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Author Topic: Open Letter to GMaxwell and Sincere Rational Core Devs  (Read 33289 times)
Quickseller
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March 07, 2017, 08:37:45 AM
 #721

The definition of "inflation" and "deflation" varies depending on who you ask.

Some economists will define inflation as the increasing of the number of units of a currency in circulation -- some economists will define "in circulation" as being not in possession by the central bank, while others will define "in circulation" as being the number of units of a currency that are printed.

Other economists will define inflation as the increasing of the number of units of a currency that it costs to purchase a basket of goods and services (eg CPI). As mentioned previously in this thread, the basket of goods/services used to measure inflation can be politically motivated. Individuals can somewhat measure inflation on an individual basis by measuring how much money they have left over after all of (or a certain subset of) their expenses at the end of the month.

If one were to use the first measure, then Bitcoin is very much inflationary because currently roughly 657,000BTC will be created every year; based on the approximately 16,079,000BTC in circulation as of the beginning of the year, that is ~4.086% inflation rate that 2017 will see. At the beginning of 2018, there will be approximately 16,736,000BTC in circulation, there will a similar number of additional bitcoin added to the total of bitcoin in circulation, ~657,000BTC, which means that 2018 will see ~3.925% inflation for bitcoin. Contrary to what the OP has claimed, the inflation rate, in terms of percentage of bitcoin in circulation will never half (the number of bitcoin created every day will half every 4 years).

If you were to use the later measure, then one would reasonably say that bitcoin has been deflationary, primarily due to market forces. As people have opined that Bitcoin has value, they have purchased it, causing it's price to increase. I would note that the OP has claimed that the price on exchanges is irrelevant to the "value" of bitcoin, however he is outright wrong here because if the price of bitcoin increases, then I can use one bitcoin to purchase more (and or higher quality) goods/services, either by directly exchanging my one bitcoin for these goods/services, or exchanging my bitcoin for some other currency that can be exchanged for goods/services.

Both measures of inflation can be heavily influenced by the availability and cost of credit. With dollars (for example), the banking system as a whole can lend out $1 to a borrower, and as long as that borrower keeps that $1 within the banking system, the banking system as a whole can lend out that $1 again -- this can be repeated for all intensive purposes unlimited number of times, however regulations have placed minimum amounts of capital that banks must hold to protect deposits against losses that result from loans not being repaid limit the number of times the banking system as a whole can re-loan that $1. Banks have not developed in the Bitcoin world, I think because users so frequently like to hold their bitcoin as "cash", as in control the private keys that control their bitcoin, removing their bitcoin from any potential banking system. Today, central banks (in first world countries) influence the cost (and effectively the availability) of credit by manipulating short term (and more recently long term) interest rates.

I would also note that John Nash is simply one economist, and just because he has a certain opinion does not necessarily mean it is correct. Although he has won a nobel prize, his opinions do not appear to be shared with many other economists. Before reading this thread, I have never heard of John Nash nor his "ideal money" theory; based on what I have read about his "ideal money" I am not so sure it is something that I would want to pursue, nor am I sure that it is even possible to achieve due to market forces, and the fact that economies change over long periods of time.

I would also note that actual ownership of bitcoin is very concentrated among a small number of people, and that if any of these people need to exchange their bitcoin for some other medium of exchange and/or for goods/services quickly, then the amount/quality of goods/services that everyone else will be able to purchase with one bitcoin will decrease due to supply and demand.

I believe that if Bitcoin does not change soon, then someone will create a competitor to Bitcoin (an altcoin) that can scale in a way that is economical. Many people are trying this today, however I have not seen anything that I think will overcome Bitcoin in the long run.

After reading the entire thread (the later parts of it more quickly than the earlier part), I am not entirely sure I understand the OP's belief of the relationship that bitcoin has with "ideal money".

Interestingly enough, it appears as if the OP agrees that increasing the TPS will cause the value of Bitcoin to increase...

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March 07, 2017, 08:46:25 AM
 #722

The definition of "inflation" and "deflation" varies depending on who you ask.

Some economists will define inflation as the increasing of the number of units of a currency in circulation -- some economists will define "in circulation" as being not in possession by the central bank, while others will define "in circulation" as being the number of units of a currency that are printed.

Other economists will define inflation as the increasing of the number of units of a currency that it costs to purchase a basket of goods and services (eg CPI). As mentioned previously in this thread, the basket of goods/services used to measure inflation can be politically motivated. Individuals can somewhat measure inflation on an individual basis by measuring how much money they have left over after all of (or a certain subset of) their expenses at the end of the month.

