I am finding myself that hoarding has a psychological barrier because I know I am not going to want to spend bitcoins once I have them. Strangely enough this has led not to pouring all my money into bitcoins until I want to spend some but rather to not putting any money into bitcoins that I think I might actually want to spend sometime in the next few years. So basically the rapid rise in price is leading me to consider bitcoins only for "savings" and look for other things to use for day to day transactions.

I wish I knew of an actually functioning ripple or open transactions or loom or something that has merchants I can look at to see what a given amount of whatevers will buy me, but none of those systems seem really to have merchants yet either even though in principle they ought to be providing units of account tha somewhat stably relate to goods I can buy instead of acting as a get rich quick bubble system.

I rather hope that Canadian Digital Notes that pretty reliably buy a CAD dollar per CDN catch on or something like that, so I can use an alternative to paypal and pecunix and liberty reserve and so on that can eventually become open like bitcoin but in the startup phase can have a reasonably reliable pricing for quite some time. This skyrocketing of prices is disconcerting, maybe it would have been better not to have used 1,0E8 units as "a coin" but instead used the raw units, so we would right from the start had a psychologically much vaster number of coins available, maybe short-circuiting the perception of rarity bitcoins have gotten at their present scale of how many base units are spoken of as "one bitcoin". The current "scarcity" seems somewhat aritificial or contrived or an illusion produced by cunning placement of the decimal point...

-MarkM-

When one of the smallest current bitcoin units is worth many dollars that will be great as it will create more use for less valuable sister-currencies that can serve as "small change".

-MarkM-

All the more reason to diversify into BitNickels and Britcoins and Martian Botcoins and so on and so on before that time comes.

There are plenty of people who will still find use for bitcoins and their variants even when they are worth less than a fiat-penny each.

In fact dirt cheap ones might be a lot more useful if they aren't zooming up in price as fast as bitcoins have lately been doing, as maybe people might actually spend some instead of just getting into a get rich quick bubble mentality.

-MarkM-

So where are the attackers going to spend their resources: attacking the big original chain or running around chasing an endless proliferation of decoy chains trying to find out which if any it actually anything more than a decoy?

A lot of small ones could be small enough that loss of their chain would not really be a problem since they all know what all the transactions and balances were anyway so can simply pour the same balances into yet another new chain...

The imagined "attackers" would probably do beter to start their own rival chain than to attack some other rival chain. So maybe it'd mostly come down to do we spend our resources trying to attack the original bitcoin or spend them on starting up our own rival. Why bother attacking rivals if you are powerful enough to do that surely you are powerful enough to rival them with one of your own?

I suppose one could put some of one's resources into one's own chain and some into attacking various rivals at random or something. But wouldn't having lots of them make for some lovely trading/arbitrage/exchange opportunities at least a few people who have piles of real bitcoins might get into, maybe some of them also having lots of processor power on hand they could throw into any "penny chain" (analogy to "penny stock") they are currently playing in?

-MarkM-

So, great, they drop to tiny cost to buy, is that simply going to lead to another round of the same due to only a few people buying up millions of coins at dirt cheap prices, or is it possible it could instead lead to many many people each dropping a centime or two on a few hundred or few thousand coins so that on the next upswing there will be many many many more "early adopters" as in people who got their coins dirt cheap the first time it tanked?

-MarkM-
 

Add eight zeros onto that number. Its base units are eight decimals smaller than what is currently, and seemingly to-you-misleadingly, being referred to as bitcoins.

-MarkM-

What for do you *need* difficulty???

All it is is a waste of energy!

You purport to want to be against waste, don't you?

So how about instead of promoting it by promoting the use of energy-intensive GPU hardware and such, you simply reward people who actually do the nice conservation-oriented behaviors you would like to encourage?

Let the "difficulty" stay at ONE, and instead of encouraging members of your community to "mine" coins, do the mining yourself (possibly a collective self, a cadre or corp or a collection of authorised mints/branches/whatever, using "nice" (lower priority execution of computation) to keep total "difficulty" at ONE even if many physically separated CPUs are in use to run the system).

Give out the "mined" coins to people who conserve electricity, lower carbon emissions, or whatever behavior you want to reinforce.

Doesn't it make more sense to reward conservation measures than to reward "competing to see who can waste more electricity faster"?

Optionally, adjust the rate at which "minting" of coins decreases to lower the number of years it will take to get the full end total number of your coins into circulation.

Once they are all in circulation (or possibly even just when some teeter-totter critical amount are in circulation) you can then open up the network to the "waste more electricity than your neighbor to make more transation fees than your neighbor" model but seriously is that really a model that even accords well with your overall supposed goal(s)

-MarkM-

Some people seem to assume that having multiple "competing" (why not "co-operating") blockchain-based currencies would be a bad thing.

I do not really understand why it would be bad.

Aren't a lot of these people the very same "types" of people who are pro-free-market, even pro-competition? In almost any other commodity do not these same people argue that competition is good? If free market competition is good for {all|most} other commodities, why not for Bitcoin / cryptocurrencies / blockchain-based currencies???

