Title: Bitcoin revolutionary? Post by: esenminer on June 01, 2013, 09:03:21 AM I think in terms of technology Bitcoin is revolutionary but I don't see how it could revolutionize our current economic system.
The key problem is that it does not address the distribution and accumulation of wealth. In fact the current mining system promotes this. People mine, collect coins, re-invest. Those with more coins can invest more and make more and over time the distribution of coins is unequal with a small percentage of people holding a majority of the coins. The second problem is it's link with FIAT money which it needs for it to have any current real world use. This link makes it a commodity, like gold, and wealthier people always end up with more. If the world were to implement a complete Bitcoin system wouldn't we just end up in the same place we are now? Minority of people holding the majority of Bitcoins? Instead of everything being done with various FIAT it would be done with Bitcoin - sure everything would be much simpler, digital, some things cheaper and less worry about inflation but for all intents and purposes the exact same underlying economic system. An economic revolution would have to address the distribution and accumulation of wealth. Title: Re: Bitcoin revolutionary? Post by: tutkarz on June 01, 2013, 09:09:13 AM the difference is that nobody will rob you with inflation forcing you to spend money when you dont want to do this.
Title: Re: Bitcoin revolutionary? Post by: Chet on June 01, 2013, 09:11:23 AM The medium will never change the behavior of the people using it. Bitcoin will stop the bankers from taking a rake everytime you want to move money around.
There are already a lot of real world goods you can buy with bitcoin and more everyday. And many of those things are from small startup businesses, so we can slow down feeding the big corporations too. Title: Re: Bitcoin revolutionary? Post by: semaforo on June 01, 2013, 09:14:56 AM Yes, it's true that patterns of accumulation would be unlikely to change. However, the political structure of the planet may end up becoming much more unified. There is the potential that "the whole is greater than the sum of its parts" and that unifying as one planet could reveal emergent properties (http://en.wikipedia.org/wiki/Emergence) in humanity and take us to another level of evolution. The laws of nature are unlikely to change, but a revolution is literally the beginning of a new cycle. Bitcoin may also facilitate interplanetary trade since its value is based on mathematics, a universal language, rather than politics or commodities which may have limited utility on planets with different atmospheres or technology.
Wealth will likely concentrate again and again, but divorcing the value of currency from the fate of nations is likely to bring about changes. Death, decay, and corruption are a natural part of life, and so is renewal. Bitcoin is such a force of renewal. Title: Re: Bitcoin revolutionary? Post by: franky1 on June 01, 2013, 12:57:12 PM the problem with wealth distribution is not bitcoin related. its user related.
bill gates is not a rich man because he mined gold in the 1980's oprah winfrey . ditto ditto ditto mining is just one way to become wealthy. and if you compare it to gold mining, the actual people doing the mining.. the african slaves etc are not billionaires, its the traders that play the markets. infact inventing a product / service can make you more wealthy then someone digging for gold/satoshi dust each day. the secret is to not sit on your hands saying "i can't be an elite because....." but instead "lets make a plan to do something" bitcoin has opened up new freedoms for self employed people to accept something of value for their labour without it having to be fiat. its opened up opportunities for these self employed people to then send their earnings to other countries without the need of banks and bureaucracy. with my bitcoins i can get on a plane and meet someone at the vacation destination and convert my coin to their native currency without the need of travellers cheques, special internationally accepted credit cards, or needing the services of banks, 'bureau de change', travel-ex, etc. to set up a website, i don't need to pay X per month with a card processing company. the whole entrepreneurial hurdles and paperwork has become less and less by just using bitcoin. Look at all the licence requirements exchanges need for handling FIAT. and ask yourself, wouldn't it be great if there was no direct need for fiat, think of something everyone needs that would work even better without the need of FIAT.. and make that your plan. then you will become one of the elite. for me food is an essential which is why for the last year i have been casually prompting the likes of foodler. just-eat, and other food delivery establishments. which are slowing becoming interested. next stage is getting wholesalers, suppliers, manufacturers to accept bitcoin so that its even easier to convince retailers that get stock from these suppliers to shift away from fiat.(well maybe not shift away, but easier to include bitcoin) Title: Re: Bitcoin revolutionary? Post by: esenminer on June 01, 2013, 02:31:35 PM the problem with wealth distribution is not bitcoin related. its user related. bill gates is not a rich man because he mined gold in the 1980's oprah winfrey . ditto ditto ditto mining is just one way to become wealthy. and if you compare it to gold mining, the actual people doing the mining.. the african slaves etc are not billionaires, its the traders that play the markets. infact inventing a product / service can make you more wealthy then someone digging for gold/satoshi dust each day. the secret is to not sit on your hands saying "i can't be an elite because....." but instead "lets make a plan to do something" bitcoin has opened up new freedoms for self employed people to accept something of value for their labour without it having to be fiat. its opened up opportunities for these self employed people to then send their earnings to other countries without the need of banks and bureaucracy. with my bitcoins i can get on a plane and meet someone at the vacation destination and convert my coin to their native currency without the need of travellers cheques, special internationally accepted credit cards, or needing the services of banks, 'bureau de change', travel-ex, etc. to set up a website, i don't need to pay X per month with a card processing company. the whole entrepreneurial hurdles and paperwork has become less and less by just using bitcoin. Look at all the licence requirements exchanges need for handling FIAT. and ask yourself, wouldn't it be great if there was no direct need for fiat, think of something everyone needs that would work even better without the need of FIAT.. and make that your plan. then you will become one of the elite. for me food is an essential which is why for the last year i have been casually prompting the likes of foodler. just-eat, and other food delivery establishments. which are slowing becoming interested. next stage is getting wholesalers, suppliers, manufacturers to accept bitcoin so that its even easier to convince retailers that get stock from these suppliers to shift away from fiat.(well maybe not shift away, but easier to include bitcoin) as a bitcoin miner you are not one of the people working in the mines you are the owner operator, you make an investment, pay your expenses and keep the profit. the hardware in a sense are your workers and they perform the labour. this is text book case of capitalism. the link between bitcoin and fiat means they are basically interchangeable. it follows that bitcoin economics will simply reflect economics as we know it - a minority of people holding the majority of wealth. yes there is a whole new arena of opportunities and some people will get rich but this is exactly the system we now have in place, nothing will have changed except the addition of a few more wealthy people. economic opportunity is not economic revolution. your argument can be made for the internet itself as it has provided more economic opportunities (and made more people wealthy) with less barrier to entry than anything (including bitcoin) before it. look, the point of the post was to get people thinking about the distribution and accumulation of bitcoin. it doesn't have to be the same as our current model. for example, and this is only a thought experiment, do not spam me :) what if you only got to keep 50% of your earnings and the rest were distributed across the network? every bitcoin user (ignoring the technical problems of identifying individual users) would have a steady stream of income - not much but they could always make more by mining themselves or investing. maybe even enough for basic living? yes they would be getting something for nothing but so what? most executives make salaries that are disproportionation to the amount of revenue that they are directly responsible for. if you want a economic revolution it can't just be the same old same old, you have to try something new. Title: Re: Bitcoin revolutionary? Post by: ganabb on June 01, 2013, 02:37:39 PM So far, Bitcoin has been used to buy games and virtual products from Internet merchants.
Title: Re: Bitcoin revolutionary? Post by: Carlton Banks on June 01, 2013, 03:52:39 PM It's a more democratic way of distributing money than anything else that's been before.
Gold? If you didn't have or couldn't physically use a pickaxe and shovel, you were always getting gold at a premium price. And you had to find it to begin with. Pretty exclusive. Fiat? If you're not a large financial company, you cannot benefit from the initial distribution of fiat money. Absolutely exclusive. The only thing that's stopping people mining BTC is the fear of the technical challenge. Well, and the upfront capital. And ASICs are less exclusive now, and that trend will only continue since USB key style ASICs with a 1.99 BTC price tag are available. Bitcoin, while not perfectly equal opportunities, still wins against the previous monetary paradigms. Title: Re: Bitcoin revolutionary? Post by: Elwar on June 01, 2013, 04:37:59 PM An economic revolution would have to address the distribution and accumulation of wealth. Redistribute all of the wealth today and in 10 years we will be exactly where we were yesterday. Title: Re: Bitcoin revolutionary? Post by: QuestionAuthority on June 01, 2013, 04:56:19 PM I just read through Satoshi's paper again and no where does it say he invented this system to overthrow governments or create a revolution. Why does everyone want to use it for that? Isn't it enough to just screw over banks that are raping everyone with ridiculous fees?
Title: Re: Bitcoin revolutionary? Post by: dancupid on June 01, 2013, 04:56:26 PM I think in terms of technology Bitcoin is revolutionary but I don't see how it could revolutionize our current economic system. If (and that's one huge IF) the people wake up to fiat money and the power of the centralized authority in determining the value of their currency, it could be replaced. The first step is for our brothers and sisters to stop voting for puppet officials. And this can only happen if somehow they can wake up to the propaganda and mind control being spewed by our current television programming. Most people are awake - that's why they don't care. Why would anyone waste their lives worrying about this? I'm living in the richest most technologically advanced period in the history of the world - I'm richer and healthier and happier than 99.9% of all the humans who have ever existed. I don't even vote anymore because it's irrelevant. Title: Re: Bitcoin revolutionary? Post by: Etlase2 on June 01, 2013, 09:41:52 PM The key problem is that it does not address the distribution and accumulation of wealth. In fact the current mining system promotes this. People mine, collect coins, re-invest. Those with more coins can invest more and make more and over time the distribution of coins is unequal with a small percentage of people holding a majority of the coins. The problem is not specifically that a small percentage hold a majority, the problem is that small percentage can use that power to control everyone else. Quote The second problem is it's link with FIAT money which it needs for it to have any current real world use. I agree. The solution to this is to have a currency that can find its own value relative to a basket of goods so that it cannot be manipulated by those with a lot of the currency. Quote If the world were to implement a complete Bitcoin system wouldn't we just end up in the same place we are now? Minority of people holding the majority of Bitcoins? Instead of everything being done with various FIAT it would be done with Bitcoin - sure everything would be much simpler, digital, some things cheaper and less worry about inflation but for all intents and purposes the exact same underlying economic system. An economic revolution would have to address the distribution and accumulation of wealth. I also agree, and I have proposed some very advanced ideas to change this. See the link in my signature. if you want a economic revolution it can't just be the same old same old, you have to try something new. See the link in my signature. Title: Re: Bitcoin revolutionary? Post by: Stampbit on June 01, 2013, 09:49:33 PM I think the fundamental issue with wealth distribution lies in our inability as humans to be autonomous. What we keep converging towards is efficiency, whereby in its effect aristocracy is born. If we can all accept to live in a world full of inefficiency then we can all accept both its benefits and costs equally, but as long as we strive for a more efficient world we will have to accept a select few to hold the reigns.
