I don't think that the amount of gold held by a central bank has anything to do with the currency they emit.  It is just that a central bank, which can emit a currency, can also use that currency to manipulate markets: it doesn't cost them anything because they can print the money to buy in the market.
Central banks usually want to manipulate the markets of other stores of value, such as gold, to make people loose money in it (except for their friends).  Bitcoin will, if it is big enough, also be manipulated by central banks.
The essential reason for central banks to manipulate other stores of value is to make them more volatile and hence less attractive as store of value, and keep people from using them in general instead of their printed money.
This is why they pump and dump regularly the gold and silver market for instance.

It has nothing to do with "keeping reserves" (for what ?), but is sold to the public that way.

Central banks want people to use their money, also as store of value.  They need to destroy confidence in all other forms of store of value.

That's a bit like "the moon and Mars violate Newton's law of gravity ; both are scams", no ?

The quantity theory of money cannot be violated because it is tautological: both sides express the price of what has been bought during a certain time with a certain monetary asset.  On one side it is the total price of sold stuff (P x Q), on the other side it is the total amount of money paid for it (M x V).  Both are tautologically equal: what you pay for it, is the price of it.  So the equation can only be valid.

If 1 million dollars is spend buying stuff, then the price of what has been bought is 1 million dollars, and the amount spent on it is 1 million dollars, right ?

It can only work because of Scandinavian mentality.  These people are terribly strict and almost incorruptible. The level of social control is very high.  Maybe it is due to the severe nature over there, but Swedish (and Scandinavians in general) are like robots that obey to the rules.  To give you an example:
I took a bus there, and the machine to discount a fare from your electronic multi-pass didn't work.  So the driver told me (and others) to "count two fares the next day if I took a bus again".  The next day, I saw many people actually DO that.  It was a different driver, btw.  He didn't know.  So people told him that they wanted to pay twice because they had gotten a free ride the day before !

Go and try such a thing in Italy

... assuming for the example, gold being the only money of course.

The point was that it doesn't matter how much "money" there is, whatever it is.  Price will adapt.

And by "the economy" I meant of course total aggregate demand (or offer).

Of course nature is intelligent.  The universe is probably the most intelligent device in existence.  The amount of entropy it can produce is gigantic.
However, I doubt that the universe is sentient.  If we say it is, we enter in totally metaphysical or even theological considerations.

Intelligence is the ability to solve a problem.  The greater the problem space, the higher the level of intelligence of course.  An AND gate is really really the lowest form of intelligence.
Being able to do arithmetic is a higher form of intelligence than being able to do a logical operation because the problem space is bigger for arithmetic.

Being conscious or sentient is something totally different: it means that subjective sensations which are "good" or "bad" are experienced by the being, that somehow emerge from the behavioural, physical construction.  

If it can solve a problem, it is intelligent.  If it can suffer or be happy, it is conscious.

It is a very elementary form of intelligence.  It can solve a logical problem.  A calculator is somewhat smarter: it can do arithmetic operations.

What is the fundamental conceptual difference between:

P AND Q, where P, Q are elements of {true, false}

and

X / Y where X and Y are elements of a subset of the rational numbers (namely those that can be represented by a calculator)

If you think that being able to do a division of rational numbers has something intelligent to it, then why is doing the logical multiplication (which is AND) in the set of {true, false}, not a form of intelligence ?

Now, if you consider X/Y not intelligent, would you consider being able to do:

integrate{x^2, x} = x^3/3 + C

a form of intelligence ?

But that's still a similar form of relationship ! 

No, this is when one changes "consciousness" for some or other behavioural pattern.  Neuroscience and AI are full of it, but they simply re-define the concept into something behavioural.  However, there's nothing behavioural to conscious experience, as the "philosophical zombie" attests.

If you can train a pattern recognition algorithm sufficiently (style Google translate) to do the above, is that algorithm then conscious ?  These are really very very naive attempts.

60 years ago, such a kind of definition would probably include "winning a game of chess against the world champion" or something.
40 years ago, we would have said such a thing about voice recognition and Google. 
 What you are describing is a problem of INTELLIGENCE, and visual pattern recognition, in accord with standard visual experience. 

