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Just a quick question on crypto

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bdialon4

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Now I know that I'm no expert here - but I just wanted to ask a quick question on cryptocoins in general - experts, please, use non-techno words that a normal, average English speaking person may easily understand - I think I've been confused by the guys over at the peercoin and bitcoin talk forums.

Anyway considering the lowering btc price over the last few years since its dramatic rise to prime time news, which I've been watching, but thankfully not really invested much in - I have wondered...

Lets just say for example, in a weird world or whatever where the world has started to accept cryptocoins into the mainstream and Walmart has started to use it as a method of payment - the mass adoption of bitcoin/random-cryptocoin mean a huge price drop where everybody uses cryptocoins and therefore there will be no more demand for cryptos in general?

Or would we just go back to using normal money/move on to another cryptocoin whenever the old coin gets saturated with merchants?

Posted on February 15, 2015 at 11:23 PM

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• irnhnve

  

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  When it comes to the point where the use of bitcoin/cryptocurrency becomes standard in daily society, the value fluctuations we see today would not be occurring. Because bitcoin/cryptocurrency use is concentrated to a small group of users in comparison to fiat money users (dollars,euros,yen,etc), large ups and downs in the market value are more likely to occur.

  Another thing to consider is that when widespread use does occur, their will be more financial safeguards in place to prevent large price swings. I don't mean regulatory safeguards, but when you have a larger group of people betting on the value rising/falling with things like options trading, it should bring some stability since there is a profit motive.

  A similar thing happened when around a year ago we saw large differences in the price per bitcoin on different exchanges. Over time, people took advantage of arbitrage between these and today the difference between the biggest exchanges is just a couple of dollars.

  Posted on February 16, 2015 at 9:17 AM
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• frameLAlife

  

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  I think once crypto is accepted in more places the price for BTC will stabilize. It will depend on how quickly and what % of the world uses Bitcoin before we see this though. We will have plenty of years to speculate and traders will always take advantage of that.

  I do think that there will still be room for speculation on different cryptos because there may always be something new testing the boundaries and as we see, the early bird gets the worm.

  Also, when you consider how much people are using crypto to represent the backing of projects, it will open up to new uses that we probably cannot even forsee yet. In those moments, you will still see room to invest in something early that may catch on. I don't think that will go away. In order for Bitcoin to be a true, good store of value, the price will have to stabilize at some point. That could still be years from now.

  Posted on February 16, 2015 at 2:53 PM
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• CryptoFan411

  

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  In the distant future where FIAT systems face genuine competition from Crypto I think you'll see community connected coins being used as a form of democratic network activity.

  You'll use the coin that directly benefits the community that you support.

  Posted on February 16, 2015 at 8:34 PM
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• bdialon4

  

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  But I feel like once it becomes widely adopted, for one reason or another, it will no longer be as much of an asset of trade to hold, such as it is now... Considering that so far the only reason to hold on to it right now is to sell it off later. I think it will kill off the whole gambling element of the thing and just turn it all into another currency.

  The other thing that I was wondering was whether the drop in mining, that will eventually come once the network has reached the max number of coins could lead to a possible 51% attack - considering the number of cloud mining groups that have fallen apart from not paying their power bills.

  Lets just say everybody has started to switch to btc which leads to a huge increase in the number of mining pools working to keep up with the demand. But eventually the profit will start to lower though as the mining reward drops, then btc reaches its max number of coins and the miners which usually used to earn a lot more suddenly have to only earn a few btc per transaction - at which point btc worth either spikes and continues to be driven up and miners stay or the miners drop their btc leading to a massive sale of btc and now defunct mining asics.

  If only 1 or 2 of the last remaining great big mining pools stay intact they would have to hold more than 50 percent of the transactions alone.

  Posted on February 16, 2015 at 9:06 PM
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• CryptoFan411

  

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  Mining is a strange game. I'm playing with proof of stake coins lately for that very reason. The next half in 2016 will be a real interesting spectacle.

  Posted on February 16, 2015 at 9:52 PM
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• pooktwo

  

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  @bdialon4 But I feel like once it becomes widely adopted, for one reason or another, it will no longer be as much of an asset of trade to hold, such as it is now... Considering that so far the only reason to hold on to it right now is to sell it off later. I think it will kill off the whole gambling element of the thing and just turn it all into another currency.

  The other thing that I was wondering was whether the drop in mining, that will eventually come once the network has reached the max number of coins could lead to a possible 51% attack - considering the number of cloud mining groups that have fallen apart from not paying their power bills.

