You make good point. However, consider the incentives of those with economic power to obscure economic theory. Employers prefer employees don't discuss their wages, just as creditors prefer debtors don't discuss banking mechanics. Bitcoin is an assertion that a different monetary model is possible.

Bitcoin is an experiment, but not with random initial values.

One bitcoin client sets a default transaction fee, but that's easy enough to alter and the market gets to decide the optimal fee on each and every transaction. Distribution of bitcoins is part of the foundation of bitcoin decentralization without which bitcoin would have a very different as yet undiscovered validation model.

The distribution rate (and finite scarcity) was an arbitrary, though darling variable of Satoshi. It is the only significant 'variable' that was truly (and now unalterably) configurable.

It's a fascinating exercise to tweeze out these preconfigurable variables for future or parallel experiments. Maybe a faster validation rate, perhaps constant inflation with no transaction fees, perhaps perhaps... We'll learn an enormous amount by this experiment. I happen to think the experiment will be so successful that it's advantageous network effect will overshadow better implementation models. In other words, sticking to the short comings may be preferable to creating a better model for a long time. IPv4 vs IPv6 anyone? Bitcoin won't die easily.

kgo, pretty cool. What's your connection to this? Or you just happen to have a short dozen you want to sell?

How does this relate to bitcoin? Do you encrypt your wallet to yourself? I conventionally/symetrically encrypt the wallet, so I'm vulnerable to key loggers and of course during the few minutes while the wallet remains in use on my disk.

If bitcoin becomes so massively deflated that 0.001 buys a coffee, then we might commonly refer to them as millicoins or some such name. Though there is little precedent -- I've only rarely seen references to things like megadollars. Many bank notes distinguish denominations by color (shapes, pictures of royalty/presidents, bridges, and architecture), but upon what bitcoin medium are these graphics to be standardized?

I think this is analogous to proposing that feminine names are pink and masculine are blue.

10% vs 2200% growth per month? Only the slope of a tabletop to a wall would be more dissimilar (shape wise). It'd say that the graphs are more comparable to the treacherous slopes of OHIO vs the casual slopes of Mt EVEREST. If you didn't notice the logarithmic axis, perhaps this is more your style: http://bitcoincharts.com/charts/chart.png?m=mtgoxUSD&t=S&r=300

Yes, please do.


Perhaps if you look at past history, that more than x% of all y consecutive months have gone up z time.

I don't know what numbers were used, but here are some x=50%, y=3, z=10.

http://bitcoincharts.com/charts/chart.png?m=mtgoxUSD&v=1&t=S&r=300&l=1

Do you happen to know if cryptographically secure hashes fall under the legal definition of cryptography?

Anyone who bought bitcoins in the last two years until a month ago has seen MASSIVE returns on their HIGH RISK investment. Apple represents lower risk. Nothing about their respective price gains nor losses should be surprising. One is more volatile than the other. That's about all we can say about their appreciation.

It's too early to predict how the CPC will look upon Bitcoins. I think it's just as likely the government will buy a massive mining rig as they are to ban it. Consider that the central party actively encourages citizens to buy gold, in fact selling it in banks like the rest of the world buys postage stamps. In any case, China has proven to be very pragmatic about money policy and I expect the govt to take a wait-and-see approach.

I wonder though, if China took a negative stance, could the govt isolate the p2p network (wonder = I don't know)? Couldn't China block the common bitcoin ports?

Since this type of discussion comes up very often. Perhaps it's useful to internalize the following fact and spread the knowledge far and wide in the future. Of course, I welcome verification of my assertion.

There is not a VERY non-0 chance.


Nor an ALMOST.

There has NOT been one SINGLE documented crack of a conventionally generated 160 bit SHA-1 hash. It could happen (if god played dice). Perhaps someone will come up with a fantastically clever new non-brute force algorithm. Perhaps computers will compute faster than currently understood physical limits (such as infinite quantum states).

