Ruh Roh, bitcoin on the radar of the IMF?

[harposox]

Just ran across this paper by University of Chicago professor Nichloas Plassaras, titled "Regulating Digital Currencies: Bringing Bitcoin Within the Reach of the IMF." Hope you've got your barf bags ready:

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2248419

Things get interesting (not in a good way) starting with page 17: "The Dangers of an Unregulated Bitcoin." It begins, "As Bitcoin continues to grow in popularity and value, it poses an increasingly serious threat to the stability of the foreign currency exchange and, by extension, international commerce. Recall that the IMF was created to tackle two global economic problems: the artificial devaluation of one’s currency to gain an economic advantage; and unstable exchange rates between various currencies. Bitcoin cannot trigger the first concern because the algorithm that supports it prohibits users from artificially manipulating its value. Bitcoin does, however, have the potential to create severe and possibly irreversible fluctuations in the foreign currency exchange. Specifically, Bitcoin poses a liability to the IMF and its member nations in the event it is used in what is referred to as a 'speculative attack' on another currency."

Did anyone catch that little slight of hand? It took me a couple readings before it dawned on me: "Bitcoin cannot trigger the first concern [artificial currency devaluation] because the algorithm that supports it prohibits users from artificially manipulating its value. " In other words, bitcoin is IMPOSSIBLE to devalue by direct manipulation—the oldest and most powerful destabilization tool in the IMF's playbook!—which is precisely WHY bitcoin is such a threat to the global central banking system. This paper is teeming with this kind of Orwellian doublespeak.

Now, I don't fancy myself the least bit knowledgeable about currencies, or about the IMF's role in managing global currency exchanges; if I had to hazard a guess I'd say that the IMF's boilerplate description of its own role is probably a gross distortion of its true purpose, at best. However, I DO know a bit about the IMF's record in other arenas, which generally involves looting the economies of underdeveloped nations by saddling them with unsustainable debt and then attaching draconian "conditionalities" to their repayment plans—forcing them to sell off public infrastructure and utilities, slash public payrolls, raise taxes and fees, etc.—all so that their victim's budget can replace these "luxuries" with astronomical debt service. I also know it's played a major role in destabilizing countries' currencies over the last 4 decades, particularly in South America (in direct contradiction of its stated mission, obviously). So needless to say a paper begging for the IMF's intervention into bitcoin made the hairs on the back of my neck stand up.

While there's too much nonsense here to parse paragraph by paragraph, check out some of the absolutely absurd assertions in this paper (page 18, last graph):

"Herein lies the threat posed by Bitcoin. In the event that a wealthy Bitcoin investor—or a number of Bitcoin investors—launch a speculative attack on a currency, what can be done to counter it? In theory, individual countries could diversify their reserve portfolio by purchasing Bitcoins from an online exchange. But if a central bank’s reserve is unable to absorb the maturity mismatches suffered by its central banks, who can it turn to? The IMF has no supply of Bitcoins; indeed it has almost no way to obtain them directly. The IMF obtains currency via the quota system and the IMF can only collect quotas from its members. Bitcoin is neither a member of the IMF, nor could it become one if it wanted to—IMF membership is only open to nation-states. The IMF could try to purchase its own reserve of Bitcoins, but whose money would it use? Which part of the IMF’s general fund would it deplete? In short, Bitcoin’s potential to become a major player in the foreign currency exchange raises a number of substantial questions for the IMF. In its current state, the IMF would be unable to supply the currency needed to counter the destabilizing effect of a speculative attack by Bitcoin users on a member nation’s currency."

The IMF has no way to obtain bitcoins, because it can't decide which of its funds to tap, and it's physically incapable of buying them? A few wealthy bitcoin investors have the juice to bring down entire currencies? What a load of horseshit. The true meaning of this paper should be absolutely clear: bitcoin has the potential to be a direct threat to the global central banking regime because it is immune their manipulation/politicization, and it must be regulated or controlled before it becomes big enough to be a serious competitor. Take this proposed "solution" to the "danger" of bitcoin (page 21):

"There are, however, two ways to incorporate Bitcoin into the IMF’s regime. The first option is to grant the IMF indirect control over Bitcoin by expanding the interpretation of an already-existing provision of the IMF. This approach requires the least amount of change and leaves the overall IMF framework mostly intact. The second option is to grant the IMF more direct control over Bitcoin by granting it and other digital currencies quasi-membership status. This more radical approach would require and amendment of the Articles of Agreement and would fundamentally alter the existing framework’s conception of a non-state actor’s role in the IMF."

Again, I don't claim any special knowledge about global currencies, economics, or finance; however, when a professor from a neo-liberal training ground like UC makes a statement like "the first option is to grant the IMF indirect control over bitcoin" (on what authority?)—and suggests that the financial powers-that-be should be willing to consider re-writing IMF treaties and bylaws and literally RESTRUCTURING THEIR ORGANIZATION in order to assimilate bitcoin—you'd better believe that the digital p2p currency revolution has the full attention of the global financial terrorists.

Thoughts?

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[jaywaka2713]

The IMF couldn't take down Bitcoin if it tried. It's too late for that now. It will cost hundreds of millions of dollars to do such a feat, and they'd need to pay a developer that understands Bitcoin enough to write code that launches hostile blocks. Also, they will have essentially deflated the US Dollar by almost 1 Billion dollars because of the amount invested in Bitcoin. Don't worry about this.

