Many Cryptos should gain in value a lot

Bitcoin, as I came to understand it, was constructed to deal with very large amounts of value. Day to day payments are often things like going to the supermarket buying groceries. It is almost like cursing to me when a group of Bitcoin enthousiasts shout that this is what it should be used for. Paying groceries with Bitcoin, really, are you kidding me...? Yes,I see the 'unbounded' Bitcoin developement branch as another Altcoin, just like Bitcoin Plus. At least that one has its own blockchain. Sure, it is fun to order take out food and pay with Bitcoin. Still I see it to be unfit for mass consumption and it was to be used for things like mortgages.

There is a story behind the creation of Bitcoin and how supposedly a legend by the name of Satoshi Nakamoto created it. Now the legend could be a group of crypto anarchists, or really just one person. Some even state that it is part of 'Agenda 21', but that makes me want to construct a hat of tinfoil, so I'll leave it at that. The reason to construct something like Bitcoin was to put the Banks out off control. There was this mortgage issue that finally was the last straw for the apparant Nakamoto Satoshi to take his anger and let it evolve into creation. And as we all know, that is Bitcoin. And maybe even the 21 million was done on purpose, as a joke, but that would make 'Agenda 21' appear to be a real thing. But I also know wearing a tin foil hat is rubbish, dangerous even. (And as you may have guesed, this is not your average post about Cryptos.)

Numbers tell something about a future value

Try to give every person on earth 1 Bitcoin. Right now you could only grant that to 16.2 million human inhabitants of planet earth. It is already about 2 million too short for the people of the tiny country I live in, Nederland. At current levels there would be about 0.0023 BTC for every human being on earth. Now try to transact that in your mind to about 7 billion people, to get this alternative economy going. Oh, almost forgot, transaction costs... 0.0006 BTC off, leaves 0.0017 BTC for every human on the planet earth. And the inflation of Bitcoin really has a future limit, while the earths population might not have. It could even be 8 billion already, it has been a while since I last counted them.

Bottom line of taking this into the apparant realm of the absurd is that there is an extreme scarcity when it comes to Bitcoin. And that accounts for Litecoin too, by the way, like I pointed out before, it has a huge value growth potential. So does Bitcoin, as it currently is still relatively very cheap. Yes, it is not like you would go to an exchange and state: "I'll have a dozen of them Bitcoin please, and while you are at it, get me four times that in Litecoin, thanks..." In fact I have a factor 30 more LTC than BTC, but that is because I believe it has much more short and mid term growth potential. And the Bitcoin developers and its community need to get their facts straight again, before it can even start to really lift off.

Some simple mathematics

There is such a, relative, small amount of full Bitcoin available that it needs to hold a lot of value per BTC. Imagine I wanted to sell my house, and more would want to do that with Bitcoin, real estate worth millions. How would one fit that into a maximum of 21 million BTC. Yes, then the 8 digits make sense, because 1 BTC needs to be divided up quite a lot to handle the real estate market for instance, or even a small part of it! And then it would not matter if it took a full hour to confirm a transaction of 500 million Euro worth of value. It would even make sense that the transaction cost was relatively huge. Even if it were 1 pro mille, would you mind? Well, I would be okay with it even if I made 10 trades a day like that.

And then there is this idea that states Bitcoin can be used for day to day transaction if the blocksize were to be set free. Currently the Bitcoin network can manage about 3.3 transactions per second. No, that is really how low it can handle. The transactions that do not want to pay a fee will be put on hold. Those who want to pay a bigger transaction fee, get in a block faster. That is a free market, I think some would call that. Still it is bound to 1 block every ten minutes. And this block is about 48576 Byte less than a real MegaByte. This way the Bitcoin blockchain could grow about 140 MB a day. That is about 50 (real) GigaByte per year.

Now, please hold on to those numbers. Currently when at full Steem (see what I did there?) the Bitcoin blockchain could grow about 50 GB per year in size. Huge harddrives, fast hardware and a glass fiber internet connection would be nice already with those numbers. Not bad, 50 GigaByte blockchain growth per year. But that sets a limit to the amount of transactions the Bitcoin network can handle, about 3.3 per second. Again, hold on to that one...

Bitshares does 3330 transactions per second

Yes, this one is for the home team, not only Bitshares, but Steem as well. The Bitshares blockchain technology has proven itself for about 3 years now that it can handle blocks like 1-2-3. Steem as a blogging platform on a blockchain could not even excist if not for the 3-2-1 aaaaand it's locked in. Just try to imagine to post with Bitcoin speed, or Litecoin, that is 4 times faster. But we are talking minutes here, not seconds! It would be like transmitting to Voyager far out in space and waiting for a reply. And even that Ether based one that claims its posts can be done taking 20 seconds... Come on, even with Steem it can be annoying when that first upvote did not get in and you have to wait another 3 seconds. (Just putting it in here in the hope that you understand what kind of supreme blockchain technology you are using right now!)

Bitshares had a stresstest, on their test network, recently that had an all time high of 3330 transactions per second! The value of Bitshares was rewarded by the market 'a bit' for that. And it will be more if people begin to understand the differences in blockchains and what their actual purpose is to be for real life usage. Remember Bitcoin being able to do about 3.33 transactions per second? Therefore it takes 1 MegaByte (slightly less in fact) in blocksize currently. Now, to even match Bitshares it would have to use a 1000 times bigger blocksize. Because 3330 divided by 3.33 gives 1000. How big is such a blocksize you say? Indeed we are talking 1 GigaByte sized blocks every 10 minutes...!

