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NO_SLAVE
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June 09, 2011, 04:37:03 AM
 #21

phillips,

I understand what your saying, but Im primarily speaking to future scenarios, where hyperinflation might be possible if the number of issued BTC or fractions thereof had no limit or astronomical numbers. If 21,000,000 is the limit and the decimal can slide .000000, that gives us 2.1Xe13 BTC fractions. That is alot of BTC derivative.
The critical question is what number of BTC derivatives creates inflationary scenarios.

Yes the issue now is hyperdeflation of assets against BTC.  There will probably be medicine (a slippery decimal point) my warning is that the solution shouldnt be too strong.  Start with .00, then .000, then .0000 just as a stock split would happen against the USD.  The market will adjust accordingly.
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There are several different types of Bitcoin clients. Header-only clients like MultiBit trust that the majority of mining power is honest for the purposes of enforcing network rules such as the 21 million BTC limit. Full clients do not trust miners in this way.
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June 09, 2011, 04:37:32 AM
 #22

@NO_SLAVE

Don't assume that you are the high mark of Austrian economic understanding on this forum, nor that you actually understand the underlying economics of Bitcoin.  From what I have seen thus far, neither is likely.  Moving the decimal place is not equivalent to hyperinflation.  In an inflationary state, money is created disproportionately to the economy.  As the central bank creates more money, the existing money loses value.  This is not what we are suggesting here.  In the case of Bitcoin shifting the decimal place, all players have exactly the same relative value as they had before; both in relation to each other and in relation to the non-bitcoin world.  All that divisibilty is already present and accounted for in the system, and the system was designed for it to happen eventually anyway.  The decimal point was placed where it is as an arbitrary design decision by Satoshi, who literally placed the decimal point in the middle of a 16 decimal integer.  The block reward is 50 BTC, but if you look at any block with your own eyes, the system does not use a decimal point at all, and awards the winning miner 5,000,000,000 of the smallest possible unit.  Nothing is changing except how that value variable is displayed by the client, and the client does it because it would otherwise be difficult to read.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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June 09, 2011, 04:57:43 AM
 #23

creighto,

my questions and observations are valid, anyone with knowledge of historical fiats of the past will compare them with this fiat.
Your answers and refutations are also valid and appreciated.  This dialogue is an attempt to get to the root of what problems may arise out of the system.
Anyone planning  large scale acquisition of BTC will do their due diligence.  This is the case here. Adoption wont happen with "its all good".
Many are satisfied that everything is worked out and infallible.  The same was thought of old fiats.
BTC is no different than any man created monetary device and it will be subject to the same market forces that destroyed old fiats.
What forces are most harmful to this currency? Liquidity? Govs? Hyper deflation/inflation? Its a laundry list.  Whats at the top?
 
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June 09, 2011, 05:01:59 AM
 #24

creighto,

my questions and observations are valid, anyone with knowledge of historical fiats of the past will compare them with this fiat.


Your concerns are invalid, because this is not a fiat.  The closest thing to Bitcoin is a LETS with a net postive balance.  In fact, that is exactly what it is, a LETS for the Internet.

By definition, a fiat currency always has a central bank.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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June 09, 2011, 05:31:44 AM
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Yeh, figured you wouldnt understand.  You have little/no knowledge of currency history or the workings of economics, that is what is starting to make me discount the underlying theories of BTC completely. No sound future contingencies or appreciation of the past 5000 years of what happens to fiat currency or the technicalities of its workings.  If you divide up the pie,  yes, there is the same amount of pie. My contention is that the pie can be divided INFINITELY.  Why not just move the decimal .0000000000000000000000?  or maybe
.000000000000000000000000000000000000000000000000000000000000000000000000000000 0000000000000000000000000000000000000000000000000000000000.
Then there are so many BTC that they devalue based on supply demand curve. Have you not watched whats happening to the dollar?  Read the zimbabwe story, and you will probably start to get it, but my feeling is that you dont want to get it. Keynesians hear no see no speak no evil... Keynesian economics can be controlled by central planners for a certain amount of time.  But eventually it still goes belly up. This currency has no central regulation, other than adding more 0's.  In summary this currency modus operandi ends in complete collapse. 

Meh.


Dude, if you're going to spout elitist snobbery, at least be correct. You sound like a 12 year old that just found his father's macro-economics textbook.

