Roger_Murdock
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November 01, 2012, 02:43:56 AM |
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One of the most obnoxious aspects of that paper is its use of the "virtual" / "real" terminology to distinguish "virtual" currencies (like Bitcoin) from supposedly "real" currencies (fiat). As discussed here - https://bitcointalk.org/index.php?topic=119113.msg1281236#msg1281236 - the U.S. dollar is very much a "virtual" currency and it's arguably less "real" than Bitcoin in all the ways that count. So while there certainly are important distinctions between the two, the ECB's attempted "virtual" / "real" classification is silly. Couldn't they have chosen more accurate (and less loaded) terms? How about something like, oh I don't know, "voluntary" vs. "violence-based"?
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SebastianJu
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November 01, 2012, 02:51:39 AM |
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I'd like to be able to say something like "it's about as likely as getting struck by lightning every time you take a piss for the rest of your life".
And even if you'd be hit by a lightning bolt every time you pee for the rest of your life, the collision would not happen before the last strike and you'd be dead by then ; ) so don't worry about that edit: !typo Only if you pee just 9 times in your life. Better say something like: "it's nearly the same as winning the lottery 6 times! 6 times!!" That doesnt sound much then because you speak about 1! new address. Nowadays you can create million new addresses in short times isnt it? So even when its randomly hit... what would be the worst effect of having the same address?
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beckspace
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November 01, 2012, 03:20:12 AM |
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That doesnt sound much then because you speak about 1! new address. Nowadays you can create million new addresses in short times isnt it? So even when its randomly hit... what would be the worst effect of having the same address?
The key point is that Satoshi built the system so if you have that much power at your disposal, it is massively more profitable to be a miner for rewards and fees than try to crack funded addresses to transfer the coins.
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Roger_Murdock
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November 01, 2012, 04:04:02 AM |
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Ok, so I finally got the chance to read the whole thing. After doing so, I have to take issue with the folks who called this a "balanced" look at Bitcoin. I suppose it's more even-handed than I would have expected considering the source, the European Central Bank, but that statement sort of falls into the "pretty nice guy for a serial killer" category. I do get the impression, as someone else suggested, that different sections may have been written by different authors because the tone / comprehension level appears to shift at times. But when it's bad, it's pretty bad. And there are some real howlers in there, e.g.: In these schemes, the settlement asset is the virtual currency, and therefore the finality and irrevocability of payments cannot be ensured. Only central bank money can do so, because central banks present no default risk and act as lender of last resort to the member of the system in order to stop any possible chain reaction resulting from payment incidents or unforeseeable liquidity shortages.10 Virtual currencies cannot therefore be considered to be safe money, since the likelihood of the asset retaining its value for the holder, and hence its acceptability to others as a means of payment cannot be ensured. It simply relies on the creditworthiness of the issuer of the settlement asset. The level of safety is clearly below that of commercial bank money, as commercial banks are subject to prudential requirements and are supervised in order to reduce the likelihood of default, thereby improving the safety of claims on these institutions. Here's the tl;dr version for anyone who doesn't want to slog through it. Some of the dinosaurs have seen the asteroid. They don't really understand what they're seeing. The dinosaurs are telling themselves they don't need to be worried about it. After all, they're so big and the something is so little, nothing more than a dot in the sky. And yet... there's a tiny part of their walnut-sized brains that IS worried.
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SebastianJu
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November 01, 2012, 04:16:48 AM |
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That doesnt sound much then because you speak about 1! new address. Nowadays you can create million new addresses in short times isnt it? So even when its randomly hit... what would be the worst effect of having the same address?
The key point is that Satoshi built the system so if you have that much power at your disposal, it is massively more profitable to be a miner for rewards and fees than try to crack funded addresses to transfer the coins. Good point...
