Quote from: tvbcof on May 07, 2012, 11:06:11 PM

I think it was you who was potentially interested in my 'bakcoin' idea some months ago. I hacked out some material around that time, but have been off on other completely unrelated interests since and have not touched it. I'd have to do (much) more work before presenting it as an alternate crypto-currency or whatever, but here's what I've got for those who might be interested:

http://bakcoin.org

Yes, it was me

I'll have to revisit the topic again.

Quote from: cypherdoc on May 08, 2012, 01:10:58 AM

take a look at this: https://bitcointalk.org/index.php?topic=79285.msg887490#msg887490

Velocity ought to be a potential accelerant for a given asset's valuation; i.e. as more transactions are performed using Bitcoin at a stable exchange level, its unit value will eventually follow.

Quote from: tvbcof on May 08, 2012, 01:28:52 AM

By my two-second calculations, if about half of the worlds population were using Bitcoin and making 2 transactions per day, a flat average would be about 70,000 transactions per second. To account for peaks which one typically finds in network service use, better bump that up to about 250,000 transactions/sec. Then one must consider the potential for DOS attacks.

Contrast this with the .25 (aka 1/4) transactions/sec at the current high.

As currently implemented, Bitcoin scales until it fails then that's all she wrote. Ultimately I would be more comfortable with a solution which anticipated 'sharding' of some sort, and it seems logical and workable to combine this with a multitude of crypto-currencies each tuned to offer various advantages to their user base.

Of course the 'money changers' would have a hey-day in such an environment, but that fine. Probably open systems would develop to make things less costly for end-users. Some guy had a link to such a project a while ago. I think it was on Docmeister's Bitcoin-2 post.

Artificial caps are currently in place. Those won't be necessary forever. Also, hardware (esp. optical switching) is advancing at a rate that will provide the Bitcoin network with more than sufficient capacity to handle the volume described.

Bitcoin scalability issues are not an all-or-nothing proposition. At a maximum rate, further increases in volume will cause a growing backlog. It will become readily apparent, and existing artificial restrictions can be lifted. Further down the road, additional capacity can be added - processing, storage, and bandwidth. Existing dynamics are not the same as what the focus will be as the network matures.

Quote from: tvbcof on May 08, 2012, 02:07:34 AM

That is the way I would like to see it evolving and at one time had hoped to see it evolving, but cannot see a mechanism for that to transpire at this point in time (thus my thought experiments on 'bakcoin'.)

Essentially Bitcoin is just to good as an exchange currency and there is no practical way to stop people from using it.

I think that there is a possibility that within the space of hours, the problem Bitcoin could face is how to discourage users rather than encourage them, and do so in a way that preserves the reputation of the solution. If such an event happened it would correspond to a failure of other currencies and would occur at the time when the Bitcoin solution was needed the most.

There's no reason to stop people from using Bitcoin. As suggested earlier, I think velocity influences a nascent monetary asset's valuation, and therefore its growth. A transition point is then reached once a saturation level (escape velocity?) is attained, whereupon the asset shifts from primarily (or even exclusively) transactional to a growing storage purpose. That's basically the making for a bubble, like tulips; they didn't have any way of being a store of value, though.

If you imagine slowly pouring water into a large glass cylinder, the water first spreads out to fill the bottom, then begins to rise as the volume expands in the direction of least resistance. Juxtapose the water with Bitcoin and my view is that the latter is filling a container representing the 21mm unit limit (base of container) and network capacity in hardware support (height of container). In this sense, the initial growth phase is two-dimensional. Scalability would be an additional dimension limited by the height of the container.

If the container's limits are exceeded, there will certainly be spillover but not a collapse - the container is made of cryptography that hasn't been compromised & the hardware it runs on. That excess would simply flow into other containers (fiat, gold, etc), generating an increased dynamic of scarcity for Bitcoin, assuming most alternatives remain as feeble as fiat currencies. Any over-exuberance would be tempered, resulting in a self-correcting equilibrium for the Bitcoin network, although how rapidly that happens depends on the how far the capacity overshoot is.

The velocity/volume issue could be equated to the problem of transporting & storing physical precious metals. Realistically and practically, only so much can be moved or held at any given time. Development of a high capacity "backbone" is already occurring naturally among some of the largest mining operations, which is one way scalability can be managed. It wasn't the end of the Internet and it won't be the end of Bitcoin, because neither are static.

Quote from: cypherdoc on May 08, 2012, 02:34:35 AM

actually you're right, Bitcoin is an excellent transactional currency as well as a store of value which makes it unique among monetary experiments and it's prospects so bright as far as i'm concerned.

gold has history as a store of value but lacks transactional flexibility and may have become obsolete with the advent of the Internet.

I wish more people would get this! That would make for destructive growth, though... le sigh - patience.

Quote from: cypherdoc on May 08, 2012, 02:34:35 AM

as i understand the old gold standard, individuals would lend their gold holdings to the nations that treated their fiat currencies with respect. if those countries got out of hand by resorting to the printing press, these same individuals would yank their gold holdings out of those countries thus decreasing it's reserves and providing a disciplinary hammer to those profligate nations. it was a self regulating system according to free market principles and worked well as far as i can tell.

why couldn't the same system be set up with Bitcoin replacing gold?

Yes, basically bank runs without the possibility of bailouts because of the physical properties of gold. The same type of system is already developing with FPS&T/BS&T and others. Not to mention a growing infrastructure with equities, futures, options, and synthetic derivatives.

Satoshi opened Pandora's box