Let's get some things straight. The bitcoin decimal cannot be moved by infinite places to the right, there are only 8 decimal places.  However, even if there were infinite decimal places, and Bitcoin kept moving the decimal over to the right, that is not inflation - it's pie cutting. So don't bring up Zimbabwe like you're the only magical person who's heard they have an inflation problem. The location of the decimal point is a notational issue, it doesn't change the quantity of money. Or thinking about it another way, it does change the quantity of "money" but it does so equally to all people instantly (rendering it meaningless apart from the notational difference). All accounts rise in perfect proportion. All prices rise in perfect proportion. In this way, the increased quantity of money is meaningless, and is vastly different from a Zimbabwe type situation, where money is printed in one location, but not instantly notated across all accounts and prices in the economy.  See the difference? Fiat money printing is economically disruptive because it devalues the units of currency already in circulation and does so asymmetrically. Adding zeroes to bitcoin does not devalue the currency because all accounts and prices rise in perfect proportion, instantly.  When Bernanke prints, your bank account doesn't increase. When Bitcoin changes the decimal, you bank account does. Big big difference.

And don't ask rediculous questions like "have you not watched whats happening to the dollar?"  Why do you think we are all so excited about Bitcoin?  We're actually getting out of the dollar, and I hope you are as well. You think I care about cryptography? I'm here because the monetary economic concepts of Bitcoin are, as far as I can tell, sound, and it's very exciting.

In summary this "currency modus operandi" (nice vocab there  Roll Eyes ) is the complete opposite of a central bank/fiat system. The "central regulation" that you desire is the algorithm itself, and it's at the behest of no individual. That's a good thing.


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June 09, 2011, 06:25:18 AM
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Yeh, figured you wouldnt understand.  You have little/no knowledge of currency history or the workings of economics, that is what is starting to make me discount the underlying theories of BTC completely. No sound future contingencies or appreciation of the past 5000 years of what happens to fiat currency or the technicalities of its workings.  If you divide up the pie,  yes, there is the same amount of pie. My contention is that the pie can be divided INFINITELY.  Why not just move the decimal .0000000000000000000000?  or maybe
.000000000000000000000000000000000000000000000000000000000000000000000000000000 0000000000000000000000000000000000000000000000000000000000.
Then there are so many BTC that they devalue based on supply demand curve. Have you not watched whats happening to the dollar?  Read the zimbabwe story, and you will probably start to get it, but my feeling is that you dont want to get it. Keynesians hear no see no speak no evil... Keynesian economics can be controlled by central planners for a certain amount of time.  But eventually it still goes belly up. This currency has no central regulation, other than adding more 0's.  In summary this currency modus operandi ends in complete collapse. 

Meh.


Wow. You are confused. If you weren't such a jerk about it I'd explain it to you.

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June 09, 2011, 09:24:09 AM
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Yeh, figured you wouldnt understand.  You have little/no knowledge of currency history or the workings of economics, that is what is starting to make me discount the underlying theories of BTC completely. No sound future contingencies or appreciation of the past 5000 years of what happens to fiat currency or the technicalities of its workings.  If you divide up the pie,  yes, there is the same amount of pie. My contention is that the pie can be divided INFINITELY.  Why not just move the decimal .0000000000000000000000?  or maybe
.000000000000000000000000000000000000000000000000000000000000000000000000000000 0000000000000000000000000000000000000000000000000000000000.
Then there are so many BTC that they devalue based on supply demand curve. Have you not watched whats happening to the dollar?  Read the zimbabwe story, and you will probably start to get it, but my feeling is that you dont want to get it. Keynesians hear no see no speak no evil... Keynesian economics can be controlled by central planners for a certain amount of time.  But eventually it still goes belly up. This currency has no central regulation, other than adding more 0's.  In summary this currency modus operandi ends in complete collapse. 

Meh.


Honestly I'm confused: if you hate fiat and think bit coin is such a currency why are you even here?

It's ok to be wrong about something, but to be so arrogant and stubbornly blind is another matter entirely. I for one, am insulted to be typecast as a Keynsianist, especially without basis. I realize that this talk of dividing bit coin by 0s sounds suspicious but you just need to learn more about bit coin. I would encourage you to read Satoshi's paper on bit coins as a start. Creighto already explained the math behind dividing BitCoin, so just think of it as dividing a pie that can only be divided eight times. Or, if you are so learned in monetary economic you should know that inflation is only bad because of the asymmetries involved and that if e new money was to be distributed by a "magical government helicopter" it wouldnt cause problems. Well, bit coin is the magical government helicopter.  Smiley.
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June 09, 2011, 09:59:09 AM
 #28

A microbitcoin is way too small now and will always be too small. Even after the bitcoin markets arrive at the true value for bitcoins, the micro coin will still be less than 3 US cents. On the other hand a millibitcoin is a larger unit-- one thousandth of today's bitcoin-- and therefore it will settle between 30 US cents and 30 US dollars, which is a much better ballpark for people to deal with that are used to dealing with dollars and cents. These numbers are based on bitcoin world GDP penetration between 0.1% and 10%.

