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Author Topic: John Nash created bitcoin  (Read 20118 times)
IadixDev
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April 26, 2017, 08:54:53 AM
 #421

seigniorage <---- Key concept here....that's the cheat!  

But all bitcoin early holders are also profiting from delayed seigniorage.  They obtained coins which were easy to mine (money that was easy to print) and it is now worth much more.  All deflationary currencies bring delayed seigniorage to their early holders.  In fact, almost all of bitcoin, and almost all of crypto, is living off the speculative effects of delayed seigniorage (cheaper printing than later market price).

There would have been a way in bitcoin to make seigniorage disappear: namely NOT INCREASE THE DIFFICULTY more than Moore's law, and keeping the block reward constant (tail emission).  You would then have a coin of which the value would remain constant, and equal to the (economic) work spent on it.  That is, if on average it would cost, say, 10 cents to mine a bitcoin in cost of proof of work, that would be about its market value, and would remain so, because if it increased, people would simply mine more of them, instead of paying more for them.  All of its seigniorage would be burned by PoW.  This is not the case in bitcoin, because as bitcoin's value is appreciating, the early mined coins were made with much less mining costs than their value, being similar to printed money in a way.

But bitcoin was not designed as an ideal money keeping its value almost constant, it was designed as a deflationary speculative asset, with delayed seigniorage, to profit early adopters, and blow a greater-fool bubble that way.


I follow what you are saying....However, I think that there is an underestimated, not well defined, and often overlooked value that is inherent in the decentralized distributed economies that is not being considered adequately.  Specifically, the potential of networking and the innovations that monetizing its creation motivates are only recently being considered....After all, aren't the goods and services which a currency attracts what make that currency confidently revolve?  Aren't some object's value greater then the sum of the value of their parts?  Shouldn't some form of harmonic mean be applied, if so, what progression?  Those are only a few of the many questions that are being evaluated while considering the potentials of big data and advanced analytics....Isn't the question much bigger?  Are the true potentials of the decentralized distributed economies understood well enough to make quantitative judgements based on antiquated understandings?

It's exactly the kind of problematics i'm working on, and i wanted to answer also something along side this line Smiley

The problem in the bottom is confusion between decentralized authority and decentralized computational power / task.

The two are a very different problem.

The pow thing is supposed to distribute authority through a distributed proof of work, but most of the computational work done by node is actually very poorly decentralized / distributed ( aka scalable).

But the whole issue is obfuscated by this whole debate with block size who are supposed 'scale' the network, but it won't scale anything, most of the computational power is in fact centralized, and only the work of one node will actually be used in the actual blockchain.

But decentralized work aka distributed application can work also with centralized authority, but the two problematics are often confused and put together, ethereum also added to this confusion.

But it's exactly the kind of problematic i'm working on, to have decentralized system able to provide services via html5 application and http API.

But the way bitcoin node are programmed is not that good to really get to the next step, because it's very monolithic, and though as some sort of swiss army knife to solve everything in once, both the server 'full node' aspect, the rpc server aspect for web apps, and the wallet for standalone app, plus mining software etc, the economic interest switched weirdly not in favor of developping more the decentralized economy aspect, but more centralizing risk and profits on mining pools and via trading logic.

But there are clearly good things to be done with decentralized economy, with distribued application / services who can work with blockchain as a paiment system, or system to store distributed ledger of public data / reccord, which can be useful for many things, and can probbably create new economies Smiley

But i don't think bitcoin development is very oriented toward this for the moment, more on the debate with the block size and segwit and speculative market on alt coin etc =)
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dinofelis
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April 26, 2017, 09:18:04 AM
 #422

The problem in the bottom is confusion between decentralized authority and decentralized computational power / task.

The two are a very different problem.

Absolutely !  "decentralisation" is about politics and decision power ; "distributed" is about the practical organisation of having geographically/topologically spread processing/storage locations.

Amazon's data centres are distributed ; but they are entirely centralized under Amazon's CEO's decision power.

You could, on the other hand, have a lot of mining of a crypto done in the same data centre, but under the decision power of many different people, independent of one another in their decisions: that would be a decentralized, but non-distributed, system.

Quote
But the whole issue is obfuscated by this whole debate with block size who are supposed 'scale' the network, but it won't scale anything, most of the computational power is in fact centralized, and only the work of one node will actually be used in the actual blockchain.

I think that bitcoin's idea was an extremely bright attempt, but simply "didn't cut it".  There were very good ideas in bitcoin, but some fundamental issues, pointed out from the start, were not addressed.

