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941  Bitcoin / Bitcoin Discussion / Re: Interesting video discussion on bitcoin (youtube) on: September 10, 2012, 03:38:07 PM
One relevant fact that is missing from most analyses of inflation and deflation is the fact that for spending purposes currency and credit are fungible.
No, it is not missing. - People spend lots of time trying to figure out exactly how much money there is because of credit.

The US experienced severe periodic inflation and deflation on the gold standard because while the gold supply was relatively stable, the credit supply was alternatively expanded and contacted by the banking system.
And this is a problem with the government-given gift of central banks, not a locked or unlocked supply of money.

Depressions are normally associated with depression because they are always preceded by a collapse of the credit markets. The question that we should be asking is, "Why does the credit supply keep getting so large compared to the currency supply, and why is it always allocated in such a way that it periodically collapses and causes a depression?"
Chicken and egg solved? I don't think so. The credit markets collapse because credit is overextended, overproduction and overconsumption are rewarded, and banks always win. The "banks always win" part is by far the most important, because no matter what happens they will fuck society in the ass without lube.

Saying that we need inflation to avoid a depression is like saying we need to keep drinking to avoid a hangover. The right solution is to stop getting drunk on cheap credit in the first place so that we don't need to worry about currency appreciation caused by increased productivity.
Saying that we need deflation to avoid prosperity...

FA Hayek: I agree with Milton Friedman that once the Crash had occurred, the Federal Reserve System pursued a silly deflationary policy.  I am not only against inflation but I am also against deflation.  So, once again, a badly programmed monetary policy prolonged the depression.

And increased productivity does not cause currency appreciation, it causes lower prices. There is a difference. There isn't more demand for the currency when prices go down; that would be silly.

I am not a keynesian, and I have never said we need inflation to avoid a depression, so please don't put words in my mouth or create a strawman. But then again, you may have not been responding to me since you just went off on a typical bitcoin diatribe after you realized you lost the argument. So, if that's the case, carry on.
942  Bitcoin / Bitcoin Discussion / Re: Interesting video discussion on bitcoin (youtube) on: September 10, 2012, 03:00:12 PM
There is no simple or correct answer to whether or not it would resemble prosperity or depression. The "Equation of Exchange" partially developed by Mises would say that if the price level drops (assuming a constant supply in circulation) either the velocity of money and the real value of expenditures has slowed (depression), or the velocity of money stays about the same and the real value of expenditures has increased (prosperity).

But in the case of Bitcoin, it is unlikely that the real value of expenditure being slowed equals depression as it probably just means that it's being used as a commodity rather than a currency, since everyone has plenty of fiat lying around that they will spend instead. If this is the case, as it seems to be when speculation makes up the vast majority of all services available to the economy, then you have to ask if bitcoin is actually successful as a currency. On the surface it may seem useful as a payment processor, but when you factor in all of the fees involved in converting currencies and the overall extreme volatility, there is probably not much of a benefit for anything other than black/gray market goods.

As far as the "mechanism" that makes falling prices good or bad, this is basically the same question reworded. If gains in efficiency result in lower prices, everyone wins (though arguably perhaps not the Earth, but that is a different subject). If heightened scarcity in currency causes lower prices, those with lots currency win, those in debt lose, and those without currency, debt, or jobs are at pretty much the same spot.
943  Other / Politics & Society / Re: Benjamin Fulford - Ultimatum on: September 10, 2012, 01:03:54 PM
He makes some pretty good points but then with a completely straight face goes off on how the US threatens Japan with artificial earthquakes. Like, EVEN IF IT'S TRUE (monumental IF), how is anyone supposed to believe it or take him seriously anymore?
944  Bitcoin / Bitcoin Discussion / Re: Interesting video discussion on bitcoin (youtube) on: September 10, 2012, 03:41:30 AM
Are you seriously suggesting that the magnitude of deflation for electronics industry prices is equal to the inflation of the currency in general?

I don't know how you could possibly infer that. - here's your homeboy's site gentlemen

The effects of price deflation differ depending on the cause(s), and on the state of the economy.

