DISH Network grants bitcoins legitimacy
There's quite an argument taking place in /r/bitcoin over whether the DISH network news will cause bitcoins to rise, or whether they will fall in value because DISH will sell all their bitcoins immediately upon receipt. This debate is missing the point.
First, DISH said they aren't accepting bitcoins until the 3rd quarter, or a month from now. Therefore, any downward pressure won't appear until then, if any occurs.
The key thing to take away from this is that DISH, overnight, changed the narrative. Before today, there were people who could still argue that bitcoins were always going to be the currency of drug dealers and fringe merchants. Even companies like Overstock and Virgin Galactic have outsized CEOs who are public figures fighting for principles. DISH is just a company trying to make money. How can people argue that bitcoins are a fad when such a huge company is accepting them?
User of the day
Today's user of the day is /u/realz-slaw, who better elucidated what I've been trying to write for a while.
In one of his posts, he imagines a scenario where every bitcoin is bought and sold immediately before and after each transaction, so that the network itself retains very little value.
If bitcoins live up to their promise, then in such a situation, you would have thousands of transactions occurring simultaneously. Even if sidechains or third-party processing services reduce block confirmation times to a few seconds, there is a certain minimum amount of time it takes a transaction to clear, if for nothing else than that the speed of light is slow enough to limit communications speed across the world. During that time, wealth needs to remain in bitcoins.
The amount of wealth that needs to be tied up in bitcoins during these clearing operations is significant, even if bitcoins entirely cease to be used as a store of value. Therefore, the price still needs to rise much higher than it is now, even in that (very unlikely) scenario.
SecondMarket
A few weeks ago, when I was preparing for this ongoing bubble, I signed up for a few Coinbase accounts. Someone suggested I check out SecondMarket, which facilitates off-market trades between high-value clients. I revisited their site today.
It was interesting to note that they have a minimum limit of 25 bitcoins for transactions. I started to wonder why they would choose that number, as it seems both arbitrary and low, given the type of clients they are looking for. However, those who pay attention to these things will notice that SecondMarket's minimums make it a perfect place for miners to unload whole blocks of bitcoins immediately and reliably without getting a different price for each bitcoin.
I wouldn't be surprised if these guys have contracts with the big mining firms, where the miners can sell bitcoins at a steeply discounted rate off the normal markets.
Transfer of wealth to nerds is good
As bitcoins continue to rise in price, there will be a transfer of wealth to nerds and geeks. Currently, much of the world's wealth is held by people in the business of culture: stage performers, actresses, comedians, musicians, and basketball stars. A transfer of wealth from these people to engineers, scientists, and entrepreneurs is a huge boon for humanity.
The production of another movie or TV show, while interesting, provides a limited short-term effect on people's lives. Compare a successful business venture like "CSI" to a company that produces a new drug to treat Alzheimer's disease. Both require a billion dollars from start to finish, but which one is really making life better? Would you rather have watched episodes of CSI once a week, or give 20 million people an extra ten years of quality life?
Bitcoins are getting money into the hands of people who can help society advance, and getting the money away from people who provide short-term entertainment. This is an accidental development, but a significant one.
How long it takes for programming
Quality programming takes a long time. Anyone who tells you about the stereotypical success story where he or she threw together a website in one week is talking about a barebones system that has very few features and (more importantly) is very fragile.
If you ever hear about a bitcoin startup that plans to release its product in 1 month or 3 months, then you should be very suspicious of whatever they are promising. A good rule is to double any estimate that is provided by someone who is not an expert in software development, and change to the next unit. If a new programmer with no experience estimates that a website can be thrown together in 2 weeks, then it will actually take 4 months.
This is very deceiving, because people will point out systems to you that look complete after only 3 months. The developer can also likely give a demo to you of what the system is supposed to do, but only if he gives it. If you were to use the system at that point, you would likely discover that there are a huge number of edge cases unaccounted for, enough that the system is unusable.
I disagree with the /u/Black__Scholes bot
I think we should respect everyone who contributes to the forum, but I disagree with this user's bot. Even with its "updated" predictions, it still isn't using a model that corresponds with the traditional behavior of bitcoins. Using the wrong model provides the wrong results.
Other
- If you've never seen the Scripps Howard National Spelling Bee, which airs the Thursday after Memorial Day on one of Disney's networks (usually either ABC or ESPN), watch a replay. It's got to be one of the most unusual sporting events on television. I participated in this bee 20 years ago, but lost in the second round.
- Days until July 24: 55