Treasury bills only make sense if you own a disproportionate share of them, or aren't paying U.S. taxes. The money for those interest payments has to come from somewhere, and that somewhere is a mix of inflation and future taxes. If you are an average U.S. citizen paying U.S. federal taxes, you might as well just keep your money at zero interest rather than taking out a T-bill and paying back your own interest--at least you'd save on overhead.

Or from another point of view, if you really think T-bills will give you a net gain, those T-bills are being paid back from other people's taxes--which means you're investing in and enabling a textbook protection racket. ("Pay your taxes and we'll protect you from the bad guys. If you don't pay them, what you mainly have to worry about is us.")

Until the feature is implemented, you can try installing the Save to Phone app. It provides a Share destination which simply saves the shared data to a file on your phone. Works with Mycelium and any other application with a Share action. I used this myself to transfer the backup .pdf to my PC. Hard to believe this isn't built in to Android...

The paper isn't quite that crazy. To begin with, they're assuming 33% of the hashrate, not 10%. The idea is that someone with full control over 1/3 of the hashrate might be able to find two blocks in the time it takes the rest of the network to find one, which is certainly possible. When the rest of the network finds its first block the attacker can release both blocks. At that point the rest of the network has wasted a block's worth of hashing, since the block it found doesn't make it into the blockchain. The attacker's costs are 1/3 of the total, or about half of what was spent on the main blockchain, and the attacker gets the reward for both blocks while the rest of the network gets nothing. On the flip side, of course, the attacker can't claim the rewards for all the times it only found one block rather than two, since it has to keep the first block private.

If the attacker holds out for three blocks rather than publishing after the first two, the situation gets a bit worse. At that point they can wait until the network finds a new block (N) and then release two (N, N+1), while maintaining a one-block head start. Then they can continue working on finding a successor to their remaining hidden block (N+2) while the network is still searching for N+1. If the attacker wins that race they can keep going, releasing the older blocks and holding the newer ones in reserve. If not, they'll have to start over, but in the meantime they get all the rewards and the rest of the miners get nothing (while spending twice as much).

There are some suggestions that the minority pool could improve its ability to stay ahead by carrying out a Sybil attack and promoting its own blocks just ahead of the "honest" miner's blocks through superior connectivity, but I just don't see that working in any realistic environment. Resistance against Sybil attacks is always welcome, of course, as is better connectivity among "honest" miners.

The main flaw, as I see it, is that the paper assumes 33% of the hashrate is controlled by someone willing to undermine the network in this way. There are pools with 33% of the hashrate, but the pool's administrators can't do this on their own, and I can't see a majority of the miners going along with this scheme to make some short-term cash at the expense of long-term trust in Bitcoin. If miners were purely profit-oriented we'd probably end up with a monopoly anyway--larger pools are more efficient and have less variance than smaller pools. As long as miners continue to keep an eye on the pool operators' policies with an eye toward maintaining the long-term value of Bitcoin, there is no issue.

The paper suggests selecting the active blockchain out of two equal-length candidates randomly to thwart Sybil attacks. My own proposal is a bit different: implement a hysteresis function to make it more difficult to switch blockchains. Instead of switching whenever a new chain is strictly more difficult than the current chain, switch when the new chain's total difficulty is strictly greater than the current chain's difficulty, plus the square of the difficulty of all the blocks which are only in the old chain. To extend the old chain by one block, no penalty. To undo/replace one block, your chain has to be at least two blocks longer rather than just one. To undo two blocks, your chain has to be more than four blocks longer. To undo six blocks, more than thirty-six blocks longer, etc. As a bonus, this could probably replace the current checkpoint system, since no one is going to get the four million block lead which would be necessary to undo the last two weeks (2016 blocks) of progress on the main blockchain, and checkpoints are generally less frequent than that.

I would suggest adding a "share" option. Provided my understanding of it is correct, that should allow you to export the key to a particular application, rather than directly exposing it to all running applications like the clipboard option, or all programs with SD card access like the file option.

If you use the key more than once then it isn't a One-Time Pad. It's one step above a substitution cipher, and if any of your unencrypted private keys ever does leak, so will the encryption key. It's possible that someone more experienced with cryptoanalysis than myself could even derive the encryption key from multiple encrypted private keys. The whole point of a OTP is that you use one bit of unique, never-used-elsewhere entropy to encrypt each bit of the message. The fact that each bit of the pad is unrelated to anything else the attacker might know is what makes an OTP resistant to cryptoanalysis.

Why "A&B"? Either A or B would be sufficient by itself, so there is no reason for Electrum to combine them into a single transaction. It probably used the output of the first transaction (address A), sending the remaining ~0.45 to change address C, and left address B alone.