Title: Re: Bitcoin revolutionary? Post by: FreeMoney on June 02, 2013, 12:34:24 AM The key problem is that it does not address the distribution and accumulation of wealth. In fact the current mining system promotes this. People mine, collect coins, re-invest. Those with more coins can invest more and make more and over time the distribution of coins is unequal with a small percentage of people holding a majority of the coins. It does. The people who manage the system and the people who help them and the people who help them and the people who help them and the people who help them and so on get bitcoins. The second problem is it's link with FIAT money which it needs for it to have any current real world use. This link makes it a commodity, like gold, and wealthier people always end up with more. It is not linked, it is compared, and that is just what happens to everything. Castles, cars, candy and clothes all get compared to units of whatever people's local money happens to be. When the monies die the things still have their value, possibly extra value. It would be truly bizarre for two monies to coexist without there being an exchange rate between them. An example of linked would be the dollar and the cent. Title: Re: Bitcoin revolutionary? Post by: QuestionAuthority on June 02, 2013, 01:10:06 AM I just read through Satoshi's paper again and no where does it say he invented this system to overthrow governments or create a revolution. Why does everyone want to use it for that? Isn't it enough to just screw over banks that are raping everyone with ridiculous fees? As if there were a clear divide between the groups mentioned in your post. Hey Holliday! Long time no talk. lol Title: Re: Bitcoin revolutionary? Post by: QuestionAuthority on June 02, 2013, 01:26:03 AM I just read through Satoshi's paper again and no where does it say he invented this system to overthrow governments or create a revolution. Why does everyone want to use it for that? Isn't it enough to just screw over banks that are raping everyone with ridiculous fees? As if there were a clear divide between the groups mentioned in your post. Hey Holliday! Long time no talk. lol :) I'll let you in on my current revolutionary theory. Don't tell anyone though. It's a secret. I think BFL is going to ship en mass within the next month or two. I just bought a shitload of Bitcoins to add to my mining savings. When the diff skyrockets because of the mining increase price will follow and I'm gonna sell all, move to Thailand and wage war on a bottle of Scotch for the rest of my life. What do you think. Good plan? Title: Re: Bitcoin revolutionary? Post by: QuestionAuthority on June 02, 2013, 02:12:10 AM I just read through Satoshi's paper again and no where does it say he invented this system to overthrow governments or create a revolution. Why does everyone want to use it for that? Isn't it enough to just screw over banks that are raping everyone with ridiculous fees? As if there were a clear divide between the groups mentioned in your post. Hey Holliday! Long time no talk. lol :) I'll let you in on my current revolutionary theory. Don't tell anyone though. It's a secret. I think BFL is going to ship en mass within the next month or two. I just bought a shitload of Bitcoins to add to my mining savings. When the diff skyrockets because of the mining increase price will follow and I'm gonna sell all, move to Thailand and wage war on a bottle of Scotch for the rest of my life. What do you think. Good plan? Some day you'll have to introduce me to Scotch that is actually worth drinking. Bourbon on the other hand... Bourbon will work in a pinch but I'd walk all the way to Glasgow for a bottle of Glengoyne. ;) Title: Re: Bitcoin revolutionary? Post by: shawshankinmate37927 on June 02, 2013, 04:28:08 AM I think in terms of technology Bitcoin is revolutionary but I don't see how it could revolutionize our current economic system. Bitcoin will revolutionize our current economic system because it gives individuals the ability to opt-out of fiat currencies and transact or save in a currency that bankers have no control over. The key problem is that it does not address the distribution and accumulation of wealth. Sure it does. New bitcoins are distributed to the miners that process the transactions, validate the blockchain, and secure the network. This is a brilliant way to distribute bitcoins because it rewards those that are providing value and offers an incentive to join the network and become a miner. With fiat currencies, newly created money is distributed to bankers, politicians, those with political connections, and people that are taking on debt and living beyond their means at the expense of savers. With Bitcoin, wealth is accumulated by those who choose to save, those who invest wisely, or those who provide goods and services that others are willing and freely choose to pay for. With fiat, it's the bankers, politicians, and people with political connections that accumulate the wealth. In fact the current mining system promotes this. People mine, collect coins, re-invest. Those with more coins can invest more and make more and over time the distribution of coins is unequal with a small percentage of people holding a majority of the coins. New bitcoins are distributed to miners according to the amount of hashing power they contribute to the network. If you're like me and don't mine, then you can purchase bitcoins that someone else mined at market value. It doesn't get any more fair than that. The second problem is it's link with FIAT money which it needs for it to have any current real world use. This link makes it a commodity, like gold, and wealthier people always end up with more. We have to have exchanges because it takes time to transition to a new currency. This sort of thing doesn't just happen overnight, especially when you're talking about the world's reserve currency. We are still in the early stages of transitioning to honest, sound money. It's going to take a while, you'll just have to be patient. As more and more people come to understand the benefits of Bitcoin, more of their transactions will be in Bitcoin and there will be less need to exchange back and forth between fiat. Gold isn't a commodity. That's what bankers want us to think. Gold is money. There is also an exchange rate between euros and dollars. Does this mean that the euro is a commodity? If the world were to implement a complete Bitcoin system wouldn't we just end up in the same place we are now? Minority of people holding the majority of Bitcoins? Instead of everything being done with various FIAT it would be done with Bitcoin - sure everything would be much simpler, digital, some things cheaper and less worry about inflation but for all intents and purposes the exact same underlying economic system. Yes, a minority of people have the majority of bitcoins right now, but over time they will be sold or spent and that wealth will be spread out to others. Clearly, the Bitcoin monetary system is the best alternative out there right now because it in no way resembles the current fiat monetary system that bankers and politicians are so fond of. It's also important to remember that one of Bitcoin's greatest features is that it is completely voluntary. As of right now, there is no banker or politician forcing anyone to use bitcoins. If there is some aspect of it that someone considers unfair, they don't have to use it. In fact, anyone is free to copy the code, modify it to their liking, introduce a new currency and then let the free market determine it's value. Title: Re: Bitcoin revolutionary? Post by: DoomDumas on June 02, 2013, 05:18:44 AM Whitout the "interest" factor, and a without bank money creation scheme, BTC will tend to equalize within its users. The fact that whealthy fiat owner are making more and more just by having tons of fiat is largely due to the interest thing, linked with bank's money creation system, wich cannot really apply to bitcoin. Yrs there is mining, and those with a lot of BTC can invest more in mining, but this is minor whealth creation compare to the interest scheme we see in the fiat world.
IMO, bitcoin is a much more fair system than the modern fiat monetary mechanic. Title: Re: Bitcoin revolutionary? Post by: esenminer on June 02, 2013, 06:04:34 AM The key problem is that it does not address the distribution and accumulation of wealth. In fact the current mining system promotes this. People mine, collect coins, re-invest. Those with more coins can invest more and make more and over time the distribution of coins is unequal with a small percentage of people holding a majority of the coins. It does. The people who manage the system and the people who help them and the people who help them and the people who help them and the people who help them and so on get bitcoins. The second problem is it's link with FIAT money which it needs for it to have any current real world use. This link makes it a commodity, like gold, and wealthier people always end up with more. It is not linked, it is compared, and that is just what happens to everything. Castles, cars, candy and clothes all get compared to units of whatever people's local money happens to be. When the monies die the things still have their value, possibly extra value. It would be truly bizarre for two monies to coexist without there being an exchange rate between them. An example of linked would be the dollar and the cent. By distribution and accumulation I am referring to the bias in capitalistic markets wherein people with more wealth can more easily increase their wealth by investing. Over time the total wealth of a country sits in the hands of a very small minority of the population. Governments redistribute some wealth through taxation and government spending (i.e. healthcare, education etc) but over time the disparity grows. Bitcoin does nothing to address this. A bitcoin based economy will have the same disparity over time. Agreed that compared is a better word. Title: Re: Bitcoin revolutionary? Post by: esenminer on June 02, 2013, 06:36:08 AM I think in terms of technology Bitcoin is revolutionary but I don't see how it could revolutionize our current economic system. Bitcoin will revolutionize our current economic system because it gives individuals the ability to opt-out of fiat currencies and transact or save in a currency that bankers have no control over. The key problem is that it does not address the distribution and accumulation of wealth. Sure it does. New bitcoins are distributed to the miners that process the transactions, validate the blockchain, and secure the network. This is a brilliant way to distribute bitcoins because it rewards those that are providing value and offers an incentive to join the network and become a miner. With fiat currencies, newly created money is distributed to bankers, politicians, those with political connections, and people that are taking on debt and living beyond their means at the expense of savers. With Bitcoin, wealth is accumulated by those who choose to save, those who invest wisely, or those who provide goods and services that others are willing and freely choose to pay for. With fiat, it's the bankers, politicians, and people with political connections that accumulate the wealth. In fact the current mining system promotes this. People mine, collect coins, re-invest. Those with more coins can invest more and make more and over time the distribution of coins is unequal with a small percentage of people holding a majority of the coins. New bitcoins are distributed to miners according to the amount of hashing power they contribute to the network. If you're like me and don't mine, then you can purchase bitcoins that someone else mined at market value. It doesn't get any more fair than that. The second problem is it's link with FIAT money which it needs for it to have any current real world use. This link makes it a commodity, like gold, and wealthier people always end up with more. We have to have exchanges because it takes time to transition to a new currency. This sort of thing doesn't just happen overnight, especially when you're talking about the world's reserve currency. We are still in the early stages of transitioning to honest, sound money. It's going to take a while, you'll just have to be patient. As more and more people come to understand the benefits of Bitcoin, more of their transactions will be in Bitcoin and there will be less need to exchange back and forth between fiat. Gold isn't a commodity. That's what bankers want us to think. Gold is money. There is also an exchange rate between euros and dollars. Does this mean that the euro is a commodity? If the world were to implement a complete Bitcoin system wouldn't we just end up in the same place we are now? Minority of people holding the majority of Bitcoins? Instead of everything being done with various FIAT it would be done with Bitcoin - sure everything would be much simpler, digital, some things cheaper and less worry about inflation but for all intents and purposes the exact same underlying economic system. Yes, a minority of people have the majority of bitcoins right now, but over time they will be sold or spent and that wealth will be spread out to others. Clearly, the Bitcoin monetary system is the best alternative out there right now because it in no way resembles the current fiat monetary system that bankers and politicians are so fond of. It's also important to remember that one of Bitcoin's greatest features is that it is completely voluntary. As of right now, there is no banker or politician forcing anyone to use bitcoins. If there is some aspect of