[Gavin Andresen]

Thoughts?

This gives me warm fuzzies; a University of Chicago professor speculating about how a wildly successful Bitcoin might affect the International Monetary Fund!

I don't really care what is said, just the fact that Bitcoin is being talked about in the elite Ivory Towers is a very good thing.

[darkmule]

The IMF couldn't take down Bitcoin if it tried. It's too late for that now. It will cost hundreds of millions of dollars to do such a feat, and they'd need to pay a developer that understands Bitcoin enough to write code that launches hostile blocks. Also, they will have essentially deflated the US Dollar by almost 1 Billion dollars because of the amount invested in Bitcoin. Don't worry about this.

They could still create a good deal of havoc trying.  The IMF should be considered a serious threat, not just to Bitcoin but to the world.  It would be a very good thing if Bitcoin did, in fact, contribute to ending the existence of the evil bunch of thugs and thieves known as the IMF.  The sooner the IMF is up against a wall the better.

[jaywaka2713]

The IMF couldn't take down Bitcoin if it tried. It's too late for that now. It will cost hundreds of millions of dollars to do such a feat, and they'd need to pay a developer that understands Bitcoin enough to write code that launches hostile blocks. Also, they will have essentially deflated the US Dollar by almost 1 Billion dollars because of the amount invested in Bitcoin. Don't worry about this.

They could still create a good deal of havoc trying.  The IMF should be considered a serious threat, not just to Bitcoin but to the world.  It would be a very good thing if Bitcoin did, in fact, contribute to ending the existence of the evil bunch of thugs and thieves known as the IMF.  The sooner the IMF is up against a wall the better.

A true financial system shouldn't need an organization like the IMF in the first place! We are doing the Fiat system a favor if we ruined them.

[deadweasel]

The IMF couldn't take down Bitcoin if it tried. It's too late for that now. It will cost hundreds of millions of dollars to do such a feat, and they'd need to pay a developer that understands Bitcoin enough to write code that launches hostile blocks. Also, they will have essentially deflated the US Dollar by almost 1 Billion dollars because of the amount invested in Bitcoin. Don't worry about this.

They could still create a good deal of havoc trying.  The IMF should be considered a serious threat, not just to Bitcoin but to the world.  It would be a very good thing if Bitcoin did, in fact, contribute to ending the existence of the evil bunch of thugs and thieves known as the IMF.  The sooner the IMF is up against a wall the better.

A true financial system shouldn't need an organization like the IMF in the first place! We are doing the Fiat system a favor if we ruined them.

We are doing everyone a favor, even them, if bitcoin squeezes them out.

[hayek]

In a simple metaphor: This is like Microsoft trying to kill Open Source. There is absolutely no chance of it ever happening.


It makes me happy. They are starting to realize their time is coming to an end much sooner than they expected.

For an additional warm fuzzy: All the Austrians love bitcoin. Jeff Tucker has been absolutely elated by bitcoin. Anytime I feel down I check out Jeff's youtube or facebook. Charming example of what anarchy is all about.

[acoindr]

Thoughts?

Expect the price of bitcoins to shoot up again soon?

Seriously, I think things are getting interesting. I agree with Gavin.

[MykelSilver]

They can buy mining hardware  equipment for unlimited amount of funds and mine the rest of the coins to corner / control the market

[jaywaka2713]

They can buy mining hardware  equipment for unlimited amount of funds and mine the rest of the coins to corner / control the market

They would need clearance and no committee would agree to wasting that much money.

[MykelSilver]

@jaywaka2713: To destroy Bitcoin there is no waste of money for them. Bitcoin is simply too dangerous for them so all funds are allowed

[jaywaka2713]

@jaywaka2713: To destroy Bitcoin there is no waste of money for them. Bitcoin is simply too dangerous for them so all funds are allowed

Well, destroying Bitcoin destroys all the USD in Bitcoin and the funds of every other Fiat invested. Why spend 500 Million to destroy almost 1 Billion USD?

[MykelSilver]

@jaywaka2713: To destroy Bitcoin there is no waste of money for them. Bitcoin is simply too dangerous for them so all funds are allowed

Well, destroying Bitcoin destroys all the USD in Bitcoin and the funds of every other Fiat invested. Why spend 500 Million to destroy almost 1 Billion USD?

Sorry could you elaborate that a bit more for me please? Thank you

[newtothescene]

Why does the Impossible Mission Force care about Bitcoin?    

Agreed, that any news is good news.

[MykelSilver]

I really hope Bitcoin survive this threat
EDIT: Date of paper is April 7, 2013.....

[melvster]

If the IMF try and destroy bitcoin 100 new alts will spring up.

But let's not forget there are *some* good folks at the IMF, let's try and win over 51%

[kriwest]

@jaywaka2713: To destroy Bitcoin there is no waste of money for them. Bitcoin is simply too dangerous for them so all funds are allowed

Well, destroying Bitcoin destroys all the USD in Bitcoin and the funds of every other Fiat invested. Why spend 500 Million to destroy almost 1 Billion USD?

They can just print more. 1 Billion "lost" is not.. 1 Billion lost.. not when you have a printing press.

[RodeoX]

Thoughts?

This gives me warm fuzzies; a University of Chicago professor speculating about how a wildly successful Bitcoin might affect the International Monetary Fund!

