Bitcoin Forum

Bitcoin is too awesome..
First of all the concept of money itself is  mind-boggling..   Now we have true money that is backed by natural resources...

The more I think.of it, the more I realize how much we are living in the Matrix!

Well Bitcoin IS mind-boggling, but it's not backed by natural resources. It is actually more accurate to say that Bitcoin is a natural resource itself... or more accurately a man-made resource.

Like gold, Bitcoin is not backed by anything because it is useful for certain purposes.

Sometimes I worry that I will wake up and Bitcoin will all have been a dream. I'll try to explain it to my friends and family, who will dismiss the silly dream as absurd. Of course you can't have secure decentralized digital money! Psssh!!

But yet, it seems real, and we're living it right now.

Don't know if "Pandora's box" is the accurate metaphor, but I too have to admit that I'm totally fascinated by Bitcoin, Satoshi, the economic implications and especially the times we're living right now.
I mean, we're onto something really new and possibly world-changing.

I feel like a pioneer exploring the new realms of the crypto age ... and that feels awesome!

I've had the feeling of living in the matrix for a long time now, I keep trying to wake the people around me in vain.

This is entertaining, re: The Matrix http://www.youtube.com/watch?v=5zN-VKh7XgQ

BTW Max Min, your song is awesome! Great production on that video too!

Is Satoshi "the one"?

What we need now is a Bitcoin style Secure Voting system for a Primary / Direct democracy- so everybody can vote on every piece of legislation and can put forward their own legislation.


Or

Crypto-Anarcho-capitalism

Or

just back to our old values and constitutions with our Liberties being respected and taking priority.


Any of the above has to be better than the Corporate bought puppet Governments we have now

Bitcoin is the first few of a series of events that will lead us to the next level of cryptoanarchy.. And its kind of scary too at the same time.... Im one of those who does not like to rock the boat too much when the waters are calm.

Hear! Hear!

my catchphrase = anarchy is underrated

It most certainly is revolutionary.

Oh thanks, glad you like it!

Bitcoin is backed by the cost of electricity (and equipment) required to compute its proof of work.

Electricity comes from natural resources like wind, hydro, solar, nuclear, and hydrocarbons.

Thus, our new Joule Standard is backed by natural resources.

Prepare to meet your doom, central bankers!  The era of cryptodollar hegemony is upon us!

I expect your friends and family think you really a major drug dealer, and that this 'bitcoin' thing is just a way for you to avoid admitting it to them ;D

What do you mean by "backed by"?  When we say "paper receipt is backed by gold" it means you can get gold in exchange for receipt at any time. In case of Bitcoin, you are NOT getting back electricity in exchange for your bitcoins, blocks or transactions. Please clarify what you mean by this.

One definition of "backed by" is "guaranteed exchangeable for."

Another is "supported by."  As in 'Bitcoin is supported by the scarcity of energy available from natural resources.'

I'm guessing that Erik's family knows a little more about Bitcoin (http://www.courierpress.com/news/2011/mar/19/local-liberty-dollar-architect-found-guilty/?print=1) than he has let on.

I guess the more costly electricity goes the more bitcoins go. With that said how will that effect electricity rates globally if one country supplies power at a substantial difference.

Interesting to discuss

then you know what to do when you wake up.

(assuming the laws of math and 1 + 1 = 2 don't change one layer of reality above ours)

I mean don't try to persuade anybody first  ;)

Good so far, will watch the rest later, thanks.

These are totally different definitions and the second one is made up. If you want to point out prerequisites to deal with Bitcoins, you don't need to redefine words. Bitcoins need the same modern capital structure that you also need for having dollars and modern banking. Namely, connectivity, electricity, equipment and many people employed in that area.

Back to the first definition (which is what most people use): what exactly and by whom is guaranteed to be exchanged for irrevocably spent electricity in case of Bitcoin?

I think the Pandora's box metaphor is accurate; you have opened this box, and you can never, EVER close it.  And it is perceived as evil by anyone with a huge stake in fiat--that is, nobody, except the men who designed and own all the fiat.  Now that's one hell of a card tower.

In the beginning, I'm sure Satoshi was like... "hmm p2p currency.. this is DEFINITELY not goint to work.. but I've spent 10 years of my life on this cr*p... so let me just get it over with."

In a certain Japanese cartoon series, in the near future 300 years from now, Earth gets almost all it's power from the Sun through a ring of solar panels a few kilometers up above in the sky, around the planet.

I can imagine this will start with a few electric companies that decide to send a few dozen satellites into space. Then a few hundred later on. All orbiting our planet, and transmitting microwave energy into collection antennas on the surface.

The real gold rush is not mining, but owning your own electric company, regardless of where you harvest the energy, from the sun, from the wind, from the heat of the earth, etc.

That's a pretty common science fiction theme, but it's not going to happen.

Think about it:  if you were a sovereign nation, would you want some other nation (with whom you might have disagreements) putting a huge power beam transmitter into orbit that could have the capability of focusing its beam into a tolerably surgical death ray?

