Grand Unified Monetary Theory

[Etlase2]

Having "intrinsic" value (which basically just implies that money is a commodity rather than fiat) was another one of the "prices" we had to pay to eliminate counter-party risk, but Bitcoin manages to eliminate it without paying that price.

The intrinsic value of gold doesn't "cost" you anything to use it as currency, it's included in the value in trade. If you want to talk about the cost of mining it, you can hardly disassociate that from bitcoin. And if you imply government is a counter-party to every transaction with fiat, surely the "early adopters" are as well.

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[Roger_Murdock]

Having "intrinsic" value (which basically just implies that money is a commodity rather than fiat) was another one of the "prices" we had to pay to eliminate counter-party risk, but Bitcoin manages to eliminate it without paying that price.

The intrinsic value of gold doesn't "cost" you anything to use it as currency, it's included in the value in trade. If you want to talk about the cost of mining it, you can hardly disassociate that from bitcoin. And if you imply government is a counter-party to every transaction with fiat, surely the "early adopters" are as well.

I mean that it's a "cost" in the sense that you traditionally had to use something with intrinsic value (i.e. a commodity) in order to guarantee scarcity despite the fact that the commodity might lack other features that make for a good money. I'm not sure what you mean about "early adopters" creating counter-party risk.  If you accept fiat in exchange for goods and services, you have to worry about the issuer cranking up the printing presses (thereby siphoning value away from your money).  If you accept Bitcoins, you don't have to worry about "early adopters" just giving themselves more coins because they can't do that.

[Etlase2]

I mean that it's a "cost" in the sense that you traditionally had to use something with intrinsic value (i.e. a commodity) in order to guarantee scarcity despite the fact that the commodity might lack other features that make for a good money.

Ah, that is much more clear then and I agree with you.

I'm not sure what you mean about "early adopters" creating counter-party risk.  If you accept fiat in exchange for goods and services, you have to worry about the issuer cranking up the printing presses (thereby siphoning value away from your money).  If you accept Bitcoins, you don't have to worry about "early adopters" just giving themselves more coins because they can't do that.

You do have to worry about them crashing the market and dissolving any idea of bitcoin actually being a store of wealth though. The end result is no different from cranking up the printing presses. And at least politicians are somewhat accountable for monetary problems--admittedly to a very small degree--but bitcoin users are accountable to no one.

[Richy_T]

He WAS indeed talking about practicality and in his eyes these big coins were bad money as they would not flow easily through society.
It has nothing specific to do with theft, it applies to all uses of the currency.

IMO, these stones were not the currency, it was the knowledge of who owns them that is the currency. Not really much different than gold-backed notes (which do, indeed have their own issues).

[Richy_T]

Gold also has an intrinsic value. You can use it to make jewelry or electronics.

I can make jewelry from macaroni too.

[BobbyJo]

Golds value does not stem from how useful it is.  It comes from the confidence people have in it.  This is why in a crisis the value of Gold shoots up!

[Richy_T]

Golds value does not stem from how useful it is.  It comes from the confidence people have in it.  This is why in a crisis the value of Gold shoots up!

Just because gold doesn't have much intrinsic value doesn't mean it doesn't have value as a fairly stable storage of wealth. Of course, if there's a bubble (and I believe there is) and it bursts pretty badly, all bets are off.

[BobbyJo]

That depends.  Bubble or no bubble, Gold is internationally recognised as a safe haven when the economy tanks and its tanking right now as bad if not worse than the thirtys, so I dont think youll see a serious drop in the gold price (long term) for the next 5-10 years!!

[mobodick]

He WAS indeed talking about practicality and in his eyes these big coins were bad money as they would not flow easily through society.
It has nothing specific to do with theft, it applies to all uses of the currency.

IMO, these stones were not the currency, it was the knowledge of who owns them that is the currency. Not really much different than gold-backed notes (which do, indeed have their own issues).

Well, if it was the knowledge of the possession that was the currency then that makes the currency super portable and thus practical.
So that would be exactly what he ment by portability. Stones would be impractical to use as a currency and would prevent it from being used widely in everyday life.

[Richy_T]

Well, if it was the knowledge of the possession that was the currency then that makes the currency super portable and thus practical.
So that would be exactly what he ment by portability. Stones would be impractical to use as a currency and would prevent it from being used widely in everyday life.

Yes. It was my understanding that the posting of the picture of the stone coins was made as a counter to the portability requirement. The stones themselves were red-herrings (which actually would possibly be portable enough to be used as currency but would probably violate the previously undisclosed "must not smell of fish" requirement).

[BitcoinNational]

Grand Unified Monetary Theory? That would be the essence of money:
Money is information. That's all it is. Who owes what to whom.

ARISTOT-cratic MONEY

• Durability - metal or info store Value over time, data integretity over time
• Portability - REGISTRY transport, ONLINE transfer
• Divisibility - fractional base unit

• Protection against market failure -  there is nosuch thing, trust/faith/belief that market is True & Fair & Transparent
• Intrinsic Value - there is nosuch thing, value is set at market spot discovery
• Protection against loss- cross investments/hedge
• Protection against theft - crypto encoded
• Ease of exchange (liquidity) - market goods /money changers /security options

The 21 million Bitcoins can currently be divided into 2.1 quadrillion Satoshis, and theoretically near-infinitely.