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cunicula
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November 01, 2012, 05:52:48 AM |
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Ok, so I finally got the chance to read the whole thing. After doing so, I have to take issue with the folks who called this a "balanced" look at Bitcoin. I suppose it's more even-handed than I would have expected considering the source, the European Central Bank, but that statement sort of falls into the "pretty nice guy for a serial killer" category. I do get the impression, as someone else suggested, that different sections may have been written by different authors because the tone / comprehension level appears to shift at times. But when it's bad, it's pretty bad. And there are some real howlers in there, e.g.: In these schemes, the settlement asset is the virtual currency, and therefore the finality and irrevocability of payments cannot be ensured. Only central bank money can do so, because central banks present no default risk and act as lender of last resort to the member of the system in order to stop any possible chain reaction resulting from payment incidents or unforeseeable liquidity shortages.10 Virtual currencies cannot therefore be considered to be safe money, since the likelihood of the asset retaining its value for the holder, and hence its acceptability to others as a means of payment cannot be ensured. It simply relies on the creditworthiness of the issuer of the settlement asset. The level of safety is clearly below that of commercial bank money, as commercial banks are subject to prudential requirements and are supervised in order to reduce the likelihood of default, thereby improving the safety of claims on these institutions. Here's the tl;dr version for anyone who doesn't want to slog through it. Some of the dinosaurs have seen the asteroid. They don't really understand what they're seeing. The dinosaurs are telling themselves they don't need to be worried about it. After all, they're so big and the something is so little, nothing more than a dot in the sky. And yet... there's a tiny part of their walnut-sized brains that IS worried. No. You are an idiot. You failed to comprehend the ECB report. You should revise your estimate of your own intelligence downwards and that of the ECB upwards. The ECB is referring to risks associated with price volatility. Sell me a shirt for the market price in. btc. There is no promise that this the shirt will be available for a similar btc price tomorrow next week or next year. For Euros, the ECB maintains approximate price stability. You need central bank intervention to maintain stable prices. This is what they mean by finality and irrevocability of payments.
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Wekkel
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November 01, 2012, 07:28:54 AM |
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You need central bank intervention to maintain stable prices.
It is probably what the ECB meant, but that is not how it works in real life. The proper sentence would read: "The last thing you need in order to maintain stable prices is central bank intervention." Hello 'loose monetary policy' bubbles
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Roger_Murdock
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November 01, 2012, 10:40:38 AM |
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No. You are an idiot. You failed to comprehend the ECB report. You should revise your estimate of your own intelligence downwards and that of the ECB upwards.
The ECB is referring to risks associated with price volatility. Sell me a shirt for the market price in. btc. There is no promise that this the shirt will be available for a similar btc price tomorrow next week or next year. For Euros, the ECB maintains approximate price stability. You need central bank intervention to maintain stable prices. This is what they mean by finality and irrevocability of payments.
No, you're an idiot. Thanks, friend. And yeah, I get what they meant. Still stupid. "Central banks present no default risk"? Only because they can conjure more of their increasingly-worthless money out of thin air. (Of course, printing new money is the functional equivalent of a partial default that falls on everyone who holds the currency.) Central banks act as a "lender of last resort to the member of the system in order to stop any possible chain reaction resulting from payment incidents or unforeseeable liquidity shortages"? This "benefit" of a central bank (propping up FRB's systemic insolvency) simply isn't relevant to Bitcoin so presenting it as an advantage over "virtual currencies" is silly. With fiat the "money supply" is a tiny little pool of "base money" and a whole crap-ton of circulating claims on that money, i.e. debt. Bitcoin isn't a debt-based instrument. "Virtual currencies cannot therefore be considered to be safe money, since the likelihood of the asset retaining its value for the holder, and hence its acceptability to others as a means of payment cannot be ensured"? Yeah, because central banks have such a great track record of ensuring that their currencies retain value for the holder. By the way, who's had the job of ensuring that gold (a better analogue for Bitcoin than fiat) retains its value? Because those guys have done a bang-up job over the past century. Maybe we should put them in charge of the central banks. "[A virtual currency] simply relies on the creditworthiness of the issuer of the settlement asset"? That may be true of Linden dollars. Of course, it's also true of fiat. But it's NOT true of Bitcoin. That's the genius of it. "The level of safety is clearly below that of commercial bank money, as commercial banks are subject to prudential requirements and are supervised in order to reduce the likelihood of default, thereby improving the safety of claims on these institutions"? Again, the beauty of Bitcoin is that you're not holding a claim on an institution to real money. Bitcoin is "real money." Forget reducing the risk of default. With Bitcoin, you can eliminate it.
