Fantastic!

One thing I'm curious about is the propagation and validation. With the transaction notification being passed through bitmessage, acceptance is still dependent upon the receiver, correct? Txs therefore can be instantaneous, but might also incur a variable delay?

Oil at $0.50 per US gallon would make life easier as well. It would also overwhelm all the production capacity in the world.

In other words, relative value and wealth flows completely deny that possibility. The only way those prices would be possible is with a complete paper/physical separation. It wouldn't matter much anyway, as real shortages expose such pricing as a joke. That's then followed by the cry: "Where's the beef?"

Riddle me this.

In that sense, yes. How much liquidity is necessary remains an open question, though. I offer that the relative amount of liquidity necessary for Bitcoin to thrive may be less than many other instruments.


The bolded section is key, particularly in reference to exchange value. It's essentially the Ripple concept, if I understand you correctly. I don't think it's the only possible next stage, though. It may turn out to be a situation where that system handles the majority of transactions, yet the common platform is Bitcoin.

Assume an environment, something along the lines of Berlin's Kreuzberg, where Bitcoin can be exchanged directly for goods and services that are denominated in BTC. There is no longer any requirement to participate in a traditional banking system: the Bitcoin network becomes the exchange, displacing other units to establish itself as numeraire. As foundation, exchanges would extend Bitcoin, not the other way around.

With sufficient adoption and usage, there is little need for exchanges; they may be mostly a temporal concern during such a transition. It is the same issue that gold proponents push, suggesting that the dollar and euro might be measured in terms of gold grams rather than gold being measured in terms of dollars and euros; just a flip in perception. The exchanges might eventually have to shift gears to become gateways not so much for different currencies, but different asset classes, both financial and real.

The part that's relevant was when Savory mentioned large herds forming as a deterrent against predators. Probably not the best video to illustrate a point, but it was too good to pass up.


Bitcoin can be exchanged for many things, including other forms of money. Bitcoin's value is what each user's purpose is. One user may make use of the means of exchange purpose while another uses Bitcoin as a store of value. Businesses that have zero transactions done in Bitcoin are using the system tangentially as a means to generate publicity. Does that make Bitcoin a form of social currency?

There is no exclusive either-or, but a relative share based on overall market size and maturity - the greater the liquidity and more widespread its presence, the more the system will be able to provide a store of value. There only has to be sufficient liquidity at the margin, the active percentage of the whole. Beyond that, other factors come into play.


Yes, a conventional receipt is a record of a transaction, being validated independently and unilaterally. In Bitcoin, the receipts are the transactions; inseparable and validated collectively. A triple-entry system by itself is an incremental improvement - as a distributed system, the advance is amplified and becomes more than a record.

Would you define a skyscraper merely as a form of shelter? At a certain scale, properties that were not possible previously manifest - Bitcoin is not simply a method of transferring wealth. Right now, the dominant purpose is as a means of exchange, but its attributes suggest an eventual status of numeraire.

It wouldn't help little people much, no. At least not anymore in western nations, unless they took action over a year ago.

I'm talking about entities that play governments against each other the way thrift store bargain shoppers hunt for the best deal at retail competitors. Scale makes a major difference.


Safety in numbers

No matter how well managed a fund is, it is no substitute for physical held in direct ownership. When all paper is in question, there is no third party audit that will perform to satisfaction. The largest independent entities are entirely capable of storing their own gold in quantity. Smaller investors would have greater relative exposure to funds.

Physical metal held in the GLD fund began decreasing at the beginning of 2013 and the decline accelerated starting in April. Almost a quarter of the tonnage in the fund has been removed, leaving the paper price vulnerable. There remains a question of where that metal is moving. Sprott's gold trust has not seen a decline in ounces held.

Note that the premium for GLD has also gone to zero, if not negative. It is not the premium on paper that will wooden, only that of physical. GLD also experienced the 2nd biggest trading volume, the first being in March 2010 which occurred at a major low before price rose again.

The most pertinent question is that asking where the gold being removed from GLD is going. There is a buyer on the other end, or it is being redeemed through physical delivery.

What is being seen in the daily volatility of currencies and commodities is the strain of paper vs physical. The undercurrent of physical acquisition is accelerating, and rapidly making paper irrelevant.

