Successful economic foundations require criminal activity liberty to thrive.
FTFY |
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Fantastic piece. Game on is right, bitches!
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If you're in the US, follow these steps for the fastest way to get Bitcoin:
1) Create a free exchange account with MtGox.com or CryptoXChange.com (5 mins)
2) Go to BitInstant and create a cash deposit order (5 mins)
3) Drive to a local bank branch of Bank of America, Chase, Citi, or Wells Fargo (you don't need an account with them) (15 mins)
4) Deposit your cash according to the instructions from BitInstant (5 mins)
Then, probably before you even get home, you'll have credit in your exchange account to buy Bitcoins. You can literally have the Bitcoins an hour from now. Of all the ways to get Bitcoin, this is by far the fastest and easiest.
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Yes, it is incorrect to say that by selling goods for bitcoin one is getting bitcoin at 50% off. A vendor sells his trinket either for $10 or $10 worth of Bitcoins, and in both cases he's obtained assets equal to $10.
Ok, but how much did the vendor buy his trinket for? Let's assume he isn't an idiot. No matter what price he paid for it, he earned X% in profit, and X will be equivalent whether it's BTC or USD which he accepts. |
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Yes, it is incorrect to say that by selling goods for bitcoin one is getting bitcoin at 50% off. A vendor sells his trinket either for $10 or $10 worth of Bitcoins, and in both cases he's obtained assets equal to $10.
There are many reasons to sell things for Bitcoin, but "obtaining Bitcoin at half price" is a fallacious one.
If your cost of goods is 50% of your retail price then the cost of the item you trade for is your cost of goods. Seems pretty simple to me. I see no fallacious argument here. Leave out the "dollar price" terminology and you simply have a situation where one good is exchanged for another. In the candy bar example, the candy bar is a medium of exchange which the person uses to acquire bitcoin instead of paying cash directly. If you're able to sell your trinket for $10 worth of Bitcoins, and you bought it for $5 worth of Bitcoins, then you've made a good trade and have earned profit. But what you're forgetting is that you could have similarly sold it for $10 worth of USD, and then bought BTC with that. In both scenarios, you're getting $10 worth of Bitcoins. If you think of this like you're getting the Bitcoins at half price, then it's also true that when you sell for $10 in USD you are getting the USD at half price. The point is you've made no value gain by choosing to accept BTC in lieu of USD. In both cases, you've obtained $10 in assets and if this is on a $5 cost basis you made 100% profit rate no matter if you accept BTC or USD to pay for it. Stated differently, choosing to sell in BTC gives you no special benefit in profitability. It's equally profitable to sell for BTC or USD (ignoring the fees issue, for the sake of argument). |
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Yes, it is incorrect to say that by selling goods for bitcoin one is getting bitcoin at 50% off. A vendor sells his trinket either for $10 or $10 worth of Bitcoins, and in both cases he's obtained assets equal to $10.
There are many reasons to sell things for Bitcoin, but "obtaining Bitcoin at half price" is a fallacious one.
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Revalin - nicely stated arguments. Though, I fundamentally disagree that the fixed supply is a problem. The fixed supply, and the profit speculation derived from it, has helped bootstrap Bitcoin tremendously. And remember, specualtion works in two ways. You say there is "nothing keeping speculation in check"... but speculation is its own check. One can make just as much by shorting and overbought asset as by buying and underbought asset.
And let's remember a very important point - unless the inflation rate perfectly matches the rate of adoption, then there will still be speculation on price. And it is impossible to know adoption, meaning that any specified inflation rate will be a guess, and it is not a far step from there to what the US has now, where smart, educated men sit around all day and try to gauge how much money to print.
One of the brilliant economic insights of Bitcoin is that money supply is irrelevant to its usefulness. We need not print 10% when 10% more people use it. Let the price rise when it's in demand, and let it fall when not so. A steady, arbitrary, asymptotic inflation rate that falls to zero is all you need for a currency. And if by setting it up that way it creates incentive to speculate and buy coins early on, that infuses the Bitcoin economy with capital to build itself up.
