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Author Topic: Open Letter to GMaxwell and Sincere Rational Core Devs  (Read 33127 times)
Carlton Banks
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March 05, 2017, 09:22:53 AM
 #381

Let us posit that some 'thing' has some quantity of per-user value. As more and more people start to employ that 'thing', does not the overall value of that 'thing' increase in proportion to the users of that 'thing'?

Why not "posit" that the 'thing' is actually something real?



If the 'thing' was a spoken language, your principle conforms, at any scale.

If the 'thing' was a computer network, your principle does not conform (except during early growth, i.e. not a function of the paradigm).



Your statement doesn't apply universally (as suggested by invoking your 'thing' abstraction). It's not a principle. You're about as intellectual as my toe nail clippings

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March 05, 2017, 03:12:10 PM
 #382

A quick recap of this thread as I understand it:

 1.  Ideal money would be money that ideally expands and contracts to account for the economy
 2.  The highly manipulated money we have today is far from ideal
 3.  Bitcoin is not ideal money and can never be ideal money (easy to prove - by the definition of Bitcoin)
 4.  However Bitcoin could be used as a thing of constant value, a standard of value, against which all other things of value, including fiat money, could be measured.
 5.  Given a standard of value against which we could actually see and measure the manipulations being done to all the various currencies the economy would naturally gravitate toward those currencies that more closely approximate ideal money.
 6.  Given this new quality metric for currencies all currencies would be forced to compete on this new playing field of quality.  This metric outside of their control would force all currencies to either asymptotically approach ideal money or die by market forces.

In order to get to the more contentious statements about Bitcoin itself, specifically with regard to the great BS (Block Size) debate of the last few years, I and many others here would be willing to accept 1-6 on face value.  In fact, if true, we get exactly what we all want:  money that works for everyone equally and cannot be manipulated by special interests (including the issuers) in order to game the system to their advantage.  Great!  However, we would have to give up on the idea that Bitcoin itself would actually be the currency we use on a daily basis - and that would be very hard for many people, myself included.

However when spelled out this paradigm does not sound all that bad, we get:

1. Ideal savings accounts using Bitcoins, or Bitcoin based derivatives of high quality, your choice
2. Ideal money for all day-to-day (off chain) transactions using either honest versions of what we already have or from a yet to be delivered system

I see two bones of contention that need to be ironed out:

1.  Bitcoin as implemented today, specifically including the current block size cap, can or will become this standard of value that will force honesty on to the world currencies.

2.  Changing the block size will break Bitcoin so that it can not or will not be able to become this standard of value.

Personally, I would be willing to give you #1 at least as a hypothetical for the time being in order to dive into your proof of #2.  Because if #2 is not provable then there is no need to go back and prove #1.  If proof of #2 relies on the proof of #1 then by all means let's prove #1 first and then get to the crux of the matter, #2.

There is a lot of noise in this thread so I could very easily missed your discussion/proof of #2 in the thread or by link.  If so please link us to that discussion.

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March 05, 2017, 03:21:03 PM
 #383

4.  However Bitcoin could be used as a thing of constant value, a standard of value, against which all other things of value, including fiat money, could be measured.
 5.  Given a standard of value against which we could actually see and measure the manipulations being done to all the various currencies the economy would naturally gravitate toward those currencies that more closely approximate ideal money.
 6.  Given this new quality metric for currencies all currencies would be forced to compete on this new playing field of quality.  This metric outside of their control would force all currencies to either asymptotically approach ideal money or die by market forces.

imagine bitcoin was not measured against the dollar and then arbitraged to the other forex currencies... but instead measured against lets say 'the cost of living index' (google it)

that way bitcoin becomes valued in manhours not fiat.

EG today lets say bitcoin was 160 minwage hours.
in america that = $1200
in cuba that = $80

thus causing the forex arbitrage to get americans to buy the cuban currency to then buy bitcoin cheap to sell to america. rinse and repeat to raise cuba's economy

effectively and eventually stablising world currencies once arbitrage has leveled the playing field of world currencies

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March 05, 2017, 03:57:54 PM
 #384

A quick recap of this thread as I understand it:

 1.  Ideal money would be money that ideally expands and contracts to account for the economy
 2.  The highly manipulated money we have today is far from ideal
 3.  Bitcoin is not ideal money and can never be ideal money (easy to prove - by the definition of Bitcoin)
 4.  However Bitcoin could be used as a thing of constant value, a standard of value, against which all other things of value, including fiat money, could be measured.
 5.  Given a standard of value against which we could actually see and measure the manipulations being done to all the various currencies the economy would naturally gravitate toward those currencies that more closely approximate ideal money.
 6.  Given this new quality metric for currencies all currencies would be forced to compete on this new playing field of quality.  This metric outside of their control would force all currencies to either asymptotically approach ideal money or die by market forces.