• 21,xxx,xxx Bitcoins

1==$11

• 21x,xxx,xxx dimeBitcoins

2==$1.10

• 2,1xx,,xxx,xxx centBitcoins

3==$0.11

• 21,xxx,xxx,xxx microBitcoins

4==$0.01 ... 3 microBitcoins per EARTHLING

• 21x,xxx,xxx,xxx

5==$0.001 ... 30 microBitcoins per EARTHLING

• 2,1xx,xxx,xxx,xxx

6==$0.0001 ... 300 microBitcoins per EARTHLING

• 21,xxx,xxx,xxx,xxx 100,000mB/BTC

7==$0.000.01 ... 3000 microBitcoins per EARTHLING

• 21x,xxx,xxx,xxx,xxx million/BTC

8==$0.000.001 ... 30000 microBitcoins per EARTHLING

• 2,1xx,xxx,xxx,xxx,xxx 10million/BTC

9==$0.000.000.1 ... 300,000 Satoshis?? per EARTHLING ... translation ... 3000.00 mean balance // 100.00 per day $FLOW

Protection against counterfeit

• As a 128-bit ECDSA key pair, a Bitcoin key is nearly impossible to counterfeit; and this protection can be extended if this ever changes.

Protection against accounting failure

• The Bitcoin network is the largest supercomputer in existence, and would require either 51% control of this network, or extensive, coordinated internet failure to break.

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[Richy_T]

• Divisibility - fractional base unit

This one makes no sense to me. You just define the base unit as the minimal fractional base unit (so the cent instead of the dollar etc). If your currency is infinitely sub-divisible then it's pretty much a null statement.

In short, your currency is either infinitely divisible or it's not.

[mobodick]

• Divisibility - fractional base unit

This one makes no sense to me. You just define the base unit as the minimal fractional base unit (so the cent instead of the dollar etc). If your currency is infinitely sub-divisible then it's pretty much a null statement.

In short, your currency is either infinitely divisible or it's not.

You keep forgetting that these rules are about practicality.
Bitcoin is far more finely dividable than any currency ever in existance.
There is no requirement for divisibility beyond usability.

[Richy_T]

• Divisibility - fractional base unit

This one makes no sense to me. You just define the base unit as the minimal fractional base unit (so the cent instead of the dollar etc). If your currency is infinitely sub-divisible then it's pretty much a null statement.

In short, your currency is either infinitely divisible or it's not.

You keep forgetting that these rules are about practicality.
Bitcoin is far more finely dividable than any currency ever in existance.
There is no requirement for divisibility beyond usability.

It's probably more about the wording than the implementation. "Fractional base unit" seems to imply things that are irrelevant to the point. I get the idea, I just think it should be worded differently.

Let's say for a second that The Satoshi was the base unit and not the BTC and that the bitcoin protocol was immutable such that it could not be more finely divided. The Satoshi is still such a small unit (currently) that it would be a useful currency. Alternately, let's say the dollar deflated massively (lol) such that a dollar would buy you a mansion. There is still the fractional base unit of a cent but what could you use to buy a loaf of bread?

The requirement should probably be "Fine gradations of value" or something similar.

[mobodick]

• Divisibility - fractional base unit

This one makes no sense to me. You just define the base unit as the minimal fractional base unit (so the cent instead of the dollar etc). If your currency is infinitely sub-divisible then it's pretty much a null statement.

In short, your currency is either infinitely divisible or it's not.

You keep forgetting that these rules are about practicality.
Bitcoin is far more finely dividable than any currency ever in existance.
There is no requirement for divisibility beyond usability.

It's probably more about the wording than the implementation. "Fractional base unit" seems to imply things that are irrelevant to the point. I get the idea, I just think it should be worded differently.

Let's say for a second that The Satoshi was the base unit and not the BTC and that the bitcoin protocol was immutable such that it could not be more finely divided. The Satoshi is still such a small unit (currently) that it would be a useful currency. Alternately, let's say the dollar deflated massively (lol) such that a dollar would buy you a mansion. There is still the fractional base unit of a cent but what could you use to buy a loaf of bread?

The requirement should probably be "Fine gradations of value" or something similar.

Well, you can divide a cent into still smaller units.
And in fact this has often happened in the past.
The only requirement is that it is sufficiently divisable to be usefull.
You should see the word 'divisable' from your own point of view. Is the currency divisable enough for you to use it in the current economy.
It is not nessesary that it is finely grained (like bitcoin).

[Richy_T]

Well, you can divide a cent into still smaller units.
And in fact this has often happened in the past.
The only requirement is that it is sufficiently divisable to be usefull.
You should see the word 'divisable' from your own point of view. Is the currency divisable enough for you to use it in the current economy.
It is not nessesary that it is finely grained (like bitcoin).

Sure. I guess I'm just hung up of "fractional base unit".