Technically you can still receive BTC on any of your receive addresses, even ones which have already been used as inputs. Some consider it less secure because the full public key is known from the earlier transactions, as opposed to just the hash of the public key which appears in the outputs. Personally I don't think that's worth worrying over.

The savings from that approach seem negligible. You still have to design the system to handle the worst case, which is a script just short enough to get past the filter. A malicious attacker would design the script to use the maximum amount of time without triggering the filter, so you have the cost of the script plus the cost of checking its complexity. The only case where you would save anything would be where someone accidentally created a script which requires too much time or memory, which should be rare (akin to creating malformed scripts which fail on valid input for other reasons).

This is an interesting experiment, but in my opinion it's unrealistic at this point to expect to be able to pay for everything you need (particularly local services) with Bitcoin, even in places where it's relatively popular.

Rather than trying to go a week with just Bitcoin expenditures, I would suggest targeting a certain percentage of your normal expenses to be in BTC--say 20% to start with--and repeating the experiment with higher targets as time progresses. In other words, if you normally spend $200 in a week, buy $40 worth of Bitcoins and limit USD expenditures to $160, and see what (if anything) you have to do without to meet your budget.

Sure, but under what circumstances would anyone care about the cost of a script which they wouldn't be running anyway?

A simpler approach might be to simply assign a CPU and memory cost to each operation, and fail the script if it goes over preset limits. The precise costs and limits would need to be defined at the protocol level to ensure compatibility. The script language could the be opened up to permit arbitrarily complex processing (loops, subroutines, recursion, etc.) without worrying about complexity.

This might be a good time to bring up the phrase "Turing Tar-Pit". To summarize, while any Turing-complete language can solve all computable problems, there are still significant differences in their expressive powers.

The fact that you can solve any problem in C or LISP does not imply that you should attempt to solve all problems in C or LISP.

http://www.haskell.org/haskellwiki/Haskell.

All the languages mentioned up to this point are imperative (or "multi-paradigm", which is still mostly imperative). Learning how to program in a functional language, like Haskell or ML, should broaden your programming horizons and improve how you think about programming, even if you're still writing most of your code in C++.

That would be bad enough if the tax was just on increases in actual value, but don't forget that the tax is assessed on the nominal price difference in USD, so when they devalue the dollar you pay taxes on the relative "appreciation" of the gold even if its purchasing power hasn't changed.

Dumping the gold standard was defaulting. The loans were denominated in dollars when a dollar meant a specific amount of gold. Going off the gold standard meant the payments were in redefined "dollars" worth far less than those originally promised. The loans were never actually repaid per the original terms.

The fiscally responsible choice would have been to not take out the loans in the first place. Short of that, admitting that they were in default would at least have had the virtue of honesty.

This is actually based on a misinterpretation of Gresham's law, commonly abbreviated "bad money drives good money out of circulation". If you look at the full form of the law it's actually referring to money which is overvalued and undervalued, respectively, when compared to the market price. For example, under bimetallism in the U.S. there was a legally-fixed exchange rate between gold and silver coins, while the actual market values of the two metals fluctuated. When the law caused gold coins to become undervalued, people hoarded them and spent their silver, and vise-versa. The coins were legal tender, so merchants had no choice but to accept them in payment of debts at the fixed exchange rate, even if the coins were currently worth less than their face values.

In the case of Bitcoin there is no fixed exchange rate; if the value is generally expected to increase over time, that will affect the net present value to the merchant as well as the buyer. The increase or decrease will not cause bitcoins to be under- or over-valued with respect to other free-market currencies. Gresham's law would only apply if there was a fixed exchange rate between bitcoins and fiat currency. For example, if the U.S. government declared that USD $1000 was equivalent to 1 BTC for the purposes of legal tender, when the actual exchange rate was $1100/BTC, people would have an incentive to settle their debts with the overvalued USD rather than the undervalued BTC.

Simple, because money (or rather, the economic surplus it represents) is scarce, and has uses other than investment. This is like asking why more production and competition don't get directed to a particular good and drive its price down to zero. As for why different investments have different rate of return, the answer is uncertainty. An investment with a guaranteed return will tend to reach equilibrium with the interest rate, but a more typical investment involving a degree of risk requires a higher return to compete.

From the depositor's and bank's points of view it makes no difference whether the loan is for investment or consumption. The loan itself is the investment which provides a 5% return. In the case of a business loan the return will generally come out of the proceeds from a capital investment, while the return on a personal loan is typically funded by foregoing future consumption. The former is easier to analyse in terms of accounting, but economically the personal loan is just as productive—it corrects an imbalance involving an excess of future income relative to the desire for present consumption, just as capital investments improve the balance between future supply and present supply when future demand is projected to be higher than present demand. (When future demand is expected to be lower than present demand, capital investments are malinvestments.)

