The price would rise while he's buying them, then drop while he's selling them. The bitcoin system would cope with that.

He would make a profit, but only because the bitcoin value is rising anyway. If it weren't for that, the price rise while he buys would be expected to equal the price drop while he sells.

When someone with a lot of money starts buying up bitcoins, we know that Bitcoin has "made it" and is here to stay.

This forum is growing very quickly and soon will be too big for one person to follow. It's inevitable that the rapid growth will spawn other forums, and each will develop its own character.

Because this forum is the main one, the one linked from bitcoin.org, it will be the first port of call for many mainstream bitstream users. It won't be long until we have the AOL crowd here, and the Fox News crowd, the Oprah crowd, and all the other mainstream crowds.

With this change in demographic, it's natural that the marginalized elements of the bitcoin economy will drift off to other forums, for their own interests rather than because they are pushed out.

For now, I think every aspect of the bitcoin economy should be welcomed here. Very soon, each subculture will create or find its own niche anyway, so the "problem" is self-correcting.

He could always wear his briefs on the outside!

Yes, certainly, if it meets the requirements mentioned in the first post of this thread.

No, if your transaction doesn't make it into the block chain, then that dollar is still yours to spend.

No. If you mean bestiality, I probably can't safely publish that (I'm in the UK). If you mean dolphins raping other dolphins, feel free to write it in return for a bitcoin.

The slogan? You mean the phrase "Now You Know"? Kind of like "Too much information, K thx bye!"

In that case you won't want to read this one:
http://quezi.com/56

Depositor-operated "banks" have a long history. In the United Kingdom they are known as Building Societies if they lend on property, and as Credit Unions if they lend for other things.

They flourished in the past, but nowadays it's impossible for a small group of individuals to set one up legally. You're not allowed to start with less than £1 million, and the application process takes two years.

After all, society can't allow innovative new businesses to compete with established banks.

Of course! But depositors in a bank don't think of themselves as investors. The investors are the bank's shareholders.

Thanks! I remixed it into a short article:
How is Yap stone money similar to Bitcoin?

I'm paying one bitcoin for each article contributed to that site, so feel free to PM me your receiving address if you'd like a coin.

Neither. The payment is recorded in the block chain. Your bitcoin client only needs to join the network when you want to check your balance or spend the payment. And you don't need to be generating to do this.

That system is safe from loss due to fractional reserve, but the depositor carries some risk from the loan itself. Suppose the bank lends the depositor's money to a house-buyer who defaults, and the bank sells the house for less than the amount outstanding on the loan.

If this happens only occasionally, the default can be covered from the bank's profit margin, but if it happens a lot then the bank will default.

Hmm. This is obviously supposed to be a clue.

Suppose the difficulty goes up by one-half. For example, from 20,000 to 30,000. This will cause your rate of generation to drop by one-third (e.g. from one block every 15 days to one block every 10 days). But I don't see where that leads...

Here's an interesting and perhaps non-intuitive consequence of the way generation works. If the difficulty increases, your rate of generation drops. If the increase in difficulty causes some people to drop out of generating, your rate of generation doesn't go up again. When other people drop out, it makes it take longer until the next difficulty adjustment, but you can still expect to generate the same number of coins per day until then, no matter what other people do.

I specifically didn't use the I-word.

Only external transactions fail in this scenario. You can send your X BTC to another MtGox account-holder, and nothing breaks. And if multiple banks are doing this, provided the transactions amongst them are roughly balanced (within the limits of each bank's fractional reserve), nothing breaks.

There's no doubt that fractional reserves will come to the bitcoin economy, but I think people will come to understand that a "real" bitcoin is safer than a "spreadsheet" bitcoin.

Sure you can do that with bitcoins. Imagine if MtGox went into the lending business. They lend money to someone, and suddenly that person's MtGox balance shows some bitcoins, without MtGox needing to accept any more Bitcoin deposits.

If everyone who borrowed money from MtGox withdrew their money, that would cause a run. But if borrowers just used it as a "bank account" for paying to other MtGox accountholders, there would be no run.

With any kind of fractional reserve banking, if there is a run someone loses out. If MtGox went into the fractional reserve loans business and suffered a run, the losses would be borne by MtGox or by its creditors or by its depositors. When a bank suffers a run, the losses are borne by the bank's shareholders, or by its creditors or depositors, or by the taxpayer.

How do you know that MtGox isn't already doing this? Holding a number of bitcoins that is smaller than the total of the bitcoin balances of all its customers?

Technically it's doable, although I don't see any economic incentive.

If anything, the incentive is the other way. Hold fewer dollars than the total of the Gox-dollar balances of all its customers. Buy bitcoins with the rest. When someone wants their dollars back, sell some of the bitcoins (and hope like hell that the exchange rate has gone up rather than down in the meantime).

Does Bitcoin's (currently-unimplemented) scripting give us a better way to do this?

Could scripting provide a way for me to sign my coins across to my heirs so that they can spend them if I haven't spent them before a certain block number?

All I would need to do is to spend the coins to myself once a year or so, but my heirs would be able to spend the coins if I haven't touched them for a year. No lawyers needed.

The best analogy I can come up with is this.

Satoshi filled his milkshake, but didn't drink yet because it tastes terrible.

We fill our milkshakes and start to drink. At first they taste terrible, but we keep drinking. Gradually our milkshakes taste better and better.

And by the time Satoshi eventually drinks his milkshake (using a MtGox dark pool straw costing $1.05) it tastes mighty sweet, thanks to everyone else.

But I find this analogy unsatisfying. Partly because it doesn't reference Monty Hall, but also because there are no flying cars in this scenario.

Meh. Someone will come up with a catchy name for the sub-units. Then, instead of getting a paycheck of 0.000432 BTC, you will get a paycheck of 43,200 Satoshis. Problem solved.

I'll be happy knowing that tomorrow's loaf of bread will cost no more than today's loaf.

No, I just agree that you should always switch.

Let's label the box that you choose "A", and label the others "B" and "C".

There are three possibilities:

1. There is a one-in-three chance that the coins are behind "A". In this case, it makes no difference which door Monty opens. You will win by sticking with "A", and lose by switching.

2. There is a one-in-three chance that the coins are behind "B". In this case, Monty must open door "C". You will lose by sticking with "A", and win by switching.

3. There is a one-in-three chance that the coins are behind "C". In this case, Monty must open door "B". You will lose by sticking with "A", and win by switching.

Therefore, if you stick with "A" you have a one-in-three chance of winning the coins. If you switch, you have a two-in-three chance of winning the coins.