The very idea that every user would need a copy of the list of all transactions everywhere, ever done, world wide, is not thinkable for quite some while, technologically speaking.  As such, a compromise needs to be found, where only *some* users keep this copy, and others (most) are at their mercy.  The other idea, that a kind of rewarded lottery is going to organize a competition to who will be the next one that at the same time can collect a reward, and decide upon the to-be-generalized consensus on past transactions, and in doing so is also going to cryptographically secure the list, was automatically going to lead, through economies of scale, to a small oligarchy of miners, to be compared to the board of governors of the central bank.
Finally, the "sound money doctrine", and the consequences of a lot of coin printing in the beginning when it was cheap, with reduced printing of coins when it becomes more expensive, is fuelling a mega-deflationary spiral better known under the name of "HODLING", which will give the mother of all seigniorage to some early adopters possessing significant fractions of the total stash.  Finally, bitcoin's transparent transaction scheme is a privacy's worst night mare.

So in the end, bitcoin is naturally heading to the entire opposite of its announced purpose: it will be a totally centralized financial entity, more tightly controlled than any central bank, by an obscure oligarchy of people without any kind of political mandate or democratic control ; its deflationary spiral will make it essentially useless as a currency an a day-to-day usage, but will be a boon for financial speculators ; it will have created, through immense seigniorage, a small and obscure financial elite of doubtful intend of a kind that ridicules even the Bill Gates' type of fortune, and it will be a tool for total control on the slightest of your financial activities through the analysis of a transparent block chain and a full control of everything you ever do.

Whether this was on purpose or because of a bright but not good enough design, I leave in the middle.
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April 26, 2017, 09:47:16 AM
 #423

The idea of having copy of transaction in itself why not, but it's not even really exploitable as such to have a true decentralized network ( in the distributed processing sense), as it would need to open the rpc port and services also too, and that nodes can be reached also from application who need to use the rpc interface, but it's not even really the case, and the fact that node also are used as wallet to store private keys and doing operation on them also obfuscate the actual purpose and function of nodes, are they single user wallets, or are they public multi user server, the whole architecture on this regard is not very clear. And it doesn't help the development of bitcoin as truly distributed platform. And in the end most of the services end up off chain, and nobody run a node, or even a wallet Smiley
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April 26, 2017, 10:24:02 AM
 #424

I don't think it ever happened in history that a currency would be printed by someone in his basement and gain international level and super high price, without being backed by any kind of group with an agenda, nothing get anywhere if there are not people who are mobilized to make it happen.

Good for you to know this.

If bitcoin was developed by some unknown average joe jap guy, it would not go so unchallenged by the governments and banks like we see so unchallenged with bitcoin.

Whether bitcoin is ideal or otherwise is irrelevant.

As long as it serves the interests of the rothschilds et. al., then it will last, until it doesn't.

dinofelis said he was passionate in promoting bitcoin on his own.
I am curious whether his passion was started before/after there was price-making mechanism in place (i.e. Mt. Gox).
If it was before, then he was truly passionate.
If it was after, then it was due to the price (not because bitcoin has potential vs tyrants or banksters).

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April 26, 2017, 11:05:15 AM
 #425

Bitcoin's whales are "new riches" made in 2 or 3 years time, contrary to the long (and half-religious) history  of gold.  This is not going to be socially accepted, the seigniorage is too large.

You need to understand, that...

1. The rothschilds want an orderly adoption of bitcoin and orderly transition (from current system to the next).
2. Any adoption/transition that is abrupt and disorderly will disrupt transition from current system to the next (which could be overtaken by gold/silver).

And that is why we see bitcoin emerges in 2009 and trigger adoptions gradually and orderly throughout the years.
You may say the seigniorage is too large but this is unavoidable as the rothschilds want an orderly adoption, or else their plan may fail.
Once bitcoin becomes the world's settlement currency, everyone will accept it no matter how large is the seigniorage.

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April 27, 2017, 08:12:54 PM
 #426

I agree with $500,000 prediction being too high, even $100,000 is still to high. Gold is a 5000 year asset, no way Bitcoin will surpass it in 13 years from now, just not possible! Sorry, but it's nonsense.

Really 500,000$ is almost next to impossible for the bitcoin to attain such a price, not even in decade. We are only 1200$ dollars now and 500,000 is like a dream which may never come true.  I think we should be realistic in predicting the prices.

Incorrect!

Read the fucking thread before you post. I am not your damn secretary!

All the $billionaires and $trillionaires will be doing their settlement in BTC.

It will be $500,000 per BTC.

That is obvious.

You don't seem to understand money very well. And I am not going to write a treatise here. It isn't my responsibility to fix your ignorance about money. I say this forcefully because it behooves you to do some learning so you stop spouting off incorrect judgments.

You said this in that other thread where the first Snapchat investor said it's going $500,000 by 2030, that you agree with that prediction.