Bitcoin is not perfect, but I think it approaches perfection, and we shouldn't let the perfect be the enemy of the nearly-perfect.
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These are sad times. See, about 20 years ago, I was able to call ATI and actually talked to one of their engineers at length about my problems with their card and they were able to identify the bug with their card (ATI Graphics Ultra Pro - I found a link). I had his extension number. When I did support myself for another unnamed PC component manufacturer, I was one phone call away from engineers, and was able find, identify, and resolve compatibility problems, and turn them over to QA and deployment. Nowadays, support is an outsourced cost center who's only goal is placating the customer by reading a script and hanging up on them as fast as possible. Of course, computer users on the whole are a lot dumber now, too. Yes, but it also brings down the costs for everyone who doesn't require tech support  I'd rather have cheaper product + Google search than more expensive product + good customer support. |
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I guess the new NSA datacenter is not for raw bruteforcing but for mining semantic data from all your intercepted e-mails and other unencrypted junk travelling trough internet backbones.
+1! Probably far easier and more cost effective to simply find the IP's of most bitcoiners, and destroy all their stuff, set them up on rigged cocaine charges, and put them in prison. That'd be a better attack vector. |
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which one could double first ?
Bitcoin will double first, but both will double. |
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If Bitcoin now jumped to $50 and stayed there for a few months
Yeah right.  If bitcoin jumped up to $50 I know I wouldn't be able to get to the sell button fast enough and I'm sure I'm not the only one. My point is, a jump like that is not sustainable, as we've already seen. A 10x jump is not sustainable? Wasn't Bitcoin at $.05 for a while, and then hit $.50? 10x. Oh, and then didn't it hit $5? Another 10x. Since the beginning of last year we already jumped over 10x and have remained quite stable in the $4-$6 range. |
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How would bitcoin be different from the Euro?
It's not debased in perpetuity. |
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I would like the old progress bar back. This one is just useless.
Yeah definitely a regression. |
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I don't think its about efficiency.
Ultimately a whole lot of the spoils/fruits of efficiency are in any case to get more inefficient things done that you want done than inefficient things other people want done or even want to do.
There are lots of inefficient things people like to do, want to do, or want others to do for them.
A huge amount of what the people who use efficiency as a mantra actually want is to be able to get other people to do inefficient things for them.
It would be great if we could let everything get done by mega multinational utilities using robots so humans hardly ever have to work at all and with such excellent control interfaces that almost any volunteer can enjoy the feeling of doing some of the "work" themselves instead of letting robots hog it to themselves.
But these "efficiency" touters don't want that, oh no, to them it is inefficient not to force everyone else to be their houseservants or something, no way they favour other people having leisure unless that leisure costs plenty payable to them...
Maybe some people would rather do each other's laundry plumbing whatever than suck the dick of some billionaire for the protein in their emissions while robots owned by the billionaire do the laundry plumbing etc...
-MarkM-
I'm not sure where I just read there But, I'll give a +1 to this sentence: "It would be great if we could let everything get done by mega multinational utilities using robots so humans hardly ever have to work at all" |
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3phase, I think we were all pretty much in agreement that it's a joke  |
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I find it amazing that they think it's wise to limit the amount of this currency anyone can have to 1,300 units or whatever! Basically, it forces one to consume as much as he produces unless he uses some other vehicle for savings. But one could not use gold to save based on this currency, because who would trade an ounce of gold for this stuff? The market for goods/services from these local communities is so small that the only way to trade for gold would be to offer a ridiculously good price.
Stated differently, while goods within the community may appear cheaper, goods outside the community will be far more expensive, thereby limiting the extent of the market and thus subsequently limiting specialization, efficiency, and productivity.