Keep this in mind: gold is as anonymous as cash and Bitcoin. Holding metal where it must be reported defeats that purpose. Smart money is exiting as many reporting requirements as possible, and the result once that window closes will be phenomenal revaluation, potentially in multiple stages.

One sample does not represent the population.

It's also amusing that accusations of Bitcoin being a pump & dump are vociferously rejected while the same argument is turned on gold. The principle of wealth protection stands for both.

As derivative instruments develop more widely for Bitcoin, the distinction between an actual Bitcoin holding and such instruments will cause the same difficulty in distinction between the asset and its representations that we're seeing with gold.

Paper claims are nothing. Physical monetary metals are not extinct, nor will they be in the immediate future. If that were the case, Bitcoin would've already come to dominate all aspects of finance and would probably be valued in excess of USD$40mm per BTC.

Temporal beneficiaries are constantly in flux. Gold historically allowed central authority to rise, and also brought its downfall. It is the surrounding dynamic as much as the properties of the metal that determines the trend.

Thank you! The updates and increased communication in general are greatly appreciated.

This does seem dangerous. Pool operators and independent miners have to be expected to have technical proficiency. Instead of this being an opt-out style change, it should be opt-in; preferably with a definable amount.

At worst, it should be a compile-time flag.

Need, no. Bitcoin can function alone now, but multiple independent systems in the same class are capable of amplifying the overall effect.

There may also be growing realization that trading BTC/LTC or BTC/XRP is preferable to BTC/USD or any other fiat denomination. There is arguably greater risk in having exposure of any kind to the traditional financial system, and remaining in the crypto environment is much faster for many activities.

Individuals who feel comfortable with relatively concentrated transaction processing power should have no problem with Bitcoin. Those who do not may prefer Litecoin, Ripple, or any other variant that might gain traction.

SatoshiDice would cripple and probably destroy any chain incapable of sustaining itself, while acting as a rite-of-passage for those that can pass muster; the stronger a source of revenue, the better.

Yes, transparency is a key factor of investment, but SD shares are non-voting.


Source: MPEx SatoshiDice prospectus

The policies of the business therefore remain the matter of the operators, not the shareholders. Whatever disclosures are made will be done so at the discretion of said operators; it effectively remains a privately-operated company.

If there is disagreement with how SD is being run, the available options are to either not buy shares, or sell currently-held shares. Discussion regarding SD is an entirely separate matter; i.e. existing shareholders weigh the benefits of holding vs. selling without having say in how the business is run, while potential investors analyze the past, present, and future value (including deciding whether surrounding discussion is legitimate or superfluous) to arrive at a decision.

As for the custom client, does it afford a direct method of acquiring BTC through BitInstant? Such an app might even have an easier time passing Apple approval, since it wouldn't involve an exchange, but simply an in-app purchase. Also, while a Bitcoin exchange rate increase might be detrimental to the Bitcoin-denominated SD share value, I see a custom client having the potential to grow faster than the deflationary effect - at least for a little while after the client hits a full-featured production release.

Physical retail businesses have the potential to expand Bitcoin usage far more then exchanges or evangelism.

Offer for change from fiat purchases to be paid out in Bitcoin!

This removes the risk of accepting Bitcoin (although a merchant can continue accepting it), placing the burden on the merchant to remain trustworthy in order to maintain repeat patronage. The primary issue is education of customers, consisting of a three-step guide (until Bitcoin functionality is implemented in mobile browsers) and point-of-sale integration.

First, a retail business point-of-sale must support Bitcoin, including generating QR codes for refund purposes. This is easier with tablet-based systems than traditional ones, but can still be added in most cases.

Second, customer education must be provided, possibly in the form of a vinyl sticker. It should consist of three steps similar to the following:

• Call to visit a URL and/or QR code link(s) directing to the bitcoin.org wallet list, or a similar page.
• Instruction to generate a QR code to be scanned by the checkout clerk.
• Direction to verify presence of the change amount, along with explanation that it may take a short time to show up.

Supplying businesses with the Bitcoins necessary to offer this service would best be handled by existing exchanges or payment processors. There may be additional regulatory hurdles for the processors, but they might also be able to work with various exchanges to overcome this.

A basic flow of the process:

Customer -> Fiat -> Business -> Bitcoin -> Customer

The process can continue readily until fiat is removed from the path.

