Topic: [Discussion]How to decentralize the price of the bitcoin? Self-moderated. - page 3. (Read 995 times)

That's about what I wanted to say in this topic a few days ago Can you stop calling Bitcoin an investment? (unfortunately, I didn't get a decent discussion in.) and in addition Up to Two-Thirds of Bitcoin Transactions Have No Economic Value. The percentage of Bitcoin transactions for illegal activities is negligible (well I exaggerate a little, just minimal) Nowadays people prefer to use other privacy-centric coins. Five years ago the analysis of blockchain data was saying up to 90% of transactions are related to illegal activities, nowadays the percentage is only 10%. (1)

Crypto speculators now are the majority responsible for the Bitcoin transactions (1) and so making it an asset. It's sad but it's the reality and we have reached the point that it won't be reversible



1. (Bitcoin Speculators, Not Drug Dealers, Dominate Crypto Use Now)

If I am not mistaken, I will just have to state the obvious reason why satoshi created bitcoin in the first place. To have a decentralized "CURRENCY", not an asset. So basically the idea to buy and spend not to HODL.





Why? because of the lack of knowledge that most bitcoin users does have. Especially the users from the third world countries which only uses bitcoin because of the idea of getting rich, as you have stated.

I don't know if I should include this but the idea of why did Satoshi created this currency is being performed illegally?

Black market has been using this currency and have been taking advantage of its benefits





I think we should start making more self moderated threads from global sections.  As what hilarious said :

Then allowing OP to self moderate its thread for anti spamming can really be a great help for them.


Lastly, I am quite saddened that the current state of bitcoin industry is starting to turn into a banking system because of the KYC policy that most exchangers have been performing.

I agree with BTCJoe that the exchanges do not control the price. The fact that the value of BTC is calculated based on what it is bought/sold for on the exchanges makes sense. This is because you can clearly see what whas sent and what amount was paid for it by following the trade sheets. People use the exchanges for a sense of security, when converting their BTC which is true if you are smart about your use of exchanges.

Personally I feel it's better the equipment pricing reflect a weighted average of the BTC value. I feel this approach may have helped cast a wider net of small/medium farms and contributed to a decentralized network. Mind you this may not have mattered as we have currently seen with these early adopters using BTC as an intended currency they created certain behemoths controlling massive amount of hashpower.


Yes I think the two have something to do with each other. The volatility has brought in the "short term trader", who was already doing this so why not try with BTC. They aren't here to understand anything beyond the value of BTC and how to exploit it. This brought in more people from all walks of life, they approach with the same attitude towards BTC. The FOMO definitely had a lot to do with the media representation as it drove more and more people into the network, but not because there was news but due to visibility, it was a space filler for the network and at the time the price was driving high. So negative news I thin kmay prevent someone from jumping on board, but I don't think many people understand the nuances of what the news means for BTC.


I feel the volatility is good for driving people to use BTC as a currency, but I worry it prevents larger businesses from adopting it in day to day use. I think it works great for a medium to small sized business as they can cash out at days end should they choose. Possibly with more businesses in that range creating a wider network for its use the price can lose some of it's volatility for larger non crypto businesses to adopt.

This.

Thus far, Bitcoin's main attraction has invited mass introductions to new users due to price spikes. We've seen the little effect that current media and news has on the volatility of bitcoin as compared to years past. Imagine an ETF announcement 3 or 4 years ago, only to have the decision not approved. I feel like years ago, it would have been DEVASTATING to the price of bitcoin, much unlike the recent small dip that the price took after the ETF failed to get approval.

I honestly believe that volatility will always be the name of the game with Bitcoin until more people start utilizing it. We are still far from mass adoption, and because of that, there are individuals and institutions that are able to manipulate the price. After the recent spike in the last holiday season, I think the FOMO and shakeout was enough to change the way that people view bitcoin. The ones calling it a scam are the ones that probably won't touch it again, but I'm okay with that. Those are the types of people that were just trying to get rich quick.

All in all, I'd say that you should expect to experience volatility, which I'm okay with. Why? Because I believe that at the end of the day, Bitcoin will pave the way for the answer to our economic crisis. Fuck fiat. Digital currency is the way to go, and blockchain technology will lead that revolution.

Mark my words... There will be a time where we won't be able to buy Bitcoin with fiat currency anymore, and I believe that this will happen in my lifetime.

Unfortunately, I still don't believe there to be a tangible method to decentralize the price of bitcoin.

Yeah I mentioned this in another post but there's a catch-22 when it comes to Bitcoin. In order for the price to go up it has to be used (spent) but when the price goes up it causes people to hold on to their Bitcoin so they can cash out for the "lambo" or whatever.

Unfortunately the original intention of Bitcoin (digital currency to disrupt the financial status quo) is going out the window with all the speculators and people who see a get-rich-quick scheme.

My hope is that one day the price will stabilize and when people see that it's not skyrocketing (or plummeting) they'll be inclined to using it more than they do now

Great, finally a good discussion here.

1. I'm not saying that my approach of price calculation is the best approach. It was just an example.

2.  I don't want to see the Bitcoin as an investment tool, an asset or Audi/lambo as suggested. Yeah the current situation is like this but the whole idea is not to HODL your bitcoins in a hope for the Moon or even Mars / well everyone does it, including me/ but to use them as a tool in the day life. I prefer to see it is a currency like the USD or EUR.

