The proportion of hash power a coin has for a given POW across all coins is probably going to be proportional to all real world assets that fall under the legal control of those coins that use that POW (that is hardware-constrained...if the same hardware can be be used on 2 POW's then in this context they are the same POW because the work is real, being the Joules to create and run the equipment). There's real value in being the biggest kid on the block because it makes it harder to break. 90% of alts right now could be destroyed if the largest pool of the largest coin (for a particular POW) decided to attack and forward timestamp every block to the max. Difficulty goes to zero and all coins are released (or as many as the attacker wants) in a few hours with only 60% hashrate. There's no fix. If they fork, he does it again. The motivation is to drive users to the big coin that he has been accumulating and he wants to retire instead of buying more equipment, not to mention constantly selling all the small alt coins before they figure it out and fork. This should eventually happen to all coins that have a halving schedule. So the underlying value is being the biggest kid on the block because it is the only kid that can't be "hacked". So side chains may displace alts. The cross swaps do not change this. They will stabilize to an exchange rate in accordance with it. If I'm right, miner economics could quickly reduce the playing field of coins that are truly peer to peer. The only alternative to being one of the very few biggest and baddest is the traditional central database. So BTC's biggest use would be between governments and banks that do not trust each other.
BTC value =(BTC FLOPS) / (crypto FLOPS) x (crypto assets) / (paper assets) ?
It needs to reach $500k per coin to replace the world's $10T M2+ dollar supply, but it's not a currency. But it will more likely find it's value in anchoring the value of other cryptos that will represent legal control of real-world assets. The world's assets are said to be $223 Trillion. so it could not be worth more than $10M per BTC (plus world asset value increases). But if someday crypto become the legal instruments representing ownership of the 1/2 assets, and 1/10 of them ultimately require BTC as a basis, then again I'm back at $500k per coin. If it is both currency and asset, then $1M per coin in an optimistic view. $10k seems to be a decent exit point, but the trend and publics lack of knowledge says at least $50k. So $100k is not a bad guess as a dreamy max.
What's wrong with a BTC fork other than preventing us from getting more free money for nothing? I mean, if it doubles the number of coin so that new entrants can afford it and so that more transactions per second can be made, how is a fork not best for society? All currencies must expand as their use increases to keep constant value so that the terms of wage and price contracts remain valid. Economies should not allow a change in the value of it primary coin anymore than we should tolerate a changing definition of the Joule. All equations (contracts) are invalidated or require adjustment if there is a change. If it does not expand, the currency will not be used by new entrants who will go elsewhere. If its use is forced by government, then limited quantity coins create a 1% class.
I think he might have estimated that if it did absolutely everything he could dream of, then a Satoshi would be $1 each in 2009 dollars. That would be $200T, which was the world's 2009 assets. This is a reasonable distant hope because only the biggest blockchain can be the secure definition of truth because its miners could destroy any other non-3rd party, non-oracle chain with a 51% attack (or timestamp forwarding). Every world asset that wants to define its owner (or vice versa) in the most secure way without a central authority must reference a BTC transaction.
The inability to inflate the references faster than the increase in world assets prevents the references from losing their value. The constant quantity aspect is kind of a cheat and marketing. Early adopters profit at the expense of late adopters to the "faith". Currency has always been directly connected to government / religion. It seems to be about deciding which "God" is in control of the assets via the references. Our ideas of "freedom" originate from the universal ancient tradition of debt cancellation. Bad rulers kept debt in place until the economies were chocked to death. The people would bring a new ruler (or religion) to power and he would erased all debt. That erased the power of the people who were in control and supporters of the previous ruler.
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There is an unavoidable, unnoticed macro-economic reason for the fighting: Society wants and needs BTC to expand. BTC wants to fork. Devs think they are fighting to keep it together, but they are actually fighting because macro-economic principles want it to fork. I do not want to have to choose between alts. I want BTC, but I want it to expand with it's use so that it becomes a constant store of value. This will optimally help society by enabling me to write contracts that reference it as "joules of value". Even if it always increases, my renters and I can't use it because we don't know the rate at which it will increase in value. Destruction of joules via making and running hardware is not the defining aspect of "joules of value". This problem goes back to the inability of b-money to equal a basket of commodities as Wei Dai's indicated.
