Deflation generally occurs when the supply of goods rises faster than the supply of money, which is consistent with these factors, the supply of money goes down, the supply of other goods goes up, demand for money goes up and finally demand for other goods goes down.
Economists generally believe that deflation is a problem in a modern economy because it increases the real value of debt, and may aggravate recessions and lead to a deflationary spiral. To be true, deflation is one of the most scariest part in the Economic sections. Nonsense. Many economists say that deflation is a problem because they've already taken a pro-inflation stance which requires that they be opposed to anti-inflation. Then again, most economists don't know enough about economies to have honest opinions about such matters, but they are statists, and being pro-inflation lets them provide cover to their political counterparts. Inflation is nothing less than the theft of value done in a way that is hard for most people to understand because no money is actually taken. |
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A sample can represent a population. Accuracy and precision is dependent upon the statistical method used.
Economic transactions are not fish in a lake. You can't cast your net and collect a bunch of them at random. You get the ones you go looking for, which is not how you collect a sample. The only way out is to get them all, which is not possible. So the entire statistics profession is wasting its time? This is indeed news. If a statistician pulled marbles from an urn while looking and deliberately choosing the ones he wanted, wouldn't you be even a little suspect when he started making claims based on the notion that his sample was random? You are attempting to refute Hayek's central point from The Fatal Conceit, namely that preferences aren't knowable except through the proper functioning of the market. Better than you have tried and failed, though they usually have the decency to sit through a freshman statistics course first. |
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Just by memory, I think that the new block's timestamp must be:
1. Later than the mean (median?) of the last 11 blocks.
AND
2. Not more than 2 hours into the future, based on the local node's notion of time1.
Requirement 1 means that the clock must move forward, overall.
Requirement 2 is soft. A block rejected by it will be accepted eventually, assuming that a better one doesn't show up first. Globally, it limits a miner's ability to mess with the clock. Without it, a group of miners could agree to run the clock fast, reducing the apparent work, artificially lowering the difficulty, increasing their profits.2
1. Note that this is node time, which is not necessarily the same as the node's OS time or hardware RTC time.
2. If you think that this causes a weakness in the system, work through the implications carefully. The distribution of work between the normal and fast chains is important.
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Fixed it for you. The "correct" basket isn't possible. "Optimal" is only meaningful from some particular subjective point of view.
The political policy that influences an economy are completely subjective. Bitcoin represents a political/economic policy that is not subjective. There is a fixed supply, known in advance, with no mechanism to ever create more. Anything else will be abused. You need to understand this. It is very important. Most of us do not want a money system that can be manipulated. We do not care how well intentioned the manipulator is. We do not care how hard the manipulator pretends that he is being objective. We do not want the tyranny of the well intentioned any more than we want the tyranny of the evil. A sample can represent a population. Accuracy and precision is dependent upon the statistical method used.
Economic transactions are not fish in a lake. You can't cast your net and collect a bunch of them at random. You get the ones you go looking for, which is not how you collect a sample. The only way out is to get them all, which is not possible. |
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Nonsense. You are claiming to have stabilized the prices of "all goods", but in reality you've stabilized the prices of none of the goods.
More appropriately, it would be "the general price level" that's stabilized. "The general price level" is a phantom. It exists only as a phrase we use. It isn't even an abstract thing. No one can describe it adequately, nor calculate it. 1Back to the thought experiment, if I, alone in this universe, bought 2 gallons of milk for 1 MØ each & 2 dozens of eggs for 1 MØ each, later 1 gallon of milk for 2 MØ & 4 dozens of eggs for 0.5 MØ each, then the general price level has remained stable during large shifts of supply & demand of milk and eggs.
Lucky you to live in a universe where money is not subject to supply and demand. Your goal, of course, is to have a stable value for the unit of currency. This is a fool's errand. There is no objective yardstick against which to measure the currency. The best you can do is make a basket, but then you are just measuring your own biases, and you'll wake up tomorrow with an obsolete basket because the world is not and cannot be made into a static system.
The Fisher Index has already mostly accounted for the shifting basket as in the above thought experiment. The optimal correct inclusion of goods & services is still unknowable. Fixed it for you. The "correct" basket isn't possible. "Optimal" is only meaningful from some particular subjective point of view. In your example, you imagine that "your best labor" is a worthwhile measure, but it isn't. While you were sleeping, someone has invented a machine to make your job easier, devaluing your labor, or someone has retired from your profession, decreasing supply and increasing your value, or something. That your labor can "still demand" a set price is an abomination, not a goal.
