Quote from: LaudaM on December 05, 2014, 05:51:17 AM

Quote from: johnyj on December 04, 2014, 11:40:25 PM

It's too early to talk about derivatives at this stage...

Exactly....That's not even something that matters right now..

On the contrary. EVERYTHING matters right now. Right from top to bottom - security, liquidity, derivatives, 'what happens when we reach 21M bitcoin'.

The number of people invested in cryptocurrencies is negligible. The potential adopters are all "out there" clueless about this little world. They are a wide spectrum of individual, corporate and public entities with diverse priorities.

For example, possibly the biggest adoption sector in the near term is retail. For them liquidity is a big deal because they want to know that if they price an item in dollars then they're going to receive that amount of dollars at the end of the month. They can insure themselves against security issues but it's much harder to insure yourself against volatility in value. That's why many of them won't touch bitcoin with a bargepole because whatever its merits as a store of value, a completely different set of priorities comes into play in specific financial sectors such as retail where the supply chain cycle constitutes a period lasting anywhere from a few days to several months.

The big deal about bitcoin was that it merged the store of value property of money with a payments system and rolled them into one.

Great. And maybe when the entire world runs on Bitcoin there will be enough stability in it for goods traders to use it directly. In the meantime however, derivatives are needed to provide stability to potential adopters while the crypto-economy is growing. Bitcoin itself doesn't need to address these issues because it can continue to act as the reserve currency for the entire crypto economy just as gold did for the dollar under the Bretton Woods system. Other cryptocurrencies can do the job of evolving the right approach to meet specific market needs.

I just described in my last post one such system which offers an elegant solution to the volatility problem for retailers and real world goods traders. It directly addresses the OP's question. The OP asked very reasonable questions in a civilised manner and didn't deserve the shitstorm of defensive abuse from clueless bedroom cryptonerds who didn't know what he was talking about. Maybe they would do well to re-read the specific point:

Quote from: UnunoctiumTesticles on December 04, 2014, 03:25:45 PM

how to move more capital into the coin without necessarily increasing the price

And that is also the question that half the world is going to ask before they adopt because they probably want to avail themselves of the advantages of crypto-currencies but they don't want to buy in at ridiculous prices which will then just tank on them later.

The answer is derivative assets which don't have the volatility that bitcoin does and the people doing all the moaning had better get used to it because they're here and they're what people are looking for to do day to day goods trading.