Post
Topic
Board Economics
Re: Bitcoin adoption slowing; Coinbase + Bitpay is enough to make Bitcoin a fiat
by
AnonyMint
on 30/07/2014, 16:52:14 UTC
An interesting but I'm not so sure it is fair to compare Bitcoins growth over the last five years to the growth of the smartphone.  The smartphone is being backed/produced by major companies with extremely deep pockets for one.  Bitcoin is grass roots and mainly depends on word to mouth forms of advertisements.  Expecting the same results as far as growth doesn't seem fair.  

You can compare it to the growth of the internet or the radio, which were decentralized early on and attained the smartphone's fast rate of growth.

My CoolPage.com was released Oct. 1998. By 2000-1, I (as a 1 man company) had well in excess of 1 million downloads (just on download.com it shows 2/3 of a million and that didn't include Tucows and other download sites, as well as downloads from our site since I was spending up to $10,000 a month on Goto.com/Overture and then Google Ads) and I confirmed using a special AltaVista search feature 335,000 active websites created with the CoolPage editor (because I embedded coolpage.com in a meta tag). At that time, if I remember correctly, CoolPage.com peaked as a top 10-50,000 site as reported by Alexa (note we didn't have a sticky site, users just dropped in to download and then not come back unless they needed to download again or upgrade or get customer support, so the site ranking doesn't reflect user share).

So in less than 3 years, it had grown to 0.1 - 0.25% share of the internet users. Bitcoin was estimated to have in the realm of 1 million users when it hit 5 years, which was only 0.03% of the internet. In 2012 when Bitcoin was 3 years old, it had probably less than 100,000 users[1] and thus 0.003% of the internet. Bitcoin.org is a top 10,000 site and peaked in the top 1000. This is understandable due to the extent that Bitcoin was hyped in the media.

Bitcointalk.org is a top 3000 site and hasn't peaked but was top 2000. Why it is more popular? Probably because creating new discussions on bitcointalk.org is DECENTRALIZED thus more N x N network effects and sustaining value, i.e. there is always new information unlike at bitcoin.org.

I wasn't backed by any big companies. My company was never plastered all over the (top down controlled!) internet news sites. I was a 1 man company, and I slaughtered Bitcoin's (top down investment pump!) rate of growth.

Bitcoin is failing to grow fast because it is becoming increasingly centralized. I believe you've got the concept backwards. Decentralized viral growth, grows geometrically faster than top-down managed growth due to Reed's or Metcalf's laws.

Bitcoin is weighed down by dead weight of myopic investment whales who work hard to top down herd the flock (see the centralization of mining for example, and it also applies to Winkervoss twins, Peter Thiel, and even our resident forum whale). This must change if we are to grow crypto-currency for the world. It won't change with words. It will change with programming.


[1] In the OP, I cited where Peter R showed that price (or was it marketcap?) is correlated very closely to N x N, where N is a proxy for the number of users. Bitcoin was < $10 in 2012, thus 1/100 of recent prices, so we can expect users were 1/10 since 10 x 10 = 100. If it was marketcap, it was even less users.