I don't really care what is said, just the fact that Bitcoin is being talked about in the elite Ivory Towers is a very good thing.

Amen. You have to fly high to be on radar.

[bigdude]

any news is good news ... and bitcoin getting talked about again, is GOOD news - despite the stupidity of the article.

[DAN444]

They can buy mining hardware  equipment for unlimited amount of funds and mine the rest of the coins to corner / control the market

They would need clearance and no committee would agree to wasting that much money.

The US can print as much as it wants so "wasting" is impossible.
I suppose the IMF could benefit from US money printing
The FED is currently printing 85 billion a month (quantitative easing)

[MykelSilver]

They can buy mining hardware  equipment for unlimited amount of funds and mine the rest of the coins to corner / control the market

They would need clearance and no committee would agree to wasting that much money.

The US can print as much as it wants so "wasting" is impossible.
I suppose the IMF could benefit from US money printing
The FED is currently printing 85 billion a month (quantitative easing)

Well,
If this is true then it is not the question IF this will be the end of Bitcoin, but When.... :-( Very sad. Bad guys always win

[cypherdoc]

Thoughts?

This gives me warm fuzzies; a University of Chicago professor speculating about how a wildly successful Bitcoin might affect the International Monetary Fund!

I don't really care what is said, just the fact that Bitcoin is being talked about in the elite Ivory Towers is a very good thing.

Amen. You have to fly high to be on radar.

Cash with Wings

[DAN444]

They can buy mining hardware  equipment for unlimited amount of funds and mine the rest of the coins to corner / control the market

They would need clearance and no committee would agree to wasting that much money.

The US can print as much as it wants so "wasting" is impossible.
I suppose the IMF could benefit from US money printing
The FED is currently printing 85 billion a month (quantitative easing)

Well,
If this is true

From the mouth of (at the time) FED chairman Alan Greenspan:
http://www.youtube.com/watch?v=q6vi528gseA

[jaywaka2713]

Ugh read more government crap about Bitcoin. Look at it this way, we got our name into IMF reports. We should see this as marketing success.

[acoindr]

They can buy mining hardware  equipment for unlimited amount of funds and mine the rest of the coins to corner / control the market

That's like trying to corner the market on winning the lottery.

Also, I don't know why we're seeing so many people talk about "mining all the bitcoins" like anyone could actually do it. It doesn't matter how much computing power you put toward mining. Coins will only come into existence at a limited rate until around 2030.

[MykelSilver]

Well, if the Hashrate explodes than I know the IMF has joined the mining business .... They can buy whole nuclear plants as power supply......

[jaywaka2713]

Well, if the Hashrate explodes than I know the IMF has joined the mining business .... They can buy whole nuclear plants as power supply......

Hash rate will already explode from ASIC lines. Will be impossible to calculate if IMF mines or not.

[MykelSilver]

Well, if the Hashrate explodes than I know the IMF has joined the mining business .... They can buy whole nuclear plants as power supply......

Hash rate will already explode from ASIC lines. Will be impossible to calculate if IMF mines or not.

By explode: I mean really explode. Think about hashrate of these numbers:

Quadrillion has 15 zeros
Quintillion has 18 zeros
Sextillion has 21 zeros
Septillion has 24 zeros
Octillion has 27 zeros
Nonillion has 30 zeros
Decillion has 33 zeros
Undecillion has 36 zeros
Duodecillion has 39 zeros
Tredecillion has 42 zeros
Quattuordecillion has 45 zeros
Quindecillion has 48 zeros
Sexdecillion has 51 zeros
Septendecillion has 54 zeros
Octodecillion has 57 zeros
Novemdecillion has 60 zeros
Vigintillion has 63 zeros
Googol has 100 zeros.
Centillion has 303 zeros (except in Britain, where it has 600 zeros)

[acoindr]

Well, if the Hashrate explodes than I know the IMF has joined the mining business .... They can buy whole nuclear plants as power supply......

Hence the beauty of Bitcoin.

If the forces that want to control/stop it actually try it contributes to speeding Bitcoin's wide scale adoption and success as they legitimize it.

[jaywaka2713]

Well, if the Hashrate explodes than I know the IMF has joined the mining business .... They can buy whole nuclear plants as power supply......

Hash rate will already explode from ASIC lines. Will be impossible to calculate if IMF mines or not.

By explode: I mean really explode. Think about hashrate of these numbers:

Quadrillion has 15 zeros
Quintillion has 18 zeros
Sextillion has 21 zeros
Septillion has 24 zeros
Octillion has 27 zeros
Nonillion has 30 zeros
Decillion has 33 zeros
Undecillion has 36 zeros
Duodecillion has 39 zeros
Tredecillion has 42 zeros
Quattuordecillion has 45 zeros
Quindecillion has 48 zeros
Sexdecillion has 51 zeros
Septendecillion has 54 zeros
Octodecillion has 57 zeros
Novemdecillion has 60 zeros
Vigintillion has 63 zeros
Googol has 100 zeros.
Centillion has 303 zeros (except in Britain, where it has 600 zeros)

OK Nobody will invest the HUNDREDS OF BILLIONS of dollars into making a device that has 1 quadrillion GH/s.

[MykelSilver]

Well, if the Hashrate explodes than I know the IMF has joined the mining business .... They can buy whole nuclear plants as power supply......

