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Unfortunately in that respect Bitcoin is a bit of a one-trick pony. It relies on the honesty of a plurality of the network hash-strength. Systems which use the

Unfortunately in that respect Bitcoin is a bit of a one-trick pony. It relies on the honesty of a plurality of the network hash-strength. Systems which use the bitcoin mechanic need a lot of adoption before they become trustworthy.

lukifer 13y ago
In theory, applications can be built on top of the existing BitCoin blockchain, which is now well-guarded by many vested interests; some projects like MasterCoin [1] and Colored Coins [2] are attempting to do just this. But ultimately, you are correct: bootstrapping a new blockchain-based service requires assembling a community with enough hashing power to fend off 51% attackers. Time will tell how the experiment will pan out, but even if most projects fail, my gut is that at least a few will succeed in the long run. [1] http://www.mastercoin.org/ http://www.mastercoin.org/ [2] http://coloredcoins.org/ http://coloredcoins.org/
- spiderbro 13y ago
  Don't forget Counterparty [3] [3] https://counterparty.co/ https://counterparty.co/
- StavrosK 13y ago
  Does anybody know how on earth Bitcoin is supposed to scale in X years, when everyone needs to have every transaction ever made stored on their computer?
  - lukifer 13y ago
    It's an implementation detail. Currently the reference wallet stores all transactions, but future versions will be able to prune old blocks and rely on more recent "reference blocks" as their starting point.
    - StavrosK 13y ago
      That's interesting, thanks.
- dragonwriter 13y ago
  > In theory, applications can be built on top of the existing BitCoin blockchain, which is now well-guarded by many vested interests "Presumed to be well-guarded by many vested interests". Of course, if you don't know who controls how much of the network, you don't know that its guarded by anything, or what the vested interests with influence over the security of the blockchain are actually interested in.
bduerst 13y ago
Not only that, but the bitcoins themselves need solid liquidity before becoming a feasible currency. That's impossible with the impending cap. Right now, bitcoins are treated like digital gold. People hoard them and treat them like investment assets. And for the same reason the world's major currencies unlinked from gold, bitcoins also exhibits recessionary behavior. (bad news for a currency)
- lukifer 13y ago
  I'm unconvinced that deflation is a problem. The buyer's incentive to hoard is mathematically equal to the seller's incentive to acquire; as with all pricing, buyer and seller would eventually meet in the middle. The greatest significant bit for spending is stability/volatility. If BTC accumulated value at a steady 3% per year, many would still spend it (especially if vendors offered a 5% pay-with-BTC discount). The problem is that no one knows if BTC's value a year from now will be 10%, or 1000%. Crypto-currency will either find a stable equilibrium over the coming years/decades, or it won't.
  - dnautics 13y ago
    Deflation is, in effect, valuing labor and productivity done in the past, relative to the future; inflation is, valuing labor and productivity done in the future relative to the past. Deflation is fundamentally less dangerous than inflation, because there is less counterparty risk. Technology is supposed to be the "rising tide that lifts all boats", perhaps not surprisingly, technological goods decrease in price in spite of inflation. But by inflating we rob society of the value created by technology and distribute it to bankers and government contractors. It's really sad, and a large reason why the rich get richer and the poor get poorer.
  - bduerst 13y ago
    I agree - I think that cryptocurrency will be an international standard in the future, just not in the way it is implemented with Bitcoins.
- jafaku 13y ago
  > impending cap Seems like every American is going to have trouble with this, since they are not taught how to use decimals and powers of ten. The rest of the world will do just fine using mBTC and uBTC.

lukifer 13y ago

In theory, applications can be built on top of the existing BitCoin blockchain, which is now well-guarded by many vested interests; some projects like MasterCoin [1] and Colored Coins [2] are attempting to do just this. But ultimately, you are correct: bootstrapping a new blockchain-based service requires assembling a community with enough hashing power to fend off 51% attackers. Time will tell how the experiment will pan out, but even if most projects fail, my gut is that at least a few will succeed in the long run. [1] http://www.mastercoin.org/ http://www.mastercoin.org/ [2] http://coloredcoins.org/ http://coloredcoins.org/

spiderbro 13y ago
Don't forget Counterparty [3] [3] https://counterparty.co/ https://counterparty.co/
StavrosK 13y ago
Does anybody know how on earth Bitcoin is supposed to scale in X years, when everyone needs to have every transaction ever made stored on their computer?
- lukifer 13y ago
  It's an implementation detail. Currently the reference wallet stores all transactions, but future versions will be able to prune old blocks and rely on more recent "reference blocks" as their starting point.
  - StavrosK 13y ago
    That's interesting, thanks.
dragonwriter 13y ago
> In theory, applications can be built on top of the existing BitCoin blockchain, which is now well-guarded by many vested interests "Presumed to be well-guarded by many vested interests". Of course, if you don't know who controls how much of the network, you don't know that its guarded by anything, or what the vested interests with influence over the security of the blockchain are actually interested in.

bduerst 13y ago

Not only that, but the bitcoins themselves need solid liquidity before becoming a feasible currency. That's impossible with the impending cap. Right now, bitcoins are treated like digital gold. People hoard them and treat them like investment assets. And for the same reason the world's major currencies unlinked from gold, bitcoins also exhibits recessionary behavior. (bad news for a currency)

lukifer 13y ago
I'm unconvinced that deflation is a problem. The buyer's incentive to hoard is mathematically equal to the seller's incentive to acquire; as with all pricing, buyer and seller would eventually meet in the middle. The greatest significant bit for spending is stability/volatility. If BTC accumulated value at a steady 3% per year, many would still spend it (especially if vendors offered a 5% pay-with-BTC discount). The problem is that no one knows if BTC's value a year from now will be 10%, or 1000%. Crypto-currency will either find a stable equilibrium over the coming years/decades, or it won't.
- dnautics 13y ago
  Deflation is, in effect, valuing labor and productivity done in the past, relative to the future; inflation is, valuing labor and productivity done in the future relative to the past. Deflation is fundamentally less dangerous than inflation, because there is less counterparty risk. Technology is supposed to be the "rising tide that lifts all boats", perhaps not surprisingly, technological goods decrease in price in spite of inflation. But by inflating we rob society of the value created by technology and distribute it to bankers and government contractors. It's really sad, and a large reason why the rich get richer and the poor get poorer.
- bduerst 13y ago
  I agree - I think that cryptocurrency will be an international standard in the future, just not in the way it is implemented with Bitcoins.
jafaku 13y ago
> impending cap Seems like every American is going to have trouble with this, since they are not taught how to use decimals and powers of ten. The rest of the world will do just fine using mBTC and uBTC.