And in the article they were saying, "it feels so good not to use money." LOL they are using money, just worse money than they had before. With that said, I fully advocate them dropping statist fiat in favor of market fiat... but far better would be to drop fiat altogether and stick with commodities like gold or Bitcoin.
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"SWIFT is a banking hub crucial to oil, financial transactions and other trades and global financial transactions are impossible to conduct without using it." ...oh yeah? Wanna bet? I must say I've completed some global financial transactions using nothing but Bitcoin I feel bad for all these countries living with antiquated financial technology. http://m.apnews.mobi/ap/db_6776/contentdetail.htm?contentguid=K1QOpiCo |
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What are these "significant drawbacks?" I can't think of any that are significant. Volatility. Gaining and losing tens of percent in a day is great for speculators, but it's terrible for people who simply want to earn money and spend it on goods. There are several possible ways to address this (eg, EnCoin, GEM, and my own proposals). None are tested, but if they work out they could be very successful. As a related benefit, they would eliminate the cries of "pyramid scheme" which have made Bitcoin a running joke among the people who should be it's strongest supporters. The volatility is purely market based - and this means the volatility is valid price discovery. If you think the price at any given point is flawed, you can take an opposing position. Bitcoin's volatility is not a flaw of Bitcoin, by any measure. In fact, it's fluidity and ability to be traded by anyone, anywhere, quickly, is one of its shining attributes. Any "means" I can think of to "curb volatility" would be harmful, because they necessarily involve the prevention or reduction in the ability of someone to take large speculative positions. Speculation, contrary to popular belief, is very healthy and the fact that anyone can speculate in Bitcoin is not a bug, but a feature. And of course, volatility will recede with time necessarily, so even if it is a problem, it's one that fixes itself. At most, it is a temporary drawback, not a "significant drawback." Mining is very expensive, and all BTC holders pay for it - currently about $36,000 per day - as inflation / devaluation. The effect is currently overwhelmed by speculation, but I don't think the speculators will pay for it forever. Increasing exchange rates make this worse. One possible alternative keeping with an overall Bitcoin-style network is proof of stake instead of proof of work. Other more radical systems are possible as well.
Not true. Your $36,000 figure assumes everyone is paying the average kwh $ for electricity. The Bitcoin system encourages mining by those with the lowest marginal cost of electricity, and thus the real "cost" of mining is far lower than your estimate. And the inflation issue is one which, again, fades with time. The inflation goes away. I see no significant drawback in the mining system or inflation schedule. Anonymity. It's good enough to protect thieves who steal large amounts and are willing to spend time and money laundering their coins, but at the same time it's hard for the average user who simply wants privacy to get strong protection without effort and expense. It's a poor balance; going in either direction would help.
Bitcoin is the most anonymous way to buy something online. How is "anonymity" a "significant drawback" of Bitcoin, when it's the best available option? The average user doesn't need "strong" protection, he just doesn't want CamSluts.com appearing on his credit card bill, and Bitcoin is perfect for that. Users who want serious anonymity can obtain it fairly easily - but let's remember anonymity is not a cheap commodity and there is a cost to acquire it. I think Bitcoin has brought that cost down substantially. Long-term viability. It's not certain that transaction fees will be an adequate way to protect the network in the long-future. Right now 51% attacks are very expensive relative to the size of the money supply. When generation goes down significantly, we may have a problem. It may be necessary to apply a new policy such as: high fees (limiting the utility as a currency); or reinstating generation / inflation (thus screwing all the people who are speculating that the limited supply will make them rich). While double spend attacks can probably be defended at a reasonable price, it may be economically viable for a large entity with an interest in destroying Bitcoin (central banks, large commercial banks) to DOS the network by buying hash power.
