"Money" is simply the most successful barter-good in an economy.
So far. Something better will come along as only technology will provide. I can't tell what that even means. Yet it seems to be the entire basis behind this whole "resource-based economy" stuff. Evoorhees' statement is just a description of what money is. Almost anything, in the right conditions, can be money. "Something better will come along". Something better than money? OK. Then that will be the new money. Something better than trade? BS. Even in a world of unlimited energy and StarTrek-level replicators, there will still be trade, for storytelling, massages and new fashion designs if nothing else. And that trade will, on it's own, as a natural consequence of human nature, prompt a search for convenience--a medium of exchange. Little kids on playgrounds get this. A generation or two ago, those colorful little glass balls made an excellent currency for trading sandwiches, favors, etc. A while back, it was colorful pieces of paper displaying fictional anime creatures. No one told these kids to do this. Most probably didn't even have examples of how to do it "properly." But if you don't think even children can continually re-invent this concept, and master it to the point they have a fully functional marketplace with detailed valuations and exchange rates, then you seriously don't understand human nature. Money is NEVER going away. The fact that some seem to see it's absence as desirable (or even possible, for that matter) is beyond baffling. |
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By the way, I can't recall the number of "libertarians" around here who openly express disdain for democracy
That's not out of any love for authoritarianism, it's more sort of, "I'd rather decide for myself than have society decide for me." +1 Still have a hard time understanding how "You live your life, I live mine, and let's not aggress against each other," is such a despised concept to some. |
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Yes bitcoin is a money & money transfer system. But if you can't get an acceptable level of fraud prevention, no one will use it for more than petty cash. How do you investigate a suspect Bitcoin transaction? Easy to identify, extremely difficult to trace who controls the destination.
Bitcoin gives you some great transparency but it is unsuitable for a corporation, as any company treasurer could run off with the firm's money and claim he was hacked. Worse, in the case of a firm like MF Global they could run off with the clients' money too.
Isn't that essentially what happened in the current, central bank-issued fiat money paradigm? But people use dollars for more than petty cash. I think once Bitcoin is established, this will just be accepted and dealt with like it is today. |
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Bitcoin is a money and a money transfer system. It is not an anti-fraud service nor is it a substitute for diligence, prudence, and caution.
In my hypothetical future where governments use bitcoin, I think that firms/banks/companies and such that want to be government backed would have to have all of their addresses and accounts registered. Ugh. Let's hope things don't go down that route. Taking that idea to its logical conclusion leads to a fairly frightening image of the future. |
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China has already won this game. It's time to put away the game of scarcity and play a more mature game.
Scarcity is real. Resources ARE literally limited. But yes, ingenuity and technology can overcome that. By now, we have the means to let everyone on earth work a simple day labor job in exchange for their basic needs. Too bad evil, corrupt men keep hindering this, and insisting it is impossible. ("Overpopulation! We need central control! Trust us!") |
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If they reject the block reward reduction, they will shoot themselves in a feet. The bitcoins will lose the value gradually, and after some time the 50 BTC reward will be worth less than 25 BTC reward, if the thing will continue as Satoshi laid out in his whitepaper. Will they increase reward to 100 or maybe 200 BTC in a future? This will lead to exponential inflation, just like real world fiat money.
Do I worry about 51% attack? No. The lulz will last for a few days maximum. They will not steal my coins, all they can do is double spend and denial of service, that's all. They will switch to profit after lulz ends.
If we can get their IP address, maybe we can get their GPS coordinates and launch a retributive bag of burning dog poo on their porch. Apparently that bag will have to reach China.  |
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Not sure if it technically fits the definition, but BitcoinSpinner is a very simple, working Android app that doesn't download the blockchain, but let's you view the balance of and send transactions from a single keypair (which is stored on the phone, not the server it connects to.)
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Address: 1111111111111111111114oLvT2 Ack! That address has several transactions too... that's just wrong.... Oh, yeah. Congrats. |
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So then difficulty is moved by price, rather than the other way around, yes?
