Topic: Gold collapsing. Bitcoin UP. - page 808. (Read 2032266 times)

you're presuming it is impossible for Bitcoin to upgrade itself.  that's incorrect.  we've seen it upgraded many times in the past several years.

Gavin and Wladimir are working on some very valuable upgrades as we speak.  what's the rush to implement something that could destroy the whole system?

he also says something very important: anything can be used as money, but what actually is money is determined by the confidence people have in it, and "why should I have confidence? It's a matter of trust".

I like the head to head competition offered by Alts, Bitcoin is still very risky as an idea, no need to confuse risks, the successful SC may have features more akin to our current economic model that is more attractive to the masses - the momentum that give it fuel to surpass Bitcoin the downside is the loss of the hope Bitcoin represents with Gold 2.0 today.

Pick your poison.

here is an interesting Jim Rickards video I happened to watch. he mentions Bitcoin out of the blue.

http://youtu.be/RVoMSJ4sry8?t=13m40s (just the snip leading up to Bitcoin - I found the full 20 min interesting.

What I found alarming: is firs he talks about "fiat" as print money, doesn't use the dirty fiat word that is so prevalent on this forum.
and second, he preemptively throws in Bitcoin - notably missing is rai stone in his comparison as he lumps it in with paper and feathers, but clearly on the radar as a competitor to Gold. 

You either risk a side chain overtaking bitcoin or an alt coin overtaking bitcoin.  With the side chain you have the risk free put to take advantage of if the side chain wins out.  The alt coin would have a harder time winning without the risk free put, but it could happen.  Pick your poison.

http://siliconangle.tv/cubeconversations-ted-rogers-xapo/

The guys at Xapo have the clearest vision out of any of the major Bitcoin companies IMO. They are spot on and great spokespeople for Bitcoin.

Rarely do we hear these type of guys say "hold on to your Bitcoins, they're going to be worth more"

i've always said this:   Bitcoin: "A Self-Contained Financial System"

that means the bitcoins themselves HAVE to stay on the blockchain from which they were created.  if you move them to a different blockchain (SC's), the dynamic changes entirely especially the security model.  you will destroy Bitcoin.

that's it! miners only do what they do for incentives, SC give miners new incentives the result is neglecting the value stored in the Bitcoin Blockchain as it moves to the SC. for Bitcoin to grow it needs competition not a transfer of value.
 

well said, the problem isn't technical its adoption of the idea or cryptocurrency, everything flows from faith in Bitcoin.

so then you're effectively saying we have to have inflation in BTC for the Bitcoin MC to survive/compete over the long run when put up against a SC issuing a sidecoin and accepting scBTC.

i don't desire that and i certainly don't want to be moving my BTC to a SC.

above is the reason, I disagree with what you are suggesting, bitcoin is the asset ledger, money is not the token but memory, you don't own bitcoin, you control a % of the asset ledger. Balance in value and security is maintained by miners making economic value judgments. For PoW to be rewarded appropriately to preserve the network and the distributed allocated of control, miners need to be incentivised . Nodes are incentivised to preserve the ledger because they have value in it, Miners are incentivised to wright to that ledger in lieu of a Block rewards.  

this is a dynamic equilibrium but in general if the Bitcoin network grows (number of users) one can expect the utility to grow as it has, (thanks Peter-R) according to Metacafe's law if it grows faster then the mining reward diminishes, then one  expects competition in mining to produce coins (miners - create "credit" in the immutable memory ledger called the block reward). What is expected to happen is: 1) innovation in mining efficiency to make better use of the limited and costly resources and energy; 2) miners will use any increase in efficiency to consume all available resource - Jevons paradox gives us a hit of what could be. if not for diminishing rewards to eventual just the cost of writing tx.  

in short efficiency in mining innovation is responsible for the hashrate, and the price of bitcoin is reasonable for the amount of energy burned. (energy being important as it is the root of all economic activity and productivity) PoW efficiency is a highly contentious issue among many in other threads, and there too the economics is also not well understood as opponents argue the energy burned and wasted while its clear to those who see it it is is not wasted and the dynamic and economics are sound.

