Saturday, October 5, 2013

Money is what money does: Treats which Bitcoin community ignores and scientifically can face


  • The protocol change. When people are in crisis, they do foolish stuff too. Here are rules which controlled by Bitcoin client aka public awareness:
    • Money emission: the fact that we can have only 21 million Bitcoins. The quantity of Bitcoins could be a subject for change during the years: since media rules the world - some powerful organizations will try to persuade masses to change the quantity of bitcoins from amount of 21 million of coins to the amount of for example 210 millions of bitcoins. Or they could even set unlimited amount of bitcoins for future bitcoin clients (they will just delete those restriction which was set by Satoshi Nakamoto)
    • Rewards for mining. The same public awareness is a pretty achilese feet: it brings weakness for the Bitcoin: when the Bitcoins community will face such problems as lack of network computing power, then bringing back the rewards for mining will raise again! People by all means will try to return the rewards for mining: even though now (October 6, 2013) the bitcoin reward is 25 BTC, and later it will be closer to 0, the community will make an attempt to persuade masses to return to the old 50 BTC or even set a new reward for mining blocks: 100 BTC.
All of those changes to protocol could bring endless amount of harm to the Bitcoin system, and that's why as conscious people we must be sure that masses won't make such dumb decissions. With the Bitcoin protocol I would recommend everyone to stay conservative, but another problem arises:
  • Recently FBI arrested the SilkRoad owner who had $3,6 in Bitcoins, probably that's a miserable amount of bitcoins in comparison with how much bitcoins are out there in circulation, but anyway, there is possibility that huge corporations such as Microsoft, Apple, Govt or whoever else could make an attempt to purchase all of the Bitcoins (right now 11 millions of Bitcoins are in circulation, and that means that it will take only $1,5 billion to purchase all amounts of bitcoins). 
That's pretty scary thing, since that will bring some unpleasant segmentation for the bitcoin market. Let's imagine that Microsoft has purchased all of the bitcoins by investing $1,5 billion. And let's imagine that after that Microsoft stopped using that Bitcoins to pay anyone during the next 20 years. Is it possible that a huge corporation will purchase a bitcoins? Yes.

What it will cause if suddenly 90% of bitcoins will be owned by 1 corporation? The bitcoins will raise in price, and people will try to use the left amount of bitcoins (which sooner or later will become 50% since we haven't mined the remaining 10 million of bitcoins yet).

As a Bitcoin investor its the most disadvantageous situation for me when people who own a lots of money now purchases a Bitcoin, because that will again give the initial power to the corporations (if even a 50% of bitcoins are owned by corporations, it is still gonna mean that corporations are in charge of this world)

Right now bitcoin has only 1% of power over the world's finances & economy. But that thing is a subject to change. When Bitcoin will take over the world's economy, it will have around 60 to 90% of influence over what happening in the finance world. In this case when corporations own significant parts of that virtual currency they have a greater freedom for purchasing other financial assets, such as lands, real estate, HR - this two things will never get old.

Okay, we've decided here that corporations won't lose their power due to bitcoins anyway. But how about governments?

Before the Bitcoins, the governments were pretty big at regulating the corporations by regulating their finances. In case if the world will face the Bitcoin revolution where Bitcoin takes over the whole economy, then government will lose its power over regulating the corporations, and corporations won't lose their power, since they will be the ones who's getting the most profit for acquiring and earning the bitcoins, but in this case now they're won't even share this outcome with governments.

With Bitcoins the world will never be the same. We will become a witnesses of pure burn of world where government has no power over the finance world, where Federal Reserve aren't controlling that stuff too, but where giant corporations like an Apple and Microsoft will rule the whole world order.

I suppose that's pretty likely to happen, since they're the leaders in sales.
Doesn't matter how much dollars every bitcoin costs and what value it will have after Bitcoin revolution, the core of revolution could be easily described by just one word: SALES

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