Bitcoin Forum

The following post was an emotional blog entry by me but the topic has been redefined by post #5 below, so you know, just go with it.

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Dear cultists,

Please stop fleecing newbies and preaching bitcoin's salvation, claiming it will destroy governments, cripple banks and lead us to libertarian heaven. Bitcoin is an experimental proof of concept that does not need spokespeople to sell it like a pump-and-dump scam, nor extremists who use their position in the community to get rich off of everyone else (honestly, 99% of bitcoin businesses are shovel manufacturers-- 50% of which are scams).

Because you surround the topic of bitcoin with your hyperbole and irrational behavior, I am forced to defend against you; to alert those around me the dangers of following a group that actually believes bitcoin is decentralized and snidely creates memes to mock those "non-believers" around them as "missing out on an investment opportunity".








Bitcoin is not decentralized because money is a social construct, not a mathematical one. People will always join together in large groups for safety and transparency. It is an inevitable part of human history, anyone who tells you otherwise is selling you something, probably bitcoin (so that theirs is worth more).

Bitcoin is not a currency because it is absolutely undependable as a currency and has no stability whatsoever. It is also backed by *nothing* other than the USD, the very currency BTC is supposedly intended to "replace", brought in by followers of said cultist leaders to make their own investment "worth more".

If you want the principles of bitcoin to succeed, stop participating in these forums run by corrupt individuals who make promises in order to receive funds and then do nothing with them; you only serve to give it legitimacy and bring more sheep here for the slaughter.

If you want the principles of bitcoin to succeed, stop creating fan-boy products for other bitcoiners and start providing an actual service or product that people can use (Coffeepress is not a viable product, asshole).

If you want the principles of bitcoin to succeed, treat exchanges just like you would mining pools and never let an exchange get 51% of the volume, no matter how hard it is for you personally.

Stick up for your beliefs, ignore the talking heads on these forums.

I am an anti-cultist and I back bitcoin, only while it makes sense to.

Haven't agreed with some things said in the past dear chap, but this is absolutely spot on.

BB.

I'm with you 100%. Bitcoin will succeed in spite of the "true believers" if it succeeds. Not because of them.

Very good points.  But you need to make the distinction between Bitcoin and the supporting infer-structure. The exchanges being the most critical link.

Bitcoin itself has already proven itself.  Hell, it even survived a blockchain split!  Think about that.

The problem is the centralized exchanges.  We can never get through hyper-exponential mass adoption (that has to happen if Bitcoin becomes used by even 1% or less of all transactions) until we get a decentralized exchange.

We desperately need a decentralized exchange.

There is no reason it cannot be done. It just needs a group of dedicated developers to do it. 

Over a billion and a half was taken from the market cap of Bitcoin, not because of Bitcoin, but because of the complete ineptitude of a few individuals.

None of this would happen with a decentralized exchange.

Mtgox will never fix itself.  They gotta go.  It's only a matter of time before it happens again.

Another exchange isn't the answer.  A new decentralized exchange architecture is.

Developers, lets get the conversation started on this now.

I can agree with you that that would eventually destroy the plans of the cultist leaders by providing a free market, something the current situation is a far cry from. Anyway, I still think the cultist leaders here need to be ignored and let Bitcoin do it's own thing. If someone doesn't use bitcoin, it should be their problem. We do not need to witness to everyone in the world like a religion. They should ideally come to us for help in making their lives simpler. If we have to *sell* something to do them, then it's a scam already.


I relinquish the floor to you. *updates topic title*

With FinCEN requiring every currency exchange to register with them paying millions in fees, that would mean that every peer in the exchange would have to pay millions of dollars.

See how government created monopolies work?

Link? I don't think BitInstant paid millions in fees, and I'm pretty sure BitStamp in Sweden didn't pay millions in fees, nor are they subject to US FinCEN regulation for that matter. Correct me if I'm wrong, IANAL. Besides, USA != World.

Already have one - its called localbitcoins.com.

