Topic: The Bitcoin Singularity is Near - page 2. (Read 20697 times)

Thanks, I was unaware of that.

I do think we are currently in a phase which could be described as a singularity or an event horizon. There is a lot of media attention right now, venture capitalists are already investing heavily in Bitcoin or Bitcoin-related startups and we are just a few steps away from institutional money investing in Bitcoin.

The best part of this, is that once people realize that Bitcoin is safer to have your money in than other currencies, there is less reason for them to sell any. It's not like Bitcoin is a stock which can perform badly if the earnings are disappointing. It could really only go up from here. The only thing threatening Bitcoin is having a bad reputation due to hacks, exchanges messing things up or technical difficulties, but this will correct itself over time. I'm getting more and more convinced that Bitcoin is the greatest investment in the history of capitalism.

Great thread, Zomdifros, and a great post.

FYI, if you're not familiar with the backstory; Vladimir was the first person to apply the term 'singularity' to bitcoin...

great post OP. i had some of the same ideas but you nailed them down

I kind of agree.  There's definitely something to be said for critical mass, and if Bitcoin gets big enough, it'll have plenty of momentum to carry itself through any feature advancements made elsewhere.  Sometimes the king can be dethroned though... (MySpace)

"The only reason #Bitcoins don't trade @ $100k right now is because most people either haven't found out about it.."

This is huge!

The Bitcoin price performance so far is largely irrelevant (and graphs by extension as well) since there is currently an asymmetry in information. Only when every potential investor in the world knows about and understands Bitcoin, you could try to predict prices according to some valuation model.

Just made a thread about exponential growth before noticing this thread:


A singluarity (mathematically) means the price would start to diverge; i.e. much faster than exponential. There is no indication of that in the graph.

How do you include a graphic directly in the post?

I honestly doubt it would be possible for a different and better cryptocurrency to overtake Bitcoin. I can't imagine which kind of features this currency would possess which are so superior that people would prefer it to Bitcoin, yet somehow cannot be adopted by Bitcoin itself. Bitcoin is build on consensus and if there exists a serious possibility that it would lose it's value due to people abandoning it for something better, consensus would dictate that Bitcoin should adopt those features. And as the Bitcoin core developers are some of the wealthiest Bitcoin owners I'm confident they'll act swiftly should any threat emerge (as they did last week).

The limited Bitcoin supply is also Satoshi's greatest trick. He realized that if the block reward would never end, there would always be a risk that Bitcoin users would prefer a deflationary altcoin since that would be more rewarding to it's miners and holders.

True, let's hope bitcoin is the one! 

A different and better cryptocurrency.

There are only 3 possibilities for currency:

1) Inflationary, see $
2) ~stable, see €.
3) Deflationary, see bitcoin, the only case resembling a blackhole.

What would be a larger blackhole?

Great OP by the way, but I think your analogy breaks down due to use of the term singularity. To my mind the singularity would be a point in the far distant future. The black hole where there is nothing else. ie Fiat is dead Long live the Bitcoin King. Whereas, if I may, the term Event Horizon would seem to be the point you are describing. The point of no return for our rocket ship, where the space, light and Fiat around us can no longer escape bitcoins inexorable pull and we are sucked in. We still have a very long way to go to get to a singularity, but you may well be right, we do seem to be fast approaching the main Event. If that's the case then there's a whole lot of fiat around us to be pulled in too, and become compressed at one point in the future to a single point only 21 mil coins across.

Just keep an eye out for larger black holes appearing with a greater gravity.

Thanks!

I wrote it just over a month ago, and with all the good news from the last couple of weeks, combined with the Cyprus story, we might be at the beginning of something absolutely massive.


And thanks to you as well!

Thanks for bumping this thread up for me. I too just read it first time. Not just OP is excellent but follow ups are really great too. This is the thread of the year for me so far.

i just got around to reading the OP.

long and short of it is:  GREAT POST.

A singularity means a place where the behaviour changes completely and suddenly from what it was before. The its not a gradual change, its a single place where the change happens. Its often used to mean a place where the behaviour becomes unspecified or multivalued.

The OP says that he expects bitcoin to explode in value soon, and I agree. Here is one way I explain why this is going to happen.

