The properties of mining pools or how they are supposed to work is all very interesting, of course Bitcoin makes sense within it's own framework. There are dozens of folks around here who can recite the rules of Bitcoin, there don't seem to be many right now who are thinking outside the Bitcoin Box. For example, from my point of view, mining is a crude energy-wasting hack and a sucker game for miners who should and will achieve a near zero rate of return over time. The arms race to mine faster and faster may not affect bitcoin within itself, but does have consequences one would hope weren't by design.

In any case I made a point of leading with the phrase 'The author asserts', as what "Nakamoto" may have anticipated in the design versus actual outcomes simply can't be addressed by others, including those who cite what are *perhaps* postings by him/her/it.

Your response completely overlooks the consequences of the uneven concentration of economic power within the tiny world of Bitcoin in the form of exchanges. In this area the author of the article makes a point which is valid, not to say obvious, irrespective of what the alleged thoughts of Nakamoto may be.

Given the orphan status of Bitcoin's design and implementation, it makes particular sense to look at it as it is, not as it is *supposed* to be. So far it certainly doesn't have a flexible history of adapting to unintended consequences, and explanations to the effect that consequences are within the design are entirely too convenient to spin up out of whole cloth.

The author asserts "Nakamoto never intended to have large bitcoin pools concentrated in few hands or to have users hand over a large virtual wallet to online repositories which functioned exactly like the banks that were meant to be made obsolete by the P2P nature of the currency. "

I guess Bitcoin didn't really fix the problem of concentration of control, now did it? This is made even more painful by the small, small size of the bc universe. So small in fact, that it resembles nothing so much as the world of low market capitalization penny stocks, where the total value of shares outstanding in a given issue is so small that it can be manipulated by a single player or a few in collusion.

A private bitcoin wallet in your possession and control is a basic and nifty feature, I have some lunch money in one myself. It would appear that implementing the "possession and control" part is neither clear nor appealing for many individuals. Not my problem, but I've seen a couple of "I think I've been hacked by space aliens" threads here that illustrate why folks may be found who would gravitate to a deposit service, so bitcoin as currently implemented is not addressing their need.

I suspect you would find that if the bulk of bitcoins were in private wallets used for primarily for in-kind exchange there would be less volatility as well, but at some point an exchange needs to take place, for example merchants receiving payment need to pay their bills in the local coin of the realm. Inevitably, these concentrations of value that link bitcoin with other currencies become vehicles of hedging and speculation - can you say Bitcoinica?

This and other issues, for example the mining implementation and perhaps the mining concept itself, make me hope that Bitcoin is not an end state. It's a very clever exercise technically, but I can only hope what we have here is the testing of a prototype that should result in improvement.

I can't see why Bitcoin would have changed the MF Global outcome at all. Within itself Bitcoin does provide tracking of cash flows, but this is nothing that MF Global shouldn't have, barring destruction of evidence of course.

I would tend to expect the funds can be traced, but at some point clawback ( pulling the funds back to the owners ) is just not feasible economically. It will be a wonderful thing for many expensive lawyers to pursue for easily a decade to come, and that is after all what living is really all about, never forget that the rest of us are here only to serve them 

+1

If anyone has a link to the audio book, please post.

There's a leading theory that vaccines are a major cause of libertarianism in the U.S., although I think this may be a bit of a stretch based on the fact that Ron and Rand Paul both are affected by Asperger's syndrome.

Thanks goodness for a state like Kentucky, backward enough that even a mildly retarded con man can still become a U.S. Senator there. Rand also distinguished by having himself certified as a laser eye surgeon by a state professional organization that he founded solely for this purpose. His inability to see any problem with this strategem is a striking example of the quirky thinking often seen in Asperger's.

Evidently yanking your chain is like taking a day off to shoot children in the face, too easy, thanks for playing 

1. I'll make it easy, it's *pretend*, sort of like Santa Claus or jeebus. Credit default swaps were believed to be valuable until someone finally acknowledged what would happen when a significant portion of them were exercised. Then a pyramid of this always phony loss insurance collapsed and the CDS wasn't so valuable any more. There's nothing magical about P2P, even if bitcoin is using Tor or i2p or point-to-point encrypted tunnels, I can neutralize those nodes, my friends up the road at the US NSA track Tor node traffic all day long. All I need then is one physical location of a party involved or not and I get to shoot somebody's child in the face. It's a slam dunk, and totally worth it.
2. You agree then that the only functional thing one can do with a bitcoin itself is use it for exchange. It's not a commodity. You can't even drive a screw with a bitcoin.
3. All that is required to disable bitcoin is enough sanction to make bitcoin untenable for most people. Shooting children in the face will be more than sufficient to achieve this outcome, hopefully, the more the better 

ROTFLMFAO! Boy, that really showed those naysayers!