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BCB
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November 01, 2012, 11:13:56 AM |
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For a while there I thought this thread was the big boys' board until two started calling each other idiots. Most of the "ECB paper" threads have sparked a vigorous, enlightened if not at times contentious debate which I thik is great. You both have valid points. I just don't think its necessary to start degrading the conversation with the name calling.
Thanks
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Roger_Murdock
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November 01, 2012, 11:42:33 AM |
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For a while there I thought this thread was the big boys' board until two started calling each other idiots. Most of the "ECB paper" threads have sparked a vigorous, enlightened if not at times contentious debate which I thik is great. You both have valid points. I just don't think its necessary to start degrading the conversation with the name calling.
Thanks
Hey, c'mon now. My "idiot" at least was rhetorical ("No, you're an idiot") , playful (note the winking emoticon - you can say anything if you follow it with one of those), AND in response to an unprovoked (and apparently sincere) attack. I wasn't actually suggesting that cunicula is an idiot, that he has a mental age of less than three. And I don't harbor any ill will towards the guy. I'm sure he's a nice-enough dude. I bet his dog loves him. tl;dr version: he started it!
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Boussac
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November 01, 2012, 12:07:15 PM |
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Some of the dinosaurs have seen the asteroid. They don't really understand what they're seeing. The dinosaurs are telling themselves they don't need to be worried about it. After all, they're so big and the something is so little, nothing more than a dot in the sky. And yet... there's a tiny part of their walnut-sized brains that IS worried.
This. Plus they are referring to Austrian economics in a desperate attempt to connect the dots with some known territory, that of academia and mass media wehre plenty of bank-sponsored "economists" can explain how dangerous a theory can be if it is not endorsed by them. Trouble is bitcoin IS an asteroid because none of these geniuses has ever come close to providing a solution to the world's current economic woes.
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paraipan
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November 01, 2012, 01:01:28 PM |
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For a while there I thought this thread was the big boys' board until two started calling each other idiots. Most of the "ECB paper" threads have sparked a vigorous, enlightened if not at times contentious debate which I thik is great. You both have valid points. I just don't think its necessary to start degrading the conversation with the name calling.
Thanks
Hey, c'mon now. My "idiot" at least was rhetorical ("No, you're an idiot") , playful (note the winking emoticon - you can say anything if you follow it with one of those), AND in response to an unprovoked (and apparently sincere) attack. I wasn't actually suggesting that cunicula is an idiot, that he has a mental age of less than three. And I don't harbor any ill will towards the guy. I'm sure he's a nice-enough dude. I bet his dog loves him. tl;dr version: he started it! ^ Don't mind Paul, he's quite famous around these parts for his inflammatory comments and blatant name calling
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molecular
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November 01, 2012, 02:34:53 PM Last edit: November 01, 2012, 02:45:08 PM by molecular |
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That doesnt sound much then because you speak about 1! new address. Nowadays you can create million new addresses in short times isnt it? So even when its randomly hit... what would be the worst effect of having the same address?
The key point is that Satoshi built the system so if you have that much power at your disposal, it is massively more profitable to be a miner for rewards and fees than try to crack funded addresses to transfer the coins. to clarify: the situation that ocurred was someone asking me: "But couldn't it happen that two people accidentally find the same address?"
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molecular
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November 01, 2012, 02:37:32 PM |
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The ECB is referring to risks associated with price volatility. Sell me a shirt for the market price in. btc. There is no promise that this the shirt will be available for a similar btc price tomorrow next week or next year. For Euros, the ECB maintains approximate price stability. You need central bank intervention to maintain stable prices. This is what they mean by finality and irrevocability of payments.
If that's what they mean they are wrong.
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molecular
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November 01, 2012, 02:40:11 PM |
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No. You are an idiot. You failed to comprehend the ECB report. You should revise your estimate of your own intelligence downwards and that of the ECB upwards.
The ECB is referring to risks associated with price volatility. Sell me a shirt for the market price in. btc. There is no promise that this the shirt will be available for a similar btc price tomorrow next week or next year. For Euros, the ECB maintains approximate price stability. You need central bank intervention to maintain stable prices. This is what they mean by finality and irrevocability of payments.
