It will be interesting if the exchange rate goes high enough to make this profitable.  |
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A pool operator would have to be able to pull off a very large double spend to offset the long term losses from people leaving the pool for good.
The idea is that the motivation isn't economic. The idea is that it can happen for any reason, and it can happen much easier if the main prerequisite for the attack is already in place: one person controlling >50% of the network. The idea is that it doesn't necessarily even have to be the pool operator that does the attack. The idea is that trust in Bitcoin, and thus the value of Bitcoins, will be lost because of the attack. The idea is that it is in the best interests of everyone who mines Bitcoins to voluntarily keep the network healthy in order to prevent the possibility of such an attack from occurring in the first place. |
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aha! exactly the same thing is true of inflationary currencies (in reverse). if you don't hold them, you don't experience inflation.
I agree. Anyone who holds inflationary currency is taking a risk. Again, the inflationary FRN is the only form of payment the U.S. government accepts for taxes. If you don't pay taxes, you will be punished. I suppose one has to spend the rest of his life selling goods (or whatever else) for FRN (and probably paying taxes again!) if he wants to avoid holding the inflationary money and not be punished. What fun. And you find it odd that this system angers people? |
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I posted this in another thread. Threads like this pop up all the time by the way.
"It like this. Some smart fellow invented the wheel. It allowed some dude to do more work with less energy. He had a huge advantage over everyone else who was still dragging carcasses, sticks, and whatnot around using barrows (wheelbarrow without a wheel). A few of the people around him see the benefit of the wheel. They start using it. They start telling their friends. The people on the other side of the world are the last to hear about this fantastic new invention: the wheel.
Now, do the early adopters of the wheel have an advantage over the people on the other side of the planet who haven't heard about it yet? Yes.
Did that make the wheel a poor tool? No! (In fact, we still use it today)
Is it unfair that the people who started using the wheel first had an advantage over the people on the other side of the planet? Maybe, but that's life.
Bitcoin isn't going to stop being useful because the people who saw it's usefulness first might profit from being first. Those who choose to boycott Bitcoin for these reasons will simply have to continue life without having the advantages of this particular useful tool. Time will tell if this becomes a disadvantage for them or not."
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I'd read somewhere it was vulnerable to a "man-in-the-middle" attack. Not sure what that means, but I figured it'd be good to be careful.
Well, if somebody can modify your web page without permission, than it is vulnerable to a "man-in-the-middle" attack. Meaning they can change your address to their address and donations that were meant for you will go to them. |
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Essentially, you want to keep the monetary base expanding in order to try to maintain price stability. The best way to do this is to expand the monetary base at a rate that is equivalent to the increase in the value of transactions. We know that Nominal GDP is equal to the Monetary Base * Velocity of Money, and that therefore if we increase the Monetary Base (holding velocity constant), then we increase Nominal GDP; whether or not prices stay the same with that change is dependent on whether or not Real GDP also went up. So if we want pricing to remain consistent, then if we can hold Velocity of Money constant we just need to increase the Monetary Base in line with any increases in Real GDP. That means for Bitcoin that you need a way to determine the total value of the the market at any one time and increase the limit on Bitcoins as that market value grows.
What's the best way to do that? I'm not sure, but that's fundamentally what you would want to do.
I have a hard time understanding price stability and why we want it. As I understand it, price stability is a relatively stable price of consumer goods over a certain period of time. How stable does the price have to be and how long does it have to remain stable? I don't see how you can have stability in something that isn't centrally controlled. Also, if supply and demand fluctuate (which they do), how can prices be constant? Instead of trying to achieve price stability shouldn't we be trying to achieve prices that accurately reflect supply and demand? And is this something that we can do better than market forces can do on their own. Basically it seems to me that you want to control the uncontrollable. You ask what is the best way to do that? What I'm concerned about is if someone has the ability to do that, what is preventing them from abusing that power? Also, you would have to convince me that price stability is more beneficial than market forces setting the price. If there is a major drought and a large percentage of wheat supplies are destroyed, why should we expect the price of wheat to remain stable? The only way to keep stability in such a situation is to have a store of wheat. I also think your definition of theft by deflation is ludicrous. If you don't have any of the deflationary currency, you are not part of the economy. If you later become part of that economy by purchasing the deflationary currency, the people who already had the currency are not taking value from you. |
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It's not like this hasn't happened before.
