Bought a $50 Dominos gift card last night. I love buying pizza with BTC.  |
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Jtimon, I feel you're so close to understanding why deflation isn't a preoblem.
Maybe this is the sticking point... it will never be that nobody wants to trade their money in a deflationary/hoarding environment. Why? As the number of hoarders approaches the number of participants in the economy, the purchasing power of the remaining money "in" the economy approaches infinite. At some point, well before infinite purchasing power, some individuals are going to take advantage of low prices and make purchases. This will raise prices slightly.
You see, there is no spiral, it's a negative feedback loop - self correcting, not subject to wild swings as is the centrally controlled fiat money.
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Having a problem on Windows 7, 64 bit. Ran the setup, everything installed fine. Need any more information? Traceback (most recent call last):
File "blackmarket.py", line 10, in <module>
from M2Crypto.util import passphrase_callback as prompt_password
File "C:\Python27\lib\site-packages\M2Crypto\__init__.py", line 22, in <module>
import __m2crypto
ImportError: DLL load failed: The specified module could not be found. |
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No, because price deflation must generalized (in fact if it occurs just in one sector, it's not really price deflation) to impede commerce.
The money is not getting out of circulation (is not being hoarded) because computers are cheaper each year. The others sectors are not affected by this.
How does removing money from circulation hurt anyone? All the other money has more purchasing power, which means individuals can purchase more of the things they need and want. Sticky wages are merely a psychological obstacle, decreasing wages are good if prices are decreasing faster. People don't really want money, they want the things they can buy with that money. If they can buy more or better things in exchange for less of their time, they will be happier (inasmuch things can make one happy). |
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HELOOOO...
Bitcoin is divisible to 8 decimal places. EIGHT! Its a digital currency, you don't have to break it on a rock to divide it. Deflation is irrelevant.
bills of 0.000000000000001 dolars can be printed too. So I guess deflation is not a problem for national currencies neither. You're right, it's not. Mostly because deflation isn't good for governments and central banks. |
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Nefario,
I'd be interested in doing some coding for this project. I'm new to Python (I assume you'd use the same language), but not to the programming world.
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The Bitcoin p2p network recalculates the difficulty of the block finding problem after every 2016 blocks. Based on the time it took the last 2016 blocks, it will modify the difficulty (up to +/4x), so that the next 2016 blocks will be found in 2 weeks. This causes a pretty constant 6 blocks found/hour, regardless of the computing power of the network. There will never be more than 21 million Bitcoin (2,100,000,000,000,000 individual base units or Satoshis).
It is true that monetary inflation is happening (it has to come from somewhere), but it is not centrally controlled, and it is known in advance. The problem with fiat currency inflation is its unpredictable nature, and the privilege of those who are able to acquire new money before it has devalued the old money.
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Currently, I think the extra decimal places serve their purpose best as future-proofing. Allowing free transactions at such small amounts opens the door to denial-of-service type attacks, flooding the network with lots of small denomination, normal size transactions. Unless another deterrent is implemented, this will continue to be the case. Thus, I think the best way is to "unlock" smaller payments as the exchange rate increases and/or as applications for ultra-micro-payments develop. For instance, there is talk about decreasing the minimum payment required to qualify as a free transaction to .001 BTC.
There are other options, such as payment processors which do not broadcast all transactions on the network, only those entering and leaving their network (like MyBitcoin). These could accept and transmit payments smaller than those accepted by the Bitcoin network as a whole without the issues the distributed system has.
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No code, and already your first farming operation already. Impressive. Hmm... now that I think about it. If a bunch of machines mining Bitcoin is a "farm", is a bunch of machines farming Carrots a "mine"? |
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Why don't people not interested into cypherdoc's call for help discuss their egoistic views somewhere else so that we can get back to the original thread motive?