The fees, long term, will be priced by the market, meaning they'll be the minimum miners require to mine. It's "possible" that the long-term market price of mining is so low that a 51% attack becomes dangerous, but suggesting it now is just speculation, and cannot be said to be a "significant drawback" when there's no solid evidence that it will ever occur. It's a "possible drawback", true. Security. Take a look at how hard it is to get something like P2SH accepted (which is looking increasingly likely but it's still not a done deal) - and despite people's hopes, it's not a silver bullet. It will help people with very large accounts, but I expect it to be prohibitively difficult for the average user to use.
The new Armory client already has multisig, offline wallets, easy paper backups, etc. The security of Bitcoin seems pretty darn good thus far. Thefts are news, meaning they're rare, and they always deal with some poor security that is not the fault of Bitcoin (bad VPS company, for example). Again, no "significant flaw" here. ... Just to name a few off the top of my head. None of those are deal killers, but they're all significant drawbacks. Making the fundamental changes to correct them may be too controversial to accomplish in Bitcoin, and an alternative coin may have to do it instead.
In Bitcoin's favor, it has jumped out well into the lead of cryptocurrencies. I find the current market adoption disappointing (which is what I base my low valuations on), but there is significant infrastructure built up, good name recognition, and an enthusiastic core of community support. That's a lot for a newcomer to overcome, but in a global market sense Bitcoin is still miniscule, so don't mistake it for an invincible force.
Bitcoin is by no means invincible, and it's future is highly speculative, for sure. But I still see no significant drawback to it's structure. I see a handful of small problems, all of which have pretty good solutions. For a long time people said the "waiting for six confirmations" was a significant drawback, but most people understand that problem has been almost entirely eradicated. There's an important lesson there. My view is simple: the likelihood of a wholly new coin being vastly better than Bitcoin is less than the likelihood of Bitcoin overcoming those few issues it struggles with. Thus, while Bitcoin may certainly be destroyed by a competitor some day, I see no evidence at all that such a competitor is anything more than theoretical. And I think the myriad problems Bitcoin has solved is too often taken for granted, and too often overlooked by those who focus instead on the limited number of problems not yet overcome. |
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Boussac, I'm just looking for a common, everyday language version of explaining it. Something used in everyday language (Pass me a clenex, can you xerox this, I need to google some info) that won't be tied to any company promotions, but can make it easier for others to understand. I do understand your concerns though.
Regarding gold, there are four issues with it:
1) no one really uses it, so no one can relate to it
2) it sounds old, as money used centuries ago, and Bitcoin is supposed to be new
3) thanks to recent politics and late night scams by gold advertisers, gold has a slightly tarnished reputation as something that tries to overcharge you with fees, or as something used only by far-right conspiracy nuts
4) calling it "digital gold" inadvertently ties it to gold and gold prices. If gold really is in a bubble, and is about to crash (or will any time in the future), gold's loss of value and associated risk will get associated with Bitcoin. People might think since gold crashed, Bitcoin will too.
I totally agree with your reservations regarding "digital gold". The problem we are facing is that anything catchier relates to "currency" and opens up a big can of worms regarding regulations. I also totally agree with those comments re: gold Rassah, well said! Boussac, I think in this context "regulations" are not a concern. We're discussing good language to use in casual conversation with people to educate them about Bitcoin. It doesn't matter if we use language which would be contentious in a legal or corporate setting. When I tell my mom that Bitcoin is a digital currency, or "similar to Facebook credits" she's not going to call up the SEC or the USPTO Always speak to your audience. When discussing Bitcoin with normals, use things they know - Facebook Credits is perfect. When discussing with lawyers or corporate types, use language that makes them comfortable (Mt.Gox shouldn't call Bitcoin a "currency", if they can help it). When talking to a gold bug, use the term "digital gold." When talking to a libertarian, use "free market money." When talking to a socialist, use "egalitarian money" or "an anti-bank currency". When talking to an economist, use terms like "scarce commodity." When talking to IT types, use "open source currency", etc. Bitcoin is attractive in different ways to different people. It has many facets; many virtues. Our challenge is to always know which virtue is appropriate for the audience in front of us, and use language that is cohesive with that virtue. |
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