Falling prices caused by increased production do not reduce the general or average rate of profit in the economic system and do not make debt repayment more difficult. For example, if falling prices result from the fact that while the quantity of money and volume of spending in the economic system are rising at a two percent annual rate, production and supply are rising at a three percent annual rate, the average seller in the economic system is in the position of having three percent more goods to sell at prices that are only one percent lower. His sales revenues will be two percent higher, and that is what counts for his nominal profits and his ability to repay debts. His profits will be higher and his ability to repay debt will be greater. There are lower prices, but no deflation.

Deflation can cause a fall in prices. But calling falling prices "deflation" is a profound confusion between prosperity and depression. There are two distinct causes of generally falling prices. The leading cause of falling prices is economic progress, whose essential feature is an increasing production and supply of goods and services, which operates to make prices fall. The other is a decrease in the quantity of money and or volume of spending in the economic system. Falling prices is the only effect that they have in common. They differ profoundly with respect to their other effects.

"I'm so sick of evidence constantly contradicting my beliefs. Can't you people stop replying on empericism and just believe me in spite of all proof to the contrary?"

Learn some semblance of what causes prices and get back to me. Until then, consider yourself owned.
945  Bitcoin / Bitcoin Discussion / Re: Interesting video discussion on bitcoin (youtube) on: September 10, 2012, 12:12:19 AM
I am so sick of hearing the electronics industry being used as an argument for deflation. You fail to remember that their prices deflate while the CURRENCY STILL INFLATES IN GENERAL. It is the dumbest, most misrepresented argument ever.
946  Other / Politics & Society / CA passes law condemning anti-semitism as Fox News, CNN, and MSNBC report on: September 08, 2012, 03:49:49 PM
Oh wait, not a single one of them have an article about the condemnation of free speech by the most populous state in the union.

The California State Assembly has just passed a bipartisan resolution (HR 35) by voice vote which constitutes a serious attack on academic freedom and the rights of students and faculty to raise awareness about human rights abuses by U.S.-backed governments. While purporting to put the legislature on record in opposition of anti-Semitism on state university campuses, it defines anti-Semitism so widely as to include legitimate political activities in opposition to Israeli government policies.

Isn't that just a touch odd?
947  Alternate cryptocurrencies / Altcoin Discussion / Re: pegging cryptocoins to energy costs on: September 08, 2012, 08:37:37 AM
I would also like to point out that there is an equilibrium between the cost of mining and the value of the coin. If the cost of mining a coin is greater than the value of the coin, then there will be fewer miners, lowering the difficulty to the point where it is again cost-effective to mine.

As I mentioned in the post above yours, the proposals for Encoin and Decrits both do not allow for the difficulty to decrease. A big part of making this possible was to separate the security of the network from mining. *Mining is not required to secure a cryptocurrency*.

In order to maintain a constant value of your coin you must be able to both add and remove coins from the economy. Now, you might be able to come up with an automatic system that can do that in theory, but it will be close to impossible in practice.

Removing coins from the economy was initially part of the Encoin proposals by destroying unrefunded transaction fees (those not returned via proof-of-economic-activity). Fairly automatic, but also unnecessary when security and mining are separate. Rather than focusing on extreme price stability, I'd rather opt to let people keep their money while everyone knows that the coins generally cost more to produce than they are currently worth, so as long as confidence has not been lost, the currency will eventually return to a point where the value of a coin oscillates around its cost to produce.

Consider that this is exactly what the Federal Reserve is supposed to do -- make the value the dollar constant. Not only have they never come up with an automatic system that works, but they have consistently done a poor job trying to maintain it manually.

Keeping the value of the dollar relatively constant is not the sole job of the federal reserve. They also have to factor in unemployment levels and interest rates. But with a currency that is created by the people and distributed to the people when the people demand it, I think you'd find that the business cycle becomes an oddity in the rear-view mirror, not a massive deciding factor on monetary policy. There is also an obvious and extreme conflict of interest with central bank policy and those who make that policy--the private bankers. This would no longer be the case when everyone can create money.