Hence the beauty of Bitcoin.

If the forces that want to control/stop it actually try it contributes to speeding Bitcoin's wide scale adoption and success as they legitimize it.

Not if they mine the remainder of ALL bitcoins... Within seconds short time they can mine all of it using the above hashrate (Centillion Hash/s)  Than they can sell those about 11M coins at once into the market so its value would drop to zero

[Tuxavant]

Not if they mine the remainder of ALL bitcoins... Within seconds they can mine all of it using the above hashrate (Centillion Hash/s)  Than they can sell those about 11M coins at once into the market so its value would drop to zero

Pretty sure this would result in a unanimous consensus to roll back the blockchain and instantly invalidate those billions of dollars spend on the hardware.

[MykelSilver]

Well, if the Hashrate explodes than I know the IMF has joined the mining business .... They can buy whole nuclear plants as power supply......

Hence the beauty of Bitcoin.

If the forces that want to control/stop it actually try it contributes to speeding Bitcoin's wide scale adoption and success as they legitimize it.

Not if they mine the remainder of ALL bitcoins... Within seconds short time they can mine all of it using the above hashrate (Centillion Hash/s)  Than they can sell those about 11M coins at once into the market so its value would drop to zero

Well, if the Hashrate explodes than I know the IMF has joined the mining business .... They can buy whole nuclear plants as power supply......

Hash rate will already explode from ASIC lines. Will be impossible to calculate if IMF mines or not.

By explode: I mean really explode. Think about hashrate of these numbers:

Quadrillion has 15 zeros
Quintillion has 18 zeros
Sextillion has 21 zeros
Septillion has 24 zeros
Octillion has 27 zeros
Nonillion has 30 zeros
Decillion has 33 zeros
Undecillion has 36 zeros
Duodecillion has 39 zeros
Tredecillion has 42 zeros
Quattuordecillion has 45 zeros
Quindecillion has 48 zeros
Sexdecillion has 51 zeros
Septendecillion has 54 zeros
Octodecillion has 57 zeros
Novemdecillion has 60 zeros
Vigintillion has 63 zeros
Googol has 100 zeros.
Centillion has 303 zeros (except in Britain, where it has 600 zeros)

OK Nobody will invest the HUNDREDS OF BILLIONS of dollars into making a device that has 1 quadrillion GH/s.

They can FREE print any amount of money they want.

[MykelSilver]

Not if they mine the remainder of ALL bitcoins... Within seconds they can mine all of it using the above hashrate (Centillion Hash/s)  Than they can sell those about 11M coins at once into the market so its value would drop to zero

Pretty sure this would result in a unanimous consensus to roll back the blockchain and instantly invalidate those billions of dollars spend on the hardware.

Is that possible? Nice thought.... Very interesting . Thanks for sharing

[acoindr]

Not if they mine the remainder of ALL bitcoins... Within seconds short time they can mine all of it using the above hashrate (Centillion Hash/s)  Than they can sell those about 11M coins at once into the market so its value would drop to zero

What part of fixed inflation rate don't you understand?

[harposox]

The IMF couldn't take down Bitcoin if it tried. It's too late for that now. It will cost hundreds of millions of dollars to do such a feat, and they'd need to pay a developer that understands Bitcoin enough to write code that launches hostile blocks. Also, they will have essentially deflated the US Dollar by almost 1 Billion dollars because of the amount invested in Bitcoin. Don't worry about this.

I'm not technically savvy enough to have a credible opinion whether an organization like the IMF can possibly threaten bitcoin as a concept, currency, or protocol; I'll leave that to smarter folks than I. However, I am definitely concerned with the influence that something as powerful as the IMF can have on making day-to-day bitcoin usage nearly impossible for laypersons such as myself—by demonizing it globally, turning politicians and political/legal systems against it, polluting academia and media with anti-bitcoin propaganda, shutting down exchanges, etc. In my mind these are bitcoin's weak links and the idea that it's immune to such assaults is extremely naive.

Remember, the global banking cartel does not fuck around—this group (the IMF, World Bank, BCCI, BIS, and their satellite network of central banks) has decades of experience bringing entire economies to their knees. Despite their laughable protestations to the contrary, they have virtually unlimited resources to bring to bear should they choose to do so... they own the printing presses!

[MykelSilver]

Not if they mine the remainder of ALL bitcoins... Within seconds short time they can mine all of it using the above hashrate (Centillion Hash/s)  Than they can sell those about 11M coins at once into the market so its value would drop to zero

What part of fixed inflation rate don't you understand?

I give up. You tell me.

[Elwar]

Their best solution would be to court the Bitcoin Foundation with promises of main player status in world currency decisions.

In exchange, the Bitcoin Foundation would need to reserve a good chunk of bitcoins for currency manipulation.

Or they could call the Winklevoss twins...

[acoindr]

...by demonizing it globally, turning politicians and political/legal systems against it, polluting academia and media with anti-bitcoin propaganda, shutting down exchanges, etc. ...

Then they fight you, then you win...

[niko]

Ah, the chicago school of economics...  Fascist scumbags, brainwashed idiots, and psychopathic criminals.