Even though gold has a long history of use as currency, weren't silver and copper and maybe even bronze used a lot too?

Why wouldn't it make sense, as Bitcoins grow in value, to introduce new blockchains that we might even *hope* will trade at least initially at lower value, much as one might use a bunch of copper coins as a handy way to "divide" the value of gold coins?

-MarkM-

Your community currencies are probably better off using their own blockchains, and only networking with members of their own community.

That way only members of that community are able to "mint" that community's coins.

I have been working with a number of variant currency experiments that so far have been working in that way, although it does seem many or most of them would like to get widespread enough that somne year in the future they will be able to open up their "mining" network to the general public.

One possible advantage of such an approach is that these currencies can each be "backed" by the originating community, in order to provide initial value to their coins.

See for example my NickelBot IRC bot in various of the bitcoin channels on freenode IRC, it works with several of these variant blockchains.

There is even now a game site, http://galaxies.mygamesonline.org/ which takes the metaphor of mining into a game context where you can mine resources which then can be bought and sold with blockchain based currencies. This provides a mechanism whereby people who do not have the computer power to compete in the CPU/GPU based "mining" of Bitcoins can instead "mine" alternative virtual resources as proxy as it were for such blockchain-based currencies. Yet another stab at answering the "how to initially distribute a new currency" problem.

-MarkM-

You could maybe start by simply mortgaging coins.

Like most mortgages, you'd only get to borrow some fraction of the purported/appraised value.

So maybe you could find for example someone who will loan you USD$50 against a bunch of bitcoins mtgox claims is worth USD$100 that day. You can use it to buy more bitcoins if you wish. If the purported value of the mortgaged bitcoins falls below USD$100 you have to pour in more or pay back the loan or forfeit the coins. Nice and simple. No risk to the loaner since they hold the coins. Or maybe you and they agree on an escrow service to use for it.

-MarkM-

Trying could be fun though.

Why couldn't the ancients have figured out the concept of confirnming previous things/values by somehow incorporating or coding them into later things?

Maybe part of the infamous "secrets" of stonehenge, the pyramids, and so on lies not merely in their stellar alignments but in some kind of chain, whereby each later such site includes some coded proof of knowledge of the previous sites in the "chain"?

Hmm...

-MarkM-

What others have been doing toward similar ends is to look forward to the so called "thin client" as the end-user software.

Your problems are all being projected out to the user end mostly because currenct Bitcoin clients are so called "thick clients".

Search the forum for references to these two flavours of client.

Basically the approach I have been seeing people use, and helping people test and use, amounts to only the blessed outlets, the mint itself and any authorised agents of the mint, running the current type of Bitcoin software.

Apparently it is technically feasible for "miners" to operate through "pools" wherein only the "pools" know what blockchain is being worked and what the ports and IP-addresses and passwords and so on for the network are. So if for any reason at some point it becomes necessary to hire processing power, hashing can be hired out to "miners" via blind pools where the miners need not know what blockchain(s) the pools are working nor what currencies nor how many coins the pool gets per block solved, all the miners need to know is how much they are to be paid per unit of work, in whatever currency they wish to be paid in.

So if at some point the network decides to open itself to the public, or if enough nodes (hitherto-authorised outlets) go rogue trying to take over the blockchain to make it necessary for extra processin power to be brought in, it can be bought from miners who have no knowledge of the currency in question they simply do hashes for some form of payment they like to be paid in.

This could work for example for something like a chain of Canadian Tire shops. Each shop could run a node, all transactions can be public if desired, each node has its map of which customer each account in that node's wallet belongs to so the identity problem is solved. The key here is simply to not let anyone except legitimate Canadian Tire stores connect to the network of Canadian Tire Coin nodes.

This is the approach being used so far by all the various bitcoin-variants my NickelBot and other IRC bots are working with. End users interface via the IRC bots not via bitcoind or bitcoin client.

-MarkM-

My experience with bitcoind has been that asking for the address of an account seems to hang if no getnewaddress has been done lately for any account.

Thus I created an account named "throwaways" and do a getnewaddress for that "throwawats" account pretty much every time I am thinking of asking for any account's address. That seemed to make the hanging/freezing go away.

I have not tested it to death though to make sure the problem really has totally utterly gone away.

I actually don't even bother using getnewaddress for any other account, since accounts that do not yet have an address seem to have one created for them anyway by the getaddress routine used to get their already existing address.

-MarkM-

Quote: "If the price of bitcoin is volatile in dollar, why should this mean that bitcoin's value is volatile, and not dollar ?"

One reason is probably a desire to regard the value of Bitcoins as having increased.

But the fact that Amazon and eBay and Sears and Zellers and Superstor and Sainsbury's and Marks & Sparks etc have not changed their prices to reflesct the declining value (in bitcoins) of the dollar is probably the main reason for most people.