Of course, coin backed by energy would have much higher exchange rate fluctuations than USD, something like price fluctuations of base commodities, i.e. 100% change within a year is quite possible.

But still we don't have same situation as with Bitcoin where it can shoot up 1000x.

On that note, an energy-related (rather than "backed") currency would also have a tangibly inherent and quantifiable value basis. Bitcoin only has value based on its demand and the unquantifiable amount of people who feel like selling and in what amounts. Everyone could easily see that it would take X amount of hours with $X amount of hardware and electricity to create X amount of Decrits. There is no such equation possible for Bitcoin. This means the currency could thrive even without central exchanges.
948  Alternate cryptocurrencies / Altcoin Discussion / Re: pegging cryptocoins to energy costs on: September 07, 2012, 11:35:18 PM
Solidcoin's peg is a joke and is just whatever RealSolid decided was an approximation of Koomey's Law (amount of work per joule doubles every 1.5 years), not one based on any real evidence from mining. Unfortunately this is an epic fail as can be seen by the jump from CPU->GPU, GPU->FPGA, FPGA->ASIC. It just doesn't work this way in reality, especially when it comes to mining.

Killerstorm, if you're reading a document then it is most certainly an outdated version of the Encoin proposals. The most up to date version is here:

Some of the problems with using an energy-based currency is that the difficulty can be manipulated (difficulty doesn't go down was a big lightbulb moment), so there have to be some controls, as described here: and here:

Moore's Law adjustment here: Koomey's law adjustment here:

Decrits uses a much more fine-tuned idea of adjusting the coin award after the difficulty increase, and making it difficult to flood the network with high-output by locking each minter into groups with others and having to wait for some of them to finish and so on. Again they are controls against intentionally raising the difficulty, a big factor when the difficulty doesn't go down.

There is no block chain in the bitcoin sense in either Encoin or Decrits, although Encoin may have sort of had one in the earlier revisions before I more finely tuned things. This was a proposal for a bitcoin-like stable value currency which had to have a form of demurrage to keep the value stable:

But I think that Decrits is the best incarnation of the ideas, as it relies on the least amount of energy waste by giving lots of coins away for free, thus allowing any change in efficiency to be quickly absorbed by the currency and providing the least amount of upset possible. It would also require some significant amount of the network's GDP to be mined before being able to maliciously increase the difficulty while profiting as little as absolutely possible. Encoin's transaction fees were ridiculous to encourage Proof-of-Economic-Activity as security for the network (whereas Decrits goes by the much simpler and cheaper proof-of-share/stake); it would also be more data heavy and less anonymous than Decrits because of that.

Decrits would still be strongly correlated with the cost of electricity plus the cost of hardware (or less the sunk costs of GPUs), which is why I dropped the energy correlation because hardware cost is a significant factor, especially as efficiency increases, so I didn't think there was any point in keeping up with the idea of it being based solely around energy costs.

But I strongly believe Decrits is the true answer to a cryptocurrency rather than backpedaling to a gold-like standard and all of the issues that went along with that. Why would anyone accept fractional reserve when by not doing so, demand for currency will rise and new money will be freely given away to the people rather than the banks? Encoin mining would still be a significant choke hold any time the market expanded by requiring 10x the mining et al to achieve the same effect as Decrits. New merchants in Decrits would be rewarded with free coins simply by transacting; certainly a nice incentive. Everyone who uses the network gets to profit on an expansion without forcing a large chunk of that profit into the hands of GPU manufacturers or electric companies, and not just those that hold lots of currency or those that mine.
949  Other / Off-topic / Re: Tim Berners-Lee: the internet has no off switch on: September 07, 2012, 02:29:23 PM
Except he's only saying that there shouldn't be, not that there isn't or won't be one.
950  Alternate cryptocurrencies / Altcoin Discussion / Re: AnyCoin cryptocurrency [concept] on: September 07, 2012, 01:09:38 PM
Ripple fits the bill for most of what you're asking for. Mining is not particularly useful for stocks, virtual game currencies, forums, governments, etc.

edit: Sorry it's actually open transactions that makes more sense.
951  Economy / Economics / Re: What prevents Bitcoin going fiat? on: September 07, 2012, 11:52:03 AM
Well it's up to the people to educate themselves and prevent such things from happening. A tough task, but the people of society need to learn to stop relying on what media and government and big corporations feed them. Hopefully cryptocurrencies can provide enough upset to the general order of things and be the catalyst to make people begin to realize there's more to what's going on than black or white, red or blue.

