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You're talking as if it's possible for "we" to make a decision to start over; it isn't, the very nature of distributed means any talk of what should be is point

You're talking as if it's possible for "we" to make a decision to start over; it isn't, the very nature of distributed means any talk of what should be is pointless. There is only what happens, no one is in charge. Bitcoin has the first mover advantage and has gained the network effect, it's extremely unlikely to be replaced by an alt no matter how good the alt is.

dragonwriter 13y ago
> You're talking as if it's possible for "we" to make a decision to start over; it isn't, the very nature of distributed means any talk of what should be is pointless. There is only what happens, no one is in charge. Even in the absence of authority, discussion of what should be can influence what people do, which then changes what happens. So while "there is only what happens, no one is in charge" is, in a sense, true, "talk of what shoul dbe is pointless" is not.
- gnaritas 13y ago
  This presumes there's agreement on what "should" be, but there isn't and won't be. Talking about what Bitcoin should be is as useless and unproductive as talking about what political views you "should" have because people are going to be on every side of the issue; there simply is no "should", there's what is and what isn't.
kaonashi 13y ago
The capacity of Bitcoin is capped.
- gnaritas 13y ago
  Care to elaborate? That's not really enough to continue a discussion.
  - kaonashi 13y ago
    My thinking on this issue continues to evolve, but roughly: The number of Bitcoins is capped. For it to have any semblance of price stability, the amount of users would be roughly fixed. Without price stability, the number of users would decline. So either an equilibrium amount of users, or constantly rising until scarcity makes the price unstable, at which point people stop using it until the point at which it becomes stable again.
    - gnaritas 13y ago
      It doesn't have to be a successful currency to be a successful distributed peer to peer payment network that extracts it's value from eliminating the likes of Western Union for international payment processing. Bitcoin is better seen IMHO as a utility rather than a currency. It can function along side official currency as a means of exchanging wealth online globally for relatively little in fees with the risk or trust required by credit cards. As a commodity, it's infinitely divisible to any number of people, so while it's value with always slowly deflate, it doesn't really matter.
      - kaonashi 13y ago
        > it's infinitely divisible to any number of people, so while it's value with always slowly deflate, it doesn't really matter. The problems with deflation have nothing to do with lack of divisibility.
        gnaritas 13y ago
        I'm well aware of that, deflation is a bad thing for a currency; I agree. I just said Bitcoin makes a bad currency, but it's an excellent commodity and service. Gold is a terrible currency as well, that doesn't remove its value.
krrrh 13y ago
Bitcoin partisans seem to have an overly categorical approach to the concept of first-mover advantage and network effects. These effects are real, but it's a matter of degree. Creating a viable new credit card for instance, would require dozens of billions of up front dollars invested in marketing, incentives, and infrastructure rollout. It would still be a risky bet that customers would see a need. These are network effects and first mover advantages in extremis. Creating a viable crypto-currency only requires a funny picture of a dog, and/or a good story. For all the hype, the spread of bitcoin into the real world economy is a rounding error. For the 99.999% of the world population that has never held any crypto-currency, who's to say that any of them should prefer bitcoin over any other? If the benefits of bitcoin are every bit as disruptive as supporters claim, then what makes bitcoin immune from the disruptive effects of new improved crypto-currencies, or for that matter innovations in nation-state-backed currencies? What makes anyone think that 99.999% of the world's population will hand over a portion of their wealth to 100,000 cool nerds, because those cool nerds decided for everyone else that bitcoin was their one and only?
- gnaritas 13y ago
  > What makes anyone think that 99.999% of the world's population will hand over a portion of their wealth to 100,000 cool nerds, because those cool nerds decided for everyone else that bitcoin was their one and only? A fair question, because bitcoin has the network capacity to work securely and is less vulnerable to attack than all other coins by virtue of its sheer size. 51% attack on Bitcoin is much less likely than with any other coin. Payment processing requires using the best available network, Bitcoin wins.
  - krrrh 13y ago
    I agree that's one of the strongest arguments in its favour. All the now useless ASIC devices out there also make any new coin that uses SHA-256 vulnerable to attack. It's likely that only one blockchain/coin per algorithm can ultimately succeed.
    - gnaritas 13y ago
acdha 13y ago
Bitcoin is extremely likely to be replaced by design: it's a deflationary currency with a wicked value curve which makes pets.com look stable. In practice, this means that anyone who buys into Bitcoin now is giving huge amounts of money to the early adopters. Speculators were buying in for the kind of returns you normally see on penny stocks and pre-IPO options rackets. That's not what anyone sane wants in a currency and it's a particularly tough sell when it's so easy to setup a competitor.
- gnaritas 13y ago
  You're wrong, it's not easy, the value is not in the code, it's in the network, and no one has shown they can replicate the power of the bitcoin network. All alt coins combined are but a fraction of bitcoin. Also, early investors always get rewarded disproportionately, that's compensation for taking the risk, it's not something wrong, it's something right; they should be rewarded for giving you a peer to peer distributed payment system that's better than western union and better than credit cards for online use.
  - acdha 13y ago
    > You're wrong, it's not easy, the value is not in the code, it's in the network What is that network, though? It's a few stores which accept many forms of payment and a bunch of people who use a little bitcoin but not for anything vital. Every party involved can switch to a new system in minutes and these days it's very fast to bootstrap networks using mobile devices and existing social networks. The reason the alt coins haven't seen rapid uptake is that most of the speculation is happening in Bitcoin while everyone waits to see whether the concept will get significant mainstream acceptance If Apple, Google, Facebook, Amazon, PayPal, etc. launched a payment system it'd have more users than Bitcoin on the day it launched. If someone like Square did it, they'd have more stores accepting payment by multiple orders of magnitude and far more credibility in the business community with a proven track record on things like support and fraud prevention. > Also, early investors always get rewarded disproportionately, that's compensation for taking the risk Again, you're talking about Bitcoin like it's a stock — which is exactly the problem, because people have different requirements for currencies than stocks. In particular, holding a stock waiting for the value to go up is fine for a company but disastrous for a currency.