If difficulty is moved by price, then what caused difficulty to increase before there were Bitcoin exchanges? Organic growth. Difficulty is certainly moved by price, but price is not the only factor. Back then, each new user was significant with their CPU mining. Even in the absence of new users, the difficulty would tend to slightly increase on its own. As pointed out above, the impact of advancing technology means there will always be more hashes per second for the same investment in equipment and energy expenditure (until Moore's law breaks, if ever.) Since I sort of started this argument, let me clarify that I wasn't suggesting price as the *only* factor in difficulty. Thank you. It didn't at all seem to me that that was implied. However, we will not sustain the current difficulty if the price drops to $0.50 like it was early this year -- we might eventually reach this difficulty again if the price were that low, but it would take much longer than what we saw with the bubble.
Agreed. |
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So then difficulty is moved by price, rather than the other way around, yes?
If difficulty is moved by price, then what caused difficulty to increase before there were Bitcoin exchanges? Organic growth. Difficulty is certainly moved by price, but price is not the only factor. Back then, each new user was significant with their CPU mining. Even in the absence of new users, the difficulty would tend to slightly increase on its own. As pointed out above, the impact of advancing technology means there will always be more hashes per second for the same investment in equipment and energy expenditure (until Moore's law breaks, if ever.) |
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The amount of gold actually hoarded by goldbugs is only a very small fraction of the overall supply while with bitcoin the vast majority sits in someones wallet. It is true that physical gold mostly never moves, but nevertheless it is constantly traded as "paper gold" which can be (excluding fraud) be taked delivery for.
Ok. I disagree, in particular with this portion, but rather than get into COMEX fraud or central bank holding estimates, let's presume it's completely true. With that difference in mind, what problem does my saving bitcoins cause? |
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And what does network hash rate follow? Network hash rate follows the amount of processing power dedicated to mining, period. Since the peak in June there have been a number of different factors which would cause people to stop mining and subsequently cause the hash rate to drop off: 1. New content releases in WoW 2. Diablo III beta opens 3. Exchange rate for Bitcoins dropping 4. Battlefield 3 & Modern Warfare 3 5. Peak of summer when electric bills are highest The list goes on, but nobody can (with a straight face anyway) lay claim to any single one of those factors as being the one that causes the network hash rate to drop. The point is that clearly, it is price that influences difficulty, and not the other way around. In particular, the price has dropped from $30 to $3. I find it odd that anyone would try to suggest any other factor as having anywhere near the influence on the difficulty drop as price. When the price-follows-difficulty versus difficulty-follows-price issue crops up, I'm not going to interject that difficulty follows hash rate, which technically follows price, new game releases, and weather. I'm going to state that the correct assertion is that difficulty follows price. Doesn't that make sense? |
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And what does network hash rate follow?
Mining profitability based on energy cost, hardware cost, advances in hardware/software, BTC value, ROI. I see in price (BTC value) in there. So then difficulty is moved by price, rather than the other way around, yes? |
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The old gold comparison, it would be valid if the investment market wouldn't be that tiny. Half of all gold is used in jewelery that alone is such a tremendous difference. Also see the "why bitcoin is not gold" thread... it explains it in some detail.
I wasn't trying to say bitcoin is gold, but they do share a lot of relevant properties that you had touched on: - If all gold stored (including jewelry) were to hit the market, the price would plummet - Most gold is being bought up by people who already have the most - Only a tiny fraction of the gold that's in existence is actually bought/sold instead of being stored I guess I'm not understanding why the idea of someone saving their bitcoins is an issue. I like them, I want some for future use, and I expect the price to go up long-term. Ergo, I buy and store some. Am I obligated to buy (or mine) them and then spend them all, never holding onto any? Because personally, I'm not acting in a desperate, malicious manner, any more than when I buy and save silver or gold or dollars. |
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But for how long? Difficulty adjustments happen every 2 weeks, and people don't just start mining in a couple minutes on a whim. Difficulty follows network hash rate, not price. And adjustments take place every 2016 blocks, not every 2 weeks. I prefer precision to assumptions based on anecdotal evidence. And what does network hash rate follow? |