I don't know how much you've studied the underlying potential economics of bitcoins, but imo you might be eerily close to what happens in regards to higher level payment systems not because it's inevitable, but because the cost of running bitcoin goes down the fewer people/corporations that run it, making it ripe for a monopoly or something close to one. It's one part of the reason behind my proposal for Decrits, a cryptocurrency that works in a completely different way. Part of the objective is to make sure that running the network is never out of the reach of an everyday person. Bitcoin doesn't care, really. If that piques your interest feel free to check the link in my sig.
952  Economy / Economics / Re: What prevents Bitcoin going fiat? on: September 07, 2012, 10:18:39 AM
I think more what you're worried about is fractional reserve banking rather than "fiat" which means "by decree" or essentially by force of government. If bitcoin or another currency is to take over the world currency, some kind of paper or plastic currency must exist to fill the need for purely cash transactions. "Trusted issuers" could issue paper bills with public key serial numbers on them so that people could check to see if these issuers were practicing FRB and keep them in check, though this would rely on people to actually check with some frequency, and there'd need to be some way to see that more than one bill shared a public key (something like

I highly doubt this would result in the block chain being completely static though as the convenience of electronic currency is very, very high.
953  Bitcoin / Development & Technical Discussion / Re: New vulnerabilities in the advent of off-the-shelf ASIC mining on: September 07, 2012, 05:07:02 AM
Yes, thank you, my entire point was that the code as written today allows this case.  I'm suggesting that it might maybe be a good idea to change that.  Did you even read my posts?
I was trying to draw attention to the fact that all the suggested fixes here involve allowing permanent forks. But yeah I misread some tenses.
954  Bitcoin / Development & Technical Discussion / Re: New vulnerabilities in the advent of off-the-shelf ASIC mining on: September 07, 2012, 04:25:03 AM
The miner timestamp.  We already enforce rules on the miner-provided timestamps,
No, the rule is enforced between blocks strung together, not the blocks on their own. Block 2 can not be more than 2 hours before block 1 or whatever the rule is. If another whole chain of blocks come along from a common point, as long as they follow that one rule about block X+1 being less than 2 hours before block X, then it is valid.

Read his attack again, it depends on timestamp manipulation to multiply the amount of DOS-blocks generated by a factor of 16 (per month).
It does not depend on timestamp manipulation, it depends on creating a chain with a very low difficulty with the intent to spam the network. I don't think Sergio's specific example works because of the 2016 block requirement for changing difficulty though.

There is absolutely no reason why the network should consider a block mined today, with a timestamp from today, as a candidate to create a month-old fork.
Well perhaps you should check the code then, because it is perfectly valid. The only thing preventing this is hard-coded checkpoints.
955  Bitcoin / Development & Technical Discussion / Re: New vulnerabilities in the advent of off-the-shelf ASIC mining on: September 07, 2012, 03:44:33 AM
* This suggests a potentially useful patch.  I haven't checked, maybe something like this is already implemented.  If you get a block that could potentially replace block N, but the new block's timestamp is more than X hours after the timestamp in block N, refuse to relay it.