dragonwriter 13y ago

> You're talking as if it's possible for "we" to make a decision to start over; it isn't, the very nature of distributed means any talk of what should be is pointless. There is only what happens, no one is in charge. Even in the absence of authority, discussion of what should be can influence what people do, which then changes what happens. So while "there is only what happens, no one is in charge" is, in a sense, true, "talk of what shoul dbe is pointless" is not.

gnaritas 13y ago
This presumes there's agreement on what "should" be, but there isn't and won't be. Talking about what Bitcoin should be is as useless and unproductive as talking about what political views you "should" have because people are going to be on every side of the issue; there simply is no "should", there's what is and what isn't.

kaonashi 13y ago

The capacity of Bitcoin is capped.

gnaritas 13y ago
Care to elaborate? That's not really enough to continue a discussion.
- kaonashi 13y ago
  My thinking on this issue continues to evolve, but roughly: The number of Bitcoins is capped. For it to have any semblance of price stability, the amount of users would be roughly fixed. Without price stability, the number of users would decline. So either an equilibrium amount of users, or constantly rising until scarcity makes the price unstable, at which point people stop using it until the point at which it becomes stable again.
  - gnaritas 13y ago
    It doesn't have to be a successful currency to be a successful distributed peer to peer payment network that extracts it's value from eliminating the likes of Western Union for international payment processing. Bitcoin is better seen IMHO as a utility rather than a currency. It can function along side official currency as a means of exchanging wealth online globally for relatively little in fees with the risk or trust required by credit cards. As a commodity, it's infinitely divisible to any number of people, so while it's value with always slowly deflate, it doesn't really matter.
    - kaonashi 13y ago
      > it's infinitely divisible to any number of people, so while it's value with always slowly deflate, it doesn't really matter. The problems with deflation have nothing to do with lack of divisibility.
      - gnaritas 13y ago
        I'm well aware of that, deflation is a bad thing for a currency; I agree. I just said Bitcoin makes a bad currency, but it's an excellent commodity and service. Gold is a terrible currency as well, that doesn't remove its value.

