Topic: Why Bitcoin is not as global as you might think - page 2. (Read 1637 times)
You don't have to be a miner or even near a miner to use Bitcoins, so I've no idea what the OP's point is. As long as you have an internet connection, you can transfer Bitcoins to anyone else in the world with an internet connection.
1- Make it easier to mine Bitcoins in Virgin areas.
2- Create a new currency in Virgin areas that undergoes the same evolution as Bitcoins, and make those different currencies exchangeable at a certain rate
3- Create a flow of Bitcoin donations to users in virgin areas. Not only will this introduce Bitcoins to new areas, but it will in return strengthen the value of Bitcoins worldwide. The more traded Bitcoin becomes, the higher it will go in value and so the net effect will probably become an increase in the total Market Cap of Bitcoins, enough to get back in value what is donated.
Hope this makes sense
2- Create a new currency in Virgin areas that undergoes the same evolution as Bitcoins, and make those different currencies exchangeable at a certain rate
3- Create a flow of Bitcoin donations to users in virgin areas. Not only will this introduce Bitcoins to new areas, but it will in return strengthen the value of Bitcoins worldwide. The more traded Bitcoin becomes, the higher it will go in value and so the net effect will probably become an increase in the total Market Cap of Bitcoins, enough to get back in value what is donated.
Hope this makes sense
You do understand that bitcoins are data that exist on the internet right? It can't get any more global than that so geographical limitations don't exist in the first place to try and remove them.
If you talk about services around bitcoin then yes there is some imbalance but the market alone will balance things out.
Some countries in the middle East have local Bitcoin trading areas. It is not as hard to use them there as you might think.
If you were to acquire the first telephone in the world, how much would you be willing to pay for it? not much, since it will be nearly worthless (you cannot call anyone with it), but the more telephones in circulation, the more desirable a telephone will become.
When cars , telephones , computers appeared they were extremely pricey , only a few managed to get them.
It happened with internet access it happened with plane tickets.
So , you're very wrong on this one.
Also ,this:
- Total Bitcoins mined on a daily basis decrease in a increasing fashion (i.e. total Bitcoins mined today will be less than the ones mined tomorrow)
you're contradicting yourself.
When cars , telephones , computers appeared they were extremely pricey , only a few managed to get them.
It happened with internet access it happened with plane tickets.
So , you're very wrong on this one.
Also ,this:
- Total Bitcoins mined on a daily basis decrease in a increasing fashion (i.e. total Bitcoins mined today will be less than the ones mined tomorrow)
you're contradicting yourself.
How can a virtual currency traded over the internet not be a global currency you might ask? keep on reading...
If we look at how Bitcoins have been created over the past couple of years, it will not be long before we notice that it logically entails that the currency today will be concentrated in certain geographical areas in the world. To see how this is so, think about the dynamics and the rules of how Bitcoins are created:
- Bitcoins are mined by users having a certain type of hardware
- Total Bitcoins mined on a daily basis decrease in a increasing fashion (i.e. total Bitcoins mined today will be more than the ones mined tomorrow)
- The more users mine Bitcoins, the less share each of those users will get
- As time progresses, it becomes more difficult to mine each unit of Bitcoin, as the codes to solve becomes more difficult
Following those rules, it then becomes logical to notice that since Bitcoin spreads faster in the earlier days of its creation, the geographical areas where Bitcoin miners emerged (where Bitcoin started to spread), are the areas with the largest concentration of Bitcoins; not only that, but it's now extremely difficult to get those Bitcoins out of those areas, here's why:
1- For Bitcoin to become widely used in a given geographical area there first must be an abundance of Bitcoins in that area; that is, a sufficient supply of Bitcoin in that area. Since it is now much more difficult for a user to mine a "new" Bitcoin, it is unlikely that supply will take off in currently virgin areas. This in return creates a supply problem (i.e. no enough users having Bitcoins in certain geographical area).
2- The lack of sufficient supply of Bitcoins in a certain area, will create a demand problem of Bitcoins as well, since the whole ecosystem in that given area will either not be familiar with Bitcoin as a traded currency, or will not be willing to take the risk and start accepting Bitcoins as a means of payment in fear of getting stuck with those Bitcoins and not being able pay with it in return.
This is the network effect at play. To give you another example portraying the same effects think about the following:
If you were to acquire the first telephone in the world, how much would you be willing to pay for it? not much, since it will be nearly worthless (you cannot call anyone with it), but the more telephones in circulation, the more desirable a telephone will become. The reason why Bitcoin first took off in certain areas is because they were easily and freely (nearly freely) distributed (mined). This is like giving out telephones for free. But once Bitcoins started to become more and more available and popular, people started to become more willing to pay for them, since they started acquiring more value (Like paying for a telephone after it became more widely available). Problem is, this network effect is only present in certain geographical areas and not in others, and since now one has to pay a large amount of money to acquire a "New" Bitcoin, it is only worth acquiring it in those areas where it already has value (Network effect value that is).