If you're getting a 5% real return, then it doesn't matter how much fractional-reserve banking is involved; it's still a waste to put the money into planting trees at 2.3%. Changes in the money supply just make it much more difficult to determine what the real return is; this impacts the estimated return of the tree investment just as much as everything else. That $1000 you're expecting to sell the tree for in 100 years may be worth less than the $100 you're spending now to plant the tree.

Neither interest nor fractional-reserve banking is evil. Fraud is evil, and FRB can be fraudulent (even if it is spelled out in the fine print). However, that is not always the case. It is only when people try to manipulate the interest rates, by whatever means--printing money, lowering FRB reserves, demurrage, fraud--that we are prevented from measuring wealth properly. In this money is no different than any other good whose price is being manipulated, save that money is the one good against which everything else is measured, so when its price is manipulated the effects are felt throughout the economy.

Whether you buy it or not, it's true. Planting trees at a 2.3% return is more wasteful than "sitting on your money" (a.k.a. investing the excess production that money represents) at a 5% return. Remember that the only reason you can get interest (or deflation) and thus gain anything from "sitting on your money" is that your deferred consumption is allowing others to make investments with a return which exceeds the interest/deflation rate. It's not a matter of whether investment happens, just whose investment--yours at 2.3%, or theirs at 5%.

This isn't really surprising at all, if you understand time preference, which obviously you do not. The revenue stream is only infinite if you defer consumption forever, and no mortal being can rationally be willing to wait forever. Eventually you and everyone you have ever cared about will be dead, and beyond caring about any further revenues. Any production past that point might as well not exist.

Consider this: under what circumstances would eating the goose be valued more highly than twenty years worth of golden eggs? Starvation, perhaps? Would it really makes sense to preserve an unending supply of golden eggs at the expense of starving in the present?

Put as simply as I can manage, you aren't qualified to tell anyone how much they should value future goods relative to present goods, any more than you are qualified to dictate any other form of economic preference to others, and yet that is exactly what you are trying to do with demurrage. You yourself act in a manner which is consistent with having a positive time preference--since you haven't starved yet, you clearly do not always choose to defer consumption--and yet you fail to perceive or understand this unchangeable fact of mortal existence and call it "irrational".

And yet, it is a wasteful act, precisely because it isn't the first thing worthy of funding. You are diverting present resources from high-ROI investments to a low-ROI investment. This is wasteful.


Compound interest doesn't reduce your return in the slightest. It just means that there was a better alternative. Put another way, you could have put $7 in the bank at 5% interest (i.e. into other investments earning 5% annual ROI, as opposed to the tree at a mere 2.3%), and gotten the same $1000 in 100 years for your grandchild, and still had $93 left over in the present to spend or invest as you choose.

I would like to take the opportunity to distance myself from this line of reasoning. Investment is not inherently better than consumption, or vice-versa. The sole point of investment, however, is to enable future consumption. Consumption is not waste; it is the whole point of economic activity. There is nothing noble about a currency designed to force its users to abandon it in favor of something more stable; that is just one of the reasons why such a currency will not become widely adopted (at least not voluntarily).

Saving to buy a car is neither more nor less productive than going into debt for that car. In order for you to go into debt, someone else had to save so that they would have the excess resources necessary to make that loan. This is true even if the only two entities involved are you and the maker of the car. Either your savings (loaned to the maker) or the maker's savings are what allow the maker to survive while working on the car rather than gathering necessities. Regardless of whether you saved up for the car, someone had to, so in the broader economic perspective there is no difference.

BTW, introducing a third party (a bank) who makes a "loan" without any actual saving doesn't change that fundamental equation; without the saved surplus, the bank can issue as much money as it wants, but there won't be anything to buy with it. Money has no value without savings.


Yes, and interest can and does become negative in real terms when there is an excess of capital. You see this when the economy is undergoing inflation--people accept below-inflation levels of interest because there is nothing better available to invest in.


If capital goods were superabundant then their marginal ROI would indeed be zero. I assume that was what you meant by "sufficient competition", but it's not a realistic scenario. Capital is scarce, not superabundant. The interest rate reflects the ROI on capital throughout the economy; if the ROI in a given sector falls below the interest rate, that is a signal that there is enough investment in that sector, so in that sense it does act as a "floor" for a particular sector. If the ROI were to fall across all sectors, however, then so would the interest rate "floor". If there was no expectation of return on investment then the interest rate would be zero (or even negative, given inflation), because no one would be interested in taking out loans.