I just got a pretty quick and thorough answer a few minutes ago. I was impressed.

"...first come first served...", is there an application process; or, will this all be made clear when tutorial comes out? Guess I am wondering if I need to monitor hourly/daily/weekly to make the initial 2000 cut.

Thank you.

I just acquired more than enough Wagerr to qualify for Oracle master node. Anyone know how the 2000 Oracles are chosen? Is the queue ordered by the largest stakes? Do I need to apply somewhere? I would like to be an active, long term participant of this effort.

Thanks!!

Edit:
P.S. I read Whitepaper but was not clear to me.

This would only happen in a fixed fractional reserve situation whereas you have 100 BTC in your reserves and so you can loan out 500 BTC based on those reserves. Your 100 BTC would be worth 103% at end of year (deflation) and your 500 BTC worth of loans will be worth 110% (of 100BTC) as you loaned them out at a -1% rate (3% - 1%). So you now have 113 BTC (103 + 10 BTC) in reserve at end of year. You then can loan out 65 more BTC.

Otherwise you are correct, you would be better just to hang on to the coin.

It is probably true that governments would have a hard time killing BTC by going after transactions and, harder yet, the network due to its decentralization. What if they just decide to cut it off its food supply?

What if the banks decide that their profits may be at stake? What if the banks of the major countries decide to launch a coordinated attack and close all accounts of BTC exchanges. How then would new money come in to BTC and how would existing BTC holders get money out? Who would want to accept BTC at that point? Could the banks even do this without a legal reason?

Concerned...

So, many have been talking about deflation in terms of 'prices down 20% today since yesterday; and will probably be down again tomorrow'. This is reasonable based on the current moves BTC has been making.

In terms of a possible antithesis to the USD though, let's pretend BTC takes over about a trillion dollars worth of M1 - checking and savings accounts - and settles at $100,000 USD per BTC and begins moving up gently along a 3% uptrend. So, now we talk about buying rice today vs. starving to get it .25% cheaper next month; these purchases will obviously still happen.

I don't know if BTC could ever be the only currency in the world but think about if it, or something like it, was. In terms of this type of deflation, how would the world look? Would loans be made at negative rates? Could you borrow at a prime rate of -1%? If so, an interest-only loan might be reasonable. Would people borrow BTC and pay interest only to buy a nice house? Would renting make more sense?

Keep in mind, if BTC were the only currency then only productivity increases and workforce increases would deflate things, so deflation wouldn't be a sure thing at all times. Couldn't we still see temporary inflation during periods of a workforce decline (e.g. Baby Boomers)?

Maybe deflation like this could be a solution and not a problem. Would the world really end as we know it - like they tell us? Would we really spiral downward into oblivion? GDP would certainly take a big hit with that transition but how would we come out of that initial depression?

But the question is: how is that bad? In terms of regular people, would a deflationary currency be 'bad' for us? Many are writing about how loans would dry up. Inflation is good for loading up debt; deflation isn't. People would consume less and save more - this is generally bad for GDP but is it bad for the regular guy?

Implied in this question is: Should only the rich guys worry about deflation or would it be bad for us all?

I think that your assertion is likely how things will develop. The Fiats won't disappear, rather BTC will act as a check on a currently unchecked group of central banks. People will no longer stand for negative savings rates. People will take their loans in fiat and keep their savings in BTC.

If  company wants a loan they certainly won't want it in BTC, they will ask for it in Dollars, Yen etc. The return on investments will be competing with the return on savings (read BTC) just as it always has. This will serve as a winnowing process with the less attractive investments failing to achieve funding. This may also have the effect of reducing the endless phenomenon of recurring bubbles as excess money sloshing around looks for a home. People will flock to a store of value that is much more liquid than gold; BTC.

In the end, BTC won't be the only currency in existence; the likely position of BTC will be to take over a large portion of what economists call M1 - the most liquid portion of the entire money supply.

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Well said. The 'bad' is in terms of our current paradigm.

Over-consumption is encouraged by 5% inflation and 1% risk free returns on treasuries. I wonder if the world wouldn't be a better place with only BTC as currency. Saving would soar (hoarding) and we would all live within our means (no debt). Deflation would become a function of population increases and productivity gains; others' successes (e.g. new home built, new company, etc.) would make all BTC holders wealthier incrementally and pro rata.