it that someone considers unfair, they don't have to use it. In fact, anyone is free to copy the code, modify it to their liking, introduce a new currency and then let the free market determine it's value. The mechanisms for creation and transfer are defn unique and do not resemble FIAT at all, agreed. And yes we can call Bitcoin money because as you mentioned eruo / usd exchange doesn't mean euro is a commodity. But what you say here: Quote New bitcoins are distributed to miners according to the amount of hashing power they contribute to the network. If you're like me and don't mine, then you can purchase bitcoins that someone else mined at market value. It doesn't get any more fair than that. Yes it's completely fair but it still comes down to capital investment - i.e. investment in hashing power. Even though bankers, politicians and others you mentioned might not be interested in Bitcoin now, mining is going to last another 15-20 years, there is nothing preventing them simply transferring their FIAT into Bitcoin and then using that wealth to enforce or create systems which benefit them. and here Quote Yes, a minority of people have the majority of bitcoins right now, but over time they will be sold or spent and that wealth will be spread out to others. Clearly, the Bitcoin monetary system is the best alternative out there right now because it in no way resembles the current fiat monetary system that bankers and politicians are so fond of. How is it that wealth will be spread to others? What mechanisms? Simply spending BItcoin won't redistribute wealth. Sure the wealthy spend money but because of the large numbers of people who are not 'wealthy' the distribution when spending tends to go the wrong way. You last sentence is why I put up this post. Is the the best alternative? I agree that from a ease of use, transferability i.e. technical points that it is but i don't think it addresses (and nor does it seem it was designed to as one poster mentioned) the social divide and inequality that the current economic system creates. Title: Re: Bitcoin revolutionary? Post by: esenminer on June 02, 2013, 06:39:08 AM Whitout the "interest" factor, and a without bank money creation scheme, BTC will tend to equalize within its users. The fact that whealthy fiat owner are making more and more just by having tons of fiat is largely due to the interest thing, linked with bank's money creation system, wich cannot really apply to bitcoin. Yrs there is mining, and those with a lot of BTC can invest more in mining, but this is minor whealth creation compare to the interest scheme we see in the fiat world. IMO, bitcoin is a much more fair system than the modern fiat monetary mechanic. How would Bitcoin remove the interest factor? If there was no FIAT and you wanted to build cars (say) wouldn't you have to borrow enough Bitcoin from somewhere? Wouldn't that somewhere be a person or entity with a large amount of Bitcoin? They certainly wouldn't lend you those Bitcoins without some sort of compensation. Title: Re: Bitcoin revolutionary? Post by: The 4ner on June 02, 2013, 07:08:36 AM I just read through Satoshi's paper again and no where does it say he invented this system to overthrow governments or create a revolution. Why does everyone want to use it for that? Isn't it enough to just screw over banks that are raping everyone with ridiculous fees? Never! LOL! Title: Re: Bitcoin revolutionary? Post by: Lethn on June 02, 2013, 07:22:03 AM Quote The key problem is that it does not address the distribution and accumulation of wealth. In fact the current mining system promotes this. People mine, collect coins, re-invest. Those with more coins can invest more and make more and over time the distribution of coins is unequal with a small percentage of people holding a majority of the coins. There is nothing wrong with saving, in fact, production and savings is what allows an economy to grow and a currency to gain strength, the reason I bring this up is because you sound like these people who more openly whine about people 'hoarding' Bitcoins. What Bitcoin addresses is the problems of central banks and government regulation, the problems that occur in the current economy happen precisely because people are trying to artificially engineer the distribution of wealth. You need to accept the fact that there will always be rich and poor and there will always be problems an economy, the best thing we can do is make it so its easy to get out of the situation yourself or make being poor fairly comfortable. If you want to stay an economy where two different groups are conspiring to steal everyone's wealth and redistribute it at will ( usually for corrupt individuals ) to get people re-elected and gain more personal wealth and to force you to work for much longer hours and for less pay be my guest, no ones stopping you, I don't understand why people so rabidly attack Bitcoin sometimes. Title: Re: Bitcoin revolutionary? Post by: esenminer on June 02, 2013, 08:05:01 AM Quote The key problem is that it does not address the distribution and accumulation of wealth. In fact the current mining system promotes this. People mine, collect coins, re-invest. Those with more coins can invest more and make more and over time the distribution of coins is unequal with a small percentage of people holding a majority of the coins. There is nothing wrong with saving, in fact, production and savings is what allows an economy to grow and a currency to gain strength, the reason I bring this up is because you sound like these people who more openly whine about people 'hoarding' Bitcoins. What Bitcoin addresses is the problems of central banks and government regulation, the problems that occur in the current economy happen precisely because people are trying to artificially engineer the distribution of wealth. You need to accept the fact that there will always be rich and poor and there will always be problems an economy, the best thing we can do is make it so its easy to get out of the situation yourself or make being poor fairly comfortable. If you want to stay an economy where two different groups are conspiring to steal everyone's wealth and redistribute it at will ( usually for corrupt individuals ) to get people re-elected and gain more personal wealth and to force you to work for much longer hours and for less pay be my guest, no ones stopping you, I don't understand why people so rabidly attack Bitcoin sometimes. I don't think I attacked Bitcoin at all. In fact if you read my OP it praises the technological advances it brings to currency. And I'm certainly not whining about hoarders of Bitcoin! Good for them? Us? :) Who knows how many bitcoins I have or you have? My post was a response to seeing dozens of ill informed posts about how the government is attacking Bitcoin. My question then was 'Do governments really have something worry about if Bitcoin is adopted? i.e. is Bitcoin Revolutionary?'. The thread was meant simply to flush out this idea and get people thinking about how a Bitcoin economy would be different from our existing economy. My thinking led me to believe that there would be little difference in the underlying distribution of wealth. I'm not sure I or any of us have to accept your assumption that there will always be rich and poor. Economies are artificially constructed though rules, laws and regulation, like you mention. For example capitalism simply could not exist without law enforcing the idea of ownership (property or otherwise). There is nothing which prevents us in constructing it in such a way that wealth is distributed equally. I also believe it's naive to think that governments will not play a role in regulating Bitcoin. If you make income mining Bitcoin do you believe you government has no right to tax this income? Alternatively if you purchase goods with Bitcoins that you mined aren't you in affect earning income and spending? In any case I don't want to steer to far away from the topic. The question is simply if Bitcoin were adopted today would this cause a revolution in the current economic system or would the people who hold on to power now simply swap their FIAT for Bitcoins and continue in the same way. Title: Re: Bitcoin revolutionary? Post by: tinus42 on June 02, 2013, 10:50:36 AM There will always be wealth disparities since people don't have equal talents. Some are better at making money than others.
If we were to start again with a new currency and everyone would get 100 units of it within a few decades there will be people who have more and people who have less. So this is not inherent to Bitcoin it is inherent to humanity. Title: Re: Bitcoin revolutionary? Post by: nosurrender on June 02, 2013, 11:52:22 AM The really revolutionary thing about Bitcoin is definitely the independence not only from banks (or bankers) but the independence form decisions of a Government with severe, sometimes life-threatening consequences for millions of people.
Despite all economical crises in the past, citizens in the US did never experience the potential complete loss of all money because of Government´s decision to abandon their complete FIAT currency. They always kept Dollar as official currency. On a broader view at this time 330 Million citizens of the so called "Euro-Zone", 17 Countries in Europa who pay and get paid in EURO, have no clue, if or how long the EURO will survive. No one knows what happens to savings, pensions, when their currency will be replaced by somewhat nobody even knows today. Since 2009 "Officials" of all those countries discuss, what may be the right move to get out of the "Euro-Crisis". They will decide, how my monetary situation is in future, how much my savings are valued in a new currency etc etc. A globally usable, accepted and stable currency beyond the direct reach of a single Government would only be endangered if the whole global economy collapses - and could even then continue to exist, because there will be always the need for trade. Just my two cents :) Title: Re: Bitcoin revolutionary? Post by: shawshankinmate37927 on June 02, 2013, 12:35:32 PM But what you say here: Quote New bitcoins are distributed to miners according to the amount of hashing power they contribute to the network. If you're like me and don't mine, then you can purchase bitcoins that someone else mined at market value. It doesn't get any more fair than that. Yes it's completely fair but it still comes down to capital investment - i.e. investment in hashing power. Even though bankers, politicians and others you mentioned might not be interested in Bitcoin now, mining is going to last another 15-20 years, there is nothing preventing them simply transferring their FIAT into Bitcoin and then using that wealth to enforce or create systems which benefit them. If they were to transfer a lot of their fiat into bitcoin mining and then try to enforce rules that benefit themselves at everyone else's expense, then everyone else will be able to create a hard fork in the blockchain. Everyone would then be free to choose which of these two currencies they prefer to continue using. The one that the bankers and politicians control or the one they had before that maintains the current rules. (They could actually continue using both if they wanted because they would now have coins on two separate blockchains.) and here Quote Yes, a minority of people have the majority of bitcoins right now, but over time they will be sold or spent and that wealth will be spread out to others. Clearly, the Bitcoin monetary system is the best alternative out there right now because it in no way resembles the current fiat monetary system that bankers and politicians are so fond of. How is it that wealth will be spread to others? What mechanisms? Simply spending BItcoin won't redistribute wealth. Sure the wealthy spend money but because of the large numbers of people who are not 'wealthy' the distribution when spending tends to go the wrong way. You last sentence is why I put up this post. Is the the best alternative? I agree that from a ease of use, transferability i.e. technical points that it is but i don't think it addresses (and nor does it seem it was designed to as one poster mentioned) the social divide and inequality that the current economic system creates. Wealth will be spread to others through the exchange of goods and services for bitcoins. Supply and demand for these goods and services will determine how wealth is accumulated. Those who provide goods and services that are in high demand and low supply will benefit the most. Instead of bankers and politicians being able to decide how money is distributed and who is allowed to accumulate wealth, the free market will decide. This is why bitcoin is the best alternative out there right now. Something better may come along, but I think it's more likely that Bitcoin will continue to evolve and would implement any improvements that another alternative currency comes up with. Title: Re: Bitcoin revolutionary? Post by: esenminer on June 02, 2013, 01:31:09 PM There will always be wealth disparities since people don't have equal talents. Some are better at making money than others. If we were to start again with a new currency and everyone would get 100 units of it within a few decades there will be people who have more and people who have less. So this is not inherent to Bitcoin it is inherent to humanity. I can only agree that it's inherent to our current economic system. I don't believe making money as a talent should be rewarded more than any other talent but in fact that is how our current economic system works and that's who it rewards. I'm not passing judgement on it that's just how