That sounds like great business opportunity. You should get raise some capital and offer to protect farmers against this very thing. You can charge them a small amount of money periodically based on the risk of drought in their area and pay them a lump sum if they lose an entire crop. As long as you diversify your own risk by making it unlikely that every farmer you protect will get hit with a drought all at the same time it should work.

Too bad nobody is doing this yet.

You're ignoring the velocity component of MV=PQ.

Suppose Megaupload customers are using Bitinstant to buy bitcoins and Megaupload is using Bit-Pay to instantly convert them to USD. The payment could conceivably spend less than an hour as bitcoins before being recycled into other transactions. Depending on the specific values of V and Q involved a massive increase in bitcoin use as a payment system could initially reduce the exchange rate instead of increasing it.

People who ascribe magical properties to gold would be better served by a more standard religion.

If you're worried about your ISP knowing you run Bitcoin then operate your node as a Tor hidden service.

If you're worried about Tor being blocked then combine your efforts with all the other people who are working on making Tor harder to block in order to have maximum effectiveness.

Are you familiar with the concept of root cause analysis?

It's a technique of examining mistakes in order to learn how to prevent them in the future. It's also a way that one can learn from the mistakes of others without needing to experience the mistake directly.

If one avoids examining all causes of a mistake because considering internal causes is called, "blaming the victim" the effectiveness of the technique is greatly reduced.

Yes, but the focus should be on bitcoin transactions themselves, not the network communication. Tor is already working on anonymized network communications so the best division of labor is to use Tor to protect the network communications and let the Bitcoin developers focus on Bitcoin-specific problems.

Any size revenue stream can "fit" into bitcoin, if you're using it as a payment system for real products and services.

It's different if you're talking about using it for speculation but I don't care about speculation anyway. In the long term a currency's value only comes from its use as a medium of exchange.

So you were gambling.

Is there no one left in the world that understands economics and compound interest any more? Getting paid high interest rates on investments indicates high risk, including the risk that the entire scheme is a fraud

Betting on mathematically-impossible returns on financial instruments will always end in tears.

The easiest way is to operate a profitable bitcoin-accepting business and keep the profits as bitcoins.

The recipient would know that all the addresses which send bitcoins to the subnode belong to the same person but an outside observer would not, so anonymity would be improved.

That doesn't follow. If you don't trust Bitcoins convert them to some other currency as quickly as possible.

Got mine today.

I have a question related to BIP 32.Could a webserver use this to give a customer an arbitrary number of payment addresses?

Suppose I want to spend BTC10 but no address in my wallet has enough. If I create a single transaction with multiple inputs this will reduce my anonymity. But what if the web server instead gives me a set of parameters to generate as many payment addresses as I need to make sure each transaction (randomly spaced within an X minute interval) has only one input?

The current best practice is to use many different receiving addresses, ideally a different one for each received payment. Perhaps when we exchange payment information what we should be doing instead is giving out unique parameters for generating addresses instead of the addresses themselves.

I never suggested IOUs should be prohibited. It's not accurate to say that credit bubbles won't happen in bitcoin though. They will happen but they won't be as severe.

You can't predict the effect this would have on the market based on current depth because their entry into the Bitcoin economy would change that depth. If a business the size of Megaupload started using Bitcoin a lot of people who don't have bitcoins now would need to buy them. A the same time Megaupload would need to sell bitcoins to pay its fiat expenses (either itself or through a service like Bit-Pay).

Depending on other factors this could either increase or decrease the exchange rate but that doesn't matter. More Bitcoin commerce is better regardless of what effect it has on the exchange rate.

Exactly.

MV=PQ

It is true the IOU is not USD, however if merchants start treating IOUs as fungible with USD then an increase in the IOU supply increases the total money supply just like a increase the USD supply.

When you swipe a Visa at the grocery store the merchant doesn't differentiate between credit created by your bank and "cash".

If in the future bitcoin merchants start accepting fractionally reserved bitcoins then it will result in a similar situation. The only difference is that with Bitcoin nobody has the ability to offer unlimited bailouts to cover unbacked credit.

That's an assumption which may or may not hold up. Historically after countries reach peak government the social programs don't tend to last very long.

Not a difficult prediction to make because it's mathematically impossible for those programs to continue.

To my knowledge reputation systems for online forums are not a solved problem, due to the reasons you listed.

I wonder if they would work better if they didn't rely on manual positive votes. There are probably a lot of other metrics that could be used, like how frequently people with a high reputation reply to a user's posts, how often people click on thread they started, how much time they spend looking at the user's posts, etc.

I would agree with them if they'd recognize that limited liability and IP laws are types of subsidies that should be abolished along with the other forms that they normally oppose.