Topic: Would Bitcoin Suffer a Similar Fate as that of Unix on the Desktop? - page 2. (Read 4406 times)

There are already alt-coins. Some have limits of 84 million. You are forgetting that Bitcoin, while it is limited to 20.9 million, has 8 decimal places. People just have a hard time understanding more than 2 decimal places because people are so used to fiat currency with 2 decimal places.

While gold can be mined, the vast majority of gold has already been mined. To go further on this analogy, half the bitcoins have been mined. Another 20 to 30 years and almost all the bitcoins will have been mined. To keep mining, miners must invest heavily in hardware.

For gold, to keep mining, they have to invest in digging deeper (more difficulty, like GPU) or going to within our solar system space (more difficulty, like FPGA), or going to deep outer space (more difficulty, like ASICs).

It's not practical nor economic to keep mining gold when it is more expensive or dangerous (overheating bitcoin mining rigs, high electricity), and there might be other stuff to do that is more profitable (like generate electricity that the miners have to buy).

In 30 years, there might not be any much point in bitcoin mining for block rewards, but instead to get all those transaction fees. For gold, maybe the analogy is similar to how gold is being used while physically being secured, you are getting certificates for your gold, not the actual gold itself (maybe you can get it later.)

When bitcoins are worth $12,100.00 as ArticMine has pointed out, then those decimal places come in handy. Transaction fees will eventually become lower to reflect the value or worth of each bitcoin.

And this is conservative because Unix works globally, just as there are other fiat currencies to consider.

A very interesting perspective but if Bitcoin were to have a worldwide market share comparable to GNU/Linux on the desktop, about 1.21% by one of the most conservative estimates http://www.netmarketshare.com/, the value of one Bitcoin would have to reach at least that of 12100 USD (2013 dollars).

Why? Because we are talking of Bitcoin accounting for 1.21% of the approximately 21 Trillion USD world M1 money supply.

Hi Flyonthewall,

The main issue you will face is defining velocity. In a pseudo-anonymous world, it is impossible to distinguish someone paying another person from someone round tripping to their own account. You could use coin-days destroyed, but coin days destroyed is a measure that is presently not being used for any adjustment, hence it might be an ok measure. Once a measure is made a target, it tends to lose its ability to measure the phenomenon. (Goodhart's law). If the coins are dependent on coin days destroyed, you will have early adopters sweeping their accounts at a regular rate to minimize the production of new coins.

The closest you have is Freicoin which degrades at a given rate, but even that is not an intelligent, sensing dependent rate. It is a fixed rate.

If you have a velocity measure that cannot be gamed, there are many people waiting for it, as a fair number of people in the real world might follow a coin more in tune with their conventional economic sense.

So bitcoin may only have a market share of 10% of the worlds currency. 


Darn

True, and this kind of coin would still be better than the current fiat system because the supply of new coins would be "democratic" - anyone willing to mine could do it. In the case of fiat, there is a monopoly on issuing money, and consequences for attempting to DIY are rather violent and painful.

You would also need to allow for the opposite - a decrease in the supply. But why bother? Just so I can always express a value of a thing in roughly the same nominal price? Why not simply let the value evolve, and correct for inflation/deflation when analyzing historical prices? Why not evolve a correct way of thinking about value, saving, and spending - if people really hold on to their (presumably appreciating) coins until they absolutely must spend them - so be it! The world won't end, and life will find new equlibriums and new games to play. As pointed out in the OP, it will all make sense in retrospect.  

Thanks for a thoughtful reply, niko. I have been waiting for your kind of reply.


Not necessarily, right? In the same manner that the Bitcoin network is self-protecting, it can also be programmed to be self-regulating: we can program the increase in quantity, one in which the increase depends only on the velocity, by some (still undetermined) formula.

First of all, OP is a good read, even though I disagree on main points.