it's designed. People with capital and the ability to use that capital effectively are able to accumulate more capital. Capital itself is fixed and the accumulation of it in one person necessarily means that other people are without. Capital purchases resources like talent but talent itself - for example being engineer talent or say mathematical talent doesn't mean wealth. Title: Re: Bitcoin revolutionary? Post by: esenminer on June 02, 2013, 01:33:43 PM The really revolutionary thing about Bitcoin is definitely the independence not only from banks (or bankers) but the independence form decisions of a Government with severe, sometimes life-threatening consequences for millions of people. Despite all economical crises in the past, citizens in the US did never experience the potential complete loss of all money because of Government´s decision to abandon their complete FIAT currency. They always kept Dollar as official currency. On a broader view at this time 330 Million citizens of the so called "Euro-Zone", 17 Countries in Europa who pay and get paid in EURO, have no clue, if or how long the EURO will survive. No one knows what happens to savings, pensions, when their currency will be replaced by somewhat nobody even knows today. Since 2009 "Officials" of all those countries discuss, what may be the right move to get out of the "Euro-Crisis". They will decide, how my monetary situation is in future, how much my savings are valued in a new currency etc etc. A globally usable, accepted and stable currency beyond the direct reach of a single Government would only be endangered if the whole global economy collapses - and could even then continue to exist, because there will be always the need for trade. Just my two cents :) I think this is a good point, independence from the decisions of a single government is very interesting - how do you reconcile that with the need of governments to collect and use taxes - for example to fund health care, education, military? Title: Re: Bitcoin revolutionary? Post by: esenminer on June 02, 2013, 01:48:45 PM But what you say here: Quote New bitcoins are distributed to miners according to the amount of hashing power they contribute to the network. If you're like me and don't mine, then you can purchase bitcoins that someone else mined at market value. It doesn't get any more fair than that. Yes it's completely fair but it still comes down to capital investment - i.e. investment in hashing power. Even though bankers, politicians and others you mentioned might not be interested in Bitcoin now, mining is going to last another 15-20 years, there is nothing preventing them simply transferring their FIAT into Bitcoin and then using that wealth to enforce or create systems which benefit them. If they were to transfer a lot of their fiat into bitcoin mining and then try to enforce rules that benefit themselves at everyone else's expense, then everyone else will be able to create a hard fork in the blockchain. Everyone would then be free to choose which of these two currencies they prefer to continue using. The one that the bankers and politicians control or the one they had before that maintains the current rules. (They could actually continue using both if they wanted because they would now have coins on two separate blockchains.) But this wouldn't solve anything since they can simply swap coins or move over to the new chain. What if for example I had 100,000 bitcoins and I decided to open up the Bank of Esenminer. I'm willing to loan out money but I want interest. Or I'm willing to give you interest on money for storing in with me - who knows maybe I will invest in some up and coming ventures. Suddenly I've got a bank. Maybe there is also the Bank of shawshankinmate37927. Now I want to make sure that people pay me back so a law is passed or a regulation is passed or some technology is applied so that I can guarantee I get my money back. People who put their money in my bank also want to make sure I'm not going to just spend it so again some regulation or some technology is applied so that this doesn't happen. Eventually though we end up exactly where we are now expect instead of FIAT it's Bitcoin. and here Quote Yes, a minority of people have the majority of bitcoins right now, but over time they will be sold or spent and that wealth will be spread out to others. Clearly, the Bitcoin monetary system is the best alternative out there right now because it in no way resembles the current fiat monetary system that bankers and politicians are so fond of. How is it that wealth will be spread to others? What mechanisms? Simply spending BItcoin won't redistribute wealth. Sure the wealthy spend money but because of the large numbers of people who are not 'wealthy' the distribution when spending tends to go the wrong way. You last sentence is why I put up this post. Is the the best alternative? I agree that from a ease of use, transferability i.e. technical points that it is but i don't think it addresses (and nor does it seem it was designed to as one poster mentioned) the social divide and inequality that the current economic system creates. Wealth will be spread to others through the exchange of goods and services for bitcoins. Supply and demand for these goods and services will determine how wealth is accumulated. Those who provide goods and services that are in high demand and low supply will benefit the most. Instead of bankers and politicians being able to decide how money is distributed and who is allowed to accumulate wealth, the free market will decide. This is why bitcoin is the best alternative out there right now. Something better may come along, but I think it's more likely that Bitcoin will continue to evolve and would implement any improvements that another alternative currency comes up with. Isn't this exactly how wealth is distributed currently? It's a modified free market system - modified so that the government can redistribute some of the wealth through taxation. But essentially if you have goods or services you want to sell you invest capital into it, sell it and hopefully make a profit. If you don't have capital you get capital from the bank or VC. Banks can only survive by lending money on interest that's how they make revenue - if they didn't lend it to people buying houses and cars and businesses for operating costs and capital investment they wouldn't exist. I'm not sure that constitutive control of how money is distributed or who is allowed to accumulate wealth. The banks will get behind anything that's going to make them money so if you're widget is going to mean extra interest for them you can bet they will be more than happy to finance it. Title: Re: Bitcoin revolutionary? Post by: shawshankinmate37927 on June 02, 2013, 06:09:42 PM But this wouldn't solve anything since they can simply swap coins or move over to the new chain. What if for example I had 100,000 bitcoins and I decided to open up the Bank of Esenminer. I'm willing to loan out money but I want interest. Or I'm willing to give you interest on money for storing in with me - who knows maybe I will invest in some up and coming ventures. Suddenly I've got a bank. Maybe there is also the Bank of shawshankinmate37927. Now I want to make sure that people pay me back so a law is passed or a regulation is passed or some technology is applied so that I can guarantee I get my money back. People who put their money in my bank also want to make sure I'm not going to just spend it so again some regulation or some technology is applied so that this doesn't happen. Eventually though we end up exactly where we are now expect instead of FIAT it's Bitcoin. The only way bankers and politicians would be able to enforce their laws and regulations is to change the rules of the Bitcoin protocol. If they were to do this, there would be separate protocols and two separate blockchains. One that followed the rules established by bankers and politicians and another one that followed the rules established by the free market. They could force you to pay taxes in their currency, but that's about it. For the products or services that you consume, you would be able to offer the more valuable free market currency as payment. For the products or services that you provide, you would be able to insist that payment be made in the more valuable free market currency as well. Also, there is no way to guarantee that you will get your Bitcoins back once they have been transferred to someone else. If this aspect of Bitcoin were to change, then you would have a hard fork and this new coin with reversible transactions would be a new currency. Isn't this exactly how wealth is distributed currently? It's a modified free market system - modified so that the government can redistribute some of the wealth through taxation. But essentially if you have goods or services you want to sell you invest capital into it, sell it and hopefully make a profit. If you don't have capital you get capital from the bank or VC. Banks can only survive by lending money on interest that's how they make revenue - if they didn't lend it to people buying houses and cars and businesses for operating costs and capital investment they wouldn't exist. I'm not sure that constitutive control of how money is distributed or who is allowed to accumulate wealth. The banks will get behind anything that's going to make them money so if you're widget is going to mean extra interest for them you can bet they will be more than happy to finance it. No, nothing about the current system is "free market". Any system that allows for redistribution, amasses massive debt and passes it on to future generations, and gives bankers the ability to expand the money supply to accommodate politicians is completely corrupt. Bitcoin is not a debt-based currency and the protocol does not allow for any of this nonsense to occur. There is nothing wrong with a bank giving out loans and charging interest as long as they are loaning out money that someone else has deposited with them. It's when they have the ability to create additional money and expand the money supply in order to lend it out that problems begin to arise. Title: Re: Bitcoin revolutionary? Post by: nosurrender on June 02, 2013, 07:34:39 PM The really revolutionary thing about Bitcoin is definitely the independence not only from banks (or bankers) but the independence form decisions of a Government with severe, sometimes life-threatening consequences for millions of people. Despite all economical crises in the past, citizens in the US did never experience the potential complete loss of all money because of Government´s decision to abandon their complete FIAT currency. They always kept Dollar as official currency. On a broader view at this time 330 Million citizens of the so called "Euro-Zone", 17 Countries in Europa who pay and get paid in EURO, have no clue, if or how long the EURO will survive. No one knows what happens to savings, pensions, when their currency will be replaced by somewhat nobody even knows today. Since 2009 "Officials" of all those countries discuss, what may be the right move to get out of the "Euro-Crisis". They will decide, how my monetary situation is in future, how much my savings are valued in a new currency etc etc. A globally usable, accepted and stable currency beyond the direct reach of a single Government would only be endangered if the whole global economy collapses - and could even then continue to exist, because there will be always the need for trade. Just my two cents :) I think this is a good point, independence from the decisions of a single government is very interesting - how do you reconcile that with the need of governments to collect and use taxes - for example to fund health care, education, military? Let me first say, that I believe a stable government and a fair administration is an absolutely must have for a modern society. Therefore I agree to the need to collect taxes and to enforce that by law. States will continue to create FIAT and this currency will surely be the basis for taxation - no cryptocoin is going to change that. In that aspect Bitcoin is just another "foreign" currency as there are plenty worldwide, looked at from the standpoint of the local government. In my option, Bitcoin could just be a "better" currency due to less tendency for inflation, less costs doing (even international) trading because of much lower fees than any other financial transaction and due to the fact, that a globally accepted currency doesn´t force one to change in foreign FIAT. It doesn´t change the systems it is used in - whether thats pure capitalism, social market economy or even more regulated economies. And it doesn´t change the political system - though it could give individuals more freedom from the impact governmental decisions may have to the "official" FIAT of any given nation. Title: Re: Bitcoin revolutionary? Post by: esenminer on June 02, 2013, 08:30:39 PM But this wouldn't solve anything since they can simply swap coins or move over to the new chain. What if for example I had 100,000 bitcoins and I decided to open up the Bank of Esenminer. I'm willing to loan out money but I want interest. Or I'm willing to give you interest on money for storing in with me - who knows maybe I will invest in some up and coming ventures. Suddenly I've got a bank. Maybe there is also the Bank of shawshankinmate37927. Now I want to make sure that people pay me back so a law is passed or a regulation is passed or some technology is applied so that I can guarantee I get my money back. People who put their money in my bank also want to make sure I'm not going to just spend it so again some