Of course, but that introduces new complexity into the thought experiment's universe; nevertheless, the quantity theory of money does account for increases in productivity. I don't think that many bitcoiners are looking for a prescriptive theory of money that involves privileged actors. And I'm not aware of any (non-trivial) predictions that it makes as a descriptive theory. 1 One may object that we can construct a basket and calculate it. This is not a calculation of the general price level, but a calculation of that particular basket, and not of "the general price level". You could define the basket as "everything", but that isn't calculable either, not even if you had perfect knowledge about all economic transactions, because transactions occur in lumps and smears, rather than flows. You'd need to slice up time, and now you are just calculating that particular choice of time rather than the general level. |
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Very close. The price of all goods and services are stabilized through manipulation of the quantity of money. So in our thought experiment universe: - One hour of my best labor (which doesn't produce eggs or milk) can still demand 50 MØ
- The price of milk skyrocketed to 2 MØ per gallon
- The price of eggs collapsed to 0.50 MØ per dozen
We can make immediate decisions over time as individual prices change because the general price level has not. My best labor can now buy only 25 gallons of milk per hour but now can overdose on eggs at 100 dozens. No one in this universe will be happy about milk, but they also won't be complaining about eggs. Over the time passed to bring this new circumstance, the relative value of the money in our pockets remains unchanged. Nonsense. You are claiming to have stabilized the prices of "all goods", but in reality you've stabilized the prices of none of the goods. Your goal, of course, is to have a stable value for the unit of currency. This is a fool's errand. There is no objective yardstick against which to measure the currency. The best you can do is make a basket, but then you are just measuring your own biases, and you'll wake up tomorrow with an obsolete basket because the world is not and cannot be made into a static system. In your example, you imagine that "your best labor" is a worthwhile measure, but it isn't. While you were sleeping, someone has invented a machine to make your job easier, devaluing your labor, or someone has retired from your profession, decreasing supply and increasing your value, or something. That your labor can "still demand" a set price is an abomination, not a goal. |
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I just created 100 pennies and I loaned them out to you + interest… How is it possible for you to pay me the 101 pennies you now legally owe me if only 100 pennies are in circulation?
The obvious solution is to pay back on an installment plan. Presumably the lender is seeking wealth, so he'll spend (or loan or whatever) some pennies back into circulation. That way the borrower can purchase a penny on the market. The word "circulation" means "movement". If the lender expects to be paid back with the same 100 non-fungible pennies he created, plus one more that doesn't exist, he'll have a hard time finding a borrower to accept that deal and there will be no movement. The less obvious solution is to punch the person asking the question. They obviously think that this question illustrates some deep principle of the modern world, but all that it illustrates is that they were fooled by a trick question that shouldn't stump a 10 year old. Oh, and Steve Keen did a lecture on this topic. Check his website for the video. He ran simulations of a closed economy with a fixed amount of money, and they ran just fine. Debt with interest didn't wreck up the place or anything silly like that. |
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Since price determines value, and price instability destroys wealth, quantity is subservient, used only to maintain a stable price level.
Ok, so you manipulate the quantity of money to stabilize the price of eggs and now the world is happy. Oh, but the price of milk is now insane. |
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No, not ever discussed at all. |
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This is all public. The code is public, the comments are public. OpenSSL is also public and we didn't avoid the Heartbleed Bug. So the OP question is valid. To be valid, a question must be answerable. This one is not. But the process is about as good as anyone on the planet knows how to make it. If you have patches, for either the code or the process, we'd all be glad to hear from you. |
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The recipient probably does not want to pay the fees on your monster transaction that clears all of the dust out of your wallet. And why should he?
P2SH lets the recipient hide all of their internal crap in a tiny little package, causing no bloat in the payment that you are sending. They may have fees later when they spend it, but that isn't your concern.
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C++ is hard to read, much harder than C, but not impossible.
I'm not sure of the context for this comment, libsecp2561k is plain C. Yeah, I was talking about the rest of the bitcoin code. |
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99.9% of people adopting the new version are not going to know what is in that new library or how it operates.
I lack the technical knowledge to give you an answer to all your other questions, but this sentence caught my attention. I just would like to say this: 99,9% of the people already have to believe every other piece of code of bitcoin because they (me too) lack the skills to review it themselves. This, in my opinion, is one of the biggest hurdles for bitcoin technology to overcome. C++ is hard to read, much harder 1 than C, but not impossible. I have a hell of a time with it myself, but I've walked people into the code so that they could personally verify some issues that they were concerned with. Checking that the code does what it says is much easier than checking that the math does what it should. Large integer multiplication, for example, is not implemented in a straightforward way. If you've never seen it before, you have some (math) homework to do before you trust it. Same with modular fields. Same with discrete elliptic curves. Anyone looking for a project? A guide, with references and links to examples and tutorials, that takes the reader through the background material and into the code would be fantastic. 1 C++ has much more implicit behavior than C. For example, in C, you always know when a function was called, and which one. A grep will get you there every time. In C++, it isn't always so simple for the layman. |
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If a digital currency replaced a fiat currency, wouldn't it then in fact be fiat?