Are you 5 years old? If so you could hold your breath and turn blue until you die and then we would all be really, really sorry.

1. Yes, for exchange, as long as the centralized idea that it *is* one is maintained by consenting parties. One need only witness what happened in 2008 when credit default swaps became the phony insurance they always had been.
2. Commodities generally have intrinsic value, for example, wheat. What can I do with a bitcoin other than exchange it?
3. Your money can be made unsafe by being made worthless, something a government can easily achieve without touching it. Hell, I can give it negative value, if I find you in collusion in the bitcoin network or hoarding bitcoins I'll shoot one of your children in the face. Don't be naïve about that. For that matter just call it counterfeiting, that's been a capital offense here and there throughout human history.
4. Banks and currency exchanges definitely feed mercilessly on captive customers. Alternatives are good. There was a time when the real (low) cost of funds transfer within the U.S. was less accessible to end users, competitive pressures have reduced this at least for some customers. Bitcoin does add something to the competitive landscape.

Good. It's very interesting that there's a game in the mathematical sense that can be constructed called a cryptocurrency, there's all kinds of clever applications of cryptography. However, from there you went directly to how bitcoin et al. is implemented. Are you saying that spinning virtual wheels into heat on a cost basis that is open-ended ( the difficulty level ) and completely arbitrary is a functional requirement? If this was any other kind of system or machine, this would clearly be an area for improvement. What value is added by this property that is actually able to vary so much in cost?

Game wise, I do like what seems to be the increasingly self-defeating endeavor of mining as an enterprise as more and more of it takes place. It brings to mind a donkey led with a carrot on a stick, the optimal solution is to see to it that the donkey only ever gets enough carrot to continue chasing the end of the stick.

A lovely sounding blurb, but you might want to do a little research about the real world. For example, I've done everything with ACH transfers for years now. The system is globally very efficient cost wise, and costs me *nothing* in direct fees. Other than having to break some quarterly estimated income tax payments into pieces of less than $100K, it's never surprised me or given me pause.

Do you get a lot of stage coach robberies where you are, or what? 

Agreed. When tulip time comes, sell 'em if you got 'em 

What's it like to live in fear?

It seems to be a great time for mediocre ideas in technology. Facebook is the premier example, it's not merely mediocre as ideas go, it's quite pernicious with respect to privacy and security, and wholly dishonest to the people who use it thinking of themselves as customers when they are in fact the product being sold.

Bitcoin is an interesting exercise in game theory. In particular the dependency on the process of mining is wasteful of energy and creates nothing of intrinsic value, it only serves to establish certain constraints within the framework of the game. In this aspect more than any other it seems the result of having only a hammer ( cryptography ) and thus treating everything like a nail.

The current interest in bitcoin itself illustrates the blinding effect of a limiting paradigm, one need only review this forum to see there is not a great deal of thinking outside the box going on here. This is further confirmation that we live in a great time for mediocre ideas.

Things could be worse though, one would hope that there aren't a lot of people mining TulipCoins in a desperate attempt to get out from under losses on Second Life properties 

Here you go, take your tin cup to this place.
http://collective2.com/

Great, this will take some of the immigration load off of the undisputed libertarian paradise of Somalia.

The trading environment is very much like pennies in that the total size of the marketplace is miniscule.

Years ago I knew a couple of penny stock scammers, they liked nothing more than stocks with a small enough market capitalization they could pretty much buy and sell the total float. Load up, pump, dump into the resulting buying. Lather, rinse, repeat.

So, yeah, if you want to commit a relatively modest amount of capital, you could probably make things swing your way. Gosh, I wonder if anyone has tried this already? 

It comes with stock picks? Oh, that really clinches it for me, it's musta gotta be great! 

There's some self-indulgent fantasy bnllshlt about the good old days that never actually existed.

My my, we really need to hurt all those bad socialists who hate the hard-working good people like us, and long as were going right off the rails and back to the half-witted nursery, God told me to skin you alive, I have to do it, Jeebus said so.

Yes, a huge industry around doing nothing that actually needs to be done in the most resource intensive way possible makes perfect sense