It is in principle even not extremely difficult to set up such a system.  In practice that's something else, but it works in the same way as Google translate: from tons and tons and tons of text pairs, find patterns of bits of phrases that always match.  If your text to be translated consists of these bits, put those systematically translated bits together with certain statistical properties.  It works better than most grammar-based translation systems !
It is also what our visual system does: we have seen and recorded so many "usual" scenes, that the unusual thing jumps up.  The elephant on top of the Eiffel tower would be such a thing.
In fact, many people would FAIL such a test if put in front of scenes of totally different scale, say, atomic scale, where physically, very strange things happen that defy all standard visual conceptions we're used to.

So we have substituted a definition of "consciousness" by one or other intelligence test.

The amount of banknotes in circulation ALWAYS corresponds to what you buy with it
If there are less bank notes, then you can buy more with a single bank note.  If there are more bank notes, then you can buy less with a single bank note.  In the end, with all the bank notes, you can buy everything.  No matter how many bank notes there are.

If there's 1 kg of gold in circulation, then that 1 kg of gold will buy the whole world economy.  If there is 1 ton of gold in circulation, then that 1 ton will buy the whole world economy.  In the latter case, you will be able to buy exactly 1000 times less with 1 kg than in the former case.

The block chain being decentralized, the ONLY security it has is the cryptographic impossibility or difficulty for it to be forged or altered.  That difficulty can be overcome, but at a price, and that price is exactly the financial cost of the proof of work that went in it.  In other words, barring smart improvements or strong technological advance, the proof of work in the block chain that secures it cryptographically, can be overcome only by producing MORE proof of work and hence spending a LARGER financial cost than the one that is securing the current block chain.

Let me put it like this: say that the current block chain (I'm taking arbitrary numbers) is protected by a proof of work of 10^22 hashes (the integrated proof of work).  If you are capable to do 2 x 10^22 hashes, then you can re-write the block chain entirely, from the genesis block onward.  Those hashes come with a certain cost, and assuming that the cost of mining equals the reward of mining, and assuming that the price of a bitcoin is constant, then the total cost spent to produce these 10^22 hashes is equal to the total price of all mined bitcoins, which is nothing else but the market cap.
Now, of course, the cost of mining in reality is LOWER than the reward, which means that it did cost LESS than the total market cap to produce 10^22 hashes.  Also, the bitcoin price ROSE a lot, so the early mining was *cheaper* than the current price of the then mined coins.  These two arguments go in the direction of telling you that the cost of 10^22 hashes is in fact LESS than the total market cap of bitcoin.

So for a price less than the total market cap, you can ENTIRELY REDO THE BLOCK CHAIN.  So the upper limit is the total market cap.  If you are willing to plunk down the market cap, you can redo the block chain.

In order to obtain bitcoins, that would be totally ridiculous.  But things secured in the block chain might be worth more, and then there's an incentive to do so.

A centralized recording doesn't have to have this property, because the security of it doesn't come from the price of proof of work, but rather from the trust you can put in that central authority, and the law enforcement, that will make that it cannot be modified by any individual plunking down some money on the table.

Suppose that in a municipal record is written down that association X possesses a building that's worth 10 million dollars, and the notebook in which this is written down costs only $5.   In bitcoin speak, it would be sufficient to buy another notebook of $5, change the owner of that building in that notebook, and hey, it is yours !
But you can't do that with a municipal record, because the employees guarding that notebook will not allow you to replace it.  If you insist, they will call the police who will come and stop you from replacing the notebook.

However, in bitcoin or in any other block chain, the notebook can be replaced by anybody.  The only thing that you have to do, is pay more Proof of Work (or proof of stake).  The block chain IS the $5 notebook.  If you buy a new notebook, you can replace it.  The ONLY reason why you don't, is that the proof of work costs more than anything that is in the notebook.  The only thing that is in the notebook (the block chain) are bitcoins.  The price of the book (the proof of work to make a new one) is about equal to the total price of everything that is in it.  In fact it is somewhat lower.
So as long as there's not more IN the book, than the cost of a new book, there's no point in doing so.  

But the day that there's something IN the book that costs more than the book itself, it is worth changing it !

