N12
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May 31, 2011, 05:22:30 AM |
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It essentially voids the purchasing power of all the easily mined coins so that those coming into Bitcoin now do not have to plan on having their purchasing power vastly cut when those old coins come out of their generation blocks and onto the market. That’s correct, but the situation will essentially be the same later on. People will call for the same thing when it’s 200k Bitcoin users instead of 20k. Should it really be done this way? How so? This proposal does not call for a change to the mining rewards, so inflation would be exactly the same. And what's "freicoin"? German for "freecoin"? Nothing would be given for free, so I don't get it. What I want is a system where ten early adopters with a combined BTC balance of 3M BTC or more, who are 100% silent in the face of "who's the richest here", don't have an undeserved claim to a third or a half of my purchasing power. Is that too much to ask? No, it was meant as a version of Freigeld with demurrage. And I don’t see why it would be undeserved for 10, but for 100 or 1000 it would be? So it really boils down to the "problem" of having a fixed money supply. That, and 10 people aren't sitting on 1/3 to 1/2 of the world's gold supply having acquired it trivially, waiting to "retire" with it. I don’t know about the distribution of gold. But in the end, it should turn out to be the same with Bitcoin, when those Bitcoin colossuses spend their riches, right?
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amincd
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May 31, 2011, 05:23:56 AM |
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GREAT! So I should feel good that I can buy a Ferrari for nothing thanks to Bitcoin, right? Yes, you should. The example of your success is beneficial for society, as it creates an incentive for others to try to develop the next big thing. What do you think motivated the Mark Zuckerbergs and Sergey Brins of the world? Mark Zuckerberg was motivated specifically by the success of the Napster p2p network. Let me say what you just said, but instead, substitute Federal Reserve notes:
Quote from: amincd on Today at 05:06:32 am An asset that provides economic value to the vast of people who buy it, like Federal Reserve notes doesn't fit this description. You're taking this out of the context of my overall argument. As I noted earlier, the Federal Reserve note gets its value through mandates, not purely through voluntarily exchange. If the asset can lose value on somebody else's whim, is it as squeaky clean as you say it is? The USD is scorned because Bernanke can turn on the printing press and steal a little bit from every holder of dollars out there. If an asset can lose value in the short run through a sell-off by a big holder, then that makes it inherently less valuable, and this uncertainty will be priced into the market price for the asset. If that weren't so, running the press would be good not bad! I scorn BTC because the holders of those 2M+ virgin coins can move them at any time. The outcome (hyperinflation) will be identical. They can move it exactly one time. After they've spent it they will have no control over subsequent transactions. If the Federal Reserve suddenly pumps $30B into the economy and says, "We didn't just print these, honest! We printed them years ago and have just been saving them for a rainy day and just didn't tell you all about them"... will it make a single iota of difference in the hyperinflation outcome? NO The difference is you KNOW how much bitcoins could possibly flood the market at any given time. There will never be more than 21 million, so the worse case scenario is that many are suddenly sold off. It can never be more than that. The Fed can print trillions of dollars and expand the money supply many fold over a course of decades. The inflation of dollars never ends, and through the force of government mandates, you have to use them over alternatives.
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unk
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May 31, 2011, 05:30:15 AM |
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The difference is you KNOW how much bitcoins could possibly flood the market at any given time. There will never be more than 21 million, so the worse case scenario is that many are suddenly sold off. It can never be more than that. The Fed can print trillions of dollars and expand the money supply many fold over a course of decades. The inflation of dollars never ends, and through the force of government mandates, you have to use them over alternatives.
you don't have to hold them long-term and experience inflation. casascius's analogy is apt. as i've pointed out many times before (though it is apparently a difficult point to get people to understand), nobody is required to hold federal reserve notes long-term and thus experience the long-term inflation that is so often critiqued here. in other words, all the 'inflation' that everyone's railing against is completely 'voluntary' in exactly the same way that people are claiming bitcoin is. it would be nice if people's criticisms and arguments were at least consistent; e.g., if you assume every bitcoin sale is fully 'voluntary' and that no pyramid scheme is possible with bitcoins, you should at least assume that anyone holding federal reserve notes long-term is doing so voluntarily. merely needing them to pay taxes means you stand to benefit from inflation at the point in the future at which you need to convert whatever you're holding instead into your fixed dollar-tax liability.