New users want lower price. Old speculators do not mind getting 2 coins for 1. Miners won't mind splitting up to get more coin even it if each is half price because hashrate competition is half. Everyone just has fear of the unknown, and a mistaken belief that capped quantity is best.
Some developers think they have a better idea when deep down they want central control and notoriety. Other's know they have a better idea. Both sides don't realize BTC wants a fork. Let the ideas compete. Let there be a fork and let the market place decide the relative value of each. I'm going to keep both indefinitely because they will settle to Zipf's law (#2 =~ 1/2 value of #1) as ETH crumbles from not following Satoshi's axioms of simplicity and non-3rd party timestamp.
You can derive all characteristics of an ideal money from one underlying goal: constant value. An approximation is a basket of commodities. Going deeper, this approximation is based on the "joules" required to construct and run the commodity-producing equipment. But the "joules" is not exactly a physical measurement. It includes a "difficulty" factor that society has in acquiring and utilizing them. More precisely, it is Gibbs free energy. This may not be the ultimate measure because there is an "efficiency" aspect in how it's used even if the machine is 100% efficient in converting it to usable energy. There might be a subjective nature to how people need to define "constant value". The currency at least needs to expand with the size of the economy to keep constant value. The ultimate goal is to keep the terms of contracts valid. But there is something else just as important: it needs to slowly devalue so that hoarding is discouraged and investment is motivated. This prevents successful participants from relaxing. Evolution does not seek fairness. It seeks power. The most efficient participants retiring is not the goal. It is just a carrot to motivate them. Slow devaluation is a way of erasing old debts which drives a rejuvenation of economic activity, redistributing wealth away from the 1% who naturally use wealth to guide markets into corners or to simply loan out at interest above the rate of coin inflation until they own all the coin via the "magic" of compound interest, further stifling growth from lack of coin and having more people to come beg for a loan.
But the initial and short term goal is constant value so that CONTRACTS have a reference point that is exchangeable between all other contracts in any given legal system that is securing law in a marketplace. The value should be constant in space and time, with some caveats like the needed inflation above, and remote places that do not have a large and diverse marketplace (the coin will have more value there).
That is the background you'll need to understand the following. If BTC is going to be a currency instead of an asset (which provides the backing for real currencies), then it needs to fork as its use expands in order to maintain constant value, or it will have to let alts take away a greater and greater share of the growing cryptocurrency market.
So your point is correct only if BTC is going to be an asset. Let currencies reference it in large quantities in a slow manner in something like the lightening network. Assets and currencies are diametrically opposed if the asset has a capped quantity. BTC and everyone who will use it and currently holds it want BTC to fork into many coins to maintain constant value if it is going to be a currency. That is the underlying cause of the arguing.
I think you failed to appreciate Nash's "value stabilization". Bitcoin is not a commodity. The joules needed to construct and run the mining equipment are a destruction of value but real mining adds value. A real stable-valued commodity is not one that is not going to dry up in the near future. It stops being a commodity in a useful currency sense when that happens. Granted, BTC as a commodity has a lot of features like gold: expensive to mine verses its economic utility and largely capped in quantity (at least without a new tech advance in gold mining). But this is why gold is more useful when a law-abiding marketplace is either non-existent, stagnant, or dying. Growing economies do not need or want gold except as a safety hedge against disaster (see previous sentence).
I disagree that a measure of value in a market place is unavoidably arbitrary. If the "Gibbs free energy" connection is not fundamentally correct, the basket of commodities is pretty good. I believe it (or both) are founded upon letting the currency quantity (adjusted for velocity) be proportional to either the total non-artificially inflated assets in an economic system under its control which might be proportional to the "important fluid assets" of some sort (like the commodities). I think by being proportional to what a group of people have under their "total relative control", it gives a gut feeling to how people define value. If they become rich in having more assets nuder their control then it takes a larger quantity of the currency to feel like it has the same value. This breaks away from a direct joules measurement, but it leaves open the possibility of a joules per joules measure. The joules of value a constant-value coin represents is a proportion of the total joules of value in a society.
