The reason is the basically the interest, and the fact the FED basically owns the Government because all the debt is owed to them. This really doesn't make sense. The fed owns about 10% of the government's debt, and the interest earned on that debt is repaid to the treasury. However that leaves 90% that is owed to other countries or very wealthy individuals/corporations. The point I was trying to make is that there's no real reason to have a debt-based currency when it's easier and fairer to issue a currency directly, as with Lincolns Greenback note. I was using the Greenback as the sort of ideal fiat example. It was a non-debt-based fiat currency which worked well. Bitcoin is similar because it can be considered a fiat currency and it's not debt-based. Greenbacks (and prior to that colonial scrip), roman coinage, british tally sticks were all flourishing examples of debt-free currency unbacked by gold. But all of those were issued to the people when the demand arose. Bitcoin can do no such thing. |
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I guess I need to explain how bitcoins are not technically backed by anything of intrinsic value, but they get their own value from their desirable qualities and usefulness as a decentralized currency. I'm mainly trying to deal with that fiat stigma which moans about currencies being created out of thin air with no backing.
And if this were 1907, we'd be dealing with the gold-backed liquidity recessionary stigma--the same stigma bitcoin will run into if it ever becomes a significant portion of the world economy. Fiat has the backing of debt. It must be repaid. This is supposed to be a good thing, just like backing a currency with gold was a good thing. Unfortunately, as history has enlightened us, debt-based currency does nothing to solve recessions. Politicians don't give a fuck if they screw over our children, therefore debt backing is meaningless. What bitcoin sort of has going for it is that fractional reserve is unlikely to prosper under this system, and certainly not at all directly through the block chain. But what that means is when there is a liquidity problem, people will flock to another currency. Or wait for Satoshi or other early adopters, like JP Morgan did in the late 1800s and early 1900s (before he sponsored the Federal Reserve Act to be written on his private island), to buy up lots of property and investment for cheap in a grand gesture to bring liquidity back to the economy. If you hadn't noticed I don't think bitcoin is the solution, so I came up with my own: https://bitcointalk.org/index.php?topic=49683.0 |
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What you come to understand, is that it doesn't actually matter what backs a currency, but who controls the quantity.
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When the bankers forced Rome to revert back to a gold backed currency, productivity came to a sudden halt, a deep depression set in, and it quickly led to their downfall. This is probably because the bankers control almost all of the worlds gold.
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The important thing is that the total number of bitcoins that can ever be 'mined' is limited to 21 million. In this way, bitcoin has properties much like gold. When the bankers forced Rome to revert back to a gold backed currency, productivity came to a sudden halt, a deep depression set in, and it quickly led to their downfall. This is probably because the bankers control almost all of the worlds gold.
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Bitcoin is a limited quantity digital commodity, a deflationary fiat currency that can't be manipulated by bankers, and it will hold its value in much the same way as gold does... In this way, Bitcoin is almost the perfect type of currency. Everyone has a chance to mine bitcoins, no one owns them all[.] Am I to presume that the early adopters will not become the new banking elite of bitcoin? No one owns all the world's gold, certainly not the bankers. Nor did they ever. All you need is 'enough'. I'm not sure why you posted the mises video (which I have not watched after realizing 30 seconds in it is probably heavily austrian-biased whereas the secret of oz is not) then go on to extol the virtues of the Greenback which I agree with. Gold-backed currency was not debt-based in the same sense that bitcoin is not debt-based. At least until fractional reserve came along. But you seem to want to ascribe virtues of debt-free currency not backed by anything as well as debt-free currency backed by gold to bitcoin, without having either of the problems. That is simply not the case. While bitcoin is not backed by anything, it still heavily favors the "gold-standard" style of currency, even including the king-maker initial distribution. It is by no means a debt-free, unbacked currency in the sense of the greenback or roman currency that were controlled by a sovereignty--which, believe it or not, can have its benefits. |
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Also I love the " protect currency as valuable and widespread as Bitcoin."  .. How exactly does he know Bitcoin has been a victim? Unless he is talking about things like DDOS and thefts which have nothing to do with the vulnerability? Hmm... Either he is full of shit trying to pump up his presentation ahead of the conference or his is the single most unethical cryptographer on the planet. I love how on one hand you love what he said, then one sentence later you turn into a raving, rabid bitcoiner. Obviously he was referring to other attacks. Does he really need to spell this out? |
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how has dwolla gone from freedom of money to paypal 2.0 so quickly is amazingly sad
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ohnoes the CPI has changed
whatever. gold is 1 commodity, it isn't some inflation-proof panacea, and you simply cannot draw the conclusion that gas and oil have any correlation besides two separate commodities on a chart
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why would you use gold instead of the CPI?