In fact, a central ledger also has a price to be modified: the price of bribing all the authorities that are supposed to guard it.  If you can plunk down enough money so that all the authorities guarding the municipal record allow you to change it, then you've also broken the security of the system.

The security of a block chain is in its proof of work.  If you can buy more proof of work, you can corrupt it.  The security of a centralized ledger is the authority guarding it.  If you can buy that authority (bribe it), then you can corrupt it.

In fact, the Euro, as a currency, is behaving amazingly well.  Those in trouble are STATES, not the money itself.  States who gave up their fiat currency to become *normal* economic agents under a currency they don't master themselves makes them go bankrupt, because they were used to reap in all the cheating that happens with a state fiat currency (essentially reaping in all the seigniorage of counterfeiting).  The most corrupt states (the south) suffer of course more than the less corrupt states of the north.

The biggest danger for the Euro is, as usual, political mixing in the monetary policy, which, according to its statute, shouldn't happen.

The Euro is not on the verge of collapsing.  Some European states are.  That's different all together, exactly because the Euro is not a state fiat money, but an inter-state fiat money.

Several states didn't realize the amount of power they gave out of hands when creating the Euro.  I'm personally happy for that, but I think some regret it.

The Euro doesn't have the status of the US dollar yet, in the sense that I don't know of any foreign country where Euro's are actually used as actual means of payment instead of the local fiat currency.  And the weak economic situation of the Euro zone at this moment is not bright either, but that has nothing to do itself with the currency itself.

The uncoupling of monetary issues from economic policy and policy in general is the best thing that could happen and I only know of the Euro in recent times that did such a thing.  The Euro is not as good as gold, but its principles are more sound than that of a state fiat currency that is much more exposed to political manipulation.

Nobody would blame gold to be the culprit of a state going bankrupt (as was almost the case with France under Louis XV after inherting the state from super spender Louis XIV).  In the same way, the Euro is not to be blamed for countries like Greece to go essentially bankrupt.  They were simply not used in keeping the books in order.

If you emulate them, you get of course exactly the same intelligence, if they go at the same speed.  If you go faster, as you claimed, you will get more intelligence, simply because you can put in more "thoughts" to resolve a problem.  In the same way that a recent i7 processor is more intelligent than a Pentium III, even though they share a similar instruction set.  The same problem can be tackled in a much more sophisticated way on an i7 processor than on a Pentium III, simply because the i7 can afford much more instructions to be executed to a problem.

If, as a child, it takes you 10 minutes to do manually a multiplication of 4 digits, and as an adult, you've learned to "see" through relatively complex algebraic expressions in a second, your mathematical intelligence is totally different, right ?  What you may find exciting as a child, is sheer boredom as an adult.  You may enjoy playing tic-tac-toe as a child, but as an adult, it is boring, or its fun resides elsewhere (the social contact, and not the fun of the game itself for instance).  So at different levels of intelligence, your "good" and "bad" experiences are also totally different.  Too intelligent kills the fun of some "boring" things, if you see immediately already the outcome.

Imagine someone, intelligent enough to 'see through' 40 steps in a chess game (a normal casual player sees 1 or 2 steps, and a master player can see 5 or 6 steps).  You'd see the end game already when you start.  No fun playing chess any more.  So the level of intelligence changes also perception of "good" and "bad".


You are confusing (as is standard in AI visibly) subjective consciousness and intelligence.  Intelligence is observable, objective and so on.  Consciousness isn't.  We can never know whether an entity is really conscious ; but we clearly can observe that an entity is intelligent.  Our computers clearly ARE intelligent.  We suppose they are not conscious, but there's no way to know.  An AND gate has a minimum of intelligence (it can solve a very elementary logic puzzle).  Whether it is conscious, we don't know (although we assume it isn't I suppose).  The only way to assume consciousness is by "similarity to ourselves", and it remains a guess.  We assume other people are conscious sentient beings.  We probably assume that most mammals are conscious sentient beings.  For fish, you can start discussing.  For insects, what do you think ?  I suppose most people assume that jelly fish aren't conscious sentient beings.  We base ourselves on the existence of a central nervous system of a "certain complexity" in their bodies. 