Plus, when it comes to the general public everyone knows what milli means, whereas hardly anyone knows what micro means.
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June 09, 2011, 10:59:48 AM
 #29

4. remove the u
When everyone talks about uBTC and nobody cares about "BTC" you can drop the u and call it BTC.

No. Changing what BTC or Bitcoin means is simply not a good idea. It is far too late to do that.

You need to introduce a new unit with a new name (try to avoid prefixes) and NOT change that.
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June 09, 2011, 11:14:33 AM
 #30

Guy's you are missing the point.  NO_SLAVE doesn't understand economic theory as well as you.  On the other hand, he has a superior understanding of the psychology of regular people.  From a mathematical perspective moving the decimal point is the same as a stock split, an event that happens with little fuss in the investment world.  However regular people do not have that perspective.  They will see prices rising and will assume that hyper-inflation is coming.  Logically there is no reason to fear, because your balance and income will also be increasing.  However people are inherently irrational and they will lose confidence in the currency.

We need to move the decimal place NOW (two places?) before bitcoin becomes popular.  We probably shouldn't fuss around with micro this and that, we should just redefine BTC for psychological reasons.  In fact every time it gets to $10 the decimal should shift one place automatically, and BTC would be redefined.  This would be just one of the "cool things about bitcoin: they reproduce!!!!"

Want to buy a 2004 Ford Taurus with bitcoin?  I live in Maryland.  Send me a private message if interested.
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June 09, 2011, 11:24:44 AM
 #31

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This would be just one of the "cool things about bitcoin: they reproduce!!!!"
Oh no, please don't! I would like to see as few decimal shifts as possible. Who needs different prices every month?

Well, if it peaks at 1000 USD per Bitcoin, talking about mBTC would be a perfect match. I just hope that people don't confuse that with MBTC.

Hey Americans, how is the metrification of your country going? I saw that you already accepted some prefixes, like using $4k to mean $4000. What about some of the other prefixes like M (Mega, 1'000'000) and m (milli, 1/1'000'000)? Do you think that the average American Internet user will be able to cope with those?

I wish I could pay my rent with 500 mBTC/month

Check out my other articles on the forum:
"The Bitcoin Establishment Plan: How to talk about Bitcoins properly"
http://bit.ly/k6LRkM
"Solution: How to shift the decimal"
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June 09, 2011, 12:34:26 PM
 #32

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This would be just one of the "cool things about bitcoin: they reproduce!!!!"
Oh no, please don't! I would like to see as few decimal shifts as possible. Who needs different prices every month?

Well, if it peaks at 1000 USD per Bitcoin, talking about mBTC would be a perfect match. I just hope that people don't confuse that with MBTC.

Hey Americans, how is the metrification of your country going? I saw that you already accepted some prefixes, like using $4k to mean $4000. What about some of the other prefixes like M (Mega, 1'000'000) and m (milli, 1/1'000'000)? Do you think that the average American Internet user will be able to cope with those?

I wish I could pay my rent with 500 mBTC/month

Eh. It's a rough battle. As an engineer in this country you have to deal with both systems. Duckbills. I hate English units.  Perhaps bit coin will be the last straw that turns America metric. One can only hope.
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June 09, 2011, 02:33:56 PM
 #33

Quote
This would be just one of the "cool things about bitcoin: they reproduce!!!!"
Oh no, please don't! I would like to see as few decimal shifts as possible. Who needs different prices every month?

Well, if it peaks at 1000 USD per Bitcoin, talking about mBTC would be a perfect match. I just hope that people don't confuse that with MBTC.

Hey Americans, how is the metrification of your country going? I saw that you already accepted some prefixes, like using $4k to mean $4000. What about some of the other prefixes like M (Mega, 1'000'000) and m (milli, 1/1'000'000)? Do you think that the average American Internet user will be able to cope with those?

