Administrative stuff
I thought that, when I decided to post here yesterday, there would probably be a limited number of very interested readers who joined me, while most would stay behind on other subreddits. Certainly, nobody would actually contribute to the discussion.
Instead, there were hundreds of visitors. I last looked and there were 110 subscribers in the first six hours, and we have lots of great contributions already. By the way, there are excellent articles that were contributed overnight (Eastern). /u/RyanOLeary examines the fear that banks have about cryptocurrencies, to which I replied and you should too.
Someone brought up an interesting point yesterday that it could be seen as unfair if I deleted posts. I don't want to delete posts, because I want to concentrate on writing. /u/Kibubik will solely moderate the posts within my threads, and I plan only to delete full topics that do not contribute to the forum, and only if I'm the only one around (there was one yesterday that had no body, for example).
/u/yruafraid also volunteered to spruce up the stylesheet and give this place some character. Within a few days, it should look a little less default.
Bitcoin is not a huge development operation
I greatly respect /u/emocmo's contributions, and his point and figure charts have made me money in the past. That said, we were talking about the 1MB transaction limit yesterday and he stated that there were many "software engineers all over the world" working on the problem. He is incorrect.
While the engineers are located around the world, there aren't many of them. In fact, the Bitcoin Foundation only has a few million dollars of cash on hand, and they are the only organization at this time (unless something has recently changed) paying people to work on the protocol itself. The group of really knowledgeable developers working on the core protocol itself may number fewer than ten.
There are huge numbers of developers working on all sorts of auxiliary areas. But there isn't any money to be made in development of the core protocol, so nobody can afford to work on it. I wish I could share /u/emocmo's optimism that core development issues will be resolved, but I don't see there being enough manpower to resolve any except the simplest and most time-critical issues, let alone huge forks, at this point.
Matt Miller recommended to put bubble chart on TV
In /r/bitcoin, /u/mattmiller1973, a journalist, is asking users what he should talk about on Bloomberg when he spends the day on TV talking about bitcoins.
At one point, someone brought out a bubble chart and told him to talk about the 234-day bubble cycle. If he does, that may be the first time the cycle has been mentioned in the mainstream media, or at least outside of places like /r/bitcoinmarkets.
Since that has never happened before, if Miller does put the charts on TV, it would be interesting to see what effect that has on the cycle itself. The cycle, in part, depends upon ignorant people buying in at the wrong times of the cycle. Myself, I don't think it would have any effect whatsoever, but perhaps there are users who feel differently.
Bitcoin doesn't react to world events, yet
Business Insider was talking about how there was a first yesterday where bitcoin rose $15 immediately after the European Central Bank announced even lower interest rates. While it is compelling to think that people are using bitcoin as a safe haven asset, I don't place much credibility in the theory.
Bitcoin is worth very little right now, less than most companies and even (as one user pointed out) skyscrapers. It is so volatile that people can lose 10% of their money in a few hours. Bitcoins are not even close to being well-known enough to be used as such an asset. In the future, it will be a different story, of course. But when $1m causes a huge crash, you can't store wealth in bitcoins and call it safe.
By the way, a good rule of thumb in journalism is to ignore any articles that end with a question mark in the headline. In such cases, the answer to the question is always "no," because why would the author write the headline as a question if the headline were a definitive statement?
What is PayPal's business model?
CEOs don't get on TV and mention stuff randomly. Patrick Byrne started accepting bitcoins just a few weeks after he got on TV saying he wanted to accept them. PayPal and eBay are almost certainly going to accept bitcoins, and soon.
The question is what PayPal's business model for that will be. To me, it seems that PayPal has an opportunity to become the #1 exchange overnight if they would simply integrate bitcoins as a currency into their existing products, and then allow people to convert between currencies at no fee. They already have all the licenses necessary to do this and, more importantly, they have a marketing team that can easily afford to plaster the airwaves and destroy Circle before they even launch.
PayPal has another opportunity that nobody else seems to be seeing, as well. Eventually, the 1MB transaction limit is going to significantly reduce the activity on the blockchain. Exactly how that plays out is to be determined, but PayPal has a large enough userbase that it can offer 0.1% microtransactions between users (which includes just about every serious merchant).
This is what I've been talking about with the blockchain becoming a ledger for huge transfers between banks. If PayPal enters the space, the promise of microtransactions will finally be realized, but what will happen is that PayPal will become a sort of "bitcoin clearinghouse" that takes all the 0.1 cent transactions from newspaper articles and bundles them together into one huge transfer. For example, consider:
- There are 1000 0.1 cent transactions for a merchant registered with Coinbase from PayPal users
- There are 1500 0.2 cent transactions for a merchant registered with PayPal from Coinbase users
Other
- If you didn't watch last night's NBA game, watch a review on ESPN. The temperature in the building reached close to 100 degrees by the time that all the fans had left, as the air conditioners had failed. The humidity also rose immensely. That game was a farce, and it's a miracle that none of the players were hospitalized. If baseball was able to postpone a game in the 2008 world series when Citizens Bank Park was underwater, basketball should have continued that game when the air conditioner was fixed.
- Days until July 24: 49