So in a certain way, we are assuming that a certain level of intelligence is necessary for the possibility of subjective experiences to emerge, to even exist.  But that's sheer guess work.

The idea was that you can put the time stamps of the blocks sufficiently spread out in time (more than 10 minutes between them) so that indeed the difficulty target would be extremely low (1 essentially).  That would allow you to re-calculate a whole chain with not much proof of work. 

The difficulty, as I understand it, comes from the slight compression in time of the blocks: that the true block chain has overall, somewhat more blocks than one every 10 minutes since the genesis block.  The difficulty is such that the block chain in time is highly incompressible: in order to squeeze a few more blocks in the same period (hence making their difference in time somewhat less than 10 minutes), difficulty rises strongly, making this compression computationally very hard to do.  My 'trick' was simply to put the genesis block much earlier, so that there's no need to compress in time, getting plenty of "time room" to space the blocks somewhat more than 10 minutes.  It would create a valid block chain, that would contain more blocks than the original chain (and would require much less PoW).

It was then pointed out that this doesn't work for 2 reasons:
- it is not the chain with most blocks, but the one with most PoW
- there's an explicit test on the original genesis block.

Brilliant !

But of course, the question matters somewhat if the concept is "ourselves".  It is not a matter of pure convenience to consider whether you are "you" of course.  That changes, I agree, if it is not just "you" but "us". 

The question was the following: assuming that machines became intelligent, sentient and would be a treat for "humanity", the suggestion was to modify humans so that they would also become much more intelligent, and gain the battle of intelligence with the machines.

My point was that these modified "humans" would not be "us" any more, not more than we are still fish.  We would simply have replaced ourselves with two entirely different, intelligent species: "the improved humans" on one hand, and the "machines" on the other hand.  But we as humans would be gone.

Yes, of course.  They ARE our thoughts.  The mystery resides in that they are subjectively experienced.  That's unobservable by itself (except by the sentient "being" that emerged from it but is behaviourally unobservable from the outside).

Maybe an AND gate is also a sentient being.  We'll never know, not being an AND gate ourselves.  The physical process of the logical AND function can of course be understood by any student of solid state electronics.  But whether an AND gate has subjective experiences or not is unobservable if you're not that AND gate.


Of course they would.  In the same way as our thoughts are different from those of a fish.

This is a very important point.  You cannot secure any thing on a block chain of which the market cap is much lower than the things you want to secure.  Indeed, the cost of the proof of work (or the proof of stake for that matter) is of the order of the market cap (or lower).  To attack the chain, you need, in the worst case, about to invest the whole market cap (you then redo all of the proof of work).  Now, for the currency itself, that would of course be ridiculous: spending more than the total market cap of all coins, to be able to attribute yourself some.  But if there are things in that chain that are worth much more than the market cap, then that might very well be worth the difficulty.

If the market cap of bitcoin is now estimated at, say, $ 4 billion, then that comes down to saying that with about $ 4 billion, you redo all the proof of work (if the mined coins were mined at the price they were worth).  That means that someone able to plonk down, say, $6 billion, can redo the entire bitcoin block chain.  Of course, that wouldn't be worth it.  But if that chain contains a contract worth $50 billion, then that changes things: if it is worth to you $50 billion to change that contract, then plonking down $6 billion is a good deal.

So the bitcoin block chain is not more secure than about its market cap. 

It is true that since the gold standard was de facto released (about around 1914), we haven't known any crises any more 

I was reacting to: "If BTC surpasses current electronic payment methods"

You mean: if a certain product A costs a price X now, and you know that the same product A will cost 95% of X 2 years from now, you will not buy product A now and wait for 2 years ?

Do people do that with the i-phone 4 ?  Have people done that with the i-phone 4S ?  Have people done that with the i-phone 5 ?  Have people done that with personal computers ?  Did people not buy a personal computer in 2002, because they could have bought a very similar machine in 2004 for less money ? 

This hypothesis is so terribly contradicted by empirical evidence that it is funny that so many people repeat it as the standard explanation of why deflation would be bad.

Will be hard to do with at most 7 transactions per second
VISA alone does about 1000 times more...