If one were to use the first measure, then Bitcoin is very much inflationary because currently roughly 657,000BTC will be created every year; based on the approximately 16,079,000BTC in circulation as of the beginning of the year, that is ~4.086% inflation rate that 2017 will see. At the beginning of 2018, there will be approximately 16,736,000BTC in circulation, there will a similar number of additional bitcoin added to the total of bitcoin in circulation, ~657,000BTC, which means that 2018 will see ~3.925% inflation for bitcoin. Contrary to what the OP has claimed, the inflation rate, in terms of percentage of bitcoin in circulation will never half (the number of bitcoin created every day will half every 4 years).

If you were to use the later measure, then one would reasonably say that bitcoin has been deflationary, primarily due to market forces. As people have opined that Bitcoin has value, they have purchased it, causing it's price to increase. I would note that the OP has claimed that the price on exchanges is irrelevant to the "value" of bitcoin, however he is outright wrong here because if the price of bitcoin increases, then I can use one bitcoin to purchase more (and or higher quality) goods/services, either by directly exchanging my one bitcoin for these goods/services, or exchanging my bitcoin for some other currency that can be exchanged for goods/services.

Both measures of inflation can be heavily influenced by the availability and cost of credit. With dollars (for example), the banking system as a whole can lend out $1 to a borrower, and as long as that borrower keeps that $1 within the banking system, the banking system as a whole can lend out that $1 again -- this can be repeated for all intensive purposes unlimited number of times, however regulations have placed minimum amounts of capital that banks must hold to protect deposits against losses that result from loans not being repaid limit the number of times the banking system as a whole can re-loan that $1. Banks have not developed in the Bitcoin world, I think because users so frequently like to hold their bitcoin as "cash", as in control the private keys that control their bitcoin, removing their bitcoin from any potential banking system. Today, central banks (in first world countries) influence the cost (and effectively the availability) of credit by manipulating short term (and more recently long term) interest rates.

I would also note that John Nash is simply one economist, and just because he has a certain opinion does not necessarily mean it is correct. Although he has won a nobel prize, his opinions do not appear to be shared with many other economists. Before reading this thread, I have never heard of John Nash nor his "ideal money" theory; based on what I have read about his "ideal money" I am not so sure it is something that I would want to pursue, nor am I sure that it is even possible to achieve due to market forces, and the fact that economies change over long periods of time.

I would also note that actual ownership of bitcoin is very concentrated among a small number of people, and that if any of these people need to exchange their bitcoin for some other medium of exchange and/or for goods/services quickly, then the amount/quality of goods/services that everyone else will be able to purchase with one bitcoin will decrease due to supply and demand.

I believe that if Bitcoin does not change soon, then someone will create a competitor to Bitcoin (an altcoin) that can scale in a way that is economical. Many people are trying this today, however I have not seen anything that I think will overcome Bitcoin in the long run.

After reading the entire thread (the later parts of it more quickly than the earlier part), I am not entirely sure I understand the OP's belief of the relationship that bitcoin has with "ideal money".

Interestingly enough, it appears as if the OP agrees that increasing the TPS will cause the value of Bitcoin to increase...
you are smart.  you give a correct over view.  its worth reading and understanding for YOU (not necessarily others).  I agree with lots you say, expect nash sovle this problem in his 20's. its obv.
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March 07, 2017, 08:59:01 AM
 #723

the banking system as a whole can lend out that $1 again -- this can be repeated for all intensive purposes unlimited number of times

This should read "intents and purposes". Are you copy-pasting from somewhere, or did you just repeat it without understanding it's meaning

Vires in numeris
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March 07, 2017, 09:40:22 AM
 #724



This should read "intents and purposes". Are you copy-pasting from somewhere, or did you just repeat it without understanding it's meaning
no chance you read that and thought they copy pasted.
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March 07, 2017, 09:43:53 AM
 #725



This should read "intents and purposes". Are you copy-pasting from somewhere, or did you just repeat it without understanding it's meaning
no chance you read that and thought they copy pasted.

There's no chance Quickseller wrote it and actually understood what he/it was writing.