If you tie other assets to the blockchain, by locking bitcoin in, you in effect are reducing bitcoins network and growing another network the SC, what happens then is the value grows in the other network, according to Metacafe's law, and the Bitcoin network is diminished. The result is lower block rewards, and less incentive to mine, all the while bitcoin holders can exchange into the new network further reducing Bitcoins value.

Bitcoin is a success precisely for all the reasons that make it, but a AltChain that leverages the value out of bitcoin, by differentiating bitcoin the currency form bitcoin the ledger, is created not as a competing innovation but as a for profit idea. truly competing ideas compete 1:1 head to head like alts, they dont peg 1:1 and drain the life out of the host.

We have the tech to do secure trust less off Blockchain micro transaction with technologies like micro payment channels, and we have the ability to create secured trust free BTC funds in an exchange or contract environment.


I have not seen any examples of obvious value proposition for SC from an economic point of view that can't effectively be addresses with existing technology. The only one I have respect for is to make the investors money but i dont like that it comes with a risk to Bitcoin, and bitcoin holders.

Are there any examples?


  

1.)  The 144,000 bitcoin is trackable.  Users will be less likely to panic into a side chain they know is heavily invested in by the gov.  Besides, I don't think 144,000 bitcoin is enough to cause a panic.  A few of the top alts have market caps near or above this and I don't see a panic into those coins, of course those alts are not pegged so there is risk in moving.
2.)  Any buying of side chain coin and/or buying of processing power to attempt a 51% attack on the main chain will invalidate the risk-free put, even if printed fiat is used. 
3.)  Arbitrage of an asset pegged at the protocol level will probably be effective, especially if multiple exchanges are involved. 

Of course the only thing protecting bitcoin from losing its MC status is the block subsidy, so there is real risk that over time bitcoin could cease to be the main chain.

Sidechains to the rescue because they are highly tunable and can easily create incentives for people to WANT to use them.  And, of course, the net effect economically is very close to using Bitcoin as native chain due to the two-way peg.

I don't actually use Bitcoin at the moment because it is not competitive with the alternatives as a means of doing most of the economic transactions I do.  I do sell them from time to time however.  If I were able to, rather than sell them, peg them to a sidechain which did something I liked (micro-transactions for instance, or allowed me to charge my PayPal account that way) I would much rather do that than go through fiat using something like Coinbase.

In fact, in addition to the sidechains push-back from fraudulent alts, a fair amount of pushback may come from outfits like Bitpay and Coinbase who could get cut out of the loop.

I'm very impressed by BitReserve. I don't have any incentive to use them but I can see how they could become a MAJOR player in this place.

Their service looks and feel very professional, kind of Circle-like.

Can't wait for these two and some others to launch marketing campaigns in 2015

Yes, I imagine this very thing to become the standard before too long because all the companies not doing this will lose almost all business and go bust.

Soon, even that by itself will be considered grossly negligent.

http://monetas.net/a-practical-elimination-of-risk/

https://bitreserve.org/en/transparency

Now THAT is impressive.

This should be expected of EVERY Bitcoin company worth a thing

The problem isn't that Bitcoin is used for buying trinkets - the problem is that Bitcoin isn't being used enough for buying trinkets.

The economics of mining are going to stay fucked up until the transaction rate grows about three orders of magnitude.

We just have to find a way to get from here to that point - after that it will take care of itself.

Basic theory suggests that mining will always become unprofitable no matter what the various magnitudes of various parameters.  We've seen in practice that this theory seems correct.  What kind of sucks about this is that the value spikes have created conditions for more sha256 hashing power to develop than can be comfortably supported by transaction fees.  At least when Bitcoin is used for buying trinkets.

The problem with this is that it could make economic sense for miners to attack Bitcoin, and this is particularly the case if they are going to throw in the towel on Bitcoin and consider their gear to be a write-off.  Some combination of economics and corp/gov coercion could provoke such a decision.

Two things which could help offset this threat would be:

  1) increase fees to increase the reward for properly supporting Bitcoin.

  2) provide a profitable outlet for the hashing power in such a way that supports Bitcoin rather than considers it dead.

  3) break mining pools into smaller pieces with more focused goals and in doing so reduce the potential for consolidated strategies to be implemented.

Sidechains seem to me to have the potential to promote all three of these desirable outcomes.

please explain why.