[BurtW]

Not if they mine the remainder of ALL bitcoins... Within seconds short time they can mine all of it using the above hashrate (Centillion Hash/s)  Than they can sell those about 11M coins at once into the market so its value would drop to zero

There is no way they can bring more computational power to the network than we already have within a short time.  They will not "mine all the rest" of the coins.  That cannot and will not happen.

If the forces that want to control/stop it actually try it contributes to speeding Bitcoin's wide scale adoption and success as they legitimize it.

This.  By design as they attempt to stop it they help it (publicity or mining).

They can buy mining hardware  equipment for unlimited amount of funds and mine the rest of the coins to corner / control the market

That's like trying to corner the market on winning the lottery.

Also, I don't know why we're seeing so many people talk about "mining all the bitcoins" like anyone could actually do it. It doesn't matter how much computing power you put toward mining. Coins will only come into existence at a limited rate until around 2030.

True.  Except where do all these dates come from.  Everyone just pulls them out of their ass I guess.  The date is 2140 as shown in your referenced article!.

Also note that this whole topic has already been discussed here: https://bitcointalk.org/index.php?topic=224704.0

[Este Nuno]

Not if they mine the remainder of ALL bitcoins... Within seconds short time they can mine all of it using the above hashrate (Centillion Hash/s)  Than they can sell those about 11M coins at once into the market so its value would drop to zero

There is no way they can bring more computational power to the network than we already have within a short time.  They will not "mine all the rest" of the coins.  That cannot and will not happen.

If the forces that want to control/stop it actually try it contributes to speeding Bitcoin's wide scale adoption and success as they legitimize it.

This.  By design as they attempt to stop it they help it (publicity or mining).

They can buy mining hardware  equipment for unlimited amount of funds and mine the rest of the coins to corner / control the market

That's like trying to corner the market on winning the lottery.

Also, I don't know why we're seeing so many people talk about "mining all the bitcoins" like anyone could actually do it. It doesn't matter how much computing power you put toward mining. Coins will only come into existence at a limited rate until around 2030.

True.  Except where do all these dates come from.  Everyone just pulls them out of their ass I guess.  The date is 2140 as shown in your referenced article!.

Also note that this whole topic has already been discussed here: https://bitcointalk.org/index.php?topic=224704.0

2 week lag on difficulty adjustment does come in to play though. So it's a bit more complicated.

[acoindr]

Not if they mine the remainder of ALL bitcoins... Within seconds short time they can mine all of it using the above hashrate (Centillion Hash/s)  Than they can sell those about 11M coins at once into the market so its value would drop to zero

What part of fixed inflation rate don't you understand?

I give up. You tell me.

The system is set up to only allow a certain number of coins to come into existence over time. There is a difficulty target which recalculates about every two weeks to see whether the difficulty should rise or be lowered. A single retarget never changes by more than a factor of 4 to prevent large changes in difficulty.

If some entity with unlimited resources tried to "mine all the bitcoins" they would first go up against the existing network, which is already record breaking in terms of collective computing power. Even if they met or exceeded that hash power that wouldn't guarantee they won all blocks/coins because that happens like a lottery. Just because you have 10 lottery tickets to my 5 doesn't mean you're guaranteed I won't win and you will.

In the meantime word would get out about the massive effort to bring down Bitcoin which of course strengthens Bitcoin. In a race to harness the most computing power it would be essentially those who control the world versus those who actually make up the world. Which side do you think wins?

[MykelSilver]

got it! Thx

[cypherdoc]

In a race to harness the most computing power it would be essentially those who control the world versus those who actually make up the world. Which side do you think wins?

i like the way you put that.

[wachtwoord]

Thoughts?

This gives me warm fuzzies; a University of Chicago professor speculating about how a wildly successful Bitcoin might affect the International Monetary Fund!

I don't really care what is said, just the fact that Bitcoin is being talked about in the elite Ivory Towers is a very good thing.

In the end, I don't care either because if Bitcoin is successful, the economic forces involved would make IMF obsolete (unable to function for lack of funds). However, nothing the IMF does or says can ever give me fuzzy feelings because I'm morally opposed to what they are and what they try to pursue. Also here (note, I didn't read the paper but am going by OPs quotes) the author is extremely condescending. Take authority over Bitcoin? On what grounds? To me, to even utter those words means being completely disconnected from reality, honesty and fairness.

[Trongersoll]

Why does the Impossible Mission Force care about Bitcoin?    

Agreed, that any news is good news.

My thought exactly. There is an easy way for them to deal with bitcoin, all they have to do is buy them all and erase the wallets.

But alt currencies are like potato chips, we'll make more.

[MykelSilver]

My thought exactly. There is an easy way for them to deal with bitcoin, all they have to do is buy them all and erase the wallets.

If they do that it would be good thing for bitcoin. Lost wallets can never be sold on the market for fiat again.

[harposox]

Ah, the chicago school of economics...  Fascist scumbags, brainwashed idiots, and psychopathic criminals.

Yes, yes and yes! We're on the same wavelength here.

However to be fair, after doing a bit of research on the author, he's but a pup—a former frat boy still chasing his UC law degree, participating in every godforsaken lawyer "society" group that'll have him... let's call him a "fascist-scumbag-in-training," at least until his balls drop.

[donut]

To clarify: difficulty adjusts every 2016 blocks. There is no time limit on this. If 2016 blocks were mined in one minute - the difficulty will adjust such that the next 2016 will be mined roughly 10 minutes apart from each other.