These need to be hashed at an ever growing difficulty. The data needs to be send all over the peer-to-peer network. But maybe IP6 multicasting could solve that. But we are talking huge numbers here. And the computers handling these huge blocks need to be able to do so. And probably a nuclear powerplant next door. That might be put a bit cynical, but I find it hard to keep a serious face on when I read about that weird 'unbounded' Bitcoin developement branche. Really, on what planet do they live? Hello, is there anybody out there? Please do the math and then think about what might be the intentional use for Bitcoin in the first place. And I'm leaving out the transaction costs that will be even more expensive than what could be expected for Bitcoin going SegWit. Because Bitcoin was never ment to be used for buying a dozen eggs at your local grocery store.

First pizza sold for 10,000 bitcoin

Now somewhere there must be a very happy restaurant owner and a very sad, former, student. Yes, those days, when everybody could mine BTC even with one CPU in their computer at home. And I remember that I had one of those early wallets downloaded and installed, it said nothing, just 0.000 BTC. Boring interface, WXwidgets based was in not? Well, I have repressed those memories, because I could not be bothered back then and uninstalled it shortly after. Anyway, back to the here and now. Bitcoin with its limited amount ever to be released is unfit to handle small to medium transactions well. It could be used as blockfillers, but the main task for BTC is to hold extremely high amounts of value. Even divided by 8 digits it still will be a lot.

Now at current marketprice that piece of food would have cost almost 11 million Euro! And this is even peanuts if Bitcoin gets used for what it was innitially intended for: handling huge amounts of value. And paying a good transactions fee for that will be like an insurance. Selling a real estate for 500 million, well you just want that to work out right. Currently though it is still possible to order out and pay with Bitcoin, but that will change. At least that is my guess, because I do not see a realistic future for BTC usage if the blocksize gets unbound. Really, to get 3330 transactions per second would need 1 GB sized blocks! And then to compete with credit card payment systems? Come on, it was not ment to be able to do that! 300 GB blocks every 10 minutes? Do the math if you do not believe me, please...

Bitshares can handle it and will stay cheap

Just like Steem, Bitshares can handle blocks like 1-2-3. If you have not used Bitshares, then do so, even it with just a few bucks. Do some trading there on the Decentralized Exchange {DEX}, because it is an experience that I can not sell with words. And if you have a Steem account, you already know the speed, you experience it every time you upvote, post, reply, make a trade on the internal, decentralized, market or send someone Steem. Imagine this taking at least 10 minutes every time, like with Bitcoin. Or 2.5 minutes like Litecoin. That would drive you up the wall if you'd have to wait for a sandwich payment to get confirmed, after an hour or so, if you set the transaction fee too low.

So for fast,experienced like almost instant, day-to-day transactions things like Bitshares and Steem are way more realistic. That is because the setup is different, the blocks are constructed clockwise, as simple as 1-2-3, that is why I hammer on that mantra over and over again. Bitcoin, Litecoin and all those alike can never ever do that, and should not do that either. The way they are constructed, set up from the start, is to be able to hold a lot of value. Meaning that 1200 Euro for 1 BTC is still a bargain. And if it does not go beyond belief, 40000 would be a good start, than I think it has failed. So, the Bitcoin developers and community really need to close ranks again. Because I think Bitshares could even become a safe haven for when BTC does split. And maybe the 'unbound' branche should just start a true fork and create a new Genesis block for it.

Ending with Bitshares and a bit of Steem

The price of Steem will not go towards Bitcoin levels, nor does Bitshares, in my humble opion. Although Bitshares has a clever pegging system that made it possible for me to buy things like (bit)Silver. At least I see a different usage for things like Steem, Bitshares, Peerplays and the future Bitcontracts. Steem could go to an Euro worth. Bitshares maybe a tenth of a Euro, or even more. But, its main advantage is that it can inflate more, due to market demand, and burned if demand lowers.

One of the best things of these kind of 1-2-3 blockchain systems is their real life day to day use. Because it is so extremely fast and can scale like 1-2-3! This is something that cryptos like Bitcoin, and its forks, are unfit for. They are for holding vast amounts of value that need to be secured very well and the price that this costs will be gladly accepted for the guaranty that is gets safely where it should. Even if it takes an hour to fully confirm it was.

Bitshares, Steem, Peerplays and the future Bitcontracts, are for the people, the merchants, those with no bank account but still a smart mobile. For a different kind of free market based economy, Free Open Sourced, with a public ledger to trust. And for the day to day use the best bet, as I see it, is Bitshares and its relatives, like Steem, for it is easy like 1-2-3. Where Bitcoin, Litecoin and all their relatives will be used for very high amounts of value. And they can all excist peacefully together in the crypto realm.

Have a good one!

License: cc0/public domain. Image by @oaldamster,
background 'bitcoin' photo by Benjamin Nelan at Pixabay

PS Only put in what you are willing and able to lose. And my speculations might be as good or as bad as yours.

EDIT 1: text correction and added some links