bitcoin as a global medium of exchange (was Re: Interesting take on Sanjuro's Assassination Market)

[Joe Wang]

I think its important that new alt coins being introduced.  Not that it confuses the market.  But to keep innovation going.  Creating specialized coins with different characteristics would only help the entire market move forward.  Its like the car industry in its infancy.  How many car companies were out there at the time when people were trading in their horse carriages with 4 wheels + a motor? 
 
-Joe


________________________________
 From: Al Billings <albill at openbuddha.com>
To: "cypherpunks at cpunks.org" <cypherpunks at cpunks.org> 
Sent: Tuesday, November 26, 2013 10:25 AM
Subject: Re: bitcoin as a global medium of exchange (was Re: Interesting take on Sanjuro's Assassination Market)
 


I suggest reading http://www.reddit.com/r/bitcoin instead of reinventing the wheel here. All of this has been discussed, ad nauseum, there and a few other forums.

We don’t live in a perfect world and people will always attempt to game the system to make themselves rich. The problem other alt currencies have is why would anyone adopt them when bitcoin is already there and clearly (somewhat) successful? Why mine litecoin, for example, when if I mine bitcoin (or even buy them), I make money for sure (for now at least)?


________________________________
From: David Vorick David Vorick
Reply: David Vorick david.vorick at gmail.com
Date: November 25, 2013 at 6:19:10 PM
To: coderman coderman at gmail.com
Subject: Re: bitcoin as a global medium of exchange (was Re: Interesting take on Sanjuro's Assassination Market) 

As I was telling Jayvan, the idea would be that early adopters
use the currency for its inherent uses to them, as opposed to its
speculative potential.

Right now, bitcoin is almost exclusively speculative. It's worth a
lot of money because the value has been increasing consistently.
That's tulipmania.


In a perfect world you would have some way to protect a currency
against speculation. The volatility in bitcoin makes it less useful
as a currency, therefore the speculation is damaging bitcoin.


I don't have a solution, and I'm not suggesting one, I'm merely
suggesting that a solution might exist that would be a substantial
improvement.




If bitcoin was based on something that had inherent value, say
cloud storage, then a spike in value would be followed by a spike
in the amount of storage being contributed to the network (bitcoin
currently does this, a spike in price is followed by a spike in
mining). The key here though is that the network would be protect
from dramatic dips in value. When bitcoin drops in price, all of
the abundant mining does nothing to save bitcoin, because the
bitcoin mining doesn't actually add any value to the network.
Nobody cares how many petaflops the network is pulling, because the
petaflops can't be put to use somewhere else.

But if the mining was based on cloud storage, a dramatic drop in
the price of the currency would result in a dramatic drop in the
cost of storing data on the network. That's something that actually
has use, and so people would let the price fall unreasonably low
(instead they would find a way to make use of the cheap storage).
This would allow the currency to ride arbitrary spikes in price
while being protected against arbitrary drops in price.


Jim, the amount of mining being done on the bitcoin network has no
impact on the price. The price might have an impact on the volume
of mining, but because the mining is specific to the bitcoin
network (double sha2 hashing or something like that) it can't be
sold or used for other applications. Bitcoin mining is only good
for bitcoin mining, which means the demand for the mining is
exclusively based on value of the bitcoins being mined every
day.
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