Besides the fact that timestamps are added by the miner creating the block, if you mean the time when the blocks are received this breaks the "unified vision" of one block chain. Forks can exist permanently without users or miners having done anything wrong. But this is also along the same lines of what Gavin suggested. This is mostly in the case of a network split though which I think is pretty unlikely and shouldn't be guarded against when it leaves the network open to certain types of more important attacks. If there is a permanent fork, then leave it up to the users and the community to decide which chain is the correct one. In the case of a network split where one country's internet is cut off or something, it is obvious.
956  Bitcoin / Bitcoin Discussion / Re: Bitcoin's are totally useless once you have a state of WAR! on: September 07, 2012, 03:36:28 AM
I think the current system makes financing war a very easy, just print the fucking money. Then use that money to take over a country and its oil, only to make more money! Now since you cant simply print bitcoin, financing wars would be harder, the only way would be to convince the people its a good idea and ask them for the their money / lives to fight for this war. As a result their would be no BS wars, because no one will pay good money to get people to kill themselves just so some corporation can come in and start pumping. Yes your right bitcoin is totally useless when it comes to war, because the oil companies would have to finance their own wars.

If it weren't for bankers financing wars, the history of the world would be far different. If governments and banks have little control over the currency, then yes I believe that war would be much more difficult. While war does temporarily promote some industries and can temporarily relieve recession-like symptoms, the greater toll is a big fat negative. But it has to get to the point where people only want a nation's currency to pay its taxes and nothing more and have to be willing to be civilly disobedient in the case of military drafts. But bitcoin won't fix most of this because of the fact that bankers will eventually accrue a large portion of the wealth or bitcoin will just fail because it's silly to loan money in a deflationary economy unless...

What's to stop the bitcoin elite from financing a large state's war? The profit incentive would be tremendous. It's what the goldsmiths and lenders did several hundred years ago for british and american wars. It was possible then, it will be possible again.
957  Bitcoin / Development & Technical Discussion / Re: New vulnerabilities in the advent of off-the-shelf ASIC mining on: September 07, 2012, 02:37:36 AM
doesn't benefit the attacker at all,
Have to stop having this mentality when the potential exists for someone who just wants to ruin the network. Otherwise it's head-in-sand.

is easy to fix, and that would be easy for the network to recover from.
Anything that requires developer intervention and community consensus is not an easy fix and is very bad for the reputation of the network.

I've got a half-finished "user-defined checkpoint" patch in my personal git tree, so users, merchants, and big mining pools can decide for themselves to add checkpoints on-the-fly (via an 'addcheckpoint' RPC command) to protect against this type of attack.
So *some* *might* be protected by an option that isn't required or part of the protocol. Who just lost 250k because of an unencrypted wallet?

Instead have a second difficulty determined by bitcoin days destroyed over the last 2016 blocks and work some kind of formula around that so it is easy for a legitimate block chain to overtake an attacking chain with significantly less hashing power. Only a client update, no options needed, no breaking changes, secure from sustained 51% attack. Unless the attacker controls more bitcoin days destroyed than the entire rest of the network activity during the time frame of a history rewrite, it will be ignored. If anyone is worried about this possibility, then there could be a further addition to the formula similar to checkpoints on the fly.
958  Other / Politics & Society / Re: Gary Johnson 2012 on: September 06, 2012, 03:22:27 AM
Simple damage control. Yea, that ole chestnut. The Lesser of Two Evils. Romney will do less damage because he has a second term to worry about winning, so I dont think he will do anything to terribly civilization-ending in the first 4 years.

Obama on the other hand has nothing to hold him back from doing the bidding of his controllers nor to hold him back from advancing his own ideological agendas, because he can not be nominated again... except Congress and The Supreme Court.

So wait, passing laws that dissolve the 1st, 5th, 6th, 7th, and 8th amendments during his first tenure wasn't damaging? Just vote for Gary Johnson or write in Ron Paul, any other vote would be a waste.
959  Other / Politics & Society / Re: FBI has 12 milion iphone user data on: September 06, 2012, 03:18:45 AM

FBI says nuh uh:

I wouldn't put it past the FBI to lie, nor would I put it past antisec to lie about how they obtained the list. Either way, somebody is sure keeping track.
960  Bitcoin / Bitcoin Discussion / Re: Why are bitcoin exchange operators so inept? on: September 05, 2012, 06:59:50 PM
It's getting hard to believe too.
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