You almost certainly would care for that...

Not so much that.  More so, there would be too much threat for overabundance of energy, and therefor energy would be either extremely cheap or completely free.  Free energy cannot be profited from, else Tesla might be the main fellow in most history books.  Right now, we have every living being (at least in the first world) thriving from electricity, and every one of them has to pay for that energy.  That's a great way to generate revenue and jobs etc., but the alternatives would completely remove these companies from existence.  It's like gasoline; why is gasoline still being used after all this time?  Have we really not found any better way to get people from point A to point B?  And considering the extreme amounts of energy coming out of the sun, energy which stirred all of life to come into existence, and will continue to burn for billions of years, could we not then power everything in the world with the sun?  Certainly.  Will the gasoline and electric companies allow it?  Not if they can help it.  There's money to be made!

would'nt the losses from a focused beam of light be the same, anybody under the collector ring would be in darkness, I think there are companies working on using lasers for transferring energy but that is still not very efficient yet (or so were told, I bet the military are a few steps ahead with this kinda tech).

In a Novel by Arthur C Clarke he describes people living on a huge flat ring that encricles the sun, everybody inside the ring has continuous daylight.


Anyway I think Geothermal is underused, it's mad to think the lengths we go to to extract oil and gas from the earth when we can just drill in certain places and extract heat directly, We live on a huge ball of molten rock with a relatively thin crust, even a few feet underground the temperature increase is significant and steady.

Not correct, though people say this very often.

"Backing" when talking about a currency has a very specific, important meaning. It means that some party has promised to redeem that currency for some other good of value. Backing requires a backer, in other words. It requires someone's promise to back Item A with Item B. This is how paper money can have real value, because if it's backed by a government or bank or corp that will give you gold/silver for it, then it has that same value by proxy. That's backing.

Bitcoin is not backed by anything, nor anyone. It is a resource, a commodity, a good in and of itself.

The cost of electricity/equipment does not back Bitcoin whatsoever, just as the cost of dredging deep-sea mud from the ocean floor doesn't back the price of this mud on the open market.

It is easy to create a secure electronic voting system on top of Bitcoin.  Simply declare in advance that all blocks in a certain depth range will be the "election period" - then let users attach text codes indicating their votes to their transactions during that period (certain clients will let you attach arbitrary text to transactions)...  The transaction fee that is paid can indicate the strength of the user's conviction...  Then you simply add up the transaction fees paid in support of each candidate during the voting period to determine the winner.  Mining collectives collect the fees paid as a reward for operating the secure voting system.  A few pools might declare themselves to be "political parties" and only accept transactions that vote for their endorsed candidate.  Other pools might declare themselves neutral and accept any transaction that pays adequate fees.

Only problem with this system, it gives political power in proportion to the wealth of the voters (in Bitcoins) and/or the computational power controlled by the miners...  Instead of "one person, one vote," we have "one Bitcoin, one vote," or "one gigahash, one vote," or something.  However, arguably, our current "democracy" is already largely controlled by money anyway, so it might not be much of a change...

Actually Bitcoin is backed by a resource.   It is backed by electricity.   Without power to run the miners machine then it would have some troubles confirming transactions.

"Backed by", I would step back and not assume the definition of exchanged for even though that is common nomenclature in the monetary world. 

People should think of at least part of a coin as how much resources went into producing it through the mining and proof of work system.  I believe miners these days have too look at that when they weigh how much that coins should be worth in purchasing power.   I understand the open market exchanges determine the current price but I am taking the side of the miner who is looking to potential sell that coin into the market for covering mining expenses.  At the moment, he would have a good idea much these coins were worth if he was keeping really good records on his daily mining reward.

Dalkore

Not many people realise this, but bitcoin is actually the first public record of anything that is not dependent on a third party. It is dependent on a bunch of third parties, but not on one. For anyone who ever was afraid of a 1984 kind of scenario, this is a very plausible way out.

I believe that the most important developments are still ahead -

A deep unbiased prediction market of anything and everything. People betting on stuff that people care about, or say that they care about, in a darknet website.

A blockchain where people seek to code law - Maybe impossible. Maybe equivalent to creating an AI. But Satoshi has opened the blockchain pandora's box and lots of things could be done with it.

It might happen, although it is understood that it can be a weapon, if there were agreements before about it's actual and intended use. If it were used inappropriately at any time, it would be shot down. Or it can be made in a such a way as to only orbit its owner's country or company and then they wouldn't have to worry about it give energy to anyone who won't pay.

Gasoline companies are now going into renewable energy. Shell is an example. They know oil is going to run out, so they are researching other ways of making money while they still can, and then move over to the next territory.

Solar power is not free. You need to set up the panels. The panels on the surface of the earth are less efficient than if they were in space, however there have been studies made where solar panels on earth can take up a small portion and be sufficient to power the world right now. I'm guessing if it's too expensive to send up some panels into space, power companies (or governments) will set up panels on giant man made islands along the equator line (where the sun is most powerful).

Then you'd have to protect those panels from the environment and from pirates and from rivals.