1 - (number of blocks, 135483) * (new addresses per block, 1 to 10) / (key space, 2^160) = 1 - 10^(5 or 6) / 10^49

99.9999999999 9999999999 9999999999 9999999999 9 % chance that it's not gonna happen

(give or take a 9, minus the chance of god playing dice, new published algorithm crack, or yet unknown technological innovation)


No. You'll then have only divided a seemingly infinitely improbable chance by a tiny finite number (number of your wallet keys with value). You can remove a '9' from my estimate above. If someone can crack one hash, then they can probably crack a huge number of them. Though not putting "all your eggs in one basket" is good advice for other reasons.

EDIT: strike-outs are mine.

Because at the end of the day, I want to be holding bitcoin, not Zimbabwe dollars.

Hi Adam, I think some of your darling users would prefer you remind them to get offline, go home, eat dinner, perhaps read them a bed time story and tuck them into bed. For a nominal fee, maybe you can also brew their coffee and ensure them not to worry, that the markets will be alright.

...and I am not suggesting truncating the key. I suggest the public key IS the address. We just refer to them (address) not by 30 char hash, but unambiguously by their "first bits" (shortest unambiguous prefix compared against all previous keys in the block chain). There should be no restriction on key length. Recommend 256 today or 384 tomorrow.

Perhaps my reference to anti-socialist Europe haters implied that the northern European country I referred to was in fact socialist. You'd be hard pressed to find a socialist country by your definition anywhere in Europe.

In fact the Scandinavian countries are among the most free production markets in the world. Low corporate taxes, few barriers to entry and trade, just as easy to fire as to hire. The point I meant to make is that the citizens are highly taxed to pay for their high level of social services, rather than an inflation of the money supply.

15 minutes of sleep is better than no sleep at all!

Thanks Serchanto,

Just a comment on 2008 prices.


 * I invite you to look at Palladium $570 March 2008 $200 by the end of the year.
 * Platinum $2 250 in March below $800 in November 2008.
 * Rhodium $10 000 July 2008, $1 000 in November of the same year.
 * Silver $20 to $9 and Gold dropped from $1 000 to $700 in 2008 (though that's normal volatility).
 * Crude oil from $130 to $30
 * Wheat $1 250 to well below $800 (my numbers run out during the fall) in 2008

No props lost on Satoshi for overlooking the "first bits" concept.

I doubt a hash protects the public key (immediately today). As a mechanism for expanding the key, it's an elegant solution. But still as I understand, the public key must be available to the block chain to verify each transaction. It seems to me then, the hash serves no purpose beyond convenience. I believe we could allow arbitrary length keys, referenced by their earliest unambiguous prefix.

Thanks MoonShadow, I have to take your word for it (and it makes sense), but I can't see much from graphs. I'm looking at st. Louis fed and m0, m1, m2, all look more or less the same except for scale (well m0 sky rockets in 2008 while the others increase as always).

Now I have to wrap my head around what happens to imaginary credit backed by defaulted imaginary credit. Why not just write the loss off the books? Why doesn't the entire economy collapse after just one default? Do the banks just get fined when they drop less than 10% reserve? The bail out just put them in the legal boundaries, precisely creating the monetary inflation the reserve laws are meant to prevent?

If what you say is correct, then the Fed did prevent price deflation (in one sector). The money supply growth remains stable. What's the problem?

This is egregious. I sold my apartment at a small loss anticipating the crash in the market, and have been paying a handsome monthly rent ever since. In theory i'm now subsidizing the guy who bought my dream home. Fuck that!

Just a comment to all the anti-socialist European haters. I lived several years in a high tax welfare state with a balanced annual budget, that today has only 11% debt/gdp, very little crime, free education, health care, long maternity leave, educated society with a working honest democracy and press, and other niceties Americans can only dream about. Yes, we all paid for that. I was still paying off my American student loans while taxed to pay for someone else's education. And it was worth it. America has a sick system. The US has low taxes but prints money to compensate. It's amazing to me the country hasn't collapsed already.

Please pardon my triple replies.. just some background references.


Michael F. Bryan, On the Origin and Evolution of the Word "Inflation",
http://www.clevelandfed.org/research/Commentary/1997/1015.pdf