...

They like the technology...but hate money with a limited supply.

They want a blockchain technology where the exchange rate can be changed by a central authority. Pretty much...they want the fancy new technology but they want to be able to use it like the dollar.

I think I've heard the phrase "oh thank god" about a million times, it still doesn't make me believe in an invisible sky-man.

Bitcoin isn't going anywhere in our lifetimes.

I compare it with bittorrent.
You see that popular files are being shared, but older files are not because there is no incentive to share longer term.
The decentralized system however works perfectly fine.
Bitcoin is different to bittorrent because there is money involved. People see bitcoin tokens as money (nobody forced them) so there will be incentive to share and mine bitcoins.
If there was no value involved in bitcoin the network would have died long ago.

Just my two satoshis

Neither does bitcoin. That's why most of them use bitcoins in some fashion.

This projects don't just use a blockchain for storing transactions. If you are to stupid to understand that, I can't help you.

I am all for centralized money... for you. All of your examples use coins. By all means buy them with your money. I'll hodl bitcoins tyvm.

I already linked one in my first post in this thread.
http://www.factom.org/

or check out Ehtereum
https://www.ethereum.org/

I heard about projects, where they want to make a chat on a blockchain. Lets talk Bitcoin uses Tokens to e.g. have access to a part of the forum(your account is linked to a wallet, if the wallet has that token you can use the forum).
I am not sure, if this ideas will work out(or if they are good ones), but there are people out there trying this stuff.

Such as? I have never come across one of them? Maybe NXT (they have coins, no?)

It doesn't have to be a coin.
If you are thinking of a blockchain, just as part of a virtual currency, you obviously don't have much imagination.
There are already enough projects out there with a blockchain, that doesn't include coins.