3 million USD per day to keep this system up
woohoooooo is paying?
Lol, sell and run away mate, this is obviously not a game for you.
that is exactly what this is - a game.
Closest thing I can describe it to is a modified game of chicken.
but people with no fear will get killed as they will hold until the final crash.
so you have to be the bravest chicken that sells right as the final wave of "investors" buys in whenever that might be, before the ultimate collapse.
@jasonjm
You have said that you have a fair amount of trading experience, and I assume you've researched Bitcoin extensively before getting involved.
What is your reasoning when you assert that Bitcoin will ultimately collapse?
Have you given any consideration to the fact that it may actually grow to a much larger size and then last for some time as a viable means of exchange?
it will ultimately collapse in my opinion for 6 reasons
1) there are too many fees relating to actually using bitcoin vs your credit card, there are fees all over the place on using bitcoin whether its losing 1%+ on the buysell conversion rate, or whether its every place you pass through taking their 1% commission. It is slower, you get no benefit, the merchant gets all the benefit - you get no dispute of charges, no points rewards. So literally no incentive to use bitcoins for legal purchases.
2) money going into bitcoin drives the price up, but adds no equity to the system, it leaves with the seller. So the only thing holding bitcoin up is the bids on the exchanges, which are dodgy to start off with. Bitcoin literally has no value outside of what the exchange bid price is. Even gold (which is bitcoin like in ways) can be used as jewelry or at much lower prices would have a lot of industrial uses. Most importantly a lot of central banks, therefore their governments, indirectly back gold. Go read an interview recently with a fed chairman where he was asked point blank if they would sell their gold to cover deficits and the answer was a simple no. Bitcoin does not have this level of support - not that I am promoting gold - i am not a goldbug.
3) the coins were distributed in an unfair and to be quite honest evil way. Whoever Satoshi is, he was a genius. This could have been quite easily solved by making the bitcoin algorithm reward miners with a certain number of coins per day based on something else - say based on the the total transaction volume of bitcoins in a day multiplied by the number of unique wallet addresses used. that way more coins come online as more people use it. So it DOESNT act like a pyramid, where all the early adopters have all the coins, and all the others are chasing fewer and fewer coins. Make it expand the coin supply at an acceptable rate - yet still make them more rare all the time so it doesnt inflate away. By bringing new supply on - based on more activity you keep prices way way more stable. If there is no increase in activity, then there will be no new coins mined that day. But noooooooo, Satoshi went the exact opposite route. More coins with nothing going on, and then less and less coins with more going on. Good for Satoshi, bad for us.
4) the exchanges are way too thin - no liquidity because of reason 3. Everyone is hoarding, not spending. Why spend bitcoins when they will be worth more because there are none to go around to match the massive interest in them? so then people argue you can STILL buy satoshis! - well do you really want to buy into a system where someone like the winklevoss hold so many coins, that in one day they can crash every western exchange at will. So what happens is you have these cycles of spikes and crashes. But what will eventually happens is the value of the coin becomes based on so few coins that when it comes time to sell, there will not nearly be enough to bids to hold it up, because the system will be so concentrated in the hands of so few.
5) massive waste of energy and resources used on mining wars. The higher the price goes the more miners invest. This becomes a direct drain on bitcoin, as the miners have to sell every day to support their infrastructure costs. This is like a vacuum sucking money out of bitcoin. If bitcoin were $10 000 right now, it would literally suck $25 000 000 dollars per day right out of bitcoin - and for what? it could perhaps have rather have been based on something logical like : 1 mining node per internet subnet /24 - if someone else on your subnet is trying to mine, sorry your software will keep trying have to wait for them to quit or put 24 hour max mining times. Mining equipment could be a regular computer CPU even an old one. So the network would be distributed way more evenly than currently it currently is - as its extremely difficult to get lots of /24 networks , hell it requires a whole lot of paperwork and justification nowdays, just for one /24- and with no waste on mining hardware or energy usage. you could also base a fraction of coins mined on wallets that have a lot of transactions (somehow not just roundtripping money, i guess the trans fee would have to be slightly more than the reward fee), rewarding people for using coins instead of hoarding. I dont know how practical any of these ideas are, I am just throwing stuff out there as alternatives to current problems, someone smarter than me will have better ideas.
so where does that leave bitcoin? real use is for anything outside of the law.
6) if bitcoin somehow does not implode, governments might put it to an end because of illegal uses. And please no telling me how you can never stop bitcoin. You can easily stop bitcoin. Shut down the exchanges and use deep packet inspection to block all bitcoin traffic. Bitcoin is dead then. Maybe not in every country but unless you travel all over the world all the time, for you in your own country its dead.
1) Chicken and the egg problem again. Being a small market, there are a few clear market "leaders" who have the funding and customer base to stand on their own. Everything else is a side-business or a hobby of someone or some group of people. Bitcoin is an infant and hasn't grown enough to walk all on its own. As the market grows and competition increases, fees will naturally decrease, especially if Bitcoin is allowed free reign and isn't forced to walk a regulatory tightrope.
2) Having a payment system that allows one to exercise more control over their money is valuable. Facebook, as far as I know, doesn't have a single tangible asset outside of a few servers, buildings, and Facebook Credits. But, the social networking utility provided by Facebook is valuable to both consumers ("Yay, I get a page all about ME!") and to corporations ("What are they clicking on? What are they looking at? How long did they look at it? Are crop tops still in?"). Bitcoin is a means of transferring money to anyone in the world at any time without waiting days for a check or wire transfer to clear, without wondering if the coins are "good" or not, without...well, without a lot of the cost and hassle of traditional payment systems. If you know enough about Bitcoin you can set yourself up so that you're ready to send or receive a payment at any time, and I think people agree that while, at present, it is rather difficult to initially acquire bitcoins, actually using them is pretty damn simple. Once you're in the game, it becomes integrated into your natural way of life.
3) Whether the coins at the beginning were distributed 'fairly' is debatable. Bitcoin is a pretty radical concept (at least, radical compared to current systems) and such a large incentive might be necessary to convince anyone, no matter how capable, to give up large amounts of time and/or money to build the first blocks of infrastructure for a brand new market. I can promise you all day long that if you work with me to develop my new Monopoly money currency then I'll give you 10% of all the Monopoly money that will ever be created, but you still have to be convinced that the the idea actually has a shot at success. What incentive would you need to contribute your time to something so ambitious?
4) Another chicken and egg problem. As the market grows, liquidity will develop. As the price increases, 'hoarders' with different mindsets will be cashing out when they feel the price is high enough. The hoarding issue becomes a lesser issue the more the market grows.
5) Creating paper money requires lots of machinery. Machines run on oil. Vehicles transporting paper money to and from banks and other agencies costs money. Physical coins are heavy and require even more energy to transfer. I guarantee you it'd be a hell of a lot cheaper maintaining the Bitcoin network with a massive ASIC cluster than it would be to maintain the status quo of paper and metal.
Also, don't forget, increases in computational power make for a more secure network. The real world equivalent is expensive manual labor and brick-and-mortar security systems.