Therefore, it is impossible to "mine all remaining coins". It just won't happen.

[donut]

Why does the Impossible Mission Force care about Bitcoin?    

Agreed, that any news is good news.

My thought exactly. There is an easy way for them to deal with bitcoin, all they have to do is buy them all and erase the wallets.

But alt currencies are like potato chips, we'll make more.

That would achieve nothing at all. I am not going to sell all of my coins, and even 1 satoshi left accessible in the whole universe is enough to sustain any possible economy - will require just one hard fork to allow for more divisibility.

[acoindr]

True.  Except where do all these dates come from.  Everyone just pulls them out of their ass I guess.  The date is 2140 as shown in your referenced article!.

The Year is a projection. Bitcoin doesn't operate based on strict dates. Time between blocks is supposed to be every 10 minutes, but has been as low as 2 minutes and as long as 2 hours if I remember correctly.

[Trongersoll]

Why does the Impossible Mission Force care about Bitcoin?    

Agreed, that any news is good news.

My thought exactly. There is an easy way for them to deal with bitcoin, all they have to do is buy them all and erase the wallets.

But alt currencies are like potato chips, we'll make more.

That would achieve nothing at all. I am not going to sell all of my coins, and even 1 satoshi left accessible in the whole universe is enough to sustain any possible economy - will require just one hard fork to allow for more divisibility.

Actually it would, but it would take time. If they bought every coin inexistance, or close to it and insured that they would never be circulated again. Once all the coins are mined, there could be so few transactions that nobody would bother mining for just transaction fees.

[harposox]

In the end, I don't care either because if Bitcoin is successful, the economic forces involved would make IMF obsolete (unable to function for lack of funds). However, nothing the IMF does or says can ever give me fuzzy feelings because I'm morally opposed to what they are and what they try to pursue. Also here (note, I didn't read the paper but am going by OPs quotes) the author is extremely condescending. Take authority over Bitcoin? On what grounds? To me, to even utter those words means being completely disconnected from reality, honesty and fairness.

Your read is accurate—the author was not only condescending, but assumed somehow that the IMF had the right (without suggesting any legal justification) to integrate/regulate/control bitcoin. I assumed the guy was a figurehead within their econ department, given the presumptive authority with which he presented his "argument"—turns out he's just an adorable overachieving UC law student with an innate deference for the authority of global financial institutions (redundant, I know).

The subject of my OP appears to be a bit hyperbolic. My apologies, folks.

[KeyserSoze]

http://blogs.marketwatch.com/thetell/2013/06/05/imf-to-admit-big-fat-greek-bailout-blunders-wsj/

[RodeoX]

Ah, the chicago school of economics...  Fascist scumbags, brainwashed idiots, and psychopathic criminals.

I will contact them again. I spoke to them in 2011 and was invited to come back. Let's charm them, not hate on them. If they can be brainwashed once, then I can do it to them also.  

http://www.chicagobooth.edu/alumni/events/showEvent?eventId=2868
Look at this.

[crumbcake]

What is everyone talking about?  This is a nothing paper, written by a non-entity Prof jr., who isn't associated in any way with IMF.  Bitcoin's not on IMF radar -- it appears in a paper to be published in "Chicago Journal of International Law ("CJIL") is a semiannual, student-edited law review published by the University of Chicago Law School since spring 2000."  In other words, Bitcoin makes it into a school rag.
Everyone:  you still got time to ebay your gamer boxen before jackbooted law students kick down your door.
 

[cypherdoc]

Ah, the chicago school of economics...  Fascist scumbags, brainwashed idiots, and psychopathic criminals.

I will contact them again. I spoke to them in 2011 and was invited to come back. Let's charm them, not hate on them. If they can be brainwashed once, then I can do it to them also.  

http://www.chicagobooth.edu/alumni/events/showEvent?eventId=2868
Look at this.

which one is you?

[TheGovernedSelf]

They can buy mining hardware  equipment for unlimited amount of funds and mine the rest of the coins to corner / control the market

They would need clearance and no committee would agree to wasting that much money.

The US can print as much as it wants so "wasting" is impossible.
I suppose the IMF could benefit from US money printing
The FED is currently printing 85 billion a month (quantitative easing)

Well,
If this is true

From the mouth of (at the time) FED chairman Alan Greenspan:
http://www.youtube.com/watch?v=q6vi528gseA

You can't argue with his logic. 

[JackH]

If Bitcoin walks this fine line the next years time, I think that Bitcoin will never be shut down. Right now we are in transition periods, with our network speed still going up. Once it hits a high peak it will show how strong Bitcoin really is. One year guys, just one more year and we are immortal! 

[alexeft]

I quote from the document:

In order to mitigate the potential impact of Bitcoin, the meaning of Article IV, Section 5 could be expanded to include digital currencies. Rather than limiting its scope to currencies used by colonies or overseas territories, the IMF could use Article IV Section 5 to label Bitcoin—or other digital currencies like it—a “separate currency.”159 As such, the IMF could require member nations to pay part of their subscription quota with Bitcoins.160 This would require member nations to purchase Bitcoins independently. They would then contribute that amount to the IMF’s general fund as part of their quota, receiving an amount of their own currency or special drawing rights equal to the value of the Bitcoins paid in exchange.161 In short, expanding the meaning of Article IV, Section 5 would grant the IMF a means of indirectly accumulating Bitcoins through its members.