regulation or some technology is applied so that this doesn't happen. Eventually though we end up exactly where we are now expect instead of FIAT it's Bitcoin. The only way bankers and politicians would be able to enforce their laws and regulations is to change the rules of the Bitcoin protocol. If they were to do this, there would be separate protocols and two separate blockchains. One that followed the rules established by bankers and politicians and another one that followed the rules established by the free market. They could force you to pay taxes in their currency, but that's about it. For the products or services that you consume, you would be able to offer the more valuable free market currency as payment. For the products or services that you provide, you would be able to insist that payment be made in the more valuable free market currency as well. Also, there is no way to guarantee that you will get your Bitcoins back once they have been transferred to someone else. If this aspect of Bitcoin were to change, then you would have a hard fork and this new coin with reversible transactions would be a new currency. Isn't this exactly how wealth is distributed currently? It's a modified free market system - modified so that the government can redistribute some of the wealth through taxation. But essentially if you have goods or services you want to sell you invest capital into it, sell it and hopefully make a profit. If you don't have capital you get capital from the bank or VC. Banks can only survive by lending money on interest that's how they make revenue - if they didn't lend it to people buying houses and cars and businesses for operating costs and capital investment they wouldn't exist. I'm not sure that constitutive control of how money is distributed or who is allowed to accumulate wealth. The banks will get behind anything that's going to make them money so if you're widget is going to mean extra interest for them you can bet they will be more than happy to finance it. No, nothing about the current system is "free market". Any system that allows for redistribution, amasses massive debt and passes it on to future generations, and gives bankers the ability to expand the money supply to accommodate politicians is completely corrupt. Bitcoin is not a debt-based currency and the protocol does not allow for any of this nonsense to occur. There is nothing wrong with a bank giving out loans and charging interest as long as they are loaning out money that someone else has deposited with them. It's when they have the ability to create additional money and expand the money supply in order to lend it out that problems begin to arise. I don't agree. I believe for the most part our economy is supply and demand. A 100% free market without government intervention is an ugly thing - think industrial revolution with little or no rights or powers in the hands of workers. Workers united to form unions which forced governments to intervene and create laws which limited free market action primarily through taxation / spending and economic policy. Taxation, primarily income tax but sales and other taces are used to redistribute wealth by providing services like healthcare, education, military and sometimes by direct spending usually on infrastructure like road building, bridge building, damns... Economic policy, what I think you're referring to is the ability of the government / federal bank to directly stimulate or slow down the economy. They do this by by loaning money, 'creating it' in a sense, to banks at their best interest rate. When they decrease the prime interest rate banks can lend at lower rates, more people will borrow and the economy will be stimulated and when they increase it the economy will tend to slow down - that's the idea at least. Creating too much money can lead to inflation and too little to deflation. The whole point of economic policy is to smooth out the highs and lows of a free market so that we don't end up in a recession or depression. It's not perfect and usually doesn't work well (!) but this is not the fault of the policy - it's a good idea in theory but in real life attempts to affect the economy take a long time to play out so a policy decision today might start showing it's effects months and months from now. So policy makers are always in a position of trying to figure out if what they did had the intended affect and what they should do next :) Why do you think this is nonsense? How do politicians fit in here? Accommodate them how? Title: Re: Bitcoin revolutionary? Post by: semaforo on June 02, 2013, 09:02:12 PM There are binaries- hot-cold happy-sad day-night. State control-free market is another such pair. If you look at history, both state control and free market lead to disaster in extreme. After a period of free markets people see the problems and opt for more state control, and with more state control people see the problems and move towards free markets.
Or take predator prey- rabbits overbreed, leading to a boom in wolf population, then the wolves overeat, which leads to starvation and dying off of wolves due to a lack of rabbits, which allows for another boom in rabbit population. If you were to project this relationship in two dimensions, it would look a lot like the double helix structure of DNA. There are evolutionary leaps. I remember learning that genome researchers discovered that in the course of evolution, the eye evolved five times independently in different organisms on the earth at different times. I think bitcoin represents such an evolutionary leap, in the social sphere. Title: Re: Bitcoin revolutionary? Post by: shawshankinmate37927 on June 02, 2013, 10:22:44 PM I don't agree. I believe for the most part our economy is supply and demand. A 100% free market without government intervention is an ugly thing - think industrial revolution with little or no rights or powers in the hands of workers. Workers united to form unions which forced governments to intervene and create laws which limited free market action primarily through taxation / spending and economic policy. Taxation, primarily income tax but sales and other taces are used to redistribute wealth by providing services like healthcare, education, military and sometimes by direct spending usually on infrastructure like road building, bridge building, damns... Economic policy, what I think you're referring to is the ability of the government / federal bank to directly stimulate or slow down the economy. They do this by by loaning money, 'creating it' in a sense, to banks at their best interest rate. When they decrease the prime interest rate banks can lend at lower rates, more people will borrow and the economy will be stimulated and when they increase it the economy will tend to slow down - that's the idea at least. Creating too much money can lead to inflation and too little to deflation. The whole point of economic policy is to smooth out the highs and lows of a free market so that we don't end up in a recession or depression. It's not perfect and usually doesn't work well (!) but this is not the fault of the policy - it's a good idea in theory but in real life attempts to affect the economy take a long time to play out so a policy decision today might start showing it's effects months and months from now. So policy makers are always in a position of trying to figure out if what they did had the intended affect and what they should do next :) Why do you think this is nonsense? How do politicians fit in here? Accommodate them how? Fiscal and monetary policies provide a temporary fix for the economy, similar to the way smoking crack provides a temporary sense of euphoria. However, the long term effects are destructive. Also, like crack, economic stimulus becomes addictive and it takes a bigger and bigger dose to keep getting the desired effect until eventually an overdose is experienced. Central banks were created by politicians to finance all of their brilliant ideas. Politicians are the central banks largest customers. Without central banks, the politicians would have never been able to acquire the insurmountable debt that they now have. Society doesn't need politicians to provide for our every need. The free market can do so much more efficiently. Title: Re: Bitcoin revolutionary? Post by: BTConomist on June 02, 2013, 11:55:35 PM There is nothing wrong with saving, True, but only if you are referring to "savings by the producers of economic value (http://en.wikipedia.org/wiki/Value_(economics))" (businesses, organizations, employees, etc). However, if you are referring to "savings by the central banks", then you must think that bankers (sorry, I meant to suggest the GOLD 2.0 miners) run the bitcoin economy? Title: Re: Bitcoin revolutionary? Post by: ShireSilver on June 03, 2013, 12:38:53 AM One thing I find missing from this discussion so far is the effect of switching from inflationary fiat currencies to deflationary bitcoin. Much of the current system has been so slanted towards overproduction and overconsumption due to the inflationary nature of dollars, euros, etc.
An example of what I mean: I've been playing around with bitcoin based investing for a while now, and one of the interesting things I've learned is that some assets will naturally decline in price due to deflation. Think about "mining turds", which should have declining prices as mining difficulty rises. They can still be a good investment though, as long as the price plus accumulated interest (dividends) does add up to more than the initial price. [I'm not sure any of them meet that criteria, just that it is possible.] How will deflationary currencies affect store profits? Capital accumulation? Business investments? What opportunities will arise for new businesses that can only exist/survive in a deflationary period? What will happen to businesses that exist now only because the primary currencies are inflationary? These are the things I'm thinking about. The fact is that bitcoin is here and it is going to change things. No Utopian wishing is going to change its essential nature, so best to deal with it as it is. Title: Re: Bitcoin revolutionary? Post by: TheGovernedSelf on June 03, 2013, 03:00:11 AM I think in terms of technology Bitcoin is revolutionary but I don't see how it could revolutionize our current economic system. The key problem is that it does not address the distribution and accumulation of wealth. In fact the current mining system promotes this. People mine, collect coins, re-invest. Those with more coins can invest more and make more and over time the distribution of coins is unequal with a small percentage of people holding a majority of the coins. The second problem is it's link with FIAT money which it needs for it to have any current real world use. This link makes it a commodity, like gold, and wealthier people always end up with more. If the world were to implement a complete Bitcoin system wouldn't we just end up in the same place we are now? Minority of people holding the majority of Bitcoins? Instead of everything being done with various FIAT it would be done with Bitcoin - sure everything would be much simpler, digital, some things cheaper and less worry about inflation but for all intents and purposes the exact same underlying economic system. An economic revolution would have to address the distribution and accumulation of wealth. It isn't necessarily if there is an unfair distribution of wealth, but more-so WHO controls that wealth. A. Would you rather it be controlled by congress? The Federal Reserve + international corporate banks? Wall Street? The Pentagon? IMF? B. Or would you rather it be controlled by brilliant, innovative, scientific, and empathetic nerds who seek to improve humanity? The choice is yours. Put your money in a mutual fund and it goes to A. Put it in bitcoin and it goes to B. Title: Re: Bitcoin revolutionary? Post by: shawshankinmate37927 on June 03, 2013, 03:20:41 AM One thing I find missing from this discussion so far is the effect of switching from inflationary fiat currencies to deflationary bitcoin. Much of the current system has been so slanted towards overproduction and overconsumption due to the inflationary nature of dollars, euros, etc. An example of what I mean: I've been playing around with bitcoin based investing for a while now, and one of the interesting things I've learned is that some assets will naturally decline in price due to deflation. Think about "mining turds", which should have declining prices as mining difficulty rises. They can still be a good investment though, as long as the price plus accumulated interest (dividends) does add up to more than the initial price. [I'm not sure any of them meet that criteria, just that it is possible.] How will deflationary currencies affect store profits? Capital accumulation? Business investments? What opportunities will arise for new businesses that can only exist/survive in a deflationary period? What will happen to businesses that exist now only because the primary currencies are inflationary? These are the things I'm thinking about. The fact is that bitcoin is here and it is going to change things. No Utopian wishing is going to change its essential nature, so best to deal with it as it is. Profits can still go up in an environment of falling prices. Because profit is equal to revenue minus expenses, profits can go up with falling revenues as long as expenses are falling at a greater rate. But, falling prices don't necessarily mean falling revenues. In fact, lower prices will often lead to a particular product or service being more affordable and accessible to a larger number of people, leading