Honestly, a year ago there was one person in all southern CA on that site - Stephen Gornick. Now, getting coins or selling them in LA is a breeze as long as you're not scared of actually meeting someone in person.

Granted, LA is a big city, but I'm just saying that the trend has been towards more local exchangers, and its only getting easier.

It's funny how much Δ(exchange rate) affects the kind of talk on these forums. It's not about the price, folks.

Having said that, I hope the reliance on exchanges will eventually lessen, and people will move to local trading. The DDoSes and stampede hordes of users disabling exchanges may even be slightly helping there, as it means that people are forced to move to other options for trading.

it's the end of bitcoins if the sole purpose is to manipulate pricing constantly and just make money off the newbie panic sellers.
the utility is completely destroyed. sigh

BitInstant:


Sure, you can have a decentralized exchange that does not include US citizens. Until the other countries adopt similar laws.

Sorry, I wasn't clear, I was asking for the link to substantiate your claim that BitInstant paid millions of dollars in fees to become MSB licensed.

We have a decentralized exchange. It's called bitcoin-otc.com.

Sitting around on IRC waiting for one of a few hundred people to respond to a request to buy or sell when they may or may not have anything to sell is not what I'd call an appropriate exchange to lead the way.

It seems obvious that a P2P solution is the only answer. I'm not a developer, coder, or anything like that, but why can't there be a peer to peer client built that would fulfill this need? I suppose ripple does this to a degree but at first glance it seems too complicated for the average person to use. I suppose the difficulty comes from the transfer of fiat to/from a peer to peer client?

Localbitcoins doesn't cut it.  It needs to be fast, liquid, and have no central point of attack.  It cannot have its own central website period!

Yeah, that is what I figured. I guess one of the inherent problems of bitcoin adoption is the difficulty of interfacing with fiat. Although I guess you wouldn't have to get fiat into an exchange if there was a standardized voucher system that could be purchased though businesses similar to bitinstant.

The million+ number for a license came from this thread:
https://bitcointalk.org/index.php?topic=154672.0

No idea of the source from there.

That thread shines a light on a solution actually, and it is a solution supported by decentralized exchanges.

Humans are how they are.
Some are idealists, some are materialists, some are altruistic, some are greedy, some are honest, some are corrupt, some are smart, some are stupid, some beleave in God and some beleave in nothing.
Nobody will change his nature just because he/she is interested in bitcoin.
You can exchange 1-2 bitcoins decentralized but you cannot exchange tausends of bitcoins against fiat money in a secure way without a centralized exchange. At least not now.

No, it's backed by the faith of the people who use Bitcoin. Just because you can exchange it into US dollars or exchange it for a shoe (this might be a new concept, but all money is fundamentally a commodity), does not mean it's backed by either dollars or shoes.

My mistake, the word I was looking for was "pegged". The purchasing power of your BTC varies not by people's faith, but what MtGox reports the last buy/sell at in USD. So you're right, it's not backed by USD, it's just pegged to USD. It's backed by MtGox. Lol

Bitcoin is not pegged to USD.  "pegged to" means the relationship is fixed or at least fixed within some range.

Bitcoin is not backed by MtGox.  "backed by" means there is a guarantee or promise that bitcoin will meet the expectations spelled out in the guarantee/promise or you get compensated.  "backed by" is even stronger than "pegged to."

E.g. when the dollar was backed by gold, you could exchange your dollars for gold at a fixed price previously established.  The dollar was pegged to gold, or gold was pegged to the dollar and the dollar was backed by gold.

Currently the Chinese yuan is pegged to the U.S. dollar as are several other currencies.  The swiss franc is pegged to the Euro for the past few weeks/months.  However those are not "backed by" their peg.

Thanks for the clarification! How do you describe the relationship with USD (not using Bitcoins in our community, but always trading for USD instead) and MtGox (Needing MtGox to be online in order to "know" the "price")?

Perhaps the solution is not to have a purely decentralized exchange, but instead have an exchange network like NASDAQ.