3.You won't buy dollars just to put them in a jar under your bed for a few years in a hope to rise their value. You gonna buy them because for example you are going to the US on vacation and you plan to spend them til the last cent.
In order this to happen to the Bitcoin too, the price has to be determined on another factor different than the ones we have today.

World of HODLers is devastating for the Bitcoin, I'm sure Satoshi won't be happy with it.

We are in the very beginning of the Crypto money and I hope that this dark period will be over soon.

If we had really a mature, transparent market without excessive speculation, then "price finding" could approach that ideal. It could reflect maybe not the "effort" (to create BTC), but the "security level" or Bitcoin.

Image you're a millionaire, or the responsible person of a big business. Would you use Bitcoin as the main tool for your transactions?

The answer would depend on, above all, one variable: security.

You can estimate BItcoin's security - meaning that you can calculate the probability to carry out an 51% attack on the Bitcoin blockchain, that 1) could steal coins from your wallets or double-spend scam you; 2) could make the price plummet.

The lower the attack probability, the higher the motivation for the millionaire or business to buy Bitcoins and use them. So a growing security level, which is proportional to the "attack cost" (but not exactly proportional to hashrate) should create demand for Bitcoins, and so the price became correlated with attack cost.

We're far away from that ideal. The reason is mainly an immature, speculative market. There are too many unknown variables (regulation, bugs, scalability) that affect the price movements and so it will take its time to reach that "ideal Bitcoin price finding market".

This is my feelings on the whole subject as well.

It'll be pretty much impossible to have the price reflect the resources because, as you said, it will vary from place to place (even within the same country) and there are other factors that come into it such as electricity hikes and utility deregulation. It's just too random to be able to accurately control.

As for supply and demand, I don't see why anyone is surprised that this is how things are progressing with Bitcoin...especially in light of the (relatively) limited supply.

You can't make the price reflecting the resources needed to mine or to support the network. How would you do it when we have a different electricity price worldwide, different machines and even machines with the same specs at a different price?

Also, the supply and demand aren't what you call "an old tradition" It's a natural result, check this example.
Imagine you absolutely want to buy an Audi A6 Quattro (costing $25k) All have been sold and no more left. If I want to sell mine to you, do you think I will accept to sell it to you for $25k? Knowing I can sell it easily $30k and you will accept since you really want one. I will use the fact there isn't any Audi A6 to sell, to make an extra cash on your your back:P

Exchanges don't control the price of bitcoin; people do. An exchange is just a facilitator for the buying and selling of bitcoin. Yes, there have been instances in the past where shady exchanges have tried to manipulate the prices, but for the most part, manipulation is instigated by shady individuals for whatever purpose.

On the contrary, though, the more you try to find a "revolutionary way to balance" the price, the more the conversation of centralization comes up. Is it in unfortunate that a bitcoin whale can manipulate the value of bitcoin? Absolutely. But think of it in fiat terms. A few families (the 1 percenters) that own a vast amount of fiat assets have a bunch of global power to influence decisions and manipulate markets for their own self gains. But because of the nature of the public's mass adoption of currencies, there are minute checks and balances that come into play.

Is it working? Probably not, with the rate of inflation and journey towards an imminent global economic crisis, but unfortunately, it can't be stopped. Same with Bitcoin. To try and introduce a way to neutralize the value of bitcoin is damn near impossible, if you ask me.

It is. But, sadly, I`ve come to think that also old ways of living are infecting bitcoin by now. I mean: regarding mining, you need a really powerful computer to be able to resolve a hash and take a piece of the cake. To have one of these computers implies a lot of money, so: can bitcoin become exclusive for those with money, with real one?
Regarding the new way to balance it, I`ve been concerned about the use of the network. Speaking about Bitcoin, more and more exchanges seems to be implementing the KYC nightmare. Do you think that by centralizing the use of bitcoin it will continue being anonymous? If the use, if the necessary means to obtain some of the common people, for instance, to buy some bitcoins is under the same laws of a banking system, then what is going o happen with the initial idea.

That`s why I think you're right: we need a new way. Bitcoin is a new kind of "money", a completely revolutionary economic system so we need different and new approaches to avoid it to become another centralized-asset, and, only by doing so, we will be able to have a truly decentralized economic system.
 

Maybe the shitposters will remain far from this one, due to the self-moderation stuff. Or not. Let wait and see.

Good thread, hope it leads towards an interesting discussion.

Tired to see only spammy mega-threads in the section that's why I'll try to start a normal one with this question.

If you think about it, the price is reflection of the bitcoin supply and demand based only on the available exchanges.
You can directly trade at whatever price you like.
What can be done?

Would't be better if the price reflects the real effort to "create" (mine) the bitcoin, or the effort to support the network like the electricity costs + hardware investments etc.

I know this is almost impossible to accurately calculate it but still it will be closer to the real value than to the speculative one "controlled" by the exchanges.

This is innovative technology and is should not relay only on the "old traditions" of price forming, we need a new revolutionary way to balance it, this is the only way to be world-wide accepted.
 
The whole idea of bitcoin is to be decentralize, but you have enough amount of bitcoins the price can easily be controlled.
We have seen already many such cases, and there are more to come.

What you think?

P.S. This is self-moderated thread, I will remove any comments that I suspect to be just a sig.spam. If you not agree with this condition, better don't post here.