What about the conundrum of the Fed "charging interest" even though it's impossible to repay in full? I thought that that system was already supposed to maintain equilibrium,
e.g.:

• the Fed would supply a stable amount of fertile ground,
• interest can only be repaid by trees/forests that are growing in proportion to the total amount of ground,
• "forest fires" represent bankruptcy and the destruction of bad debt.

Except that in Spitznagel's example it's implied that the banking hierarchy and large corporations are nobly represented by conifer trees. Mistletoe and eucalyptus are probably more accurate depictions, respectively.

Depends on what you buy it with and when?

I assume you meant paying in gold Philharmonikers?

But I already get intangible spiritual benefits from my bitcoins. Don't you?

Satoshi is my god, and bitcointalk.org is my place of worship.

Although I suppose for it to be recognised as a "religion" we might need a pope and/or devil figure. Any suggestions? Krugman perhaps?

Sort of, except I have to nitpick about definitions. (You'll see why in a moment). For me it's something like this:
Bitcoin has some value in people's minds. They swap dollars and bitcoins for a certain exchange rate. The price of getting a bitcoin is having to part with 5 dollars. Meanwhile, the demand for Bitcoin is a nebulous economic term that graphs the total amount the population is willing to buy at a range of different prices. A "bid wall" is a real-world estimate of demand, except that it stops at the "ask wall" instead of continuing.

If we use those descriptions, we find that the demand is driven by the value. If we want to increase the price, we have to first increase the value, which will then increase the demand. So we can ask: how do we increase the value? And this is what a lot of people have been doing all along -- running bitcoin businesses, creating new products and services, making things easier and cheaper to do than in the dollar/euro/yen economies, and generally kickin' ass. The problem with increasing the demand just by telling people about Bitcoin is that it always starts off with zero value in their minds. It's totally worthless to them... until?? Until they stumble upon one of the many things that makes Bitcoin useful for them.

I believe Satoshi's white paper referred to the hashing algorithm as analogous to casting votes, so I guess that's one similarity. And some democracies allow a minority government. E.g.: New Zealand has had a few of those.

But anyway, I don't think it's that important to put a label on it. What if someone came along and said "wow! Bitcoin is great, it's got elements of Marxism and Islam, and Tao te Ching all rolled into one!"? I'd just roll with it.

That's OK, I hate revisiting old threads, only to find out that I said something scathing and/or stupid.


It sounds like you got a bit of a hard time above (so much for intellectual freedom!), even though intuitively the idea seems like an obvious improvement. The problem with "communities" is that you almost inevitably have to deal with things like groupthink, NIMBYism (not in my back yard), NIHS (not invented here syndrome), idolatry, conservatism... and that's just the civilised programmers...

I like ideas!

Clint Eastwood-like dude with a hat and a glinting bitcoin in his tooth? Maybe ripping off the old Dick Smith logo a little?

Stylised blockchain in the shape of Australia with a big Bitcoin in the middle? I'd drop the double slash though. Someone said it was specifically US to look like an "S" with a U cutting through it.

Aboriginal mural inspiration?

Keynesian economists seem to think that the money supply shouldn't just be inflated according to a blind formula without any regard for the size of the economy. As a crude example, if the economy grows by 10%, the money supply should (according to them) be increased as well so that the average price of a basket of goods (CPI) doesn't go down. However, there are a lot of problems which Keynesians seem to brush off as irrelevant. For example, who decides what goods should be eligible for CPI statistics? Similarly, who decides what criteria are allowed for determining the growth of the economy? What if cars (or some other important product group) go out of fashion and start skewing CPI results?

Hence, staying in control of all the information seems very complicated and labour-intensive, and for what? The holy grail of making sure that pizza/milk/shoe prices always stay the same? Prices keep creeping up forever anyway.

Did somebody say cheap coins?

*fortifying personal buy wall*

You find two sellers offering the same product for the same price, but one of them is willing to "undercut" the competition by accepting 40% up front, so you go with that one because as a buyer, you get more power. It was just a thought that I had. I'm curious to find out what would happen in a free market if someone out there provides a "collection" of different escrow options.

Well if he's so smart, why doesn't he invent a digital currency that does what he wants? It can't be that hard, just define the system very precisely, and there's your skeleton code -- half way there! As it stands, he's just being a smooth-talking critic in front of a camera.


All these massive requirements are built on top of the urban legend that a currency must grow (and shrink) to keep pace with an ill-defined concept of economic growth. What if a revolutionary new product or industry is created that transforms the economic landscape, thus changing the very definition of economic growth?

So they do some kind of cost-benefit analysis, terrain mapping, and generally sit around in space suits sipping coffee in camel packs. They bring back core samples. Then they ask the government for a grant to start a mining operation, and build free teleports to compensate angry aliens for the damage to their habitat (but only after the aliens nuke a few cities first).

Then it turns out that the mine only just breaks even when the price of gold exceeds $1800 (in April 2012 dollars). The contractors, sub-contractors, and sub-sub-sub-contractors made a killing on building the mine, and the investors make an excellent source of funds.

That's cool. The video sounded a bit like it was cut off by some unknown amount before the end.

The video didn't cover some of the more advanced features like escrow -- I only recently learnt about escrow myself. Is anyone providing such services with Bitcoin already? Basically I can envisage an on-line market along the lines of Gumtree or Ebay, except that buyers and sellers can negotiate special terms based on things like trust, rankings, and transaction size.

For example: sellers try to attract wary buyers by accepting a flexible X% payment in good faith, and X% in escrow, unlocked on delivery.

For expensive items, the market operator (or Bitcoin??) could provide a two-way escrow system, whereby both the buyer and seller set aside some funds, so that both sides are motivated to be honest. Imagine going on-line, paying a fully refundable deposit in Bitcoin on a piece of jewellery/car, meeting the seller in public, taking the item back with you, and then paying the remainder on-line!

The charts? Legit.
Either work hard or you might as well quit.
That's word because you know
You can't touch this. You can't touch this.

Break it down.
Stop, Hammer time.

Quick! Ask it for the answer to the ultimate question!

I think the legend for that graph is misleading. It disguises the block reward as a transaction cost. It's really:
M/d
_____

Tx/d

Or: mining income per day, divided by the number of transactions per day.

Each Mhash is weighted equally. So if you contribute 10Mhash of effort, you are 10 times more likely to get the reward than someone who only contributes 1Mhash. There is no loading of the dice. Perhaps that's what people meant by equality?

Don't forget the Gox's checkout thing they've been promoting...

Things aren't looking good. Even the stars are really badly aligned with Aries shagging Pisces and Jupiter at apposition. How do I do one of them "10:1 leveraged shorts" on Bitcoinica? I've got a hunch

To me he sounded supportive of one of Bitcoin's themes, which is to automate the inflation according to a fixed set of rules and take it out of the hands of mere humans.

However, I'm not sure if Selgin fully accepts that the concepts of "central control" and "guaranteed scarcity" are simply irreconcilable. Computerising the FED would just be a fancy gimmick if banks could still exert the same power by controlling lending rates. The entire hierarchy would have to be automated -- so much for his wishful thinking about reducing regulations for his banking buddies. It boils down to 2 rational options: have the whole system nationalised and centrally controlled, or have it decentralised and uncontrollable.