Depends what you mean by fiat. The word itself means "not voluntary", but in the context of economics, it is taken to mean "a virtual (valueless) currency" because those are the currencies that people will not use by choice. Bitcoin is new. It is a fully virtual currency, but not one that anyone is being forced to use. Kinda hard to call that fiat. We need a new word to describe it. |
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Tadaa, two years later we are at that precise point, as predicted by me.
Yes we could remain loyal to the 50%< (or more precisely 100%) of the hashing power which what everyone who has half a brain would do but Gavin is Gavin.
What did you predict? Sorry, I just read this whole thread again, and I must've missed it. |
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This is all public. The code is public, the comments are public.
A library like this is pretty specialized. Not a whole lot of people are competent to review it, and I think that a good fraction of them already have. If you have specific questions, gmaxwell could probably answer them. General paranoia probably won't get you much attention though.
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OK, at whose expense are you sauntering down the street, and how does this sauntering apply to " possibly enrich themselves at the expense of others"?
Still not the right question. At whose expense were resources just sitting on the shelves during the great depression, there being no purchasing power nor incentive to give those goods away?
OK, then who owns the raw materials, and who owns the bitcoins I control?
"Libertarians" being advocates of private property, isn't that a question for them to answer? Can one own a sequence of bytes?
Hmm. No meaningful posts. Only answers questions with more questions. Has no point, no connection to the discussion other than quoting. I think we've got a troll here. |
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If a mob boss owes you a favor, do you imagine that there is no debt because there is no fixed exchange rate between "a favor" and loaves of bread, or between favors and global production? You could argue that this isn't a debt for whatever reason, but if you ask a bunch of random people, I'm sure you'll find that pretty much everyone considers this to be "debt".*
It is a very good example because again it explains the difference between debt and property ! On the other hand, if I just propose to give a false testimony, to win his sympathy, with the idea that one day, he will return the favor, then there is no debt. However, I own abstractly some of his sympathy. That could be an illusion on my part. I may have invested wrongly in what I think to be the sympathy of a mob boss, with the idea that one day, I might ask him a favor. But if on that day, he laughs in my face, then I just invested wrongly. You forgot to quote my footnote. Here, I'll post it again: * You can define debt narrowly and declare everyone else to be wrong, but this is folly. Economics is ultimately the study of people. If you disregard them, you are just jerking yourself off.
P.S. LOL. "own" some of his sympathy? That's your idea of property? |
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And then comes the problem: you cannot explain any behavior of money that way. You cannot explain inflation or deflation. You cannot explain exchange rates between different monetary assets. If society owes me "a loaf of bread", but then they don't really owe me a loaf of bread, but rather whatever they are willing to give me in return for my unit of money, the concept of IOU with money goes beserk. There is no possibility to have inflation or deflation with such a view, as what society owes you can only do two things:
- remain constant (if society owes me a loaf of bread, then hell, it owes me a loaf of bread !)
- inversely change with economic growth (if society owes me a billionth worth of what is produced, hell, it owes me a billionth worth of what is produced).
You can accept abstract units when it suits you, but only when it suits you. The dollar doesn't need to have a fixed exchange rate to bread, nor does it represent a fixed fraction of all production, but it can have an abstract value of "whatever I can get for it". This does not depend on any particular concept of money. If a mob boss owes you a favor, do you imagine that there is no debt because there is no fixed exchange rate between "a favor" and loaves of bread, or between favors and global production? You could argue that this isn't a debt for whatever reason, but if you ask a bunch of random people, I'm sure you'll find that pretty much everyone considers this to be "debt".* I actually covered this, long ago, so I'm just going to recap and skip to the end. Debt is of the form "A owes B to C". Where we disagree is that you think that the essence of debt is in the nouns A, B and C, while I think it is the verb, "owes". Mortgage: A=homeowner, B=cash payment stream, C=bank (in reality C is usually investors via a MBS) Mob favor: A=mob boss**, B=(ABSTRACT), C=poor shopkepper Bearer bond: A=bond issuer, B=cash, C=(ABSTRACT) Dollar: A=(ABSTRACT), B=(ABSTRACT), C=(ABSTRACT) * You can define debt narrowly and declare everyone else to be wrong, but this is folly. Economics is ultimately the study of people. If you disregard them, you are just jerking yourself off.** If the movies are accurate, A can be abstract here too, as a son may well honor a favor owed by his dead father, or an underling may attempt to extinguish the debt without letting it get to the top. |
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