While the 12%/yr distribution of BTC is inflationary, I do think that the final number of 21 million is the important point. It is well known and is what is causing the deflation in spite of the temporary and declining 12% inflationary force.

Also, IMHO price discovery would be more efficient and we'd have better liquidity if a decent trading platform were developed. I think I have read that a dark pool is in the works; maybe they will offer bracket orders with stops/limits.

While that is true, you would be paying a 'one pizza loan' back with the number of Bitcoins that would now buy 60 pizzas. It is the same deal as if you were doing dollar conversions. A mortgage, 10 years later, will be the amount of BTC that could now buy two of the very same home you borrowed for. See how borrowing is just a bad deal with deflation? People would start living within their means and spending/GDP would plummet. The current power structure would be upended (financially speaking) and a new system of economics/commerce would emerge.

As more and more people reject their own fiat currency and exchange to Bitcoin fiat it seems that infinity is the direction Bitcoin will head. If the world has a 'next' financial crisis then it could be the case, one day, that this apolitical currency may have to absorb the value of all property. I don't know what that number is but it sure lives in infinity's neighborhood.

Infrastructure has a long way to go but I did just see an article in the WSJ regarding CIOs keeping a close eye on Bitcoin. I can only assume that is with regard to transacting business in it. [Suspicious link removed]j.com/story/latest-headlines/SS-2-63399/SS-2-206822/[/url]

I think one important development for liquidity and price discovery would be for a decent trading platform to emerge. As a former futures trader I'd like to see a platform with ability to enter bracketed orders with limits and stops. I suppose that borrowing BTC in order to sell it short should be possible, as well.

With regard to spending in a BTC only world: spending would plummet. Like I posted a day or two ago, imagine that you took a loan one year ago to buy a pizza; you borrowed three Bitcoins. You go to pay it back today and realize that you just paid $630 for that pizza! That is how loans would look in a deflationary world, albeit much tamer than in our last year. The point is that loans would grow larger over time vs our current system that minimizes them over time relative to our currency. As you know inflation encourages spending now and borrowing, deflation encourages the opposite. I think that reasoning is sound. I think that world may even be a better world.

Some interesting ideas here. While the Bitcoin creation process can be seen as inflation, I think that it is the expectation of the 21 million and no more that makes Bitcoin appreciate like it is. Even now, as coins are minted, the price to buy Bitcoin is soaring (deflation) because of the expectation of scarcity. This expectation will never go away.

Imagine taking a loan in Bitcoin one year ago. How painful would it be to pay that loan back now. You would have bought a pizza with a loan of 3 Bitcoin and say you chose to pay it back now, you'd have paid nearly $600 for that pizza. That is exactly how loans would look in a deflationary system.

If the world adopted Bitcoin exclusively then the value of all products, property and capitalized shares of ongoing businesses would have to cram into 21 million units with 8 decimal places. At that point, we would likely be working within that 7th or 8th decimal position for common, everyday purchases.

With a currency that appreciates over time and, literally, goes up a little along with everyone else's Bitcoin each time someone builds a new home or starts a successful company, it would be like owning common stock in the whole world. Everyone would root for everyone else's success. Gains for someone would be gains for all because something new, that has value, is being crammed into those 21 million units we'd call our money.

Am I making sense here? Could this be a uniting phenomenon and cure some of the problems plaguing our current system?

Disinflation has been covered to some extent. What would an economy look like if the only currency was one with built in deflation.

Would people live in smaller homes since their currency would generally appreciate relative to their home? Would companies need to outperform the general level of productivity increases and population growth in order to get their first dollar of investment capital? I believe that if the entire word used only a deflationary currency then deflation would be a function of productivity increases, population increases and the shrinking of the supply of currency (e.g. lost passwords); is this a correct view?

What other implications/problems or benefits are there with a potential worldwide adoption of Bitcoins and a ubiquitous rejection of fiat currency?

I guess I'll post once a day about nothing until I am approved to move on.

Long time lurker, first time poster. I'd like to enter in the Economics discussions.
BFL machine in < 1 week...fingers crossed.