2030 is 13 years from now

Current price: $1200

That's $498,800 to go in 13 years, which according to my third grade math means BTC should raise around $38369 per year if your theory is correct.

Isn't this a bit nuts? How can BTC grow so much in 13 years? It would need to go parabolic in an unprecedented way. It would redefine the meaning of going parabolic. Nothing ever has grown this much, not even Berkshire Hathaway Class A stock. We are looking at insane levels of growth in a parabolic way in the last 3 years before 2030 is hit and by the time the curve of coin release starts being flat:



So if this is of any guidance, by about 2025 we would need to start seeing some serious shit, like legit insanity of price growth. And I say parabolic, because I don't see anything near $38369 per year happening any time soon if the growth was more or less linear, so it must be next-level parabolic. We would need to be seeing gold whales, stock whales, fiat whales, everything, moving money onto bitcoin to hodl there (or transact within the blockchain but never leaving BTC).

We are talking about 5 figures of growth per day in the last period... this is insane and would cause heart attacks left and right from hodlers that become rich in such a extreme way.

We are looking at current mega whales (considering they don't sell along the way) becoming the richest men on earth, maybe surpassing Rotchilds? I don't know how many BTC the mega rpietila and MP tier whales have, but at $500,000 per BTC they would become stupid rich, maybe first trillionaires ever (as a single guy owning +trillion).

I don't know, the growth required for $500,000 in 13 years seems too much. It would be something never seen before, books would be written about it, kids would learn about it in schools. It would be all over the planet, minds would explode, people that didn't buy at $1000 would hang themselves with a belt.

"The greatest shortcoming of the human race is our inability to understand the exponential function". Al Barlett on Growth and Sustainability

Compute: (500000÷1200)(1÷13) = 1.59

Thus to reach $500,000 in 13 years from a starting price of $1200, a compounded rise in price of 59% per year is all that is required.

Do you understand now why I think @dinofelis is very mathematically near-sighted.

The chart you showed is not constant compounded growth, but rather logistic growth. Indeed we should expect Bitcoin to be logistic, because nothing can grow at a constant exponential rate forever. Since the $10 entry price in early 2013 to the recent $1300 price, Bitcoin has averaged 237% gain per year compounded. So we can see that Bitcoin's price is rising much faster than 59% per year right now and so by 2030 the price rise can slow down to much less than 59% per year and still reach $500,000. I believe @rpietila did some logistic models of potential BTC prices.

If we assume a 75% compounded rate (for the equivalent logistic model) from now until 2024, then the BTC price will rise 50X, thus $60,000 and the market cap will be $1.2 trillion.

Of course no one can surpass the elite in BTC wealth, because they mined most of the first 10.5 million Bitcoins.

Most of us won't have enough BTC to stay on chain that long so we will be kicked out to currencies (altcoins or what ever) which are regulated and many of us will have our wealth confiscated by governments gone bezerk with the severe sovereign debt collapse that Bitcoin is going to help cause and make severe.

You say you won't give your private keys, but the government can throw you in jail and torture you. Also I expect by 2024 or so, the elite will have control over the mining and can blacklist addresses they want to.

Why would the elite want to create thousands of new trillionairs?

They aren't. See above.

Why would trillionares need BTC when they own offshore banks?

Offshore banks aren't a reserve currency.

ME SOCIAL SECURITY CHECK IS ESTIMATE TO BE $1000 TODAY.

THAT WILL BUY 1 GALLON GAS FOR ME ELECTRIC CAR IN 2030.

I USE LEFT OVER WHEELBARRAL OF USD IN FIREPLACE TO HEAT HOUSE.
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May 03, 2017, 02:09:04 PM
 #427

Man! this is good good kind of insane!  Cool

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May 03, 2017, 05:46:28 PM
 #428

Bitcoin's whales are "new riches" made in 2 or 3 years time, contrary to the long (and half-religious) history  of gold.  This is not going to be socially accepted, the seigniorage is too large.

You need to understand, that...

1. The rothschilds want an orderly adoption of bitcoin and orderly transition (from current system to the next).
2. Any adoption/transition that is abrupt and disorderly will disrupt transition from current system to the next (which could be overtaken by gold/silver).

And that is why we see bitcoin emerges in 2009 and trigger adoptions gradually and orderly throughout the years.
You may say the seigniorage is too large but this is unavoidable as the rothschilds want an orderly adoption, or else their plan may fail.
Once bitcoin becomes the world's settlement currency, everyone will accept it no matter how large is the seigniorage.
Today's banking system has very much tied people to itself and nothing can exist without the influence of the Bank. So a large family keeps all the financial flows of the world and unequivocal manage the whole world and even ordinary people. Perhaps Bitcoin is the solution to the problem and become more free.
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