1.
If you look at the bubble chart, something interesting has happened: nothing. In fact, the price fell to about $420, and then it has been on a steady but slow uptrend over the past few days, right along the lower boundary. Rather than a catastrophic crash or a huge rise as everyone was predicting, there has been a slow increase.
Remind anyone of anything?
2.
Yesterday, there was some discussion about developers, with some users attempting to make a distinction between hardworking developers and "smart" developers. I don't agree that you can draw a chart with four squares in it and then group developers into a continuum along two axes.
The problem is that you can't separate these two characteristics. People who work hard at things tend to become smart. Lazy people never make an effort to learn anything and therefore remain dumb. You can't give people a test in any subject that rules out the effects of effort and singles out "intelligence," because intelligence isn't something that is set in stone and isolated from all other external influences. Even if you use general tests like IQ scores, which aren't even accurate for adults, they have to be continually be readjusted as education improves and people become smarter over time.
Therefore, most developers fall in the "smart and motivated" or "dumb and lazy" categories, which is why I've said there aren't many people in the other two squares of the chart.
3.
In her latest exposé, Kashmir Hill returns to the streets and tries to live for a week on bitcoins only. Unfortunately, the results are discouraging. While she has, so far, found more uptake than previously, she has also discovered that many businesses have poorly-integrated POS systems or (worse) have stopped accepting bitcoins altogether.
Businesses stopping accepting bitcoins is worrysome. If it is widespread, then educated investors need to figure out why those businesses have stopped.
On the other hand, this series of articles bodes well for the price of bitcoins. If the current price is based upon many fewer businesses than we thought accepting bitcoins, and it has finished falling, then we are far earlier in the adoption curve than expected, and there is far more money to be made.
4.
I did some thinking about what the remaining threats to widespread bitcoin adoption are. I had planned to list them here, but after stewing over them, I only came up with one: the upcoming bubble goes way too high and the 1MB transaction limit is reached, so that transaction fees become so high that they choke off the network and transform it into something less valuable.
The reason why I see that as the only real risk is that in all of the other doomsday scenarios, like a terrorist attack financed by bitcoins, the network remains untouched and eventually resurrects itself once the political pressure fades, or continues to be used elsewhere.
The 1MB transaction limit is such an insidious problem because it is the only scenario that actually affects the nature of bitcoins themselves. Reaching the limit reduces the value of your wallet, because rising transaction fees would essentially inflate the currency, taxing your savings. Unlike the other catastrophes, in this scenario, people who want to use the network can't continue using it as they did previously.
Other
- Today's irrelevant fact: in my quest to see what can be predicted other than bitcoins, I discovered today that phenology (https://en.wikipedia.org/wiki/Phenology) is the science of predicting natural plant and animal events. It turns out that for every 100 feet in elevation, 100 miles north, or 100 miles west from the coast (at least on the eastern half of the US), the leafing dates of trees are delayed by one day. Apparently, you can predict when the trees will grow leaves by looking at when trees at a lower elevation did. So I looked at pictures of the White House on April 28, saw that many of the trees in the background were green, computed that I live 1300 feet higher, 150 miles north, and 150 miles west of Washington, and can predict that the forest should start growing leaves on May 14. It's amazing how much knowledge is available in any field to predict future events.
- Days until July 24: 77