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I'm not one that is going to dabble in tax evasion and risk getting huge fines. It's in my own self interest to pay taxes.
I would never suggest tax evasion. And I agree that it is in your self interest to pay taxes. But only due to fear of the repercussions from not paying them. Not because you agree with what they are use for. |
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i hold only the dollars, pounds, and bitcoins that i want to hold. no more, no less.
If you are born somewhere that happens to be inside the borders of the U.S.A. and you want to live your life where you were born, and you want to own property to facilitate that, you must hold FRNs. You must pay property tax in FRN or your property will be taken away from you. If you've worked your whole life and want to retire on your savings, a portion of your savings must be in FRN or you risk losing your property. Suggesting that you can trade whatever you've put your savings into for FRN is not a valid argument because you are suggesting that you can convert whatever you have saved for FRN, which may not be the case. |
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as a trivial example, it couldn't possibly be theft if the money were given back proportionally to holders of the currency! Yes, but that certainly isn't the case. Or do you have an example of where it is? and even if it does steal from currency holders long-term, nobody's required to hold currency long-term. i'm trying to stay away from deeply political discussions, but i'm frankly puzzled at the anger toward fiat currencies. if you don't like them, don't use them. I'm not angry at the currency, I agree that would be silly. I'm angry at the people who enforce it simply because of where I was born. "If you don't like them don't use them" is a great argument if there weren't penalties for not using them. I'm trying to avoid a political discussion myself, and I avoid fiat currencies where possible, but you simply can't live your life without being forced to use them in some way, shape, or form. If I try to buy products, at my current geographical location, without paying taxes on those products, I would be guilty of tax evasion. the government isn't forcing employers to pay anyone in fiat currency. Please, give me an example. You yourself recently gave me examples of how a business is required to report its inventory for tax purposes. Besides that, how does one continue to own property without paying the property tax? |
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He did say he doesn't visit this forum very often, hopeful someone can drop him a line so he can provide some explanation.
I have sent him an email letting him know about this thread and inviting him to respond here.
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it may be that bitcoin seems attractive as a value store only because fiat currencies seem so poor at it currently, but that's partly due to our particular moment in history and partly due to the particular group of activists that are influencing the discussion about bitcoin.
you once asked me about my 'theme' in forum discussions. i think this discussion has helped me to figure it out. it's as follows: if you're excited about bitcoin because you think of it as a get-rich-quick scheme and are hoping the value of a bitcoin will appreciate and solve all your financial problems, you're probably excited for the wrong reasons (or at least reasons i disagree with). instead, bitcoin is exciting for other sorts of reasons.
Bitcoin seems attractive if you understand inflation is theft and most fiat currencies are being inflated. Do you agree inflation is theft from those who hold the currency being inflated? This is true regardless of your political ideals. I completely agree that if you are excited about Bitcoin as a get-rich-scheme, you are excited for the wrong reasons. |
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Or, we could just discuss existing tax laws like adults, until someone like you comes along.  And I'm not a leech of the government teat. I am a working individual who abhors the absurd amount of welfare dollars we give away every day, all the while going into deeper and deeper national debt. I would like nothing more than to see all of the welfare-driven programs abolished, and the tax rate halved because of it. Apparently, trickery, cheating other people, and tax evasion is ok in your book. Remind me never to do business with you. None of those things are necessary. As unrealistic as it might sound to you, if you disagree with the way taxes are being spent, live your life in a way that will ensure that you pay as few taxes as possible. I know this is difficult for most, but it's hypocritical to claim you disagree with the welfare/warfare state while continuing to pay for it. |
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Rezin777: In regards to being able to use the savings, unk made the point that if no one else wants to accept the currency in which you saved then they are not savings at all. Bitcoin does not solve that problem.