It Walmart changed their USD prices to reflect how little the USD is now worth compared to a Bitcoin would they make a dent in this kind of perception of simply make themselves uncompetetive compared to neighbouring merchants who still think USD is good?

I wonder how a bitcoin type currency might do if it were initially distributed by merchants prepared to back it with goods at certain prices instead of by arbitrary miners? For example if Canadian Tire started a Canadian Tire blockchain for its Canadian Tire money, waiting until all coins, or at least a large proportion of them, are in circulation bfore opening up the network to every tom dick and hairy that wants to process blocks for it?

Attempts are already in progress at such experiments but not by anyone as large as Canadian Tire yet...

-MarkM-

I use Fedora Core 14, so I just needed to do "yum install m2crypto".

-MarkM-

Yikes, are you saying that when the bitcoin daemon's accounts system is used to maintain a number of different accounts, such as accounts for various customer balances to be accounted by, the bitcoin trasaction fees are not accounted to the specific accounts the transactions are done by?

-MarkM-

I figured a good traditional tip is two cents, as in "your two cents worth", "my two cents worth" and so on.

That doesn't sit well with one cent transaction fees.

Thus the BitNickel (NKL) was born.

A large part of the reason my IRC bots support BitNickels is in order to implement a "$0.02 <nick>"  command in IRC to send 0.4 NKL to the specified nick. A BitNickel address is created for the specified nick and 0.4 NKL transferred to it.

The assumption is that BitNickels correspond to five "cents" in the context of "my two cents worth".

How much these so called "cents" actually trade for in a free market could of course vary, but by using BitNickels instead of BitCoins we get to only pay a transaction fee of 0.01 NKL instead of 0.01 BTC.

Extending this simple tipping system to other media than IRC does seem like a good idea, I just started with IRC due to not having handy ports people can connect to do implement various protocols with thus used IRC as a way to not need incoming ports to run services.

-MarkM-

Maybe each exchange can simply create their own blockchain which only they "mine"?

Hack the code to make "mining" only be valid if the coins "mined" are assigned to a specific address, so that no matter who does the "mining" coins are only ever generated to one specific account, an account the specific exchange whose indebtedness that particular blockchain represents.

The coins of such a blockchain would be I.O.U.s, valueless to the exchange that issues them but valuable to anyone else insofar as the issuer does in fact redeem them at their published exchange rates for various other things tokens coins goods currencies commodities or whatever.

This is maybe what some of the alternate blockchains my IRC bots support should have done, or maybe should at some point do, so that blockchain building can be done by anyone anywhere who wishes to help secure the blockchain by processing blocks can do so without thereby also minting coins. (Since the coins are someone else's I.O.U.s not the miner's I.O.U.s representing the miner's contract to pay something to the bearer on demand, it makes sense in this kind of case that any coins aka I.O.U.s minted should initially be in the possession of the party who has actually agreed to redeem the things.)

-MarkM-

Easiest for merchants would be for the payment processing provider to do any conversions needed.

A widget where the merchant specifies the type and amount of currency the merchant wants.

All details of what the customer gives to the processing-provider is between the customer and the processing provider.

For the merchant the only effect a customer's choice of payment method/currency has is the customer's perception of the price. The higher the overhead or customer-perception of overhead the processing-provider places on the conversion of the customer's chosen currency / payment-method into the merchant's chosen currency the worse the prices are likely to appear to the customer.

On the other hand the more obscure the currency or method the customer wants to use the less likely it probably is that other merchants can be bought from via such a method or currency.

From a merchant perspective the best payment method to use is probably the one that gives the customer the largest range of options, so the merchant doesn't have to implement many different interfaces.

Presumably in the competition among payment-processing providers how wide a range of options they can offer to customers and to merchants and how little overhead their service imposes on prices as seen by customers are two of their major selling points?

This approach lets the currency trading and speculating be done by the payment processing service.

It also frees merchants from worry about the price of coins or rupees or whatever the customer chooses to pay with changing during the transaction. The payment processor will pay the merchant the price the merchant set in the currency the merchant set. Whether they accept sexual favours or icecream cones or lottery tickets or dollars or bitcoins or whatever from the customer isn't' really the merchant's problem worry or concern except insofar as it might influence the customer's perception of the price as being high or low or good or competitive or uncompetitive.

-MarkM-

Has anyone discussed the pro and con of using a totally capitalist model where you own the domain only until someone buys it from you by paying more for it than you are paying or have paid?

The general idea comes from a Robert A. Heinlein novel (Number of the Beast, if I recall correctly), though in the novel it was real estate and based on the appraised value you paiod taxes on instead of on wha you actually paid.

That is, if you are not willing to sell for less than X money, then you better pay taxes on it as if it were worth X money. Because however much you approaise it at for tax purposes is how much anyone who chooses to can take it from you for (by paying you that X money you claimed it was worth to you.)

-MarkM- (I wonder if hardcore capitalists actually like such models at all?)