  Lets just say everybody has started to switch to btc which leads to a huge increase in the number of mining pools working to keep up with the demand. But eventually the profit will start to lower though as the mining reward drops, then btc reaches its max number of coins and the miners which usually used to earn a lot more suddenly have to only earn a few btc per transaction - at which point btc worth either spikes and continues to be driven up and miners stay or the miners drop their btc leading to a massive sale of btc and now defunct mining asics.

  If only 1 or 2 of the last remaining great big mining pools stay intact they would have to hold more than 50 percent of the transactions alone.

  I feel that one day miners will be built into everyday electronics. Two possible examples I see with this theory:

  • 1 - Routers, phones, tablets, tvs, monitors, mobiles, gaming consoles, ext will all have a very energy efficient miner built inside of them. Yes at that point it might only be a 1 Ghash SHA ASIC, but the energy for it to run would not even show up in your electric bill. Kind of like the "star energy" sticker electronics get for going green, a "BTC Miner" sticker could be added to show that this particular electrinc you are buying helps reduce the amount of large mining operation. Then over time with enough devices like this, mining operators will ultimately shut down because they cannot compete with millions of small Ghash miners that require no cooling. So this could all be attached to a decentralized mining pool that operates like Tor or utorrent and distributed the funds evenly to all devices owners wallet of choice.

  • 2 - (this is my favorite) take the exact same scenario as above, but instead of a decentralized mining pool, you have every device act like its the old CGminer solo mining days and none are a part of a pool, but rather independently mine. Then its like a lottery system, one day your phone may be the one that solves the block and earns the 25 (or at that point 12.5) BTC for solving the hash. This would bring it back to the original idea of satoshi 1 CPU equals 1 vote and putting money into a giant operation will no longer be financially beneficial.
  Posted on February 16, 2015 at 10:01 PM
  Last Edited: February 16, 2015 at 10:02 PM
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• bdialon4

  

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  @pooktwo Yeah that second to last point really got me thinking. Really interesting ideas you've got there.

  Posted on February 17, 2015 at 10:54 PM
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• pooktwo

  

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  @bdialon4

  @pooktwo Yeah that second to last point really got me thinking. Really interesting ideas you've got there.

  Thank you :D I think its a good idea and completely removes centralization, though to bad I do not have the skills to invent it.... But the idea is free so you invent it please :D

  Posted on February 18, 2015 at 12:49 AM
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• heunland

  

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  @pooktwo

  @bdialon4

  @pooktwo Yeah that second to last point really got me thinking. Really interesting ideas you've got there.

  Thank you :D I think its a good idea and completely removes centralization, though to bad I do not have the skills to invent it.... But the idea is free so you invent it please :D

  Actually, someone already is working on a similar concept called the ePlug, which is supposed to have, among a lot of other features, a built-in function to "farm" some coins like SJCX for example, right in your outlet or lightswitch.

  You can read the whitepaper here:

  http://kencode.de/projects/ePlug/ePlug-Whitepaper.pdf

  and if interested, participate in the crowdfunding going on right now on Lighthouse here:

  http://kencode.de/projects/ePlug/

  You would have to first install Lighthouse from here:

  https://www.vinumeris.com/lighthouse

  to be able to open the project file that can be downloaded from the aforementioned crowdfunding page.

  Note that I am not in any way associated with this project I just find it interesting.

  Posted on February 22, 2015 at 10:39 AM
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• pooktwo

  

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  @heunland

  @pooktwo

  @bdialon4

  @pooktwo Yeah that second to last point really got me thinking. Really interesting ideas you've got there.

  Thank you :D I think its a good idea and completely removes centralization, though to bad I do not have the skills to invent it.... But the idea is free so you invent it please :D

  Actually, someone already is working on a similar concept called the ePlug, which is supposed to have, among a lot of other features, a built-in function to "farm" some coins like SJCX for example, right in your outlet or lightswitch.

  You can read the whitepaper here:

  http://kencode.de/projects/ePlug/ePlug-Whitepaper.pdf

  and if interested, participate in the crowdfunding going on right now on Lighthouse here:

  http://kencode.de/projects/ePlug/

  You would have to first install Lighthouse from here:

  https://www.vinumeris.com/lighthouse

  to be able to open the project file that can be downloaded from the aforementioned crowdfunding page.

  Note that I am not in any way associated with this project I just find it interesting.

  It looks very interesting, i am following this now, thank you :)

  Posted on February 22, 2015 at 10:45 AM
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