Fortunately, those that create threads do not have absolute control over them, and cannot exile certain types of discussion to another thread. Though, I think that would be an interesting message board, if the thread creator had moderator rights in that thread... |
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@jtimon - I agree with both of your posts. I think recycling "lost" coins just makes extra busy work for savers. One thing regarding inflation/deflation (this isn't necessarily directed at you). There are two very different things that go by the same name. The first is monetary inflation/deflation, which is when the money supply increases or decreases. Generally we only experience monetary inflation, but in the case of Bitcoin, once the generation subsidy drops to 0, we will experience very slow monetary deflation in the form of lost private keys. Changes in the quantity of money will cause a change in the price of products, which is the second type - price inflation/deflation. Currently, the money supply of Bitcoin is inflating (at a rate of about 7200 BTC/day). If the Bitcoin economy were larger, this would cause an increase in prices (denominated in Bitcoin), just as we see today with prices in USD (which is highly inflationary). However, there are other causes of price inflation/deflation. In the case of Bitcoin, prices appear to deflating, even though the monetary supply is inflating. The cause of this is the exchange rate of BTC/USD. Because few can pay their business costs in Bitcoins, it is easier to price in dollars and then convert to BTC on the fly. As Bitcoin gains popularity and/or the dollar inflates, those goods will be prices in fewer Bitcoin, but only because Bitcoin is more valuable as compared to the dollar. Once businesses can pay for their costs in Bitcoin, this "deflation" will disappear and prices will become more stable. |
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It seems to me that there's some disagreement in this thread about one particular technicality of the bitcoin system. It boils down to this question:
Does including a transaction in a block also require including all previous unprocessed transactions for those same bitcoins or doesn't it?
[mike] seems to think that it does and bases his models on that. The OP claims that instead, miners can just include the transaction w/ the fee and forget about the rest. So who's right?
Let's say I send some newly generated BTC to a friend. I create transaction A with no fee, which signs ownership over from my address X (represents private key X) to their address Y. They create transaction B with a fee, which signs ownership from their address Y to their address Z. If B makes it into a block, but A doesn't, the transaction will be invalid. This is because the previous output of the transaction is not in the block chain. The network (as it exists today), along with my client, would consider me the owner of the coins transferred in transactions A and B, as there exists no transaction in the block chain signing from X to Y or X to Z. |
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Merchants could also form a guild and purchase mining hardware that way. Membership in the guild (one of many, perhaps) gets your transactions confirmed.
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For those running this GUI miner in Windows 7, will you tell me what your CPU usage is?
Windows 7 64 bit, Radeon 5850 - negligible CPU usage (an occasional 1%) What CPU do you have? I'm getting 100% CPU usage on an Athlon 64x2 4200+. Any ideas on why I'd be getting 100% CPU usage? Are you CPU mining as well? That would do it. I've got an Intel Core i5-750 2.66GHz. |
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Personally, I'd have liked it if BTC that aren't used for much too long begin fading away and get slowly collected by miners, after 10 years or so. That way, the amount of BTC is exactly determined and they don't just get less and less with nobody knowing how many are left. Plus we'd have some remaining mining in the future that has a solid and fairly predictable income.
But it may be too late for that fix now. I actually never understood why it shouldn't be done -- nobody accidentally keeps coins around unmoved that long.
So you would steal from those who saved and give that savings to miners? That sounds an awful lot like the the USD economy, except anybody can be a miner (just not a big one). |
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For those running this GUI miner in Windows 7, will you tell me what your CPU usage is?
Windows 7 64 bit, Radeon 5850 - negligible CPU usage (an occasional 1%) |
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Is it possible to run the exchange in -testnet mode, for the duration of testing? That way people could throw money around with wild abandon. It seems like it might be a better testing strategery.
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With the guy receiving a lesson on not being too selfish we're one (small) step closer to having a world with more selfless people.
What is "too" selfish? What is wrong with being selfish? Other people don't like it and will punish you in social settings (like this game). Figured that was obvious... |
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Nster, you don't know what you're talking about. Even a 5-7% increase is worth the time of some individuals, and that's all it takes. Never mind that the process could most likely be partially or fully automated.
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I don't understand how fewer miners = lower fees. What's their incentive to keep fees low?
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