The demand for Bitcoin is very much determined by *how many* people are involved. The supply for bitcoin, is pretty much fixed, or if you like, determined by price becauce to a degree higher prices do release more coin on to the market, but not as much as you might think. Sure, some will sell if the price goes up, but plenty of other fol will also say, well if its gone up this far I shall hang on. Yes, some bitcoins are mined, but I dont think thats very significant these days.

So price is very sensative to the number of people involved.

Now what is odd about this is that each person involved talks to other people, and over time perhaps at a linear rate, some more than others, gets other people involved. Consider bitcoin like a bubble, it started with a person called Satoshi Nakimoto and his friends, and gradually the word has spread. I see it like a circle. Inside the circle, everyone knows bitcoin. Outside, nobody does. At the border people talk, and after some talking some of those people move inside the circle, it gets a bit bigger. This is a bit inacurate because all the people in the circle know and talk to people outside (and suck them in!!) but you get the idea. Now here is the whammy: As the circle gets bigger, not only does its circumferance get bigger, read the conversations and conversions of people outside the circle but, and thei sis the important point the rate does as well its an upwardly accelerating curve that (on this model) has no bound.

Of course nothing accelerates without bound. What are the limitations? Well the main one I see is that the world is not an infinit sea of people but a finite one. Once we get to the state where everyone either knows about or already uses bitcoin, well the model doesnt work any more. (Something different is needed. This is called saturation.) You could think of it that the circle expands to fill or nearly fill the paper. Or perhaps it fills a corner of it. Point is we are noweher near that yes,  If bBitcoin reaches 1% of the size of paypal, an explosion will have happened and we will still have a long way to go!!

Mathematically the rate of expansion is proportional to some power of time, so it will go up at a massively increasing rate.  Focus on this relationship, because it is key to what is going to happen.

And the number of bitcoins in existance? Still Fixed!!

There is another anology here. Bubbles that form in a beer sitting on the table. The surface tension on the bubble is inversly proportional to the size of the bubble. So a large bubble has low surface tension and it can easily get bigger. But a small one has high surface tension, and its tricky to form. You can prove in fact that its impossible for a zero size bubble to form, and without the tiny bubble, obviosly there can be no big ones, so we just proved beer can never have bubbles. Haha! Its the same with bitcoin, If I had thought of this, all my friends would have laughed, not even bothered reading it I would have died a frustrated man, and all my friends would still be laughing about it long after I was dead. Bitcoin? Cryptographic currency they could say in their ignorance. Satoshi managed to get this thing started and once started, the bubble will grow and is unstoppable.  Focus on the dynamics, because I belive it will go ballistic.  (Dont get me started on ballistics!!)

Why does beer have bubbles in then? Its because the bubbles form round tiny particles of dust, perhaps on the sides of the vessel perhaps in the liquid, but mostly they need something to form around, just ordinary beer will not do it. Once a tiny bubble forms it rises to the top geting bigger all the time. Its the same with Bitcoin, ordinary beer wont do it needed Satoshi!!

So yes I expect a singularity, and it may not be far wrong the quote. "A Bitcoin is worth an ounce of gold, just that most people do not realise it yet. "

Well it is a paradigm shift as well, obviously. The trouble with using terms like singularity, paradigm shift, black swan and tipping points is that I'm going to sound like the Pointy-haired Boss from Dilbert

Thanks for that explanation.

We used "Paradigm shift" in the day. I'm getting old.

I used the term singularity to compare the future of Bitcoin with a technological singularity, where increased (artificial) intelligence leads to an acceleration in technology. For Bitcoin, the singularity is point at which Bitcoin becomes mainstream, which could end in a price explosion much greater and much faster than is currently expected.
 
I don't know for certain when or even if this is going to happen, but I do believe it is a plausible scenario due to the fact that most people simply follow the herd and don't want to be left behind. And because we haven't reached that point yet we are either the lucky few who got a first class ticket on the greatest ride ever in financial history or we will simply lose a lot of money.

The singularity is not the value of bitcoins being infinite in real terms, it is the value of a bitcoin approaching infinity in terms of fiat, since the value of fiat approaches zero over time.