krrrh 13y ago

Bitcoin partisans seem to have an overly categorical approach to the concept of first-mover advantage and network effects. These effects are real, but it's a matter of degree. Creating a viable new credit card for instance, would require dozens of billions of up front dollars invested in marketing, incentives, and infrastructure rollout. It would still be a risky bet that customers would see a need. These are network effects and first mover advantages in extremis. Creating a viable crypto-currency only requires a funny picture of a dog, and/or a good story. For all the hype, the spread of bitcoin into the real world economy is a rounding error. For the 99.999% of the world population that has never held any crypto-currency, who's to say that any of them should prefer bitcoin over any other? If the benefits of bitcoin are every bit as disruptive as supporters claim, then what makes bitcoin immune from the disruptive effects of new improved crypto-currencies, or for that matter innovations in nation-state-backed currencies? What makes anyone think that 99.999% of the world's population will hand over a portion of their wealth to 100,000 cool nerds, because those cool nerds decided for everyone else that bitcoin was their one and only?

gnaritas 13y ago
> What makes anyone think that 99.999% of the world's population will hand over a portion of their wealth to 100,000 cool nerds, because those cool nerds decided for everyone else that bitcoin was their one and only? A fair question, because bitcoin has the network capacity to work securely and is less vulnerable to attack than all other coins by virtue of its sheer size. 51% attack on Bitcoin is much less likely than with any other coin. Payment processing requires using the best available network, Bitcoin wins.
- krrrh 13y ago
  I agree that's one of the strongest arguments in its favour. All the now useless ASIC devices out there also make any new coin that uses SHA-256 vulnerable to attack. It's likely that only one blockchain/coin per algorithm can ultimately succeed.
  - gnaritas 13y ago

acdha 13y ago

Bitcoin is extremely likely to be replaced by design: it's a deflationary currency with a wicked value curve which makes pets.com look stable. In practice, this means that anyone who buys into Bitcoin now is giving huge amounts of money to the early adopters. Speculators were buying in for the kind of returns you normally see on penny stocks and pre-IPO options rackets. That's not what anyone sane wants in a currency and it's a particularly tough sell when it's so easy to setup a competitor.

gnaritas 13y ago
You're wrong, it's not easy, the value is not in the code, it's in the network, and no one has shown they can replicate the power of the bitcoin network. All alt coins combined are but a fraction of bitcoin. Also, early investors always get rewarded disproportionately, that's compensation for taking the risk, it's not something wrong, it's something right; they should be rewarded for giving you a peer to peer distributed payment system that's better than western union and better than credit cards for online use.
- acdha 13y ago
  > You're wrong, it's not easy, the value is not in the code, it's in the network What is that network, though? It's a few stores which accept many forms of payment and a bunch of people who use a little bitcoin but not for anything vital. Every party involved can switch to a new system in minutes and these days it's very fast to bootstrap networks using mobile devices and existing social networks. The reason the alt coins haven't seen rapid uptake is that most of the speculation is happening in Bitcoin while everyone waits to see whether the concept will get significant mainstream acceptance If Apple, Google, Facebook, Amazon, PayPal, etc. launched a payment system it'd have more users than Bitcoin on the day it launched. If someone like Square did it, they'd have more stores accepting payment by multiple orders of magnitude and far more credibility in the business community with a proven track record on things like support and fraud prevention. > Also, early investors always get rewarded disproportionately, that's compensation for taking the risk Again, you're talking about Bitcoin like it's a stock — which is exactly the problem, because people have different requirements for currencies than stocks. In particular, holding a stock waiting for the value to go up is fine for a company but disastrous for a currency.