...which means that IMF's member countries (ie the world over, the exception being North Korea) would have to buy ... you guessed it ... bitcoins!!!

$1mil per bicoin anyone?

[bluemeanie1]

Why does the Impossible Mission Force care about Bitcoin?    

Agreed, that any news is good news.

My thought exactly. There is an easy way for them to deal with bitcoin, all they have to do is buy them all and erase the wallets.

But alt currencies are like potato chips, we'll make more.

so if I hold out and don't sell, my coins will be worth big $$$$!

[alexeft]

Further down in the document, another solution is discussed. That the IMF might incorporate bitcoin and make it a member.

I quote the possible outcome from the document:

This solution is not, however, without its drawbacks. Collecting Bitcoins via a quasi-membership scheme creates a collective action problem. Because Bitcoin operates through a decentralized network of users, aggregating the necessary amount of Bitcoins would be difficult. There is no centralized institution for the IMF to go to, and no easy way for the IMF to contact Bitcoin users directly. The IMF would have to enter online Bitcoin exchanges like any other prospective Bitcoin user. Even if the IMF were able to transact with Bitcoin users directly, the recognition-in-exchange-for-trading scheme creates a tragedy of the commons: all Bitcoin users benefit from the increased legitimacy of IMF recognition, but no one individual user has an incentive to transact with the IMF. In fact, Bitcoin users might very well have incentive not to transact with the IMF right away. Recall that Bitcoin’s mining software is programmed to cap the generation of Bitcoins by approximately 2025.168 Once the availability of Bitcoins becomes finite, we can expect the value of Bitcoins to increase. Thus, Bitcoin users have a short-term incentive to hold on to their Bitcoins rather than trade them. Since the proposed system relies on the completely voluntary participation of Bitcoin users, the incentive to hold on to Bitcoins creates a serious problem.

I raise you!!! $10mil per coin!!!!  

[Tuxavant]

There is a difficulty target which recalculates about every two weeks to see whether the difficulty should rise or be lowered. A single retarget never changes by more than a factor of 4 to prevent large changes in difficulty.

Difficulty is recalculated every 2016 blocks regardless of the time it took to make them. It's *suppose* to be 2 weeks, but in the context of some cryptographic super horsepower device that can do googolhashing, it only lasts a very short while. only about 8000 blocks can be generated in a short time before it goes back to 10 minute blocks at that hash power.

[telemaco]

What if the "peak oil extraction" has been already left behind and we find that more and more and more electricity is just too expensive? What would happen? ASICs would have to be more power efficient and many miners would be left behind. Mining companies could get too centralized and at one point be infiltrated by states? Even banksters could have a big share of many mining companies (like jpmorgan and similars now own a great slide of the world) and decide to perform constant 51% attacks.

Another issue. What would happen on a war economy. We have been living a long period without wars but that won't continue for long (i hope that is not true). On a war economy and under war laws states could exert extreme violence to anyone using bitcoin or entire regions of countries could just shutdown the internet like north korea or lybia during revolts. What would happen? many forks?

Other possibility. What happens with bitcoin when there is no internet, when 3G lines are switched off and there are not even mobile lines for failing infrastructures or in zones with inhibitors? What would happen with Bitcoin?

Just some thoughts

[wachtwoord]

The internet is designed to survive in a global war.

[crumbcake]

Other possibility. What happens with bitcoin when there is no internet, when 3G lines are switched off and there are not even mobile lines for failing infrastructures or in zones with inhibitors? What would happen with Bitcoin?

Just some thoughts

You'll have to purchase one of these...https://encrypted-tbn1.gstatic.com/images?q=tbn:ANd9GcTLi8CdGTTAIWryt1aSoOXs2zJcMIB_zHeeqnQqi9yiOM0f1mHtYw

[telemaco]

Other possibility. What happens with bitcoin when there is no internet, when 3G lines are switched off and there are not even mobile lines for failing infrastructures or in zones with inhibitors? What would happen with Bitcoin?

Just some thoughts

You'll have to purchase one of these...

Yes, then i recommend to new users they start to download the blockchain now.

I think bitcoin would be far more secure if there were some kind of open wifi or similar project around the world to provide internet no matter what happens. Who knows, one of those computers for 10 bucks for underdeveloped countries that appear sometimes in the news. Maybe would be nice to have one of those in case of war.

[crumbcake]

Other possibility. What happens with bitcoin when there is no internet, when 3G lines are switched off and there are not even mobile lines for failing infrastructures or in zones with inhibitors? What would happen with Bitcoin?

Just some thoughts

You'll have to purchase one of these...https://encrypted-tbn1.gstatic.com/images?q=tbn:ANd9GcTLi8CdGTTAIWryt1aSoOXs2zJcMIB_zHeeqnQqi9yiOM0f1mHtYw

Yes, then i recommend to new users they start to download the blockchain now.

And getting a nice pots line.  And swapping ips for phone numbers.

[bitzox]

Another issue. What would happen on a war economy. We have been living a long period without wars but that won't continue for long (i hope that is not true). On a war economy and under war laws states could exert extreme violence to anyone using bitcoin or entire regions of countries could just shutdown the internet like north korea or lybia during revolts. What would happen? many forks?

Haven't we been at war for the last 12 years?