Vires in numeris
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March 07, 2017, 10:13:50 AM
 #726



There's no chance Quickseller wrote it and actually understood what he/it was writing.
thats not what trainscarswreck said.
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March 07, 2017, 10:17:19 AM
 #727

Put the pipe away, it's not doing you any favours

Vires in numeris
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March 07, 2017, 07:00:49 PM
 #728

http://web.math.princeton.edu/jfnj/texts_and_graphics/Main.Content/An_Interesting_Equation_and_An_Interesting_Possibility/An_Interesting_Equation/Equation.general.vac/From.PennState/intereq.r.pdf

It's difficult to explain to a society that covets inflation that the inflationary model of the universe is wrong.
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March 07, 2017, 07:05:07 PM
 #729

Put the pipe away, it's not doing you any favours
One of us is a moron.
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March 07, 2017, 07:17:27 PM
 #730

OK I'm just weighing in on an interesting (and exhausting) thread with some thoughts. I will likely get flamed by OP, so I preemptively put him on ignore. Sorry buddy.

OP you are a smart guy with some good ideas and lots of knowledge, but you think you are John Nash. Your personal attacks on critics reveal your own insecurity and undermine your arguments. Finally, I suspect that you lack technical expertise to fully understand the bitcoin network and protocols. it's time for you to do some reading also. Nothing personal.

I read up on some of the Nash theories - he was certainly way ahead of his time. However, "ideal money" is an oxymoron IMHO. Nothing more to say there. Assumptions that the current global financial system is normal, stable, logical, or even functional are flawed. It's a giant FRAUD IMHO, and any alternative to it is refreshing. Bitcoin has its warts, and some nutcases at the wheel, but it's still far better than any other current or proposed monetary system. Value is inherently subjective as we've all agreed here, but I think Bitcoin has tremendous value just by virtue of being so unique.

Furthemore, I believe that economic and monetary theories are not entirely equipped to understand and predict bitcoin's use, utility, and trajectory. Technical limitations also factor in, and are not in the domain of economics, further complicating the issue. Let me pose a question to illustrate my point:

* When is the last time a global monetary system was created by an unknown person and run cooperatively by unknown people all over the world?


It's quite possible to damage the bitcoin network, both by limiting it excessively and trying to scale it beyond technical limits. However, I sincerely believe that the majority of actors want it to keep functioning, due to self interest first, but also due to a fanatical devotion to the concepts behind it.

So everyone here give yourselves a pat on the back!

Maybe bitcoin development is DONE. Would that be an example of a Nash Equilibrium?
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March 07, 2017, 07:19:00 PM
 #731


How many dimensions are needed to discribe the universe best? 4? 12?

Our math is nice. But never sufficient.

Who is a moron ? 1, 2, x?

Carpe diem  -  cut the down side  -  be anti-fragile
A feature that needs more than one convincing argument is no and Satoshi owes me no proof.
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March 07, 2017, 07:26:22 PM
 #732


How many dimensions are needed to discribe the universe best? 4? 12?

Our math is nice. But never sufficient.

Who is a moron ? 1, 2, x?
one of us has read shinichi mochizuki's works on interuniversal geometry.
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March 07, 2017, 07:27:33 PM
 #733

The best is when someone says something is nonsense and conveniently attacks ad hominem, reveals to me that intelligence is not high enough to understand and downgrades oneself to insulting for maximum affect.

Generally those with high intelligence often seem to be babbling nonsense to those who are not capable of understanding.

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March 07, 2017, 07:28:03 PM
 #734

OP you are a smart guy with some good ideas and lots of knowledge, but you think you are John Nash.

no one here believes you that I think i am Nash.  and just to be clear, I am not john nash.
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March 07, 2017, 07:29:26 PM
 #735

The best is when someone says something is nonsense and conveniently attacks ad hominem, reveals to me that intelligence is not high enough to understand and downgrades oneself to insulting for maximum affect.

Generally those with high intelligence often seem to be babbling nonsense to those who are not capable of understanding.
I think slightly differently than this.  they say nash would do infinite loops with his bike.  I think he was just pacing.  you need to be able to pace.  Also the work/text part of the brain is different than the speak listen.  it means if you talk to yourself, you can create two identities that can bounces ideas of yourself.  They say adam smith did it.
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March 07, 2017, 07:41:20 PM
 #736


How many dimensions are needed to discribe the universe best? 4? 12?

Our math is nice. But never sufficient.

Who is a moron ? 1, 2, x?
one of us has read shinichi mochizuki's works on interuniversal geometry.

Again, you show strong tendency to restrict things down to what you are able to grasp and try to make things ideal (standard task of a scientist)

So you miss things out of this (your) box and might neglegt all the others on similar / paralell tracks.