So what are the implications of that?
It simply implies that Bitcoin is not as global a currency as you might think! It will remain in certain geographical areas (At least in the short to medium term). Try to spend a Bitcoin in the US and it will be a relatively easy task, but try to spend it in the Middle East, and I will wish you good luck with that.....
How can this problem get solved?
Well the only solution I can think of is to make it cheaper for people in virgin areas to acquire Bitcoins, and progressively make it more and more difficult as time goes by as they catch up with the areas having an abundance of Bitcoins. This can be done in 3 different ways:
1- Make it easier to mine Bitcoins in Virgin areas.
2- Create a new currency in Virgin areas that undergoes the same evolution as Bitcoins, and make those different currencies exchangeable at a certain rate
3- Create a flow of Bitcoin donations to users in virgin areas. Not only will this introduce Bitcoins to new areas, but it will in return strengthen the value of Bitcoins worldwide. The more traded Bitcoin becomes, the higher it will go in value and so the net effect will probably become an increase in the total Market Cap of Bitcoins, enough to get back in value what is donated.
Hope this makes sense
If we look at how Bitcoins have been created over the past couple of years, it will not be long before we notice that it logically entails that the currency today will be concentrated in certain geographical areas in the world. To see how this is so, think about the dynamics and the rules of how Bitcoins are created:
- Bitcoins are mined by users having a certain type of hardware
- Total Bitcoins mined on a daily basis decrease in a increasing fashion (i.e. total Bitcoins mined today will be more than the ones mined tomorrow)
- The more users mine Bitcoins, the less share each of those users will get
- As time progresses, it becomes more difficult to mine each unit of Bitcoin, as the codes to solve becomes more difficult
Following those rules, it then becomes logical to notice that since Bitcoin spreads faster in the earlier days of its creation, the geographical areas where Bitcoin miners emerged (where Bitcoin started to spread), are the areas with the largest concentration of Bitcoins; not only that, but it's now extremely difficult to get those Bitcoins out of those areas, here's why:
1- For Bitcoin to become widely used in a given geographical area there first must be an abundance of Bitcoins in that area; that is, a sufficient supply of Bitcoin in that area. Since it is now much more difficult for a user to mine a "new" Bitcoin, it is unlikely that supply will take off in currently virgin areas. This in return creates a supply problem (i.e. no enough users having Bitcoins in certain geographical area).
2- The lack of sufficient supply of Bitcoins in a certain area, will create a demand problem of Bitcoins as well, since the whole ecosystem in that given area will either not be familiar with Bitcoin as a traded currency, or will not be willing to take the risk and start accepting Bitcoins as a means of payment in fear of getting stuck with those Bitcoins and not being able pay with it in return.
This is the network effect at play. To give you another example portraying the same effects think about the following:
If you were to acquire the first telephone in the world, how much would you be willing to pay for it? not much, since it will be nearly worthless (you cannot call anyone with it), but the more telephones in circulation, the more desirable a telephone will become. The reason why Bitcoin first took off in certain areas is because they were easily and freely (nearly freely) distributed (mined). This is like giving out telephones for free. But once Bitcoins started to become more and more available and popular, people started to become more willing to pay for them, since they started acquiring more value (Like paying for a telephone after it became more widely available). Problem is, this network effect is only present in certain geographical areas and not in others, and since now one has to pay a large amount of money to acquire a "New" Bitcoin, it is only worth acquiring it in those areas where it already has value (Network effect value that is).
So what are the implications of that?
It simply implies that Bitcoin is not as global a currency as you might think! It will remain in certain geographical areas (At least in the short to medium term). Try to spend a Bitcoin in the US and it will be a relatively easy task, but try to spend it in the Middle East, and I will wish you good luck with that.....
How can this problem get solved?
Well the only solution I can think of is to make it cheaper for people in virgin areas to acquire Bitcoins, and progressively make it more and more difficult as time goes by as they catch up with the areas having an abundance of Bitcoins. This can be done in 3 different ways:
1- Make it easier to mine Bitcoins in Virgin areas.
2- Create a new currency in Virgin areas that undergoes the same evolution as Bitcoins, and make those different currencies exchangeable at a certain rate
3- Create a flow of Bitcoin donations to users in virgin areas. Not only will this introduce Bitcoins to new areas, but it will in return strengthen the value of Bitcoins worldwide. The more traded Bitcoin becomes, the higher it will go in value and so the net effect will probably become an increase in the total Market Cap of Bitcoins, enough to get back in value what is donated.
Hope this makes sense
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