I wish I could pay my rent with 500 mBTC/month

Eh. It's a rough battle. As an engineer in this country you have to deal with both systems. Duckbills. I hate English units.  Perhaps bit coin will be the last straw that turns America metric. One can only hope.

I hate Metric.  Only engineers like it.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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June 09, 2011, 02:38:22 PM
 #34

I hate Metric.  Only engineers like it.

Ah - Metric FTW! I actually thought English Units were some sort of conspiracy created by mathematicians that were trying to eventually rule the world (as no one would be able to use that weird system that requires major math magic all the time).

Oh wait. Maybe I could be labelled an engineer.  Cool

Maybe ...

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June 09, 2011, 02:58:49 PM
 #35

Having gone through several currency adjustments in the opposite direction (removing, rather than adding, zeroes) my suggestion is to stick with groupings of three... Milli Bitcoins, Micro Bitcoins.

You start moving two zeroes only and you're flirting with disaster. For some reason, we humans seem more mathematically inclined to dealing with thousands/ths and millions/ths than hundreds/ths and tens of thousands/ths.

The original idea in this thread is very sound, except, as mentioned before, for the ultimate change from uBTC back to BTC. No need, we can all start talking in uBTC (or mBTC, as the case may be), without any problem whatsoever.

Cheers everyone
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June 09, 2011, 03:24:57 PM
 #36

I love the idea of the client giving you the option of working with bitcoin in BTC or μBTC.

I would want to reference μBTC with the prefix and never drop the μ.

BTW, It does bug me a little when I see people use a (u) instead of a (μ), but it is not a big deal. Micro is micro.


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June 09, 2011, 04:47:00 PM
 #37

You've given me the answers I was fishing for. Seems I'm playing devils advocate.  People will try to view BTC through the lense of what is known or assumed about currency.  These differences you mention should be the first things articulated about BTC, when educating potential adopters. sorry if my tone was troll-ey.  Undecided
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June 09, 2011, 04:48:24 PM
 #38

Quote
BTW, It does bug me a little when I see people use a (u) instead of a (μ), but it is not a big deal. Micro is micro.
Unfortunately, μ is not present on every keyboard layout, so many people are forced to use "u", if they don't want to copy&paste a μ from somewhere everytime they want to talk about Bitcoins. (I wished they changed the metric system so that μ gets replaced by u and k by K. That would make it a lot easier.)

Anyways, I hope the client gets the option to display all values as BTC, mBTC or uBTC. These metric prefixes could be Bitcoin's version of dollars and cents: 1,05 BTC could be spoken as "One Bitcoin and Fivety Bitmils". How about we agree to always use 3 decimal places, even when they are not needed, to make conversions easier? Like you write 1,50 USD instead of 1,5 USD.

My suggestion:
1 BTC: "Bitcoin"
0.001 BTC = 1 mBTC = "Bitmil"
0.000001 BTC = 1 uBTC = "Ubit"

The sound of these names is very distinct, both from other words and from each other. It also uses simple sounds that should make it work in many languages (Though I haven't checked if "Bitmil" or "Ubit" are swear words in any language. Anyone knows?)

Check out my other articles on the forum:
"The Bitcoin Establishment Plan: How to talk about Bitcoins properly"
http://bit.ly/k6LRkM
"Solution: How to shift the decimal"
http://bit.ly/m0N0H4
If you find any of my articles worth reading, consider tipping me:
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June 09, 2011, 04:53:20 PM
 #39

Hey Americans, how is the metrification of your country going? I saw that you already accepted some prefixes, like using $4k to mean $4000. What about some of the other prefixes like M (Mega, 1'000'000) and m (milli, 1/1'000'000)? Do you think that the average American Internet user will be able to cope with those?

Since nobody caught the 3 orders of magnitude error, I will say "No." Smiley

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June 09, 2011, 05:11:53 PM
 #40

1 Bitcoin is 1 Bitcoin is 1 BTC. That should never change, ever. That would just cause confusion and force webmasters to fix their sites.

Simply making it an option to display uBTC works best (ideally with a small notification of how many uBTC you have, or BTC, depending on which your preferred unit is).

Just moving the default unit from 1 BTC to 1 uBTC would work best, because it's easy to convert between the two, and there's no need to distinguish between 'old BTC' and 'new BTC'.


EDIT: And the send dialogue could use something like this:



Except without the stuff that doesn't apply to BTC.

And with another row below the "100 Million" with the same number in microbtc.



That's a very expensive shuttle.
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