We are not here to find the truth. The rails to it are not even clear. The key might be found in math only.

Carpe diem  -  cut the down side  -  be anti-fragile
A feature that needs more than one convincing argument is no and Satoshi owes me no proof.
My coding style is legendary but limited to 1MB, sorry but cannot come much over my C64, Bill Gates and Tom Bombadil
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March 07, 2017, 07:48:14 PM
 #737

...
(1) After reading the entire thread (the later parts of it more quickly than the earlier part), I am not entirely sure I understand the OP's belief of the relationship that bitcoin has with "ideal money".

(2) Interestingly enough, it appears as if the OP agrees that increasing the TPS will cause the value of Bitcoin to increase...

I am going to respond to this posting, since OP has an inability to articulate themselves
and explain concepts clearly and plainly (whether on purpose or by limitations).
The OP's current comment to your posting, is now contradictory to OP's prior
statements.

I mostly agree with Quickseller's other statements otherwise.

(1) Op's theory: Bitcoin's Consensus mechanism for certain changes has stalled.
Neither side has enough hash or influence to either SegWit SF or to Blocksize HF.
A stalemate has occurred and may now never be undone. The point in time has
now arrived in which certain important changes would always be contentious.

If we accept that we never change again (for sake of argument here), then the
current state of bitcoin is actually more a digital gold, than a digital currency.
There is no doubt that Bitcoin started with digital gold like properties with the
intention of ultimately scaling (currency), but the issue now is, scaling (On-Chain)
may not ever occur now (by the direct rules of our Consensus Mechanism).  

The prophesied "Consensus deadlock" has now occurred and as a result, bitcoin
as a digital gold with a low TPS has "manifested" as a near perfect asset device
to help facilitate Nash's "Ideal Money". At this point in time, with this theory
and premise in mind, Bitcoin's only purpose is to exist in it current state, ever
increasing in value, UNTIL the financial world is forced to change and create
a new money that must compete with bitcoin's ever increasing power.

When the financial world does so, bitcoin was successfully used as a weapon to
compel them to reform and usher in a new way of thinking and dealing about
money for the masses and the systems. Bitcoin will not be the future money,
it is only the device that starts the war. It is not an end game. In this Nashian
theory, bitcoin would be considered the "Alternative Option" that Nash envisioned
would start the world correction, but not be the final answer.

Bitcoin's only relationship to "Ideal Money" is it causes a shift in the status quo that
forces reform as a byproduct. Bitcoin is a means to an end for the "Ideal Money".

(2) I'm not sure where you are reading OP said that. OP has stated that any TPS
increase will destroy bitcoin's gold like properties in theory, which would cause a
decrease in value over time. The more TPS ability, the more it becomes a currency
and less a digital gold. The flow of value needs to be stable (like now) so that bitcoin
is equally as predictable as now as in 60 years from now. A TPS increase of any
significant size would hurt the value of bitcoin and prevent it from being able to cause
the financial world's forced reform to "Ideal Money".


The above is my understandings of the OPs prior postings.
Sorry, I couldn't make it shorter, I wanted to flesh it out for clarity.

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Request a signed message if you are associating with anyone claiming to be me.
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March 07, 2017, 07:49:56 PM
 #738

Bitcoin is a means to an end for the "Ideal Money".

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March 07, 2017, 08:44:35 PM
 #739

There is a growing body of literature that disputes the inflationary (and big-bang) models, I'm happy to report.

I find it interesting that nash brings up the notion of longitudinal (compression) waves in electricity and gravity... something that tesla also reported.   Sadly, I can't really follow the math myself.

seems we are getting off topic.  though.  sorry.


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March 07, 2017, 09:57:52 PM
 #740

There is a growing body of literature that disputes the inflationary (and big-bang) models, I'm happy to report.

I find it interesting that nash brings up the notion of longitudinal (compression) waves in electricity and gravity... something that tesla also reported.   Sadly, I can't really follow the math myself.

seems we are getting off topic.  though.  sorry.


Discussing such things at a time when dark matter is not understood but is responible for vast majority of all energy does not make sense at all. Look for math and try to get over Platons Cave issue.

Carpe diem  -  cut the down side  -  be anti-fragile
A feature that needs more than one convincing argument is no and Satoshi owes me no proof.
My coding style is legendary but limited to 1MB, sorry but cannot come much over my C64, Bill Gates and Tom Bombadil
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