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casascius (OP)
Mike Caldwell
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May 31, 2011, 05:43:08 AM |
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GREAT! So I should feel good that I can buy a Ferrari for nothing thanks to Bitcoin, right? Yes, you should. The example of your success is beneficial for society, as it creates an incentive for others to try to develop the next big thing. What do you think motivated the Mark Zuckerbergs and Sergey Brins of the world? Mark Zuckerberg was motivated specifically by the success of the Napster p2p network. How is my example beneficial? In profiting from BTC, I have given nothing to society. I have only taken. Zuckerberg and Brin got rich in the process of giving mankind something of useful value. I gave nothing. I didn't invent Bitcoin, I didn't do anything other than perhaps share my opinion that cryptocurrency (as a concept) is sound, something I'd have offered for free. And yet I was able to receive goods and services in exchange for nothing. What is that an example of? Promoting the idea that others too can receive goods and services in exchange for nothing? Unsustainable, and the basis of a pyramid scheme.
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Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable. I never believe them. If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins. I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion. Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice. Don't keep coins online. Use paper or hardware wallets instead.
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amincd
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May 31, 2011, 05:43:16 AM |
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you don't have to hold them long-term and experience inflation. Avoiding long-term holding of the main currency of trade to avoid inflation is an inconvenience. The point is the decision to use or not use a fiat currency does not come about through absolute freedom of contract. Your choices are limited and constrained by mandates. How is my example beneficial? In profiting from BTC, I have given nothing to society. You are creating an incentive to try to find and invest in companies/products/assets that have fast appreciation rates. This results in more value and innovation in the long run. Zuckerberg and Brin got rich in the process of giving mankind something of useful value. I gave nothing. You provided funding for a useful currency, just as the early investors in Facebook/Google provided funding for useful internet services.
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unk
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May 31, 2011, 05:52:00 AM |
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Avoiding long-term holding of the main currency of trade to avoid inflation is an inconvenience. The point is the decision to use or not use a fiat currency does not come about through absolute freedom of contract. Your choices are limited and constrained by mandates.
as i said, the point is apparently difficult to understand, but it is not a 'fiat' that forces you to use dollars to trade with others. it's your choice and other people's choices - exactly the same kinds of 'choices' that may affect the price of coins in the current chain and that will likely turn that chain functionally into a pyramid scheme, even though the bitcoin technology has the potential to be so much more. (also, as an aside, it's just not true practically that it's inconvenient to avoid holding dollars or other fiat currencies. i can't imagine anyone with significant enough holdings to care about long-term inflation saying that. the costs are low and the effort is trivial. i do it routinely without a second thought.) in any event, my point is that if you don't like using dollars in daily transactions, then by your own critique you should blame the 'private' parties that are asking you to pay in them, not the government. in america, there are only two required uses of dollars: to accept debt payments and to pay taxes. that is insufficient on its own to lead to the sort of 'convenience' factors that you're describing. it's fundamentally people's 'voluntary choices' that are making your life inconvenient.
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kjj
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May 31, 2011, 05:55:46 AM |
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this is turning into an ideology argument, there's a subforum for this
There is? Can it be true? How I've longed for a "Hello, I'm new to Bitcoin, and I have some really bad ideas to fix things that I think are broken because I don't understand them" subforum. Oh, happy day!
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17Np17BSrpnHCZ2pgtiMNnhjnsWJ2TMqq8 I routinely ignore posters with paid advertising in their sigs. You should too.
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unk
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May 31, 2011, 05:56:49 AM |
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You provided funding for a useful currency, just as the early investors in Facebook/Google provided funding for useful internet services.
what about me? i've never bought or sold a bitcoin, but i mined about 12000 of them early on. what did i provide that's of any value? presumably your answer is more than 'securing the block chain', which was at best of hypothetical value and, more realistically, was in fact of no value to anyone.
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casascius (OP)
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May 31, 2011, 05:59:49 AM |
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How is my example beneficial? In profiting from BTC, I have given nothing to society. You are creating an incentive to try to find and invest in companies/products/assets that have fast appreciation rates. This results in more value and innovation in the long run. It does? How did me taking money from others help innovation? It would be different if those others gave me money to help me create something. That is not the case, I created nothing. Zuckerberg and Brin got rich in the process of giving mankind something of useful value. I gave nothing. You provided funding for a useful currency, just as the early investors in Facebook/Google provided funding for useful internet services. Zuckerberg and Brin created useful tools with practical daily applications. My funding did nothing to help create the currency or the concept or the software. It simply paid off earlier participants (who likely created nothing) and put me in a position to be paid off by later ones, while I meanwhile created nothing. That's exactly how a pyramid scheme works, and yet we know those are detrimental to society. In a pyramid scheme, some take, and many others get taken from... all voluntarily... all while nothing, or nearly nothing, of intrinsic worth, is created. How exactly is this good for society? And if me exploiting this community this much with just 25,000 BTC was this lucrative, just imagine how lucrative it is for whoever is holding those 2,000,000 BTC in their original generation blocks.