No, you're an idiot. Thanks, friend. And yeah, I get what they meant. Still stupid. "Central banks present no default risk"? Only because they can conjure more of their increasingly-worthless money out of thin air. (Of course, printing new money is the functional equivalent of a partial default that falls on everyone who holds the currency.) Central banks act as a "lender of last resort to the member of the system in order to stop any possible chain reaction resulting from payment incidents or unforeseeable liquidity shortages"? This "benefit" of a central bank (propping up FRB's systemic insolvency) simply isn't relevant to Bitcoin so presenting it as an advantage over "virtual currencies" is silly. With fiat the "money supply" is a tiny little pool of "base money" and a whole crap-ton of circulating claims on that money, i.e. debt. Bitcoin isn't a debt-based instrument. "Virtual currencies cannot therefore be considered to be safe money, since the likelihood of the asset retaining its value for the holder, and hence its acceptability to others as a means of payment cannot be ensured"? Yeah, because central banks have such a great track record of ensuring that their currencies retain value for the holder. By the way, who's had the job of ensuring that gold (a better analogue for Bitcoin than fiat) retains its value? Because those guys have done a bang-up job over the past century. Maybe we should put them in charge of the central banks. "[A virtual currency] simply relies on the creditworthiness of the issuer of the settlement asset"? That may be true of Linden dollars. Of course, it's also true of fiat. But it's NOT true of Bitcoin. That's the genius of it. "The level of safety is clearly below that of commercial bank money, as commercial banks are subject to prudential requirements and are supervised in order to reduce the likelihood of default, thereby improving the safety of claims on these institutions"? Again, the beauty of Bitcoin is that you're not holding a claim on an institution to real money. Bitcoin is "real money." Forget reducing the risk of default. With Bitcoin, you can eliminate it. Put a couple of newlines and paragraph breaks to make this a wonderful post! Right to the point(s).
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fergalish
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November 01, 2012, 02:59:10 PM |
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Trouble is bitcoin IS an asteroid because none of these geniuses has ever come close to providing a solution to the world's current economic woes.
It is not clear that bitcoin will solve the world's economic woes either. There *was* once a gold standard, you know, and even then there were still market crashes, recessions, booms, and all that. Not on today's global scale, though, but that might be just as much a symptom of globalization. Tell the truth, I wouldn't be surprised if there's a yet undiscovered fundamental law of economic systems which states that a static economy is either impossible or is a contradiction in terms. I'm thinking of something along the lines of Einstein's proof that a static universe is not possible according to general relativity.
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DublinBrian
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November 01, 2012, 03:11:08 PM |
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There *was* once a gold standard, you know, and even then there were still market crashes, recessions, booms, and all that. I dont believe there were recessions as we know them today. As far as Im concerned there was no boom bust credit cycle when we used gold and silver.
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mccorvic
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November 01, 2012, 03:33:55 PM |
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Ok, so I finally got the chance to read the whole thing. After doing so, I have to take issue with the folks who called this a "balanced" look at Bitcoin.
Sorry, we meant to say it's seems pretty balanced as a report to people who know what real life is like. This is a report meant to be read by people who know and work in banking, not by people who default to conspiracy theory and end any conversation with "becuz of guvernmint". It is balanced because it highlights pros and cons as they apply to everyday experiences. Is it perfect? Psht, of course not. Is it a much better examination and explanation that what can be found in the vast majority of posts on this forum? Probably.
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cunicula
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November 01, 2012, 03:37:32 PM |
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I dont believe there were recessions as we know them today. As far as Im concerned there was no boom bust credit cycle when we used gold and silver.
Would it be possible to present evidence that would lead you to re-examine this view? If so, what kind of evidence?
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molecular
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November 01, 2012, 03:50:55 PM |
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There *was* once a gold standard, you know, and even then there were still market crashes, recessions, booms, and all that. I dont believe there were recessions as we know them today. As far as Im concerned there was no boom bust credit cycle when we used gold and silver. Another possible criticism of a "global (fixed-supply) currency" I have heard is that the economic zones (or nationstates) would be "too different to be 'run' by a single currency". Is that a valid criticism?
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