to more sales volume. Risky business investments (in the stock market) have basically become a necessity for most Americans who hope to have a retirement with more than their Social Security benefits. A currency like Bitcoin eliminates this requirement and allows people to simply save and live below their means. Business investments would still be available for those who are more risk tolerant and looking for more return than the interest earned in a bank deposit or the increased purchasing power that their bitcoins acquire over time. Some of the business owners whose businesses depend on a constantly expanding money supply--those whose customers are primarily buying on credit--would have to find a new line of work. Shifting to honest, sound money, just like kicking a crack addiction, isn't an easy thing to do, but it's necessary in order to transition to a sustainable and prosperous economy. Title: Re: Bitcoin revolutionary? Post by: semaforo on June 03, 2013, 04:03:22 AM One thing I find missing from this discussion so far is the effect of switching from inflationary fiat currencies to deflationary bitcoin. Much of the current system has been so slanted towards overproduction and overconsumption due to the inflationary nature of dollars, euros, etc. An example of what I mean: I've been playing around with bitcoin based investing for a while now, and one of the interesting things I've learned is that some assets will naturally decline in price due to deflation. Think about "mining turds", which should have declining prices as mining difficulty rises. They can still be a good investment though, as long as the price plus accumulated interest (dividends) does add up to more than the initial price. [I'm not sure any of them meet that criteria, just that it is possible.] How will deflationary currencies affect store profits? Capital accumulation? Business investments? What opportunities will arise for new businesses that can only exist/survive in a deflationary period? What will happen to businesses that exist now only because the primary currencies are inflationary? These are the things I'm thinking about. The fact is that bitcoin is here and it is going to change things. No Utopian wishing is going to change its essential nature, so best to deal with it as it is. Agreed... this reminds of Max Keiser's discussion on the credit apartheid. Inflation serves as a tool to concentrate debt in the hands of the wealthy. It reduces the value of everyone's wealth, but the wealthy are still able to leverage big investments based on their creditworthiness. As inflation outpaces wage growth, working people's money becomes worth less and less, as they are forced to spend their earnings on surviving rather than investing, and those who still have surplus wealth, even though it is worth less, are able to invest, which channels money from working people to those who can still afford to invest. A concrete example: Joe has 6000 dollars a month. He spends 5000 on house/car/food/utilities and invests 1000 in retirement fund and college fund for kids. Inflation kicks in, let's say, devaluing the money by 10% over a few years. Joe gets a raise in this time, but it's only an additional 300 dollars a month. Now his income has effectively been reduced by 330 dollars- inflation hit him with a minus 10% and the raise increased it by 5%. That means he is faced with two choices: lower standard of living or invest less. This is the choice the American middle class is facing right now. On the other hand, Uncle Scrooge has a net worth of $10 million, and is getting 10% interest on two million of it, having invested in a combination of mortgage banks, consumer product companies like toilet paper and potato chip manufacturers, and so on. This two million generates two hundred thousand a year which Scrooge can live on. Scrooge also has 8 million in assets in real estate. Whereas Joe's creditworthiness is dependent on his employment, Scrooge has a huge line of credit just based on his assets- when Joe loses his job, Scrooge can borrow 3 million and snap it up and ten others like it at 20% below market value, just because he has the cash and because Joe is strapped for cash. Joe continues consuming toilet paper and potato chips, but starts investing less. Scrooge flips the ten houses he bought for 10% profit when the stimulus packages kick in and the housing market increases. The loss in value due to inflation does not bother Scrooge much, because his income is already in excess of his expenses. His ability to play the market to his advantage effectively negated inflation's effect on his wealth. So inflation serves as a squeeze to concentrate wealth in the hands of the already wealthy. Gold could have been a deflationary bastion in the past for people, but the difficulty in dividing it and converting it for every day transactions made it impractical to your average working family. Deflationary currencies competing with national currencies just get shut down by the government. And there's the revolutionary- it closes one channel of accumulation by making available a store of wealth that can be used for everyday purchases, that is easily divisible and easily convertible, and not to mention it has the growth rate of a pyramid scheme without actually being a pyramid scheme- the more people get in on bitcoin and make the switch from fiat, the greater its value- it's like taking bricks from the pyramid, which is only there for the sake of the Pharaoh's vanity, and using it to build things like workshops and houses. I think when people realize this they have one of two reactions- either "Wow, this is great, I want to support this!" or "The government is obviously going to shut this down, I'm going to keep at most a modest position in bitcoin and watch to see how it turns out." However, being truly global, even if the US, Europe, Australia, and Russia shut all exchanges down, we will still probably be able to buy drugs, Iranian crude, weapons, Argentinian pesos, as well as rapidly inflating dollars from Chinese entrepreneurs who've been selling American plastic crap for the last fifteen years, for bitcoin, with exchanges based in Iceland, Bolivia, Tokelau, Switzerland, Kazakhstan, and so on and so forth. It used to be people would store value in gold. Then in war time, governments would come and pull out everybody's gold teeth, take all their jewelry, tear apart their houses and confiscate all the gold. Try doing that with a brain wallet. Title: Re: Bitcoin revolutionary? Post by: esenminer on June 03, 2013, 03:05:20 PM I don't agree. I believe for the most part our economy is supply and demand. A 100% free market without government intervention is an ugly thing - think industrial revolution with little or no rights or powers in the hands of workers. Workers united to form unions which forced governments to intervene and create laws which limited free market action primarily through taxation / spending and economic policy. Taxation, primarily income tax but sales and other taces are used to redistribute wealth by providing services like healthcare, education, military and sometimes by direct spending usually on infrastructure like road building, bridge building, damns... Economic policy, what I think you're referring to is the ability of the government / federal bank to directly stimulate or slow down the economy. They do this by by loaning money, 'creating it' in a sense, to banks at their best interest rate. When they decrease the prime interest rate banks can lend at lower rates, more people will borrow and the economy will be stimulated and when they increase it the economy will tend to slow down - that's the idea at least. Creating too much money can lead to inflation and too little to deflation. The whole point of economic policy is to smooth out the highs and lows of a free market so that we don't end up in a recession or depression. It's not perfect and usually doesn't work well (!) but this is not the fault of the policy - it's a good idea in theory but in real life attempts to affect the economy take a long time to play out so a policy decision today might start showing it's effects months and months from now. So policy makers are always in a position of trying to figure out if what they did had the intended affect and what they should do next :) Why do you think this is nonsense? How do politicians fit in here? Accommodate them how? Fiscal and monetary policies provide a temporary fix for the economy, similar to the way smoking crack provides a temporary sense of euphoria. However, the long term effects are destructive. Also, like crack, economic stimulus becomes addictive and it takes a bigger and bigger dose to keep getting the desired effect until eventually an overdose is experienced. Central banks were created by politicians to finance all of their brilliant ideas. Politicians are the central banks largest customers. Without central banks, the politicians would have never been able to acquire the insurmountable debt that they now have. Society doesn't need politicians to provide for our every need. The free market can do so much more efficiently. I don't understand the references to politicians in this context. For example in the US the politicians have no direct say over monetary policy that I discussed above. The prime interest rate is decided several times a year by the treasury (or a sub group composed of federal banks). Politicians have access to either the national budget and if required they can raise additional money buy issuing bonds and pay interest on that - is this what you are referring to? Are there any specific instances of these brilliant ideas that come to mind? Just for completeness I pulled this information from the US budget for last year http://en.wikipedia.org/wiki/United_States_federal_budget (http://en.wikipedia.org/wiki/United_States_federal_budget) Quote During FY2012, the federal government collected approximately $2.45 trillion in tax revenue, up $147 billion or 6% versus FY2011 revenues of $2.30 trillion. Primary receipt categories included individual income taxes ($1,132B or 47%), Social Security/Social Insurance taxes ($845B or 35%), and corporate taxes ($242B or 10%).[13] Other revenue types included excise, estate and gift taxes. and Quote During FY 2012, the federal government spent $3.54 trillion on a budget or cash basis, down $60 billion or 1.7% vs. FY 2011 spending of $3.60 trillion. Major categories of FY 2012 spending included: Medicare & Medicaid ($802B or 23% of spending), Social Security ($768B or 22%), Defense Department ($670B or 19%), non-defense discretionary ($615B or 17%), other mandatory ($461B or 13%) and interest ($223B or 6%). and most interestingly which is relevant to your point Quote The annual budget deficit is the difference between actual cash collections and budgeted spending (a partial measure of total spending) during a given fiscal year, which runs from October 1 to September 30. Since 1970, the U.S. federal government has run deficits for all but four years (1998–2001)[48] contributing to a total debt of $16.77 trillion as of March 31, 2013.[49] [50] Title: Re: Bitcoin revolutionary? Post by: shawshankinmate37927 on June 03, 2013, 05:36:35 PM Fiscal and monetary policies provide a temporary fix for the economy, similar to the way smoking crack provides a temporary sense of euphoria. However, the long term effects are destructive. Also, like crack, economic stimulus becomes addictive and it takes a bigger and bigger dose to keep getting the desired effect until eventually an overdose is experienced. Central banks were created by politicians to finance all of their brilliant ideas. Politicians are the central banks largest customers. Without central banks, the politicians would have never been able to acquire the insurmountable debt that they now have. Society doesn't need politicians to provide for our every need. The free market can do so much more efficiently. I don't understand the references to politicians in this context. For example in the US the politicians have no direct say over monetary policy that I discussed above. The prime interest rate is decided several times a year by the treasury (or a sub group composed of federal banks). Politicians have access to either the national budget and if required they can raise additional money buy issuing bonds and pay interest on that - is this what you are referring to? Are there any specific instances of these brilliant ideas that come to mind? Just for completeness I pulled this information from the US budget for last year http://en.wikipedia.org/wiki/United_States_federal_budget Quote During FY2012, the federal government collected approximately $2.45 trillion in tax revenue, up $147 billion or 6% versus FY2011 revenues of $2.30 trillion. Primary receipt categories included individual income taxes ($1,132B or 47%), Social Security/Social Insurance taxes ($845B or 35%), and corporate taxes ($242B or 10%).[13] Other revenue types included excise, estate and gift taxes. and Quote During FY 2012, the federal government spent $3.54 trillion on a budget or cash basis, down $60 billion or 1.7% vs. FY 2011 spending of $3.60 trillion. Major categories of FY 2012 spending included: Medicare & Medicaid ($802B or 23% of spending), Social Security ($768B or 22%), Defense Department ($670B or 19%), non-defense discretionary ($615B or 17%), other mandatory ($461B or 13%) and interest ($223B or 6%). and most interestingly which is relevant to your point Quote The annual budget deficit is the difference between actual cash collections and budgeted spending (a partial measure of total spending) during a given fiscal year, which runs from October 1 to September 30. Since 1970, the U.S. federal government has run deficits for all but four years (1998–2001)[48] contributing to a total debt of $16.77 trillion as of March 31, 2013.