This is one reason why so many people seem to hate alt-coins.

If one thinks of Bitcoin as a money bubble, and there are loads of these bubbles all located in a finite space (like a kitchen sink), if one bubble gets bigger, the others have less room. Shaking up the water may increase the number of bubbles, but the amount of real value represented -- the air resource -- does not increase, so each bubble controls a smaller amount. (A glass bottle with a closed lid is probably a more accurate analogy).

You can't just move the goalposts when reality doesn't match your theory. You guys keep doing this all the fucking time. Don't like something? Unexpected loophole? Blame the government! Not our fault!

Of scud missiles?

Oh, you mean buying and selling consumer items in some kind of market place? OK then, give me an example of a voluntary trade. Explain why the trade would still happen even though the buyer faces no systemic pressure to buy, and the seller faces no systemic pressure to sell.

Or... excellent decisions allowing someone to profit from government funds? I'm not trying to defend government efficiency in principle. Far from it. I'm just suggesting that many of its 'executive' actions are probably not based on a profit motive in the first place (e.g.: as with public health where the whole point is to increase availability of health services, not profit. If you didn't know a certain health service was funded by government, and you saw it just when it first opened, you'd think "holy crap these new guys are really cheap! The others better start putting their prices down." If the demand is inelastic because it's something people actually need, then the country could still end up profiting as a whole, even if the state owned enterprise keeps making terrible losses.) From a meta perspective they already control tax and borrow money, so the rest is just trying to make sure it goes to the right places.... In theory anyway.

You have no evidence that the free market is always more efficient than an executive decision. In fact, companies themselves tend to have an authoritarian style with a strong downwards flow of executive decisions, and an upwards flow of feedback. Governments are just another layer in the fractal structure of society. That is human nature.

Yes -- prolonged government inaction and laissez-faire flexibility towards lobbying. That is the problem with US government, not a "strong hand" or too much of it as you're trying to suggest. It's as if the government did not exist. Hence the allegations of Fascism, Corporatism  and that the US really does have a free market because the government is part of that market. Sure, the government might be too real for you, but that just means you don't have enough money to lobby them in your favour.

I don't know where you got the idea that they're short-lived. If there's competition, then it's not a monopoly. A monopoly in a laissez-faire Capitalist type system like the US basically can't die. For a monopoly to die, take your pick:
a) government kills it by introducing state competition. As is plainly obvious with the example of state health, you guys are really struggling with the propaganda being unleashed by vested interests who want to maintain the monopoly, about how everything is turning into evil socialism.
b) natural competition emerges. The means either: the market is less free and less laissez-faire than I thought because the government protected the competition against anticompetitive practices, and they rejected the lobbying.

Protectionist government probably intervened. How? E.g.: (to make up a fictional example) a brutal police force that saved Nikon/Minolta/whatever from getting their offices fire-bombed by mercenaries hired by Kodak. And don't tell me they wouldn't do that because of the kindness of their hearts. In a free market, there would be nothing stopping Kodak. In fact, the kindness of their hearts would tell them: "we must not let our children starve, even if it means fire-bombing the competition. They would do the same for their families. So fuck 'em."

Call it protectionism if you want, but really they lobbied too hard and again the laissez-faire government did what the industry wanted.

Maybe not.
Actually, some resources can be reorganised and redirected by governments. E.g.: hospitals can be built using taxpayer money. It's just that the insane bastards running the private health system in the US desperately don't want that to happen.

See above.
No, they could do lots of things. Directly regulating a price is pretty naive and just because the Russians did it, it doesn't mean that the only other way is free-market extremism:
-I already mentioned state competition, funded by taxpayer funds.
-really poorly performing industries could even be nationalised, with the basic idea of restructuring the upper management. For obvious reasons the managers would be absolutely mortified, so anything can happen, right down to lobbying government to do various crazy things to help out. So instead of taking over, the government does something idiotic like putting artificial limits on the available university places for that industry. Notice how that stops the threat of state competition?

No, you didn't provide much in the way of new material, and nothing that debunked anything I said.

What you say doesn't make sense. I didn't say anything about brainwashing - that was your idea. How about I put it like this:

The Libertarian ~ Anarcho-Capitalist story:
Sovereign individuals can freely trade with each other for resources. There are no artificial restrictions on things like prices or anything like that, so everyone charges as much as they can for everything because greed is good. Of course we don't have to worry about high prices like 1 million dollars for a litre of water because
a) supply will meet demand, resulting in the 'right' price where both sides are happy for the voluntary trade to occur, and
b) unhindered competition will kick in, forcing prices further down with increased efficiency due to technological progress.
c) The non-aggression principle lubricates the whole process until eventually: no government, or maybe just minimalist local authorities to tie up loose ends in rare outlier cases where the free market has trouble meeting some need.
Then: peace on Earth!