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i say perma ban coinhunter and bitwomanexpress
the world will be a better place for it
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how about offering even 1 whit of difference from bitcoin
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The only reason you need better than 128-bit is if quantum crypto becomes available, AND can perform Shor's Algorithm fast (like, 1 billion ops per second). In that case it could crack 128-bit in a few hundred years. If that scares you, use 256-bit which will simply never be brute-forced.
I don't think you need 1 billion ops to use shor's algorithm. I am not that well-versed in this stuff, but my understanding is that Shor's can be used to break the "hard problems" of the discrete logarithm and such rather easily with a sufficient amount of qubits. This seriously affects public key cryptography (in reference to the thread title and the worry as it applies to bitcoin), but not AES and SHA and so on other than making it easier. Either way, it is still probably useless to build a bigger and badder ass computer when the keys are 80+ bits of protection at this point. But historical stuff, who knows. |
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but pointing this out is like saying the sky is blue, it is something that makes everyone who reads it dumber
I may be walking out on a deductive limb him here, but it looks to me like notme's post was a direct response to somebody else explicitly stating that they didn't understand what was quoted in the OP. I don't think notme was trying to give you, or the community in general, a powerful and intriguing lessong in math or economics or whatever. I wasn't saying anything about notme's response, just the article in general. It provably made me dumber. |
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If I were nitpicking, I would point out that "sowing" would be clearer word than "sown" but I'm not. I understand your message perfectly.  The question was, "what have I done" not "what am I doing." I used the proper conjugation in response to the question. /nitpick a nitpick |
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but pointing this out is like saying the sky is blue, it is something that makes everyone who reads it dumber
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ARABIAN CRACK IS WHACK BRO
this is a sure fire way to make money at a 50% discount, what u talkin bout willis
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Sown the seeds of dissent, of course.
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I don't follow the logic of acquiring bitcoins at a 50% discount. The article appears to be written by someone who shouldn't be writing articles, no offense.
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New ideas that will eventually make their way into the wiki:
Big TradeNet change: I kept worrying about businesses not wanting to be part of the TN because they would have to use 1 account only to get their transaction fee refunds and that would take away any anonymity they would have. This bothered me a lot and I think it would have hindered acceptance. So I've come up with a very good compromise: proof-of-stake. Before, the proposal used proof-of-economic activity to gain reputation. Now, there will be 5 or 6 levels of reputation that are based solely on a stake amount. Example: level 0 would be around 500 ENC or like 50 or 100 ENC mined in the SupplyNet (in lieu of a stake). Level 5 would be around 30-35k ENC with steps in between.
This is just hand-waving for now, but something like this:
Level 0) 10%
1) 10%
2) 20%
3) 20%
4) 20%
5) 20%
These are the shares of the transaction fee refunds that each level gets. On top of that, a level 5 gets a share in levels 0-4, level 4 in 0-3, and so on. Additionally, if any merchant does not care about anonymity, they can use their stake account to collect transactions and get refunds specific to their transactions in amounts of 30-70% depending on their level. There will still be some kind of reputation system but it will be more to track if an account did not create a transaction block when they were supposed to and so on. Once deposited in a stake, the stake money cannot be used in the network. There will probably be a 10 day waiting period or some such before a stake can be removed.
On SupplyNets: to further create competition, SupplyNets will now compete against each other. If the 6 ENC award is used per block, then the top half will receive 8 ENC and the bottom 4 ENC. There will also be a minimum number of SNGs required before mining can begin. It will probably be equal to the number of TNGs. That way at any given time, there will need to be at least 100 or so people looking to mine before a mining competition can begin. This competition among groups will help keep the difficulty honest and reduce the possibility of an attack on the difficulty.
Also, MoneyIsDebt, a programmer of 15 years, has tentatively agreed to help work on the project, so hopefully it will begin development soon.
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well I still say proof-of-transaction-activity or whatever you want to call my idea is better in every way, and no chain fork  |
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yah and the issues are currently being discussed in the various other threads. didn't really need a new topic was my point.
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how can you possibly make this thread when you made the wiki page like 2 days ago? jump the gun much?
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