[49] [50] Bankers and politicians have a symbiotic relationship. The US Federal Reserve currently has over $3 trillion in US Treasury Department IOUs on it's balance sheet. That's $3 trillion that was created and loaned to the Treasury Department for the express purpose of funding the federal government's budget. I forget how many IOUs are in the Social Security Trust Fund, but those IOUs will also eventually be purchased by the Federal Reserve with newly created dollars and end up on their balance sheet. The Federal Reserve exists to ensure that politicians are able to acquire the funding needed to expand the size of government more that it would otherwise be able to. Taxes do not provide enough revenue, hence the deficits. The Federal Reserve will keep coming up with new programs under the guise of stimulating the economy, but the true purpose of imposing an inflation tax by expanding the money supply is to fund government programs. The bankers are all too happy to play along, because they profit immensely. A few of the brilliant ideas of the politicians that I was referring to that immediately come to mind include wars, food stamps, and public health care. When I say "brilliant", I'm being facetious, of course. :) Title: Re: Bitcoin revolutionary? Post by: Zarathustra on June 03, 2013, 06:05:41 PM Tribalism ---> Feudalism ---> Capitalism --------> ....BITCOINISM Tribalism ---> Feudalism ---> Capitalism --------> ....BITCOINISM ----------> Tribalism Title: Re: Bitcoin revolutionary? Post by: esenminer on June 03, 2013, 07:42:58 PM Fiscal and monetary policies provide a temporary fix for the economy, similar to the way smoking crack provides a temporary sense of euphoria. However, the long term effects are destructive. Also, like crack, economic stimulus becomes addictive and it takes a bigger and bigger dose to keep getting the desired effect until eventually an overdose is experienced. Central banks were created by politicians to finance all of their brilliant ideas. Politicians are the central banks largest customers. Without central banks, the politicians would have never been able to acquire the insurmountable debt that they now have. Society doesn't need politicians to provide for our every need. The free market can do so much more efficiently. I don't understand the references to politicians in this context. For example in the US the politicians have no direct say over monetary policy that I discussed above. The prime interest rate is decided several times a year by the treasury (or a sub group composed of federal banks). Politicians have access to either the national budget and if required they can raise additional money buy issuing bonds and pay interest on that - is this what you are referring to? Are there any specific instances of these brilliant ideas that come to mind? Just for completeness I pulled this information from the US budget for last year http://en.wikipedia.org/wiki/United_States_federal_budget Quote During FY2012, the federal government collected approximately $2.45 trillion in tax revenue, up $147 billion or 6% versus FY2011 revenues of $2.30 trillion. Primary receipt categories included individual income taxes ($1,132B or 47%), Social Security/Social Insurance taxes ($845B or 35%), and corporate taxes ($242B or 10%).[13] Other revenue types included excise, estate and gift taxes. and Quote During FY 2012, the federal government spent $3.54 trillion on a budget or cash basis, down $60 billion or 1.7% vs. FY 2011 spending of $3.60 trillion. Major categories of FY 2012 spending included: Medicare & Medicaid ($802B or 23% of spending), Social Security ($768B or 22%), Defense Department ($670B or 19%), non-defense discretionary ($615B or 17%), other mandatory ($461B or 13%) and interest ($223B or 6%). and most interestingly which is relevant to your point Quote The annual budget deficit is the difference between actual cash collections and budgeted spending (a partial measure of total spending) during a given fiscal year, which runs from October 1 to September 30. Since 1970, the U.S. federal government has run deficits for all but four years (1998–2001)[48] contributing to a total debt of $16.77 trillion as of March 31, 2013.[49] [50] Bankers and politicians have a symbiotic relationship. The US Federal Reserve currently has over $3 trillion in US Treasury Department IOUs on it's balance sheet. That's $3 trillion that was created and loaned to the Treasury Department for the express purpose of funding the federal government's budget. I forget how many IOUs are in the Social Security Trust Fund, but those IOUs will also eventually be purchased by the Federal Reserve with newly created dollars and end up on their balance sheet. The Federal Reserve exists to ensure that politicians are able to acquire the funding needed to expand the size of government more that it would otherwise be able to. Taxes do not provide enough revenue, hence the deficits. The Federal Reserve will keep coming up with new programs under the guise of stimulating the economy, but the true purpose of imposing an inflation tax by expanding the money supply is to fund government programs. The bankers are all to happy to play along, because they profit immensely. A few of the brilliant ideas of the politicians that I was referring to that immediately come to mind include wars, food stamps, and public health care. When I say "brilliant", I'm being facetious, of course. :) I agree that wars / military spending in the US is way too high but I have no problems with healthcare or welfare - healthcare I believe is a right - if I'm paying taxes the least the government can do is make sure I can stay healthy :) I see your point above about generating debt but isn't this only a temporary position? the us has had surplus in the last decade and several times before that (although overall it does tend to run a deficit). Other countries tend to run surpluses every year. What is the affect of this on the avg person? Title: Re: Bitcoin revolutionary? Post by: esenminer on June 03, 2013, 07:52:41 PM I think in terms of technology Bitcoin is revolutionary but I don't see how it could revolutionize our current economic system. The key problem is that it does not address the distribution and accumulation of wealth. In fact the current mining system promotes this. People mine, collect coins, re-invest. Those with more coins can invest more and make more and over time the distribution of coins is unequal with a small percentage of people holding a majority of the coins. The second problem is it's link with FIAT money which it needs for it to have any current real world use. This link makes it a commodity, like gold, and wealthier people always end up with more. If the world were to implement a complete Bitcoin system wouldn't we just end up in the same place we are now? Minority of people holding the majority of Bitcoins? Instead of everything being done with various FIAT it would be done with Bitcoin - sure everything would be much simpler, digital, some things cheaper and less worry about inflation but for all intents and purposes the exact same underlying economic system. An economic revolution would have to address the distribution and accumulation of wealth. It isn't necessarily if there is an unfair distribution of wealth, but more-so WHO controls that wealth. A. Would you rather it be controlled by congress? The Federal Reserve + international corporate banks? Wall Street? The Pentagon? IMF? B. Or would you rather it be controlled by brilliant, innovative, scientific, and empathetic nerds who seek to improve humanity? The choice is yours. Put your money in a mutual fund and it goes to A. Put it in bitcoin and it goes to B. I'm not sure about this. Putting your money in a mutual fund can mean anything from investing a basket of companies in the tech sector or a basket of companies representing all companies on a stock exchange. You haven't lost control of your money, you've invested in those companies and you earn money depending on how the company (shares) performs. You can always invest in mutual funds which buy shares in companies run by those in B :) Title: Re: Bitcoin revolutionary? Post by: esenminer on June 03, 2013, 08:14:02 PM One thing I find missing from this discussion so far is the effect of switching from inflationary fiat currencies to deflationary bitcoin. Much of the current system has been so slanted towards overproduction and overconsumption due to the inflationary nature of dollars, euros, etc. An example of what I mean: I've been playing around with bitcoin based investing for a while now, and one of the interesting things I've learned is that some assets will naturally decline in price due to deflation. Think about "mining turds", which should have declining prices as mining difficulty rises. They can still be a good investment though, as long as the price plus accumulated interest (dividends) does add up to more than the initial price. [I'm not sure any of them meet that criteria, just that it is possible.] How will deflationary currencies affect store profits? Capital accumulation? Business investments? What opportunities will arise for new businesses that can only exist/survive in a deflationary period? What will happen to businesses that exist now only because the primary currencies are inflationary? These are the things I'm thinking about. The fact is that bitcoin is here and it is going to change things. No Utopian wishing is going to change its essential nature, so best to deal with it as it is. Agreed... this reminds of Max Keiser's discussion on the credit apartheid. Inflation serves as a tool to concentrate debt in the hands of the wealthy. It reduces the value of everyone's wealth, but the wealthy are still able to leverage big investments based on their creditworthiness. As inflation outpaces wage growth, working people's money becomes worth less and less, as they are forced to spend their earnings on surviving rather than investing, and those who still have surplus wealth, even though it is worth less, are able to invest, which channels money from working people to those who can still afford to invest. A concrete example: Joe has 6000 dollars a month. He spends 5000 on house/car/food/utilities and invests 1000 in retirement fund and college fund for kids. Inflation kicks in, let's say, devaluing the money by 10% over a few years. Joe gets a raise in this time, but it's only an additional 300 dollars a month. Now his income has effectively been reduced by 330 dollars- inflation hit him with a minus 10% and the raise increased it by 5%. That means he is faced with two choices: lower standard of living or invest less. This is the choice the American middle class is facing right now. On the other hand, Uncle Scrooge has a net worth of $10 million, and is getting 10% interest on two million of it, having invested in a combination of mortgage banks, consumer product companies like toilet paper and potato chip manufacturers, and so on. This two million generates two hundred thousand a year which Scrooge can live on. Scrooge also has 8 million in assets in real estate. Whereas Joe's creditworthiness is dependent on his employment, Scrooge has a huge line of credit just based on his assets- when Joe loses his job, Scrooge can borrow 3 million and snap it up and ten others like it at 20% below market value, just because he has the cash and because Joe is strapped for cash. Joe continues consuming toilet paper and potato chips, but starts investing less. Scrooge flips the ten houses he bought for 10% profit when the stimulus packages kick in and the housing market increases. The loss in value due to inflation does not bother Scrooge much, because his income is already in excess of his expenses. His ability to play the market to his advantage effectively negated inflation's effect on his wealth. So inflation serves as a squeeze to concentrate wealth in the hands of the already wealthy. Gold could have been a deflationary bastion in the past for people, but the difficulty in dividing it and converting it for every day transactions made it impractical to your average working family. Deflationary currencies competing with national currencies just get shut down by the government. And there's the revolutionary- it closes one channel of accumulation by making available a store of wealth that can be used for everyday purchases, that is easily divisible and easily convertible, and not to mention it has the growth rate of a pyramid scheme without actually being a pyramid scheme- the more people get in on bitcoin and make the switch from fiat, the greater its value- it's like taking bricks from the pyramid, which is only there for the sake of the Pharaoh's vanity, and using it to build things like workshops and houses. I think when people realize this they have one of two reactions- either "Wow, this is great, I want to support this!" or "The government is obviously going to shut this down, I'm going to keep at most a modest position in bitcoin and watch to see how it turns out." However, being truly global, even if the US, Europe, Australia, and Russia shut all exchanges down, we will still probably be able to buy drugs, Iranian crude, weapons, Argentinian pesos, as well as rapidly inflating dollars from Chinese entrepreneurs who've been selling American plastic crap for the last fifteen years, for bitcoin, with exchanges based in Iceland, Bolivia, Tokelau, Switzerland, Kazakhstan, and so on and so forth. It used to be people would store value in gold. Then in war time, governments would come and pull out everybody's gold teeth, take all their jewelry, tear apart their houses and confiscate all the gold. Try doing that with a brain wallet. Quote And there's the revolutionary- it closes one channel of accumulation Very nice point and to that point I want to propose something - I mentioned it earlier but I guess people ignored it :) What if all channels of accumulation were closed and distribution more uniform. Assuming you could guarantee each person a single unique wallet, when applied to Bitcoin it would look something like 1. Transaction fees are higher - say 10-15% and they are distributed equally over the network - this results in a steady flow of income for all users. I spend 100 Bitcoin, 10-15 bitcoins get spread to all users. 