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The whole "investing" strategy into bitcoin stinks to high heaven because the tiny fraction actually used for exchange. If all the coins currently in existence were to hit the market we would need to go down in price another 90%. Currently we are in the "that will show em" stage... the same people responsible for the bubble have declared a tow war against bitcoinca, Ignoring their sunk costs they are trying to further increase artificial scarcity by buying whenever they can. This thread is kind of the manifestation of this desperation, its a siege, parasitic on the real bitcoin economy which eventually gets choked to death. We have come to a state where the main net buyers of bitcoins are the ones already holding the most of them. flame on.  Ignoring the bitcoinca angle, I wonder how much of this is equally applicable to gold (the net buyers are the ones already holding the most, etc.) Point being, people still invest in gold, even though it's rarely used in everyday trade, and it doesn't seem to be a problem. |
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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  Mediocre? You looked into bitcoin, worked with it, and the key word you're summing it up with is... mediocre? a limiting paradigm not a great deal of thinking outside the box going on here. Wow. I'm not even sure how to respond to this. It does make me wonder why an obvious genius of your caliber is even on this forum though. I suppose brilliance must take breaks from basking in its own radiance; deigning to properly assess the world's first cryptocurrency seems like a noble enough distraction. *smh* |
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There's a fundamental flaw I think in supposing that difficulty dictates price. I'd take it the other way: price determines difficulty. I think this has been proven to be not exactly accurate. For instance as the exchange rate went from $30+ down to around $7 or 8, the difficulty did not drop at all. In fact it kept on rising to ridonkulous levels. But for how long? Difficulty adjustments happen every 2 weeks, and people don't just start mining in a couple minutes on a whim. It takes a while for new miners to get through the pipeline. And even though a miner can turn off his rigs at will, the decision to do so (never mind getting rid of equipment) can also take a while, and isn't always immediate. So a response to a price rise isn't instant... what we saw was the slower difficulty rise in response to the high prices override the (potentially pretty fast) difficulty drop in response to price drops. In the end though, difficulty HAS come down, and is continuing to come down. There's just a lag between the price's affect on difficulty. |
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There are two factors at play when considering the difficulty:
1) The miners that can mine at present prices not at a loss.
2) The miners that can't mine profitably at present prices.
Not quite sure where this is going, but I'll try to address it. Do you deny that #2 exist? If they do exist, what are they doing with their coin?
What kind of affect is that having on the supply?
Well, I guess I do, in a sense. I mean, someone may mine bitcoins at a cost of $4/btc when the Mt. Gox market shows $3/btc, but if they keep doing it, is it really fair to say they aren't profiting? They're doing it for some reason, whether for the anticipated future profit, or because for them personally the cost of going through Mt. Gox works out to over $4/btc (or is just impossible), or just for the personal enjoyment as a hobby, which is worth the extra $$$. I don't see the relevance, because if they continue to mine, even "unprofitably", then they don't affect difficulty anyway. If they are not (present tense) mining, then they aren't miners... they are either buyers or someone sitting and watching from the benches, so they aren't relevant there either. If they were mining, but stop and walk away due the price dropping relative to the difficulty, then their demand has been reduced, and they help lower difficulty, and lower price as well by allowing the coins they would have mined and kept to be available for others to buy. If they were mining but stop and start buying, due to the price dropping relative to the difficulty, then they help lower difficulty, but do not impact the price. If they were mining 50 coins a month, but stop and instead have the same demand, and buy 50 coins a month at the current price, then the remaining supply of available bitcoins doesn't change, and the price stays the same. At no point would the action of these "unprofitable" miners raise the price. #2 exist because there are investors (and will be more) out there that see that Bitcoin is secure, fast, and global and they are willing to hold that kind of a currency, even if it costs them more in fiat government money today, because they know the fiat government money isn't necessarily always going to be around. It's essentially a risk vs. reward decision. And I'm saying there are large financiers right now in global politics that have a lot of this fiat money that might through $3 million into an FPGA array for no reason other than "risk". So you're saying that there are new people who want bitcoins. That would be increased demand then, wouldn't it? Increased demand is what pushes up the price. ("I expect bitcoins to be $100 soon, or more if the dollar collapses! I want some!" so they buy more and take them off the market, reducing supply and driving the price upward.) And this increased price--even anticipation of it--is what drives more people (sometimes those same people!) into mining, which drives up the difficulty. |
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Ripple system implementation through diaspora would also be perfect match. Perhaps even better than Bitcoin. Unfortunately, a suitable implementation of Ripple doesn't exist yet (to my knowledge). P.S. If you don't know what Ripple is, check the video on http://www.ripplepay.com/Ripple denominated in Bitcoin. Settle your debts with actual coin, or transfer your debt via a credit you have with a mutual friend. Beautiful. |
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