There's a couple of graphics showing this.

http://www.landartgenerator.org/blagi/wp-content/uploads/2009/08/AreaRequired1000.jpg

http://images.huffingtonpost.com/2008-05-30-solarpowerworldnn03.jpg

Yes, capitalism has this way of not really caring for the bigger picture and focusing more on "how much money can I make by doing this, and how can I stomp out my competition?"  A combination of geo-thermal and solar would be great; there's lots of potential, if not free energy, to strike down the cost of it, but of course even that can be compensated by simply charging people the same rate as ever and pocketing the profits.  Gasoline companies couldn't care less about renewable energy, they only go where their crowd is going.  They'll find whatever the 'new' thing is, own it, and then charge everyone else several times more to use it.  The problem today is energy is completely inefficient.  America's one of the worst; if everyone needs to go places, and often to the exact same place from 8 to 5, why is public transportation so undeveloped?  We figured out a while back that if you hang a train on magnets against a magnetized rail, you can make it go real fast, real efficient, and charge a small fee for using it.  Set up such a system nationwide, with smaller, more local methods of transportation, perhaps trolleys or very conveniently placed train stations, and you can save on a lot of energy, where instead of individual vehicles getting crammed onto a road, you have one vehicle which can hold many--it would also be safer, but, that's another argument.  A system like this will probably catch on today, if any entrepreneur wanted to screw with the gasoline companies, and take advantage of incredibly high gas prices.

If we're considering powering the world as it stands, we're going to have a hard time.  Powering a more efficient set of societies is a much easier task to accomplish.

Bitcoin is backed by it's unique properties of utility. Instant transfers, anonymity, low fees, uncensorability, controlled inflation, integration in today's cyber world. It is like gold. Gold also have unique properties that are utilitarian by themselves like corrosion resistance, conductivity, reflectivity. Gold would not be valuable by scarcity alone without other awesome properties as a material. There is not much value in dinosaur poo although it is also rare like gold.

Plus this technology allows for an unlimited amount of competing currencies. If people can come together and switch their currency at will, this completely flips the market system on its head.


 ;D

I agree. Governments back currency to create confidence.

Bitcoin derives confidence from being useful as a currency. The ultimate currency should be easy to use (make micro-transactions simple and close to free), be secure (from fraud, government seizure, and provide anonymity), and be a good store of value (scarce).  To the extent that bitcoin scales to these tasks, is the extent that bitcoin will prevail in the long-run.

It is possible but all other competing currencies have failed to gain momentum so far, with Litecoin being the most successful so far. Take example ixcoin. It is very similar to Bitcoin, but almost noone uses it. There is no need for alternate cryptocurrency right now because none of them provides substantial advantages over Bitcoin.

You have to include misappropriation of resources. New 'currency' objects could alleviate the bottleneck through which goods flow.

The first definition only (strictly/literally) applies to currencies legislatively or constitutionally tied to a commodity, IE dollars on a gold standard.

The second definition subsumes the first, is more general, and more useful because it is more commonly used.

The second definition is not "made up."  You are merely confusing your own lack of education with objective reality.

If you Google "backed by" you will plainly see every single dictionary listing numerous variants of the second defintion, as well as linguistic context demonstrating a preponderance of evidence testifying to the correctness of that usage.

http://lmgtfy.com/?q=backed+by

WRT Bitcoin (and gold), a metaphorical blending of both definitions occurs, allowing Bitcoin's utility to be conceptualized as its backing.

http://www.youtube.com/watch?v=s8YO5icNGn0 (http://www.youtube.com/watch?v=s8YO5icNGn0)

Bitcoin is this telephone call to the Matrix ...

I agree mostly. Electricity price does however set a floor on the cost of production, while we are in the "block reward" phase at least. Bitcoin cost of production cannot be overlooked but is currently insignificant given the size of the monetary premium in the current BTC price, and will probably remain insignificant unless there is a massive crash.

Cost of production is the reason BTC did not go to zero after the last crash but stopped around ~US$2. Think of it like the backstop ... way, way, way down there and it is of course tied to difficulty and thus popularity of mining, i.e. network adoption.

No, but what is simple is to pontificate loudly on forums.

I've got data on price and mining costs going back to when bitcoin was less than US$0.05 that shows you to be wrong. In fact, it has yielded some quite simple and profitable trading strategies, and no you won't be seeing it ... but keep believing it is "simple", is good for me.

Since we're going by common usage, no one says that the US Dollar is backed by its anticounterfeiting technology, even though according to the same reasoning, that limits its supply and supports its price. This is not even close to a common use. Why would we say that for bitcoins? The only way we could is if we're going against common usage.

Even ignoring that, speaking of guaranteeing scarcity, mining doesn't guarantee scarcity, since the 21 million limit is there regardless of the ability to rescind transactions, which is what mining actually tries to prevent.

Should this ever happen then you can always implement it yourself from scratch because then you will be the first one who had the idea and become the Satoishi of this other reality. I would do the same in my reality.