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Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable. I never believe them. If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins. I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion. Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice. Don't keep coins online. Use paper or hardware wallets instead.
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amincd
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May 31, 2011, 06:07:13 AM Last edit: May 31, 2011, 06:18:24 AM by amincd |
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as i said, the point is apparently difficult to understand, but it is not a 'fiat' that forces you to use dollars to trade with others. it's your choice and other people's choices Yes it is. Fiat forces me to pay taxes in dollars, and fiat punishes me with capital gains taxes if I use a non-inflating currency in trade. I have a choice, but that choice is between facing coercive action and using the fiat currency. (also, as an aside, it's just not true practically that it's inconvenient to avoid holding dollars or other fiat currencies. You have to pay a significant transaction expense every time you trade in and out of a store of value and a fiat currency. in any event, my point is that if you don't like using dollars in daily transactions, then by your own critique you should blame the 'private' parties that are asking you to pay in them, not the government. There are mandates that punish private parties who do not use fiat currencies. Quote from: amincd on Today at 05:43:16 am You provided funding for a useful currency, just as the early investors in Facebook/Google provided funding for useful internet services.
what about me? i've never bought or sold a bitcoin, but i mined about 12000 of them early on. what did i provide that's of any value? presumably your answer is more than 'securing the block chain', which was at best of hypothetical value and, more realistically, was in fact of no value to anyone. Securing the block chain was essential in it becoming more widely accepted. The benefit you will accrue is a drop in the bucket compared to the benefit bitcoin will provide society if it becomes widely adopted. Quote from: amincd on Today at 05:43:16 am Quote from: casascius How is my example beneficial? In profiting from BTC, I have given nothing to society.
You are creating an incentive to try to find and invest in companies/products/assets that have fast appreciation rates. This results in more value and innovation in the long run.
It does? How did me taking money from others help innovation? It would be different if those others gave me money to help me create something. That is not the case, I created nothing. I've already answered this: You provided funding for a useful currency, just as the early investors in Facebook/Google provided funding for useful internet services. Quote from: amincd on Today at 05:43:16 am Quote Zuckerberg and Brin got rich in the process of giving mankind something of useful value. I gave nothing.
You provided funding for a useful currency, just as the early investors in Facebook/Google provided funding for useful internet services.
Zuckerberg and Brin created useful tools with practical daily applications. My funding did nothing to help create the currency or the concept or the software. Your funding gave the currency market value which made it more attractive to merchants. You helped its adoption along. Your funding also provided for hashing power to secure the currency. It simply paid off earlier participants (who likely created nothing) and put me in a position to be paid off by later ones, while I meanwhile created nothing. That's exactly how a pyramid scheme works, and yet we know those are detrimental to society. Pyramid schemes provide nothing for society. A secure currency provides a medium of exchange that facilitates trade. For a currency to get a large enough user-base and attain a high enough value to become useful in large-scale commerce, it needs early adopters/investors that will use/invest-in it. And if me exploiting this community this much with just 25,000 BTC was this lucrative, just imagine how lucrative it is for whoever is holding those 2,000,000 BTC in their original generation blocks. It's not exploitation since you provided value in making an early investment.
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unk
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May 31, 2011, 06:11:32 AM |
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Securing the block chain was essential in it becoming more widely accepted. The benefit you will accrue is a drop in the bucket compared to the benefit bitcoin will provide society if it becomes widely adopted.
absolutely nothing guarantees that. there's an arbitrary relationship between the two, unless you adopt an extremely strong and untenable view of voluntariness (which you've already refused to apply to people's choice to use dollars).
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amincd
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May 31, 2011, 06:21:23 AM |
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absolutely nothing guarantees that. there's an arbitrary relationship between the two, Nothing guarantees what? That the block chain becoming more secure was essential in its reaching its present level of adoption, or that the benefit you accrue will be a drop in the bucket compared to the benefit bitcoin will provide society if it becomes widely adopted?
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kjj
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May 31, 2011, 06:32:19 AM |
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as i said, the point is apparently difficult to understand, but it is not a 'fiat' that forces you to use dollars to trade with others. it's your choice and other people's choices Yes it is. Fiat forces me to pay taxes in dollars, and fiat punishes me with capital gains taxes if I use a non-inflating currency in trade. I have a choice, but that choice is between facing coercive action and using the fiat currency. I think you are confused. Men with guns force you to pay taxes in dollars.
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17Np17BSrpnHCZ2pgtiMNnhjnsWJ2TMqq8 I routinely ignore posters with paid advertising in their sigs. You should too.
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unk
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May 31, 2011, 06:45:21 AM |
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absolutely nothing guarantees that. there's an arbitrary relationship between the two, Nothing guarantees what? That the block chain becoming more secure was essential in its reaching its present level of adoption, or that the benefit you accrue will be a drop in the bucket compared to the benefit bitcoin will provide society if it becomes widely adopted? well, either, but i meant the latter.