The issue of hard limit boils down to psychology and culture. It is stated in the OP how the supply of an ideal currency should scale with the economic growth or recession. In that case, we need to think in terms of changing supply and (ideally) steady real value of the unit of currency. In reality, however, this implies trust in a central authority issuing and destroying currency at their (corrupt) will. It implies uncertainty. Importantly, we have all seen how dysfunctional and corrupt this system is. Taking "experts" seriously would mean mental disease at this point.

Bitcoin, on the other hand, offers a mathematically certain supply (with some minor variation due to hash rate variation and compressed or extended schedule of difficulty adjustments). In the case of Bitcoin, therefore, we need to think in terms of scheduled supply and variable real value of the unit depending on the growth or recession of the economy. If the economy is growing, value of coins is rising, and people may slow down on spending and increase savings, thereby slowing down the economy, thus leading to a slower increase or even to a decrease in the value of a coin, which then stimulates spending, and drives the economic growth... you get the picture. Hard limit on the supply leads to a sane, self-regulating economy, as opposed to the current mainstream idiocy.

The bad news is that there is no such thing as "store of value". There is only medium of exchange. If the Bitcoin currency loses its value as medium of exchange, it will have no other value, and your savings would turn out to be of no value. Remember, it is people that ascribe value to any currency. Not just you, not just me, but all of us. If we all think that Bitcoin is nothing, then it is nothing. And yet it has real value as medium of exchange. Its value resides in us using it as medium of exchange.

Savers are effectively persecuted by banksters worldwide. There is a published research claiming that in past 4 years in UK only 102.4 Billion £ were confiscated from savers via quasi-zero interest rates and inflation.

Bitcoin and PMs is  the last refuge of the prudent. You try to take this away and ammo will become the  asset of last resort.

What you call "hoarding," I call saving.

Besides, electronics are prone to deflating prices, yet people line up for brand new fully prices Iphones all the time!

Don't they know??? There will be a new one next year!

Saving is exactly what is missing from our current economies. Too much blind consumption to "stimulate" the economy is what is leaving us increasingly impoverished.

This is perfectly fine and reasonable point of view you have. If you think 21 million BTC is bad for a currency you gotta go and create one with another limit or no limit. If you are on a mission to change Bitcoin in this direction it is simply hopeless. Not going to happen and frankly there is nothing to talk about much outside of "alternative currencies" section of this forum.

I am a Bitcoin enthusiast myself, and am invested in it. It is also in my interest to see Bitcoin thrive, but emotions aside, an objective analysis of the situation really puts a question mark on the hard limit. Like I wrote in the opening, I believe it is not the unlimited quantity per se that is bad (about fiat currencies), it is rather the absence of rules about increasing the quantity. As I have shown, increasing market price will cause hoarding, and thereby reduce velocity, which is not good for any currency.

Not this again.

There is no reason to not "start another currency that has no hard limit on quantity" you can do it. It is easy. I dare you to start it right now. In fact, such shitcoin is sorely needed. It would be great to have all inflation lovers to start using their own inflationary currency and leave us Bitcoiners alone.

The metaphor may not be correct in that Unix derivatives now dominate the handheld and embedded markets, but if we limit our discussion on the desktop market, there is no doubt in my mind that Windows has won. Of course, we are now in the handheld era, and in this market Windows is clearly losing. My only mistake here is that I did not qualify what I meant by "fate" -- which should be the Unix fate in the desktop.

Rather than dispute the metaphor, I want to get people's opinion on the real subject, which is Bitcoin bifurcation, and the reason described why it makes sense to do it, to start another currency that has no hard limit on quantity.

This is the last known photograph of Satoshi and Linus together.

Linux dominates server market.
Linux dominates smartphone market.
iOS and OSX are Unix (literally, Apple paid the fees to get certified as such)

Yep probably nobody read that wall of text. OP read the words below my avatar. Then google "network effect".

He's just worried anyone with the know-how can start a crypto-currency, just as the wild-west of Linux all it's many distros........

@OP, get in where you fit in.

Fate of Unix? Do you mean as in UNIX running most of infrastructure of The Internet. I expect that yes it will.

Not sure "suffer" is the proper term here. I would use "enjoy" instead.