There was no "should" regarding simplification in my post. I am a proponent of Litecoin and Ripple in conjunction with Bitcoin, as well as gold - even fiat during transition; nor was mention made of holding gold exclusive of anything else. Additional improvements, such as the potential with proof-of-stake variants, are also constantly being sought. That's about as far from a "One True" anything in my view.

Further, risk cannot be eliminated, only masked or redirected - and reducing complexity does not necessarily affect risk in a direct manner, but it normally makes assessing risk more apparent. Gold in particular has a specialized monetary purpose, no longer as applicable to general use as other solutions are now. However, there are numerous other uses for the metal, similar to how Bitcoin and other cryptocurrencies may be used to implement time-stamping, smart property, or identification even without the currency element. Risk may be distributed in differing proportions, but the identity does not change.

To sum: where Bitcoin's form can change, gold's uses can change; risk shifts relative to those forms and uses.

This appears to be a case of dogmatic projection and erroneous reading comprehension. We're in agreement; our differences are semantic.

While I generally agree with the concept, I still don't see how it has much to do with using gold as an economic weapon.

No form of wealth is capable of risk management, because wealth has no capacity for thought. Whichever form of wealth is appropriate to counter financial risk at a given time is the one that will protect. All manner of financial instruments have had their day in the sun, and it is gold's turn once again. This is due to gold's broad acceptance and physical properties. Passive options, like gold, are usually the most effective.

Risk also has numerous forms. Gold does not apply to all of them, but it can assist depending on the circumstances - determining what's appropriate for which type of risk comes back to independent, rational thought.

It may help to define risk for the purposes of this discussion. I'm considering it to be any danger or negative outcome, financial or otherwise.

What's happening because of Bitcoin is indeed a shift in understanding, but I think it's more of a subtle realization by the masses that supply and demand of money are both malleable. The choice of crypto over all, including gold, is the simplification of that variability by making one element static (eventually). Historically, the closest analog societies have had to Bitcoin was gold. It's that simple.

On the point of redistributing risk, it seems that Wall Stret has done an expert job of it through manipulation of perceptions toward wealth. Maybe we should call bankers neo-communists?

This seems to be out of context with my last post. I was making an observation on the use of gold as an economic weapon similar to how the west utilizes sanctions within the fiat system.

Liquidity is not a problem for gold when it is used for what it is best suited. Your statement is like suggesting cars are worthless without highways while dismissing the rest of the roadway infrastructure. Monetary gold is a tank that is best used off-road.

To reply on the philosophical aspect, I've posted numerous times on the inevitability of cryptocurrencies and other constructs over monetary metals. As far as I can tell, everyone in this thread agrees on that eventual ascendancy. The issues seem to lie in how the transition will occur. There appears to be an either-or mindset from most regarding gold, which I do not find realistic.

The way I see things, fiat in its current state is dead. Gold is not, and has a major part to play in the transition. Movement toward crypto is a virtually guaranteed process with several critical variables.

I highly doubt this is a simple pump and dump; wealth accumulation does little when market saturation has been achieved. A power play is much more probable.

The west is debt-ridden and in a very weak position. Gold and other real assets have been flowing east for a decade. This is a time to strike against that off-balance opponent.

That strike involves increasing the pressure, and is most effectively done by psychologically prepping domestic citizenry and then enlisting their efforts. It's effectively an all-out assault in a financial war.

Central gold demand has softened the west by extracting wealth in the form of gold, and now the masses are delivering the final blow via accelerating that flow.

I'd be curious as to a firsthand dealer experience, preferably recorded with video, or at least audio. The rapidity in which circumstances can change may be surprising. Store shelves get cleared out suddenly when an emergency situation arises, and this is a man-made emergency.

Everyone seems to be stuck on the issue of faking gold. Ultrasound is much more effective, and far less expensive. As I explained, with only a few equally powerful participants in an exchange, it becomes nearly impossible for any one to defraud the others for long, if at all.

Gold is not going to be used as a transactional currency for any major period of time. It functions best as a reserve currency used for sizeable trade balance settlements. In other words: gold is the money of nations and entities far larger and more powerful than the individual. Yet any individual holding gold will have a piece of that immense wealth.

Bitcoin is the individual's method of garnering a similar handle on wealth. Ripple and other systems will develop into more effective fiat replacements, allowing Bitcoin to act as a settlement currency - gold's digital analog.