This is verbose. I did not take time to refine it.
Some more thoughts in this video:
http://www.youtube.com/watch?v=0UKC7iaBKvsI like the point that "Ponzi" Sotashi (the anonymous creator) disappeared when the developers started to pressure him on his identity.
Our talking points:
1. SATOSHI:
I don't know if you like the conspiracy angle, but it doesn't make any sense that someone can work on something alone for 3 years, then pop up and be such an expert on cryptography, no one in the industry knows him, no family or friends know of him and his work, then disappear without a trace. Normal people talk to other people over a period of years. This indicates it must be CIA or military industrial complex like agent. In one of the cryptography examples that Sotashi gave on the mailing list where he first discussed his invention with James A. Donald (a person I know), he used a military example.
The design Satoshi chose (as described below) is not a random choice. It was clearly design to fail in a very specific way that gives power to the government, even there are other designs that won't fail.
2. BITCON's DEBASEMENT IS NOT AT ALL THE SAME AS GOLD:
Bitcoin fanboys claim that Bitcoin is like gold because the debasement is halving every 4 years, to stop at 21 million coins with a couple of decades (75% in first 8 years, 87.5% in first 12 years). This provided 50% of the total money supply to the insiders who mined in the first 4 years.
But this is nothing like gold, which was debased over millenia, and still has an increasing supply forever (we can mine gold in future in outer space), and the nominal increase every year it itself increasing. Gold is much more fair to mankind because the very rich can't enslave us with a money supply that never depletes. Slowly depleting money supply is important, so that lazy capitalists can't concentrate their percentage of money supply with interest bearing bonds. Innovation comes from new production, and in the small. Large capital can't see all those small innovations and can't finance innovation with guaranteed interest. Investmet at risk is required to finance innovation, not usury. A money supply which did not debase at all, is slavery to the usurists.
What is bad about debasement, is uncontrolled debasement or especially debasbement that is decided by one group. Gold is meritocracy because the debasement can't be altered easily by any one group, and new gold is added to keep capital from becoming lazy and sit in usury bonds.
3. BITCON's INFLATION IS IN THEORY UNLIMITED (but are they fungible?):
P2P currency units can be created by anyone who creates a competitor. If an exchange is created between different P2P currencies, then if a merchant accepts Bitcoin, then it also accepts the currencies that can be exchanged to it. Exchanges could operate in real-time in theory because these are digital, so "Clickout Shopping Chart" in Bitcoin could in theory be paid with any P2P units.
I liked this point a lot. Currently Litecoin is only worth pennies per coin even though there are much less Litecoins mined than Bitcoin.
Perhaps they are not yet fungible, because people a) don't see this real time exchange capability, b) they don't yet trust that Litecoin is a stable system.
Fungibility between Bitcoin and competitors can maybe be provided by a real-time exchange at the time of spend.
It is still required to have confidence in the quality of the competitor's P2P database.
I don't agree this is the strongest point. I am urging to hit the other points also.
1:1 ratio is irrelevant. Fungibility is all that is required with an exchange. Real-time makes it more fungible. Fungibility lifts the value of the less expensive currency via arbitrage, until fair-value is reached.
4. ANONYMITY IS OVERRATED:
Yes each sending and receiving address doesn't have a name. But FinCIN ruled March 13, 2013 that to cash in/out to any other currency makes the person a money transmitter and falls under their regulation and reporting requirements.
The P2P (peer-to-peer) database has one copy and is viewable by everyone. The govt tracks what we do with various methods such as cookies,
man-in-the-middle routers, our facebook and google accounts (they have to provide the info if govt asks for it), etc.. Thus they can figure out the identity of the transactions if they really want to.
Gold is a private hedge against government. You can trade it without any public record viewable by everyone on the internet.
5. MONOPOLY ON PROCESSING (666):
Digital kill switch.
I want you to get the technical description correct. So I will write the following paragraph carefully.
Bitcoin transactions are processed by the peer computers who contribute their processing power to computing a hash puzzle, in exchange for a reward which is the debasement that occurs with each transaction block. Without this processing by the peers, then no transactions can occur and the Bitcoins would be worthless. These peers compete to solve the puzzle (on each 10 minute block of transactions), and this mathematically insures that there can't be a double-spend in the one distributed copy of the database (sounds like magic but it isn't). If an attacker had 51% of the processing power, he could corrupt this database, refuse to do certain transactions, or even change the protocol to do hyperinflation or what desired. Normally it is not likely for an attacker to get 51% because the whole world is motivated to contribute processing power in exchange for that debasement reward. But this reward is halving every 4 years and will eventually be 0. So who will process the transactions then? The developers of Bitcoin claim that a) some retailers such as Walmart will have an incentive to offer processing for free in exchange for prioritizing their own transactions, and b) that a market-based transaction fee can
compensate other peers.
That is a logic fail. If the corporations can give away processing for free, then there is no market for a transaction fee. Users will not route their transactions to the peers that charge, if the corporations are offering to process the transactions for free. (Also the market-based transaction fee wouldn't scale any way for numerous reasons... ask me if you need to know... but you don't really need to know because the other point trumps this one any way).
So therefor Bitcoin is designed to hand over processing of digital payments to corporate-fascism.
Although some might think we can't create a competitor later (in which the no debasement is a lie), I actually think that once the bitcoin is #1 and widely adopted, it will be impossible to compete to create a new P2P currency. The reason is because the primary need will be fulfilled and it would be impossible to get the momentum to build from small again. Remember money is a social institution, so you need economy-of-scale. Right now, everyone is very excited because there is no such P2P currency in widespread adoption. Once there is, most people won't want to try an upstart small currency. And I think probably they are not fungible, but you can present both arguments.
6. WASTEFUL and THUS NOT PROFITABLE FOR PROCESSORS
Bitcoin's Proof-of-Work algorithm for preventing double-spend requires all the peers to be continually processing thus burning electricity (the main cost) and expensive specialized hardware such as GPUs, FPAs, and ASICs.
Thus the mining is less profitable and the Bitcoin difficulty scales to the total mining power in the system. This keep the reward for mining nearly equal to the cost of mining on a system-wide basis. The only way to profit is the have a more efficient hardware (or lower electric cost) than the other peers. Thus there is really not net profit being generated system wide-- zero-sum game. Many miners don't realize this yet and have doubled-down on huge hardware investments and long payoff terms (but Moore's Law means the new miners double in speed every 18 months).
Thus the miners really are not profitable. Thus this is going to fall right into the lap of the corporate-fascism to keep the processing going.
Whereas, I designed a Proof-of-Work which uses hard-disk space and the peers are only doing something when they are selected round-robin. Thus mining can be much more profitable and the more important thing is everybody already has a hard-disk to contribute and don't need to buy esoteric specialized hardware.
So my point is that Bitcoin is designed to making the processing by peers fail and fall into the lap of corporate-fascism. There is a way to fix this technically, but Bitcoin refuses to make these changes. I talked with the developers for a period of days, then they banned me when they realized I had figured out their scam system.
