Why do you bring that up whenever bitcoin's faults and miseries are pointed out?  Do you think that somehow bitcoin will be a better monetary system than the Venezuelan bolivar or the Zimbabwean dollar?  Do you think that it will end economic exploitation of the poor by the rich?  Looking at its history and economy, I see no reason to expect those things.  Why are you so sure that the 21 million limit will never be lifted, or that there will never be a negative interest tax on blockchain accounts?  Why are you so sure that it will not be superseded by some other cryptoscam in a few years time?

If the rise is indeed due to MMM's "Republic of Bitcoin" ponzi, it may continue for a while, unfortunately. Mavrodi's previous scams are estimated to have moved 10 billion dollars.  Turnout was 50 million dollars per day at one point -- 50 times what bitcoin miners are sucking from bitcoin buyers at present. 

https://en.wikipedia.org/wiki/MMM_(Ponzi_scheme_company)

Something tells me that the Bitcoin Alliance, created to cleanse bitcoin space from criminals and scammers, will pretend not to see that one.

By the way, note that 50 people committed suicide when MMM finally collapsed.

Is that an ordinary cone, or is it the mythical Round Pyramid of Akhenaton?  

I wonder if anyone would see bitcoin as a good way to protect one's money from a 3% devaluation of the Yuan...


That report may have had more impact in the West than in China.  Back in mid-2014, some PBoC official was quoted as saying that the bank had no objection to bitcoin ownership and trading, and compared it to trading rare stamps.  I can't see in the CAC report (through Google translate) a more positive attitude.  I don't see it as signalling a relaxation of the current restrictions (e.g. as suggesting that financial institutions could start investing in it).  Instead, I read the report as saying "bitcoin is connected to illegal activities, more regulation may be needed".

I wish that there was a real translation by someone fluent in Chinese.

Demand has always been exactly equal to supply; otherwise you would see unwanted bitcoins scattered on the ground around the bitcoin mines, or kings on their knees begging in vain for bitcoin holders to sell them a single satoshi for all the gold in their kingdoms and the hands of their princesses too.

You mean that more people are now more willing to pay more dollars for 1 BTC.  Fine, but why?  Saying that "the price rose because of supply and demand" is like saying that the weather is hot because the temperature got higher...

Wouldn't an "F" of "Fail" be fair and fitting for failing to follow the familiar format?

Then what is your explanation for that rise?

My guess is that the month-long rise from ~220 to ~270 was due to MMM's "Republic of Bitcoin" ponzi, while the spike to ~280 over the last two days was due to the VAT decision.

It seems that the VAT news have already been forgotten.  "Wat VAT?" 

The only reason why this thread has outlived all the others on bitcointalk is that the "topic" extends from the walls at least fifty miles in every direction, so it is pretty hard to get "off" it.

Do you all agree that this thread is more fun in the old pyramid format?

Thanks for the lesson! But how would that work, for example, if a village needed to decide the path of a road to a nearby town?

Smart means left, not right, of course. 

Indeed I confess that I do not know the difference between the two when it comes to this issue: what decision process they advocate, in place of democratic vote and majority rule?

Ahem, that is what Gavin and Mike tried to do with BitcoinXT.  But it seeems that "come up with their own implementation" is not allowed in bitcoin space...

What about Gr[ae]yscale -- is it included in the deal?

EDIT: Apparently not, Greyscale is owned by Barry's  Digital Whatever

Because those international committees (IERS, IUPAC, ISO, IEC, etc.) are formed by representatives of countries, usually appointed by the national standards bodies; and reach their decisions by voting (after years of technical discussion).  Correct me if I am wrong, but libertarians despise voting, because it means the majority imposing its decision on the minority. 

Libertarians prefer "consensus" instead; because, by definition, a consensus decision must please the minority parties too.  A pity that they can't explain how consensus could be achieved when the minority does not like what the majority proposes...

I explicitly said "expectation of future usage".  That was THE selling point in Nov/2013 when I first learned about bitcoin.

And I also did not say that the "proper fee" question is unsolvable. I said that there is no solution (known, or within sight) and that it would  requires another brilliant invention. 