Except that that story has so many holes it's ridiculous:
a) yes, supply meets demand, but basic high-school economics also teaches us about elastic and inelastic supply and demand. If people want to use an economic theory to justify their political ideas, they can't just pick the bits they like. They must use the whole theory. Basically, anything that's essential for survival has inelastic demand, whereas luxury goods, i.e.: the optional ones, have elastic demand. The most negotiating power always lies on the side that has the most flexibility.
a1) "voluntary" is emotive propaganda used by the likes of Stefan Molyneux to make it sound like free trade is somehow morally superior to alternatives. (And he doesn't even discuss the issues, he diverts attention away from the problems of internal pressures that are built into each trade, and starts talking about about external violence instead, which is an unrelated topic.) Real trade occurs across a spectrum of situations:

• At one extreme end, the buyer has practically all of their needs met (a la Maslow's hierarchy of needs), except for one last luxury item -- maybe another TV -- that will expand their horizons and nurture their creativity, allowing them to be fully content.
  
• At another extreme, the buyer has some urgent need for survival, e.g.: life-saving surgery.

In the first case the trade is extremely voluntary for the buyer: it's a free-will decision for them. But it's more difficult for the supplier because their lives depend on making enough sales. Therefore: extremely cheap TVs.
In the second case, the buyer's negotiating position is extremely weak. It's not voluntary for them at all. Therefore, the service involving a just few hours of work from a few skilled artisans using relatively primitive tools is likely to be priced many times higher than a TV set, even though the TV set almost certainly cost more in terms of total resources. None of this can be blamed on governments interfering. It's just simple economics. Free trade can sometimes be evil and coercive and non-voluntary.

b) Competition can be very useful to drive evolution. But in terms of raw efficiency, it's probably far more efficient at any given moment for businesses to merge and gain economies of scale, rather than staying separate. But if there are no competitors, there's no risk of one of those competitors driving you out of business, so why waste so much effort innovating? Therefore the R&D budget gets cut. This has been discussed before: free markets trend toward monopolies. Monopolies get lazy and non-innovative. They also sometimes get weird psychoses from their controllers who are paranoid about losing their steady income stream.

c) Non-aggression principle is just crap. Sure it's a nice sentiment and everything, but if mankind could operate on a simplistic golden rule instead of chaotic systems of laws, then it surely would.


So, in summary, you're complaining about Eric Li's description of Democracy, but you seem to be doing so while standing behind some flavour of Libertarian story which has even more holes. Therefore: pot kettle black, and his advice applies to you too that you should work on improving your own system first.

It seems possible to rotate cash and coins between exchanges for profit, and incidentally equalise prices, but the price difference suggests that most speculators are bullish and they don't want to risk having too much cash frozen in the banking system in a bull market.

To combat delays, they could have extra cash on hand to buy more coins at a cheaper exchange, but why wait if the price is going up? Hence they are all-in and have no spare cash. 2) They're sceptical of MtGox so they don't send coins there either. Therefore MtGox's prices are higher due to a BTC shortage, not a ca$h shortage.

I'll sleep on it

Being the king's jester seems to be his trademark. Without the humour his messages would get buried under the noise emitted by the mainstream media who try to mask their incompetence by projecting a serious image. It also offers a layer of protection because he can always say: "but Your Honour/Dear Mafiosos, the show is satirical. It wasn't meant to be taken seriously!"

So who's forcing you to pick a story and believe in it before it becomes the established order? You forgot:

5) Don't believe in any of the stories. Just work with what you've got and try to make it better.

That's what I think Eric Li was trying to get across. He seemed to be advocating a kind of "rational conservatism" by implying that it's better to work on improving whatever system you have, rather than throw it out and replace it with somebody else's better sounding story. Revolutions tend to be bloody for some, and profitable for armchair manipulators behind the scenes. And believing in the Anarchist story does not give you a free pass because it's just another story full of plot holes.

Story = synonym for 'ideology'.


Pot kettle black?

Your link does not provide any evidence for machines coming to life.

Interesting ideas, but also lots of assumptions and some of the anecdotal evidence seems to go against what you're saying.

E.g.: childbearing seems to be the lowest per person in areas with a well developed market system, like European countries or the English-speaking West. Why? More anecdotal evidence suggests fear: people are simply afraid that they can't afford a family, and the solo child is usually an accident.

