The Seven Network Effects of Bitcoin
When the scheduled speaker failed to show up Trace Mayer, Host of the Bitcoin Knowledge Podcast and investor in Bitcoin companies such as Armory, Bitpay and Kraken, explained impromptu the seven network effects that will lead to Bitcoin's unrivaled dominance and success.
From his talk hosted by CRYPSA at LaGuardia Community College on June 29, 2015
The 7 network effects of Bitcoin are as follows:
Speculation - As a novel, cryptographically-backed asset class with the potential for appreciation and high volatility, Bitcoin is perfect for speculators with a high tolerance for risk. HODL!!!
Merchant Adoption - Merchants will increasingly accept Bitcoin because they can increase their profit margins by avoiding credit card fees and chargebacks.
Consumer Adoption - Consumers can use Bitcoin to save money at certain vendors. For example, getting a 20% discount on Amazon by spending Bitcoin through Purse. Additionally, consumers can buy things with Bitcoin that they cannot buy (easily) in any other way. Consider: An American can buy Persian rugs or Cuban cigars online despite trade embargoes. Bitcoin increases the efficiency of the economy, particularly in niche areas such as these.
Security - Merchant, consumer, and speculator adoption lead to a higher price and thus incentivize more miners to participate and secure the system. The decentralized, immutable transaction ledger also serves as a form of Triple Entry Bookkeeping, wherein Debits plus Credits plus the Network Confirmations of transactions increase trust and accountability across the system.
Developer Mindshare - Bitcoin is a dumb and predictable network with simple rules and a publicly-auditable codebase. It is fertile ground for the development of complicated algorithms, machine-to-machine payment protocols, smart contracts, and other tools. Its decentralized nature allows for innovation without permission. Altcoins (such as Litecoin and Ethereum) pose little threat as Bitcoin is already dominant as a store of value and as a medium of exchange in the cryptocurrency space. If you harbor doubts about the importance of this currency network effect — or worry about altcoins overtaking Bitcoin in some other way; I would point you to Daniel Krawisz with an insightful and though-provoking article on the subject: The Coming Demise of Altcoins. Ultimately, developers will continue to flock to Bitcoin.
Financialization - Bitcoin will eat up progressively more of the market share of legacy banking institutions in areas such as remittances, micropayments, peer-to-peer lending, and the exchange of stocks and securities. This process has already begun (consider NASDAQ's support of Open Assets/Colored Coins for the transfer of securities, NYSE's investment in Coinbase, etc.). Old money risks dying out lest it embrace new protocols such as Bitcoin.
Adoption as a World Reserve Currency - Eventually all transactions will be settled on the blockchain, including house titles, stock purchases, car titles, and other monetary instruments and currencies. Network effects one through six culminate in this final network effect. Any newcomer in the realm of cryptocurrency or traditional currency, for that matter; would need to beat Bitcoin in all seven of these areas. This is unlikely considering the pace of development in Bitcoin Core, the level of investment in Bitcoin companies around the world, the growth in Bitcoin's user base, and on and on; Further price increases will only accelerate the process. Finally, a speculative attack could dramatically boost the value of Bitcoin almost overnight.
Bitcoin is a strong currency: it thrives on the internet; it frees its users from 3rd parties; it saves merchants money; it is deflationary; its code can be audited by all; its developers work tirelessly to improve upon it; the list goes on. The above-listed network effects can only serve to strengthen it. Competitors beware.
Trace Mayer explaining the Future of Bitcoin and why it will succeed. This event was hosted by CRYPSA at LaGuardia Community College is one example of what a P2P community can achieve.
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AdvantagesThe core is the most reputable wallet software for litecoin, suggesting that it's relatively secure. It can be used to send and receive litecoin, making it relatively convenient. As long as it's kept synced with the network, it also contributes to litecoin's overall health: running 'full nodes' (full, synced copies of the blockchain) helps to keep litecoin decentralized, whether you are mining or not.cpa bitcoin make use of different companies. In fact, you may not want to make use ofbitcoin vip
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Instead, the effects of increasing the money supply are transmitted, over time, through an expansion of the credit system. The credit system attempting to contract is the market and the individuals within an economy adjusting and re-pricing value; the Fed attempting to reverse that natural course by flooding the market with dollars is, by definition, overriding the market’s price setting function, fundamentally altering the structure of the economy. The market solution to the problem is to reduce debt (expression of preference) and the Fed’s solution is to increase the supply of dollars such that existing debt levels can be sustained. The goal is to stabilize the credit system such that it can then expand, and it is a redux to the 2008 financial crisis, which provides a historical roadmap. In the immediate aftermath of the prior crisis, the Fed created $1.3 trillion new dollars in a matter of months. Despite this, the dollar initially strengthened as deflationary pressures in the credit system overwhelmed the increase in the money supply, but then, as the credit system began to expand, the dollar’s purchasing power resumed its gradual decline. At present, the cause and effect of the Fed’s monetary stimulus is principally transmitted through the credit system. It was the case in the years following the 2008 crisis, and it will hold true this time so long as the credit system remains intact.about about a digital revolution: telecommunications and email allow forbitcoin token bitcoin planet monero usd bitcoin atm bitcoin billionaire хардфорк monero bitcoin simple
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