(Without some automatic and economically sound fee adjustment mechanism, a workaround would be to have a governing body like the international commission that defines and updates (by voting) the Metric System: with no legal power, but with effective moral power derived from competence and representativity.  But try telling that to the libertarians...)

This price surge seems to be led by the Western exchanges, and must be due to the European VAT ruling.

Were there any countries where bitcoin trades were already paying VAT (or inhibited because of it)? In Sweden maybe? In the UK?

The price of bitcoin has been, and still is, determined by the expectation of its demand being high in some future time.  

Until recently, that high future demand was supposed to come from its use as a currency for internet payments.  The current level of use (maybe 5 million USD/day, by optimistic estimates) is too low to produce that demand, by orders of magnitude.  To justify a price of 2500 USD/BTC (say) one would need 100 to 1000 times as much use.  

The current "normal" traffic T, ignoring the recent "stress tests", is about 120'000 tx/day, or about 0.45 MB/block on average; and has doubled in the last 12 months.  That is too close to the effective capacity C of the network, currently ~200'000 tx/day or ~0.80 MB/block. (C is not 1.00 MB/block because of the inevitable empty blocks).

Granted, much of that traffic is not payments (bitcoins changing hands in exchange for other goods and services).  Lots of it is gambling, wallet housekeeping, tumbling, notarizing, testing, and possibly fake traffic meant to give the illusion of increasing adoption.  How much of T is due to those "non-essential" uses?  Guesses vary; my own guess is 90% or more.

But even if 90% of T was "non-essential" and could be eliminated, to get to 2500 USD/BTC one would still need 10 to 100 times more traffic than there is today.  If running a full node is not viable for home users today, it will be quite impossible by then.  In other words, if the proper working of bitcoin depends on home users running full nodes, then bitcoin is not a viable competitor for PayPal or Apple Pay, much less for VISA.

Back to the present, the block size limit would not be such a pressing issue if that "non-essential" traffic were excluded.  IMHO, the best way to do that would be to set a significant fee and a significant minimum transaction value -- say, 0.001 BTC (~0.25 USD) per output.  That is how Charlie Lee solved the spam problem in Litecoin; but his suggestion to the Bitcoin devs to do the same fell on deaf ears.  (So much for the old claim that "Bitcoin will not be superseded by a better altcoin because it can itself incorporate any good features of the latter".)

By my guess, a significant fee and value threshold would reduce T to 1/10 of the present value.  It would also make stress tests and spam attacks much more expensive to the attacker, hence much less likely. (We still haven't seen a real spam attack, but it is estimated that an effective one could be sustained for a couple of days for maybe 100'000 USD/day, or less.)  Note that 0.25 USD/tx is still less than 10% of the per-transaction cost of mining.  On the other hand, it would not prevent the hoped-for 100x or 1000x increase in adoption that would be needed to drive the price up.

Unfortunately, raising the fee is politically impossible, for several reasons.  "No fees" has been a pillar of the "marketing" of bitcoin since the drive for general adoption started in 2013, and is still part of the discourse of important players like Coinbase and BitPay.  A fee raise would probably break gambling compaies like SatoshiDice, and several other companies that are politically powerful in "bitcoin space" (e.g. by sponsoring the "bitcoin media", events, and avertising in mainstream media.)  A large drop in T would also expose the fact that adoption for e-payments is not growing, and probably declining.

A large minimum fee has been opposed also on "ideological" grounds, because it would need some governing body to decide the proper value, and change it from time to time based on the current market price and the state of the economy.  Thus, the small-blockians claim that letting the "fee market" define the fees would be an "ideologically pure" solution.  But the 1 MB block size limit was not chosen for that purpose.  "Market" fees that result from an arbitrary block size limit would be just as arbitrary as fees set directly.  A governing body would still be needed to impose a block size limit, and revise it from time to time, to achieve the best fee and volume numbers.

So, what is the solution?  In my view, there is none; hence my signature.  As most of you know by now, I think that bitcoin should never have been marketed to the general public. It was started a technical experiment to test whether the protocol worked in practice, as it seemed to work in theory; and should have remained such.   The protocol mostly works, but the result is not a viable currency for several problems that were not foreseen.  Fixing those problems seems to require another couple of brilliant inventions, like the PoW blockchain.

You mean pawwots, right?