Quote from: mortified on February 11, 2015, 09:58:54 AM

That's not what I mean at all. Bitcoin will create entirely new industries that don't currently exist like the internet has only begun to do. There will be plenty of incentives for operating nodes and resourceful ways to expand Bitcoin's pipelines. It's not just about Moore's Law, it's about a New Industrial Revolution, not some armchair philosophy. Your x-y financial charts will require a z-axis with Bitcoin.

This is an important clip from one of Szabo recent blogs, the significance is that it bridges all our current economic knowledge in the physical world with the software world in a very tight package:

Quote from: N.szabo

Metcalfe's Law states that a value of a network is proportional to the square of the number of its nodes. In an area where good soils, mines, and forests are randomly distributed, the number of nodes valuable to an industrial economy is proportional to the area encompassed. The number of such nodes that can be economically accessed is an inverse square of the cost per mile of transportation. Combine this with Metcalfe's Law and we reach a dramatic but solid mathematical conclusion: the potential value of a land transportation network is the inverse fourth power of the cost of that transportation. A reduction in transportation costs in a trade network by a factor of two increases the potential value of that network by a factor of sixteen. While a power of exactly 4.0 will usually be too high, due to redundancies, this does show how the cost of transportation can have a radical nonlinear impact on the value of the trade networks it enables. This formalizes Adam Smith's observations: the division of labor (and thus value of an economy) increases with the extent of the market, and the extent of the market is heavily influenced by transportation costs (as he extensively discussed in his Wealth of Nations).

Now speaking of transportation costs and especially in relation to software Adam Smith makes some interesting observations that aren't necessary against bitcoin DEPENDING on the parameters set for it:

Quote from: Smith

The gold and silver money which circulates in any country, and by means of which, the produce of its land and labour is annually circulated and distributed to the proper consumers, is, in the same manner as the ready money of the dealer, all dead stock. It is a very valuable part of the capital of the country, which produces nothing to the country. The judicious operations of banking, by substituting paper in the room of a great part of this gold and silver, enable the country to convert a great part of this dead stock into active and productive stock; into stock which produces something to the country. The gold and silver money which circulates in any country may very properly be compared to a highway, which, while it circulates and carries to market all the grass and corn of the country, produces itself not a single pile of either. The judicious operations of banking, by providing, if I may be allowed so violent a metaphor, a sort of waggon-way through the air, enable the country to convert, as it were, a great part of its highways into good pastures, and corn fields, and thereby to increase, very considerably, the annual produce of its land and labour.

Smith seemingly isn't disliking gold and silver but rather makes observations on them and their relation to types of money that might fly freer than the physical metals (which act like highways?). And also when thinking about optimizing currencies and especially in relation to market equilibrium and voting etc, it might be helpful to consult Dr. Nash and the lectures on "Ideal Money":

Quote from: Dr. Nash

Illustrating the principle of these optional choices, the people of Sweden recently had the opportunity of voting in a referendum on whether or not Sweden should join the eruoc-currency bloc and replace the kronor by the euro and thus use the same currency as Finland. The people voted against that, for various reasons. But it cannot be irrelevant whether or not the future quality of a currency is really assured or whether instead that it depends on the shifting sands of political decisions or the possibly arbitrary actions of a bureaucracy of officials.