The size and efficiency of their commodity-producing and delivering infrastructure should stay proportional to that wealth. If the commodity machine starts struggling to meet demand and prices rise, then the coin is deflated to encourage investment in commodity infrastructure while reducing the strain on commodity production. Then there is the converse.
This discourages economic bubbles. Better commodity-based economics enables larger armies to destroy other economies. Democracy subverts capitalism towards higher commodity production instead of concentration of wealth.
This seems to break away from the joules/joules measurement, but I have a out: an ideal currency should not be a direct joules measure as I initially said, nor the proportion. It should be also divided by the number of people. If commodities got scarce, there is the implication there are too many people for the commodity infrastructure. The commodity infrastructure should be valued relative to the number of people. So the coin is restricted with the commodities to make them both retain the same price (to keep contracts valid) and this makes people have less coin (worth less) and thereby work harder for the commodity production.
I've been trying to discover the connection between evolution, economics, and all other adaptive learning "machines" for years. Here are my latest tweets in this effort. I should point out all machines replacing biology are doing so because they are removing oxygen from metal, silicon and carbon "ores" which results in a far lower entropy per mass of the economic machine. Hardness and reliability are deeply connected to lower entropy per mass. There may be a connection between entropy and coin I have not discovered. Gibbs free energy touches upon it because GFE= joules + pressvolume - entropytemperature which is "energy available for work". So I'll consider the possibility that entropy per mass decrease we are witnessing in our evolving economic system should be connected to a reducing quantity of coin per person.
My last tweets:
Local heat/noise fluctuations under gravity/coin constraints discovers greater systemic efficiency when energy comes in & entropy goes out.
Economics, evolution, & learning are closed but not isolated thermodynamic systems. Energy in, entropy out. Entropy per mass reduces.
If you shake a jar of objects that are in a gravity field, the objects will compact. Compaction is a lowering of entropy when all other variables are the same. Entropy is conserved. The excess entropy escapes during the shaking as low-energy black-body radiation photons as a result of a heat increase from the shaking energy and friction. Energy was converted to lower entropy in the jar, plus even more entropy that was released as the heat escaped.
In evolution, the shaking energy is the Sun and moon. I've written on the importance of the moon to life on Earth. The mass on Earth is constrained to the surface which is the jar.
In economics and A.I. energy obviously is coming in from the outside, and heat is escaping. There is also a lowering of entropy per mass as in the jar and evolution. Law and Earth are the jar. Currency is a conveyance of energy between participants in accordance with the constraints. To allow greater compaction in a jar, sometimes you need more room for new positions to be discovered. In A.I. they periodically relax variables so that they can take on different values before they are slowly constricted again. This enables it to get out of non-optimal solutions. There is also a redistribution of wealth at times in A.I. to make sure it does not get stuck in local minimums (the 1% taking over).
The end game of currency will be a trust network where your reputation among friends and past buyers/sellers is the amount of currency you own to purchase things in the future. You can't lose your keys because your reputation is stored on the network. It's not centralized in any way like bitcoin, except for the protocol people should agree on. Complete anonymity is not possible, but only sociopaths don't have any friends and don't deserve any currency. A super-majority of friends can rat you out or give your keys back. You can't exchange with strangers until the network grows tentacles via 6 degrees of separation. You are penalized if a friend cheats and vice versa. You can have multiple identities but it means you would have to split friends among them, not getting any net benefit except fall-back security and dispersion to distant networks. There is no currency except how friends of friends of friends etc choose to score your reputation. There's no profit to being a dev or adopting early. There's huge profit in not being anonymous.
your FB and Amazon "upvotes" would be carried over by FB and Amazon using the correct XML interface. And if they don't, then companies that do adhere to the protocol to open up the data they're collecting to your friends would win out
DNA = blockchain w/ many forks & new genes = new coins (virus-induced?). Genes = environment's currency to economize resources 4 negentropy