Cryptocurrency Charts was an open protocol implemented in open source code.
Other blockchains might have different hashes, block sizes, block times or consensus models (how to choose who adds the next block).
Short times mean you can verify transactions faster, but too short a time means a block may not get all the way across the network before it’s time for the next block – leading to “confirmed” transactions no longer being confirmed when another version of that blockchain is found that’s longer.
The other main proposed consensus model is Proof of Stake, in which the next block miner is chosen at random
according to how many coins they already own.
This saves on wasted hashing, but is a bit too blatantly a rentier economy – “thems what has, gets.
And, like every other economic endeavour in history, it will obviously tend toward people putting in up to $50 worth of effort to acquire $50 worth of coins – a stealth “proof of work” however you try to structure it.
(Although it may be less ecologically destructive – spending $49.99 of your bank balance generates less carbon dioxide than burning $49.99 worth of coal.)
A few altcoins have tried new ideas, such as Namecoin
(an attempt to implement an alternate Internet DNS system on a blockchain) Freicoin.
(which uses demurrage – negative interest – to discourage speculative hoarding)
and Curecoin and Foldingcoin (whose Proof of Work is protein folding for Folding@Home, a distributed computing project for disease research).
But most have a much simpler value proposition:
The usual scheme is that the creators have more of the coin than anyone else, substantially pre-mining the coin before release.
They launch it with speculative promises of interesting future features, then sell their coin off (for bitcoins), telling the new bagholders they’re actually early adopters.
Some went further: DafuqCoin compromised exchanges with a rootkit because the exchanges failed to check the code before running it.
Bitcoin Charts advocates correctly consider most altcoins a scam and can effortlessly list all the problems with them – while failing to note that most of these are also problems with the substantially early-adopter-owned Bitcoin chart.
Bitcoin Price Chart Up
However, Bitcoin Price Chart is also going to receive massive amounts of demand from increasingly large investors in the next few years. Indeed, in March 2013, Malta-based Exante Ltd.
has the solution with its new Bitcoin Fund.(Cryptocurrency charts)
I hope our fund will be the first hedge fund to take advantage of using Bitcoins,” explained managing partner Anatoliy Knyazev.8
This really should be no surprise.
If you were a high-net-worth individual and heard that say platinum had gone up one thousand times in four years you would phone your hedge-fund manager to confirm that he had indeed allocated at least some of your portfolio to platinum.
If he had not done so, you might then look into finding another hedge-fund manager who was able to invest properly.
Should a hedge-fund manager look into Bitcoin and do his homework properly, he will realize that the power that gives Bitcoin Chart its inherent value (merchants’ willingness to accept the currency) is in its infancy.
At the time of writing, the world “online-purchases” market is worth $1.25 trillion.
However for now the numbers of Bitcoin-chart accepting merchants are in the thousands and not millions and
(with a few notable examples) they are tiny companies.(Cryptocurrency charts)
It seems entirely reasonable to assume that all online services, software developers, dating websites, Internet telecommunications, social media, etc., will be largely settled in Bitcoin chart by the end of 2014. This is because it just makes no sense to settle transactions in bank credit instead of Bitcoin chart.
This will put incredible pressure on a limited supply of Bitcoin. (Cryptocurrency charts)
This is an existential issue of both banks and some of the less enlightened governments.
They can be expected to fight Bitcoin-chart tooth and nail.
They do indeed have all the power of force and coercion on their side.
However, as von Mises said: “Only ideas can overcome other ideas.”
Naturally banks will no longer allow anyone to transact with Bitcoin chart exchange.
But what if the lawmakers of irrational governments with plenty of financial banking decide to go after Bitcoin-price-charts?
They shall almost certainly attack and make illegal the exchanges as well as all of those merchants who openly accept Bitcoin-chart.
They shall force it underground.
They shall throw people in prison.
They shall use force. But this overlooks two important points.
First, Nakamoto created Bitcoin value to work underground.
His original posts were written on TOR.
Originally created by the intelligence unit of the Naval Research Laboratory, TOR scrambles messages through the network so that it cannot be traced. Furthermore, the transaction is anonymous other than a very long piece of code.
Bitcoin Chart was designed from scratch with this confrontation very much in mind.
Second, their attack on Bitcoin value, when it comes.
The very first businesses in the Bitcoin charts economy were exchangers (NewLibertyStandard, BitcoinMarket, BitcoinExchange,….).
This is not an accident, but flows from the Charts analysis above.
Market exchangers fill this gap and give Bitcoin charts users access to this knowledge.
This is a subjective valuation arising from properties such as anonymity, decentralized system of clearance, cryptographic trust, predetermined and defined rate of growth, built in deflation, divisibility, low transaction fees, etc…. inherent to the Bitcoin system.
The essential point is that once exchange can occur between a money (USD) and Bitcoins, providers of goods have a means by which to value Bitcoins as a potential medium of exchange.
The money regression is satisfied, because taken back far enough we reach traditional commodity money: BITCOINS> USD> MONETIZED GOLD & SILVER [start monetary economy]> [end barter economy] COMMODITY GOLD & SILVER.
Of course, if a major meltdown occurred and knowledge of all price ratios was wiped out, Bitcoin probably would NOT directly emerge as a money (assuming Bitcoins have limited value outside of exchange).
Fiat currencies with zero direct barter Bitcoin value certainly would not.
Commodities such as gold and silver that have widely recognized direct value in barter would likely emerge first. The economy would then be monetized with price ratios in gold and silver.
Bitcoins then, being valued for intrinsic properties amenable to exchange,
might then become prevalent in trade.
Initially, creators of value would continue to make their price value ratios in terms of the true money (gold oz/BTC ratio), but with time Bitcoin prices (BTC) can emerge (see vekja.net as example).
We are in this initial phase now.
Therefore, so long as exchange of BTC and USD/Euros/etc… occurs, knowledge of existing price ratios can be utilized in the Bitcoin economy.
The BitcoinCharts Economy thus emerges. The Misean regression theorem is satisfied.
edit: clarified possibility of direct emergence of bitcoin Chart as money from barter economy.