That's very interesting, considering

1. Bitcoin is, in fact, the Mother of All Blockchains, and

2. Bitcoin is, by design, the ultimate settlement network.

I conclude that BTC will best approximate ideal money (variance notwithstanding).

But I'm not sure how to incorporate the fungibility issue (and Monero's role) into this rubric.  Any ideas?


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March 05, 2017, 04:10:40 PM
 #385

A quick recap of this thread as I understand it:

 1.  Ideal money would be money that ideally expands and contracts to account for the economy
 2.  The highly manipulated money we have today is far from ideal
 3.  Bitcoin is not ideal money and can never be ideal money (easy to prove - by the definition of Bitcoin)
 4.  However Bitcoin could be used as a thing of constant value, a standard of value, against which all other things of value, including fiat money, could be measured.
 5.  Given a standard of value against which we could actually see and measure the manipulations being done to all the various currencies the economy would naturally gravitate toward those currencies that more closely approximate ideal money.
 6.  Given this new quality metric for currencies all currencies would be forced to compete on this new playing field of quality.  This metric outside of their control would force all currencies to either asymptotically approach ideal money or die by market forces.

In order to get to the more contentious statements about Bitcoin itself, specifically with regard to the great BS (Block Size) debate of the last few years, I and many others here would be willing to accept 1-6 on face value.  In fact, if true, we get exactly what we all want:  money that works for everyone equally and cannot be manipulated by special interests (including the issuers) in order to game the system to their advantage.  Great!  However, we would have to give up on the idea that Bitcoin itself would actually be the currency we use on a daily basis - and that would be very hard for many people, myself included.

However when spelled out this paradigm does not sound all that bad, we get:

1. Ideal savings accounts using Bitcoins, or Bitcoin based derivatives of high quality, your choice
2. Ideal money for all day-to-day (off chain) transactions using either honest versions of what we already have or from a yet to be delivered system

I see two bones of contention that need to be ironed out:

1.  Bitcoin as implemented today, specifically including the current block size cap, can or will become this standard of value that will force honesty on to the world currencies.

2.  Changing the block size will break Bitcoin so that it can not or will not be able to become this standard of value.

Personally, I would be willing to give you #1 at least as a hypothetical for the time being in order to dive into your proof of #2.  Because if #2 is not provable then there is no need to go back and prove #1.  If proof of #2 relies on the proof of #1 then by all means let's prove #1 first and then get to the crux of the matter, #2.

There is a lot of noise in this thread so I could very easily missed your discussion/proof of #2 in the thread or by link.  If so please link us to that discussion.

Excellent summary, thanks for that.

Obviously, I cannot speak for the OP, but regarding your #2 bone of contention I would say this:

I don't think the OP believes something like a simple 1M->2M BS change would literally permanently break the gold-like properties of Bitcoin - but...
  A) Such changes may already be impossible, and are certainly approaching impossibility.  The current deadlock is witness to this fact.
  B) It would be a change to the value, and would thus be antithetical to the goal of establishing a stable value
  C) Such changes accomplish no real purpose, because Bitcoin itself, by design, really is incapable of being 'coffee money', so trying to make it into that ultimately does nothing but destabilize the value (see B above).

An additional benefit of NOT changing Bitcoin anymore:
Eliminating the controversy over who 'controls' what Bitcoin is:  Currently, there is a great deal of contention over who is 'in control' of Bitcoin.  The OP's arguments support, I think, the contention that there is ultimately no reason to change Bitcoin further - and IF we could establish a Bitcoin that is IMMUTABLE, beyond possible bug fixes, then this whole attack vector would go away.  The one possible central point of control - development - would no longer be controversial.




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March 05, 2017, 05:28:48 PM
 #386

1.  Ideal money would be money that ideally expands and contracts to account for the economy
 

This is where I part company with the logic expressed by the OP.

Dynamic Keynsian money supplies are only ideal for one part of the economy: producers. And the only reason for that is to maintain a profitable business for those producers, but that paradigm is diminishing increasingly rapidly, and may well disappear altogether before the 21st century finishes.

And it also ignores the fact that there are multiple established ways for producers to mitigate this risk (deflationary losses). This should be sefl-evident without any need for details; the world economy expanded consistently over the long term, despite deflationary money being more popular prior to the 20th century. The world couldn't have experienced a long term economic uptrend if it wasn't possible to handle the problems of deflation.

