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I understand how proof of work functions, thanks. The person I was replying to claimed $1000 was an absurd amount for a bitcoin. I was merely pointing that 1

I understand how proof of work functions, thanks. The person I was replying to claimed $1000 was an absurd amount for a bitcoin. I was merely pointing that 1 btc is an arbitrary amount of satoshis. Anyways, my point stands: how do you expect a grassroots currency to bootstrap itself? Of course the first miners had it easy, no one took the currency seriously back then.

nostrademons 9y ago
Regardless of the numbers, the other posters on this subthread are making an important point: too much wealth concentration deters new adopters. Think of it in terms of the Ultimatum Game [1]: when faced with a new system of wealth distribution, potential new participants not currently within the system have two choices. They can choose to trade something they possess that would be of value to the existing participants (labor, wampum, or $USD, for example) for the new currency. Or they can say "Fuck you, I'm not playing in your sandbox." The challenge for Bitcoin is that only ~0.3% of the population is involved in it, but the amount of money you have to spend to get a tiny fraction of the wealth that early adopters got just for showing up early is ridiculous. Under those conditions, the incentives for the remaining 99.7% is to say "Fuck you, I'll stick with my dollars". Or, alternatively, to create new currencies with their own pyramid schemes in the hopes of replicating Bitcoin's success. Too little reward for early adopters and the new currency never gets adoption. Too much, and its adoption stalls out before it reaches a critical mass of the population. Ramp up the inflation rate later, and you can get continued growth after adoption, but at the expense of overall trust in the currency. It seems like you need a steady stream of broken promises, buried history, and disaffected outsiders to both gain adoption of a new currency and continue its growth. (Interestingly, fiat has the same problem now: a significant number of people believe their chance of amassing significant wealth is near-zero within the current system, which is one of the major factors driving adoption of Bitcoin. They're effectively saying "Fuck you, I'm not playing in your sandbox" to the financial system of the developed world. But the other posters in this thread are pointing out that this problem is not unique to fiat, and that Bitcoin itself has this problem too, as does every other attempt to coordinate a new store of value.) [1] https://en.wikipedia.org/wiki/Ultimatum_game https://en.wikipedia.org/wiki/Ultimatum_game
- hndamien 9y ago
  So I take it you will leave the fiat game then?

nostrademons 9y ago

Regardless of the numbers, the other posters on this subthread are making an important point: too much wealth concentration deters new adopters. Think of it in terms of the Ultimatum Game [1]: when faced with a new system of wealth distribution, potential new participants not currently within the system have two choices. They can choose to trade something they possess that would be of value to the existing participants (labor, wampum, or $USD, for example) for the new currency. Or they can say "Fuck you, I'm not playing in your sandbox." The challenge for Bitcoin is that only ~0.3% of the population is involved in it, but the amount of money you have to spend to get a tiny fraction of the wealth that early adopters got just for showing up early is ridiculous. Under those conditions, the incentives for the remaining 99.7% is to say "Fuck you, I'll stick with my dollars". Or, alternatively, to create new currencies with their own pyramid schemes in the hopes of replicating Bitcoin's success. Too little reward for early adopters and the new currency never gets adoption. Too much, and its adoption stalls out before it reaches a critical mass of the population. Ramp up the inflation rate later, and you can get continued growth after adoption, but at the expense of overall trust in the currency. It seems like you need a steady stream of broken promises, buried history, and disaffected outsiders to both gain adoption of a new currency and continue its growth. (Interestingly, fiat has the same problem now: a significant number of people believe their chance of amassing significant wealth is near-zero within the current system, which is one of the major factors driving adoption of Bitcoin. They're effectively saying "Fuck you, I'm not playing in your sandbox" to the financial system of the developed world. But the other posters in this thread are pointing out that this problem is not unique to fiat, and that Bitcoin itself has this problem too, as does every other attempt to coordinate a new store of value.) [1] https://en.wikipedia.org/wiki/Ultimatum_game https://en.wikipedia.org/wiki/Ultimatum_game

hndamien 9y ago
So I take it you will leave the fiat game then?