The only way you will have price stability in this currency, and as a result a currency that will gain widespread acceptance, is if you have the amount of currency fluctuate with the size of the economy which the currency represents.
You're right, it doesn't. But it comes closer than other currencies. It makes more sense to save in a deflationary currency than an inflationary currency. Price stability? I can give any logical reasons why such a thing should exist. |
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It is sad, sad statement of the mindset of society that a thread about a glorious win by an enterprising, far-sighted individual gets turned into a sordid discussion of taxes and various other leeches wanting to bleed him of his new found wealth. You should all be ashamed ... in fact some of you are probably on the gubmint teat and this is your angle to get hold of something you were never entitled to, i.e. a slick form of theft.
You guys are all just so far gone and fucked up by the statist brainwashing that it is too late, I fear .... even bitcoins will not save you if you are not prepared to stand up to the looters ... and Just Say No! ... hands off my wealth fuckers.
I only discuss taxes because I try to avoid being "under the gun" of the government with the biggest guns on the planet. If that makes me a coward, so be it. I'd rather be a grey man (even though I do a poor job) than a dead man. |
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there's actually something interesting in what he said, which is that the main block chain has little special value as the foundation for a payments system. it's the bitcoin technology that provides that value. in the steady state, the competitive advantage of the main block chain over others is just in the hashing power that backs it, and that matters only to the extent your threat model cares about it (in view of, for example, your concern about double-spending and other security issues during the short term, if you plan on moving out of the currency immediately).
the more i read and post, the more i become convinced that bitcoin stands or falls as a payment system, and the rest -- including investment, speculation, and even storage of value in the main block chain -- is just noise. with respect to storing value, bitcoin doesn't do what other currencies (and precious metals) don't. you can't suddenly lock in value in a way that avoids what economists call the speculative 'beauty contest' game, and you can't hedge perfectly against future events.
of course you can't; that problem is beyond the scope of currency. if i want to save money 'perfectly', i need to answer the question 'what will i be spending it on?' and hedge accordingly. the 'perfect savings' problem is one of contract and investment, not currency. currency and precious metals (dollars, gold, bitcoin, etc.) substitute for investment only because people think they know what other people are going to value these instruments at in the future, but in almost all cases that's a speculative zero-sum exercise. the average currency trader loses money, and that won't be different for bitcoin.
It is interesting. I would suggest that the main block chain also has first mover advantage. Also, the properties of this specific block chain might also be valuable to some. Of course, Bitcoin probably won't do any of the things that it wasn't designed to do, unless it's by accident. I would suggest that anyone who wants to store value spread their wealth. Bitcoin is potentially a better store of value than many other currencies though. What's important in savings is that you value and can use your savings for the rest of your life (or beyond if you are concerned about your offspring). |
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Any miner with half a brain will undercut the transaction fee.
If we have to rely on brains, we are screwed. |
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Oh my god, how stupid is that!??
I guess it's brilliant if you are the one spending the money and have no morals? |
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The solution to this will be someone else creating a system where new coins are created as the economy grows, thereby maintaining price stability and eliminating deflation pushing value onto the original currency holders.
It's amazing how people resist posting for so long, when they have so much to share! Personally, I would never use the system you suggest. I have to wonder how much value Bitcoin has simply because it does not grow beyond a certain limit. |
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as for taxes on manufacturing, inventories, and sale, the problem is that we're deep into a grey area, and the various classifications are difficult. i may have misspoken about us law on manufactured goods. you seem to be right that mere manufacture of goods does not result in taxable income. traditional mining (which might have nothing to do with bitcoin mining) can, however, but it's complicated. see for example 26 CFR 1.613-4.
It's a wonder that people wouldn't become disgusted with such extensive tax laws and simply refuse to produce anything at all. Unless of course, they had strong incentive to believe in what those taxes were being use for. |
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