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March 05, 2017, 05:33:25 PM
 #387


I see two bones of contention that need to be ironed out:

1.  Bitcoin as implemented today, specifically including the current block size cap, can or will become this standard of value that will force honesty on to the world currencies.

2.  Changing the block size will break Bitcoin so that it can not or will not be able to become this standard of value.

Personally, I would be willing to give you #1 at least as a hypothetical for the time being in order to dive into your proof of #2.  Because if #2 is not provable then there is no need to go back and prove #1.  If proof of #2 relies on the proof of #1 then by all means let's prove #1 first and then get to the crux of the matter, #2.

There is a lot of noise in this thread so I could very easily missed your discussion/proof of #2 in the thread or by link.  If so please link us to that discussion.

Start with this, IF changing the tps raises the value of the network, do you agree that is value manipulation?  Hint: it tautologically is.
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March 05, 2017, 05:36:17 PM
 #388



This is where I part company with the logic expressed by the OP.

Dynamic Keynsian money supplies are only ideal for one part of the economy: producers. And the only reason for that is to maintain a profitable business for those producers, but that paradigm is diminishing increasingly rapidly, and may well disappear altogether before the 21st century finishes.

And it also ignores the fact that there are multiple established ways for producers to mitigate this risk (deflationary losses). This should be sefl-evident without any need for details; the world economy expanded consistently over the long term, despite deflationary money being more popular prior to the 20th century. The world couldn't have experienced a long term economic uptrend if it wasn't possible to handle the problems of deflation.
You changed all the words and gave a semantically different argument.

Listen.  for this thread, ideal money means stable in value.  Not your own fucked up definition.  Not thing else.  We are using the phrase "ideal money" to mean something specific.  This is how words work.

You can't speak to a different definition and think "I am smart".  We are having a discussion TOGETHER.

Money that has a supply that is fixed cannot be stable in value, when the underlying economy it represents changes.

If you can't see this, leave.  There is no rational argument versus this.  Its basic basic basic basic basic basic basic economics, and common sense.  


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March 05, 2017, 05:40:22 PM
 #389

I see two scenarios that need to be discussed.

We have what bitcoin is today with all its magnificence and warts.

1. We finally agree to a one time step function, let's say for example going to a new value of 8 megabytes for the maximum block size.

2. We finally agree to a formula or other method to increase the maximum block size over time.

#1 (which has been done before with no dire consequences, but at a time when Bitcoin was younger and more malleable) would cause a one time revaluation of the entire system and would test the impulse response of the system.  As long as it is never done again things would eventually settle back down and we would be back to the current state, which for the sake of argument is assumed to eventual lead to a stable value metric system.

#2, whether BU or an predefined expansion formula, is another matter.  This is where I am hoping to see the macro economic argument that shows it leads to the loss of the stable value property.

As noted up thread #1 could be considered a special case of #2 since it can be repeated over time in order to change the block size on an "as needed" basis.  But, given our current inability to agree to change it now, I expect we would have an even harder time changing it 5, 10, 15 years from now.  So the argument that this would somehow "set a precedence" is not convincing to me because a) there is already precedence for it and b) changes of this type will only get even harder if not impossible to do in the future.

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March 05, 2017, 05:43:31 PM
 #390

When I said:
In order to get to the more contentious statements about Bitcoin itself, specifically with regard to the great BS (Block Size) debate of the last few years, I and many others here would be willing to accept 1-6 on face value.

I must have had CB specifically in mind Wink
1.  Ideal money would be money that ideally expands and contracts to account for the economy
 

This is where I part company with the logic expressed by the OP.

Our family was terrorized by Homeland Security.  Read all about it here:  http://www.jmwagner.com/ and http://www.burtw.com/  Any donations to help us recover from the $300,000 in legal fees and forced donations to the Federal Asset Forfeiture slush fund are greatly appreciated!
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March 05, 2017, 05:44:20 PM
 #391

Money that has a supply that is fixed cannot be stable in value, when the underlying economy it represents changes.

If you can't see this, leave.  There is no rational argument versus this.  Its basic basic basic basic basic basic basic economics, and common sense.  

I accept it. I don't accept it is as serious a problem as you present, for the reasons I stated. Rationally.


Nowhere did I state that fixed supply money was either stable in value, or ideal. You said that on my behalf.

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March 05, 2017, 05:54:16 PM
 #392



I accept it. I don't accept it is as serious a problem as you present, for the reasons I stated. Rationally.