Free market dogma also promotes costly private education that can only afforded by a minority of successful business savvy couples. And the same applies to private health-care. Meanwhile, the system is gamed by bankers, brokers, and other profit-seeking middlemen who profit by putting themselves in between the resources and the consumers of those resources, and artificially restricting access. If the ongoing feedback from the population isn't strong enough, such a system can trend towards Fascism, as seems to be happening in the US. How is that not "tyranny of the free market"?

Only if the state is seen as illegitimate by its constituents. It seems likely that all governments will have to start adapting their policies to cope with the coming wave of "digital tax havens". Governments that are more responsive will naturally have an advantage over those that are late to the party. As often seems to be the case with new technology, (assuming rational behaviour) the big players will be eager to incubate Bitcoin on home soil to get maximum benefit from it later.

I recommend watching:
http://www.ted.com/talks/eric_x_li_a_tale_of_two_political_systems.html
20 minutes very well spent.

~~~

TZM seems to be drawing inspiration from China's transformation, and basically suggesting that instead of weak fallible people in the management hierarchy, why not a noble software system that won't fail us?

On the one hand, Peter Joseph seems to have a strong understanding of economics and an impressive ability to think abstractly. It was quite clear from the debate between PJ and Stefan Molyneux that PJ was able to think outside the 'square' of ideology, and therefore can't be a modern-day Marxist since that's just another popular story for people to rally behind.

On the other hand, this "software at the top" idea suggests the TZM has a weak understanding of software and computing. And the transhumanists who seem to believe (without any evidence) that computers will one day come to life, ARE NOT HELPING. All this 'singularity' bulls* is just sci-fan bulls*. Don't get me wrong, maybe some incredible breakthrough will allow computing systems to be alive like Number 5. But right now, the world as we know it doesn't work like that.

I promise to do some bedtime reading of that, now that I've given Scribd my email and personal biometrics in exchange for the pdf.

To me it sounds like people are getting so tied up in details like: how hardware re-usability affects incentives, that it's easy to lose sight of context. Meanwhile, others are shocked that there exists an ecosystem of altcoins at all, and they're clearly fearful that this stealth inflation will dilute their profits https://bitcointalk.org/index.php?topic=279650.0. Plz bear with me while I try to summarise some coin evolution:

Communist coins (least evolved)
Anyone can make infinite coins for free. No scarcity, no relative scarcity. Basically no-one is 'fooled' into valuing them.

Proof of Work coins
Anyone can make coins, expensively. The production rate is continuously measured and then tightly regulated so that it follows some horrible arbitrary-looking scheme. The game seems to introduce scarcity, and because the coins are unevenly scarce, lots of people value them. However, altcoins and liquid exchanges can dilute this scarcity, though I admit it seems like a formidable task predicting just how network effects and a first mover advantage might play out in a future. At least "communist coins 2.0" doesn't seem likely, since there seem to be distinct elements of meritocracy at play (more about that in a moment).

Proof of Stake coins
I'm rusty on the details, but IIRC they fix a bunch of perverse incentives, by promoting a monopoly coin rather than an unhealthy ecosystem of coin-hopping speculators. And the production cost is low, which gives a PoS based economy a competitive edge ahead of PoW money. The lesson seems to be that the scarcity doesn't have to be 'real' with costly PR in the form of a PoW mining game. As long as the coins are relatively scarce, having trusted stakeholders seems fine. (And they could probably fine-tune the system by controlling velocity by managing transaction fees).

However, if I'm correct that PoS coin would trend towards a monopoly, then lending becomes a problem. Fractional reserve in the form of a pyramidal banking hierarchy is highly inefficient: every time an end-user wants to borrow money, the banking hierarchy creates friction by adding their own (usually enormous) costs at each level. Compare that to something like this:

A business wants money for some venture. In order to overcome the lending problem (what units do they borrow to fund their business??) they issue high-tech shares that are somehow added to a popular currency that represents a basket of various participants' shares. But how to do it? Perhaps something like:
the business registers itself as a participant on a blockchain somewhere.
the business releases 'old' coins, while everyone else's pre-existing coins are automatically devalued slightly with the new shares. The transparency prevents stealthy, dishonest inflation*. And there is no longer any need for lending. *The idea is of course incomplete. There would probably need to be additional incentives to prevent excessive inflation, perhaps some system of dividends. This is where we should be focussing our efforts. Proof of stake is still nibbling around the edges.

Oh no! So it would be a kind of "51% attack" where a majority cartel could sort-of "double-spend" their coins?! Why did nobody ever think of this? Bitcoin is doomed! rofl

Bear trap later this month as it touches $500 and dips back down to $300~$400 for about 14 days.
Then Christmas & New Year's rally to 12000CNY.

Just wait until they find out it's possible to bring down the whole network by flooding the queue (distributed memory pool, whatever) with fake transaction requests.