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Jaime Frontero
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May 31, 2011, 06:56:47 AM |
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This is how I would solve the problem of the early speculators profiting disproportionately at the expense of newer comers.
it's amazing how those without imagination persist in attempting to define a problem in those who have that quality... to quote james coburn in the magnificent seven: "no - you lost." deal with it.
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casascius (OP)
Mike Caldwell
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May 31, 2011, 07:13:53 AM |
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Food for thought. Snack on this. ![](https://ip.bitcointalk.org/?u=http%3A%2F%2Fimg11.imageshack.us%2Fimg11%2F4215%2Fbcpbeta1.jpg&t=665&c=B0Jvn6_W0YawaQ) ![](https://ip.bitcointalk.org/?u=http%3A%2F%2Fimg851.imageshack.us%2Fimg851%2F343%2Fbcpbeta2.jpg&t=665&c=aQVtFTW-cHesxw)
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Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable. I never believe them. If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins. I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion. Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice. Don't keep coins online. Use paper or hardware wallets instead.
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minerva
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May 31, 2011, 07:17:29 AM |
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This new bitcoin client should have a difficulty level based on predicted computing increases in accordance to Moore's law.
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Tip-Jar: 15NN2YwMGAntKopJgAsFBJvfuCARkV62xo
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Timo Y
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bitcoin - the aerogel of money
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May 31, 2011, 07:31:09 AM |
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You do realise that your Bitcoin2 will also have a "speculator's reward"? Except that this reward won't go to the early adopters but to City boys at Morgan Stanley and Goldman Sachs. Any major commodity that is freely floating and experiences price fluctuations, will attract speculators.
Every time you fill up your car at the petrol station you are paying a "speculator's reward" to oil traders, because they were smart enough to bet on rising oil prices and you weren't.
Worrying about the supposed injustice of the Bitcoin "speculator's award" is silly. Specualtion is inevitable in a free market. You may as well worry about the weather.
By the way, anyone who buys 1 BTC for 8 USD and sells it again for 8 USD (or buys products worth 8 USD), has given nothing to speculators. The only time you pay a "tax" to speculators, early or otherwise, is when the exchange rate happens to drop between the time you buy BTC and spend BTC. Bitcoin can, in theory, experience price deflation forever without collapsing like a Ponzi scheme. This price deflation would eventually reflect general economic growth. Younger people would pay a "speculator's reward" to older people. But once they get old, they would be receiving an even higher "speculator's reward" from the next generation, and so on. This can go on indefinitely as long as the world economy keeps growing.
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casascius (OP)
Mike Caldwell
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May 31, 2011, 07:41:05 AM |
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You do realise that your Bitcoin2 will also have a "speculator's reward"? Except that this reward won't go to the early adopters but to City boys at Morgan Stanley and Goldman Sachs. Any major commodity that is freely floating and experiences price fluctuations, will attract speculators.
I don't care if people speculate, that's not what I'm concerned about. I am concerned that millions of BTC at difficulty 1 are out there and stand to have the same effect on the Bitcoin economy as Bernanke's printing press. Say a new client were released around difficulty 1 million, and that 1 million mark were used as a benchmark for convertibility of BTC to BCP - at least, all BTC created before difficulty 1 million had diminished convertibility to BCP. So 1 BTC created at difficulty 433000 would be worth 0.433 BCP. 1 BTC created at difficulty 1 would be worth a micro-BCP if the holder actually cared to convert it (they may as well not bother). And mining either on BTC or BCP would essentially pay 50 of that currency, all of which would be convertible to BCP at face value as long as the BTC difficulty were at least 1000000. We'll still have lots of fluctuations, but people worried about those millions of BTC out there can switch to BCP and extinguish them by essentially refusing to accept them, or rather, simply accepting them for how hard they were to create relative to mining difficulty 1000000. Those who want to stick with BTC can keep using BTC, the market can freely decide what currency it wants to accept, not me.
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Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable. I never believe them. If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins. I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion. Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice. Don't keep coins online. Use paper or hardware wallets instead.
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N12
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May 31, 2011, 07:51:36 AM |
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I don't care if people speculate, that's not what I'm concerned about. I am concerned that millions of BTC at difficulty 1 are out there and stand to have the same effect on the Bitcoin economy as Bernanke's printing press.
I still don’t understand why this is a problem. The market prices this possibility in imo, and I would love if Satoshi or some other ancient miner decided to dump a few hundred k. It would just mean incredibly cheap coins for us, and I would gladly jump at the opportunity. They can’t unload forever/infinite amounts.
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