Nowhere did I state that fixed supply money was either stable in value, or ideal. You said that on my behalf.
Ok, I think you are saying you don't see an importance in creating a stable metric for value?  Is this what you are saying?
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March 05, 2017, 05:54:55 PM
 #393

Start with this, IF changing the tps raises the value of the network, do you agree that is value manipulation?  Hint: it tautologically is.
OK, I will grant you that because I want to see the meat:  proof that a change in transactions per second does in fact change the value of the network - under a specified definition of value.

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March 05, 2017, 05:55:51 PM
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OK, I will grant you that because I want to see the meat:  proof that a change in transactions per second does in fact change the value of the network - under a specified definition of value.
It is the argument of everyone that a constricted network constricts the value.  Does anyone here not believe that?
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March 05, 2017, 05:58:33 PM
 #395



I accept it. I don't accept it is as serious a problem as you present, for the reasons I stated. Rationally.


Nowhere did I state that fixed supply money was either stable in value, or ideal. You said that on my behalf.
Ok, I think you are saying you don't see an importance in creating a stable metric for value?  Is this what you are saying?

No. How about this argument: we already have a stable metric for value, the joule.

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March 05, 2017, 06:01:00 PM
 #396

OK, I will grant you that because I want to see the meat:  proof that a change in transactions per second does in fact change the value of the network - under a specified definition of value.
It is the argument of everyone that a constricted network constricts the value.  Does anyone here not believe that?
It is the belief of many that constricting TPS is constricting the value of the network for them.  It is the belief of others that constricting the TPS maintains the value of the network for them (yourself included here).

That is all belief.   I am looking for an argument based on economic facts.

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March 05, 2017, 06:03:39 PM
 #397

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Ideal money would be money that ideally expands and contracts to account for the economy

Then accept that bitcoin is not, and cannot be ideal money. Otherwise you need a central counterparty issuing and destroying bitcoin according to how they guess the global economy is doing. Bitcoin will be a deflationary currency, the opposite of fiat.

Scaling and transaction rate: https://bitcointalk.org/index.php?topic=532.msg6306#msg6306
Do not allow demand to exceed capacity. Do not allow mempools to forget transactions. Relay all transactions. Eventually confirm all transactions.
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March 05, 2017, 06:04:28 PM
 #398



I accept it. I don't accept it is as serious a problem as you present, for the reasons I stated. Rationally.


Nowhere did I state that fixed supply money was either stable in value, or ideal. You said that on my behalf.
Ok, I think you are saying you don't see an importance in creating a stable metric for value?  Is this what you are saying?

No. How about this argument: we already have a stable metric for value, the joule.

Assuming there is a certain amount of stability to the value of energy there will be even more stability to the value of Bitcoin as variation in the production cost and technological improvements in the production of energy are removed by the design of Bitcoin.

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March 05, 2017, 06:05:08 PM
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No. How about this argument: we already have a stable metric for value, the joule.
Right.  So that is a metric of work/energy.  Now you might argue that is transferable to value as the markets valuate it and put a price to the commodity produced.

In a way this is relevant, and you might agree that the result is fairly stable as the work involved is fairly stable.  But its not perfectly stable.

Quote from: Ideal Money
   
The metric system does not work because french chefs de cuisine are constantly cooking up new and delicious culinary creations which the rest of the world then follows imitatively. Rather, it works  because it is something invented on a scientific basis…
    
Our view is that if it is viewed scientifically and rationally (which is psychologically difficult!) that money should have the function of a standard of measurement and thus that it should become comparable to the watt or the hour or a degree of temperature.
    
…this standard, as a basis for the standardization of the value of the international money unit, would remove the political roles of the “grand pardoners,”…

But you have correctly alluded to something.  There IS relationship between a possible standard metric of value, and for example, a metric of work/energy.

But the underlying energy cost is not necessarily stable:

Quote
We can see  that times could change, especially if a “miracle energy source” were found, and thus if a good ICPI is constructed, it should not be expected to be valid as initially defined for all eternity.  It would instead be appropriate for it to be regularly readjusted depending on how the patterns of international trade would actually evolve.

We need stability for LONG terms, like cosmologically long term. I have more to say but I need to see what you follow me and what it means to you.
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March 05, 2017, 06:06:00 PM
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Ideal money would be money that ideally expands and contracts to account for the economy

Then accept that bitcoin is not, and cannot be ideal money.
We have all accepted this.  Please catch up before posting.

Our family was terrorized by Homeland Security.  Read all about it here:  http://www.jmwagner.com/ and http://www.burtw.com/  Any donations to help us recover from the $300,000 in legal fees and forced donations to the Federal Asset Forfeiture slush fund are greatly appreciated!
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