We already have a decentralized exchange: SilkRoad.

What we need is one not on the deepweb that lets users exchanges normal goods/currency/services for cryptocurrency that is decentralized and has a rating system which is not easily hijackable.  Ripple is not the answer; ripple is modestly decentralized system (see Ripple node list) that is dependent on a centralized means of transfer via US banking intermediaries.  There's no reason why we just can't overnight gold or cash to one another.

It is a floating relationship.

In other words, the relationship between bitcoin and USD is not fixed, it changes or floats at the whim of those who wish to exchange between the two.

This is the same relationship status as between the USD and most currencies in the world (e.g. the yen, pound, euro, franc, AUD, CAD, ...).

The exchange problem is the real issue, and really the only reason Bitcoin has been hurt so far. Decentralized currency doesn't mean much if it is all routed through a lone, very attack-able exchange that alters the price instantly because 80% of the traffic runs through it.

It seems this may be the one part of Bitcoin that should have been built into it somehow, though it seems there will always be a need for singular exchanges.

It seems a better solution is provide an open source exchange platform. I know if Intersango, though it seems like there is ample room for another one that isn't such a pain in the ass to set up. Just like mining is diversified, exchanges must also be this way.

Very good post.

So many talking heads around these parts, each with their own motives.
I won't name names, because they're pretty prolific around here, but yeah, I've noticed that adopters of Bitcoin are starting to deviate from the things that make Bitcoin so valuable to begin with!  Let's get back to the basics!

I'm pretty green on economics, can someone explain to me why having the price of Bitcoin built into it would be a bad idea? I mean, couldn't it be something that miners "vote" on (just as they vote on everything else)? That for some reasons seems the most democratic decentralized option.

As long as there is free market the void will be filled by exchanges ran by people eager to contribute to the bitcoin economy.

I do not understand the whole decentralized obsession.

"United we stand, divided we fall"
Yes but I also believe we need a unified & decentralized exchange system for bitcoin that all independent exchanges can run on, if they wish.

Please read through
https://github.com/p2p/bitcoin-exchange
and come with any suggestions you may have for this system.

You can also participate in the discussion at
https://bitcointalk.org/index.php?topic=172705.0;topicseen


The proposal in the github readme is not only my ideas, but a summary of the ideas i have read through at bitcoin talk - and my own experience from trading stocks and futures at the "real" exchanges / brokerage firms.

Sounds weirdly similar to what I had in my mind.

My idea basically was that you cannot decentralize fiat currency, but you can decentralize debt, however writing protocols that would do so in a secure manner is mind boggling. If you could establish whether a certain debt has been paid out by the company holding the debt (e.g. Paypal, Banking account, Dwolla etc) you can then establish through which exchange was the debt paid out, throw in a reputation system for the exchanges and you can create individual "workers" that would process the debts in exchange for a fraction of the debts.

Of course the obvious cons are that such a system would ironically lead to the death of bitcoins as they will no longer be needed, or maybe if the centralized banks would continue to fight this would become a system that would solely be used in order to exchange bitcoins for fiat. Exchanges could be automatically shut down from the system if a sufficient amount of debt has not been paid out in a timely manner (e.g. if they are hogging all the debt) so exchanges would be constantly shut down by the goverment. All of this would be based on the same concepts as the bitcoin protocol.

Bitcoin will become to the p2p exchange what NameCoin is to the Domain-system of .bit.

Even if bitcoin would ONLY be used to pay exchange fees and used nowhere else,
that would create a huge demand and value for bitcoin.
Think about all trading that is taking place around the world in the markets of FX, Futures, Options and Stocks.

Even if our p2p exchange would only capture 1% of the global markets that would mean a lot for the bitcoin as a currency!

This is exactly what bitcoin needs to make it stronger. I think what we need to start thinking about is escrow systems/business to replace banks/exchanges. I am looking into something that could possibly make these systems trustless. ill update with my findings   

Nice thread Matthew.


But I doubt many here did understand a word you were telling them.