2. Negative interest on wallet balances - for example 4-5% of your wealth is redistributed automatically every X days if you don't spend it. I have 100 Bitcoin, I lose 4-5 bitcoins if i don't spend it X days - they get spread to all users. With the end result (maybe) being that everyone has a steady stream of income and it is difficult if not impossible to accumulate coins as the more you have the more you lose hence very little motivation to save more than you can spend. It's very naive and crude but something like this can only work with a decentralized digital currency. I'm sure there are various ill side effects but it seemed interesting to think about it. Title: Re: Bitcoin revolutionary? Post by: Etlase2 on June 03, 2013, 09:16:25 PM With the end result (maybe) being that everyone has a steady stream of income and it is difficult if not impossible to accumulate coins as the more you have the more you lose hence very little motivation to save more than you can spend. It's very naive and crude but something like this can only work with a decentralized digital currency. I'm sure there are various ill side effects but it seemed interesting to think about it. Again I'd like to direct your attention to the link in my signature. While it is not as crude and punishing as your idea here, you might like it. Most new money is distributed via a sort of transaction fee refund policy. Money production is unbound, but has lots of brakes based on tx activity, and miners creating new money creates a lot of additional free money that is distributed via that tx activity. What I think this does is prevent the advantage you mention to the wealthy in economically poor times. When deflation exists, money will be added to the supply at the lowest levels, and I don't believe that the wealthy will be able to have such a huge advantage over the not-wealthy as you have described. I don't think we need to devolve all the way down to completely eliminating money as a store of value. However, freicoin supports this theory, it might also interest you. Title: Re: Bitcoin revolutionary? Post by: Carlton Banks on June 03, 2013, 10:08:43 PM I agree that wars / military spending in the US is way too high but I have no problems with healthcare or welfare - healthcare I believe is a right Good luck with that; government mandated healthcare comes from business interests too, and guess what? They prefer bigger profits to smaller ones. Hence, palliatives are what they produce. There's no profit incentive in keeping your population 100% healthy, how would the pharmaceutical companies and health insurers profit from that dynamic? The most profitable model is to try to ensure that everyone has some ailment or other, so that it can be capitalised. Title: Re: Bitcoin revolutionary? Post by: shawshankinmate37927 on June 04, 2013, 01:29:26 AM I agree that wars / military spending in the US is way too high but I have no problems with healthcare or welfare - healthcare I believe is a right - if I'm paying taxes the least the government can do is make sure I can stay healthy :) I see your point above about generating debt but isn't this only a temporary position? the us has had surplus in the last decade and several times before that (although overall it does tend to run a deficit). Other countries tend to run surpluses every year. What is the affect of this on the avg person? I don't have a problem with government provided welfare and healthcare for those who want it and are willing to pay for it. I do have a problem with forcing it on those who don't want it and forcing them to foot the bill for it or debasing the currency and saddling future generations with debt to pay for it. No, I don't think the national budget is going to be balanced anytime soon. Their debt will just keep getting bigger. Even the government bureacrats are projecting deficits for years into the future. According to the quote you provided in Post #49: Quote The annual budget deficit is the difference between actual cash collections and budgeted spending (a partial measure of total spending) during a given fiscal year, which runs from October 1 to September 30. Since 1970, the U.S. federal government has run deficits for all but four years (1998–2001)[48] contributing to a total debt of $16.77 trillion as of March 31, 2013.[49] [50] The Treasury Department was able to claim a budget surplus for the four years from 1998-2001 only because they were looting the Social Security Trust Fund (SSTF) and replacing those funds with IOUs. (See Chapter 1 of the IOUSA documentary: www.youtube.com/watch?v=lcb0hMPG5S0#t=07m52s) Without the ability to divert SSTF money to the other programs, there would have been a surplus only for the year 2000 in that four year period. The average person has to pay higher taxes, work more to make ends meet, and watch their dollars lose purchasing power. If allowed to continue, eventually the dollar and the bond market collapse. Title: Re: Bitcoin revolutionary? Post by: esenminer on June 04, 2013, 09:35:35 PM With the end result (maybe) being that everyone has a steady stream of income and it is difficult if not impossible to accumulate coins as the more you have the more you lose hence very little motivation to save more than you can spend. It's very naive and crude but something like this can only work with a decentralized digital currency. I'm sure there are various ill side effects but it seemed interesting to think about it. Again I'd like to direct your attention to the link in my signature. While it is not as crude and punishing as your idea here, you might like it. Most new money is distributed via a sort of transaction fee refund policy. Money production is unbound, but has lots of brakes based on tx activity, and miners creating new money creates a lot of additional free money that is distributed via that tx activity. What I think this does is prevent the advantage you mention to the wealthy in economically poor times. When deflation exists, money will be added to the supply at the lowest levels, and I don't believe that the wealthy will be able to have such a huge advantage over the not-wealthy as you have described. I don't think we need to devolve all the way down to completely eliminating money as a store of value. However, freicoin supports this theory, it might also interest you. Hi sorry I must have missed your earlier reference - I will defn check it out, thanks. Title: Re: Bitcoin revolutionary? Post by: bitcoinbear on June 04, 2013, 09:41:38 PM I think in terms of technology Bitcoin is revolutionary but I don't see how it could revolutionize our current economic system. The key problem is that it does not address the distribution and accumulation of wealth. In fact the current mining system promotes this. People mine, collect coins, re-invest. Those with more coins can invest more and make more and over time the distribution of coins is unequal with a small percentage of people holding a majority of the coins. If you do not see how bitcoin addresses the distribution of wealth, then you need to look more closely. In the current environment dollars are printed and then given out to the wealthy, elite, powerful who then lend then out to everybody else with interest. Bitcoin has an initial distribution to the people who know and care about it, but as time goes on the overall distribution will be that the people who are best at providing goods and services will get the most money. Thus bitcoin will destroy the current system which favors the elite few by allowing true capitalism to progress. Title: Re: Bitcoin revolutionary? Post by: semaforo on June 04, 2013, 10:04:16 PM Very nice point and to that point I want to propose something - I mentioned it earlier but I guess people ignored it :) What if all channels of accumulation were closed and distribution more uniform. Assuming you could guarantee each person a single unique wallet, when applied to Bitcoin it would look something like 1. Transaction fees are higher - say 10-15% and they are distributed equally over the network - this results in a steady flow of income for all users. I spend 100 Bitcoin, 10-15 bitcoins get spread to all users. 2. Negative interest on wallet balances - for example 4-5% of your wealth is redistributed automatically every X days if you don't spend it. I have 100 Bitcoin, I lose 4-5 bitcoins if i don't spend it X days - they get spread to all users. With the end result (maybe) being that everyone has a steady stream of income and it is difficult if not impossible to accumulate coins as the more you have the more you lose hence very little motivation to save more than you can spend. It's very naive and crude but something like this can only work with a decentralized digital currency. I'm sure there are various ill side effects but it seemed interesting to think about it. If the deflation issue actually turn out to be real, then this might be a fix. This reminds me of the woergl. http://en.wikipedia.org/wiki/W%C3%B6rgl#The_W.C3.B6rgl_Experiment As I remember there was a negative interest rate built into the currency which caused people to spend rather than hoard, and there was almost full employment whereas the rest of the country was around 50% unemployment. Then the government shut it down, saying it was a threat to sovereignity. These are good ideas, but ultimately a currency is only worth what people believe it is worth. It sounds like you could apply these ideas to a new coin- like devcoin, where 10% goes to miners and 90% goes to developers. I am starting to think that complementary cryptocurrencies are key to bitcoin's success. Title: Re: Bitcoin revolutionary? Post by: esenminer on June 04, 2013, 10:11:10 PM I think in terms of technology Bitcoin is revolutionary but I don't see how it could revolutionize our current economic system. The key problem is that it does not address the distribution and accumulation of wealth. In fact the current mining system promotes this. People mine, collect coins, re-invest. Those with more coins can invest more and make more and over time the distribution of coins is unequal with a small percentage of people holding a majority of the coins. If you do not see how bitcoin addresses the distribution of wealth, then you need to look more closely. In the current environment dollars are printed and then given out to the wealthy, elite, powerful who then lend then out to everybody else with interest. Bitcoin has an initial distribution to the people who know and care about it, but as time goes on the overall distribution will be that the people who are best at providing goods and services will get the most money. Thus bitcoin will destroy the current system which favors the elite few by allowing true capitalism to progress. Capitalism / free-markets are the cause of the unequal distribution of wealth so I'm not sure what you mean here. Assume you have a completely free-market, no government interference, regulation, taxation just bunch of people with Bitcoins. Even assume that everyone starts off with the same number of Bitcoins. Some people invest wisely, maybe start a business and make money, other people invest and fail and others will save. Over time some people have more some people have less. Those with more Bitcoin have extra so they might invest in other businesses and make even more Bitcoin. Over time Bitcoins accumulate with a small number of investors simply because only those with extra Bitcoin can invest. The number of Bitcoins is fixed so you then have a small group of people holding onto the majority of Bitcoins with a majority of people splitting what's left. Call the majority 'the wealthy, elite, poweful'. This property exists in all capitalistic free-markets. It is capitalism's achilles heel. When the inequality goes to far people will tend to revolt and demand a more equitable system. Borrowing from an earlier post it might look something like Tribalism ---> Feudalism ---> Capitalism --------> Socialism --------> ? Title: Re: Bitcoin revolutionary? Post by: jdbtracker on June 04, 2013, 10:21:05 PM Bitcoin cannot resolve the problem of inequality in a society, It is only a program made to let people handle money in a revolutionary way. if you wish to distribute the wealth, why not? do it, it allows a lot of flexibility on how to do transactions.
But it does give an example where the creator thought to distribute the wealth of the many who use it to the many that support it. They gave us an example of selflessness, think about facebook, ebay, amazon etc, billions of dollars worth concentrated into a few individuals no more than 10,000 people, supporting complementary businesses that pay their workers minimum wage and these jobs soon will be replaced by robots... what will happen when wealth is concentrated that heavily? |