[telemaco]

I recommend one of this for your backpack



http://www.voltaicsystems.com/

and then with a laptop you can be a moving bitcoin ATM ... (you can get part of the blockchain on a usb to speed things up and sell that data to others or leave them suffering the modem speed for ages)

[Mageant]

I'm wondering what they are actually going to do?

So far its just scaremongering (and taking down other vulnerable systems like LR).

 

[telemaco]

Another issue. What would happen on a war economy. We have been living a long period without wars but that won't continue for long (i hope that is not true). On a war economy and under war laws states could exert extreme violence to anyone using bitcoin or entire regions of countries could just shutdown the internet like north korea or lybia during revolts. What would happen? many forks?

Haven't we been at war for the last 12 years?

well that is not my case. If you are american, you haven't suffered one in your home land (i think), disrupting electricity, comunications, bombings, health problems, etc that would be severe enough to disrupt bitcoin. If you are on a civil war on Congo you probably would have problems using bitcoins.

[bitzox]

I'm wondering what they are actually] going to do?

So far its just scaremongering (and taking down other vulnerable systems like LR).

I would like to seem them actually try something (and fail).

Getting a little bit boring...  

Given the IMF's track record...(http://online.wsj.com/article/SB10001424127887324299104578527202781667088.html) They will probably wait until its too late and then do the wrong thing

[crumbcake]

I recommend one of this for your backpack

https://dl.dropboxusercontent.com/u/7609612/pictures/2013-06-06_002112.jpg

http://www.voltaicsystems.com/

and then with a laptop you can be a moving bitcoin ATM ... (you can get part of the blockchain on a usb to speed things up and sell that data to others or leave them suffering the modem speed for ages)

Now you're gettin' it!  We'll set up a p2p network of solar-powered laptops!!  We'll bring back can-tennas too!

[bitzox]

well that is not my case. If you are american, you haven't suffered one in your home land (i think), disrupting electricity, comunications, bombings, health problems, etc that would be severe enough to disrupt bitcoin. If you are on a civil war on Congo you probably would have problems using bitcoins.

Fair enough. I have this stupid American habit of assuming that everyone who types in English must by American...forgive me I'm working on it.

But ya that wont ever really be a problem in my lifetime, we have two very large oceans that do a damn good job of protecting us from wars on our land. Barring an EMP from some terrorist/China/NK(hahahahaha ya right, you need a functioning ICBM for that)/Russia/Iran?all-the-other-palces-that-hate-us we should be ok.

As to other parts of the world that have a much higher likelihood of having a disruptive conflict within their boarders I really don't know. Even with the backpack and the laptop you still need internet access. Some sort of SAT phone connection maybe? trying to think of things that will work w/o local infrastructure and having a hard time.

[telemaco]

I recommend one of this for your backpack



http://www.voltaicsystems.com/

and then with a laptop you can be a moving bitcoin ATM ... (you can get part of the blockchain on a usb to speed things up and sell that data to others or leave them suffering the modem speed for ages)

Now you're gettin' it!  We'll set up a p2p network of solar-powered laptops!!  We'll bring back can-tennas too!

yes we just need to divide the terrain between us and don't get too close.

[telemaco]

well that is not my case. If you are american, you haven't suffered one in your home land (i think), disrupting electricity, comunications, bombings, health problems, etc that would be severe enough to disrupt bitcoin. If you are on a civil war on Congo you probably would have problems using bitcoins.

Fair enough. I have this stupid American habit of assuming that everyone who types in English must by American...forgive me I'm working on it.

But ya that wont ever really be a problem in my lifetime, we have two very large oceans that do a damn good job of protecting us from wars on our land. Barring an EMP from some terrorist/China/NK(hahahahaha ya right, you need a functioning ICBM for that)/Russia/Iran?all-the-other-palces-that-hate-us we should be ok.

As to other parts of the world that have a much higher likelihood of having a disruptive conflict within their boarders I really don't know. Even with the backpack and the laptop you still need internet access. Some sort of SAT phone connection maybe? trying to think of things that will work w/o local infrastructure and having a hard time.

yeah i am working on it, some kind of antenna for the helmet ...

damn! this guy was faster

https://www.youtube.com/watch?v=NIHzz6PtwCo

[telemaco]

well that is not my case. If you are american, you haven't suffered one in your home land (i think), disrupting electricity, comunications, bombings, health problems, etc that would be severe enough to disrupt bitcoin. If you are on a civil war on Congo you probably would have problems using bitcoins.

Fair enough. I have this stupid American habit of assuming that everyone who types in English must by American...forgive me I'm working on it.

But ya that wont ever really be a problem in my lifetime, we have two very large oceans that do a damn good job of protecting us from wars on our land. Barring an EMP from some terrorist/China/NK(hahahahaha ya right, you need a functioning ICBM for that)/Russia/Iran?all-the-other-palces-that-hate-us we should be ok.

As to other parts of the world that have a much higher likelihood of having a disruptive conflict within their boarders I really don't know. Even with the backpack and the laptop you still need internet access. Some sort of SAT phone connection maybe? trying to think of things that will work w/o local infrastructure and having a hard time.

yeah i am working on it, some kind of antenna for the helmet ...

damn! this guy was faster

https://www.youtube.com/watch?v=NIHzz6PtwCo

Now seriously on a war economy bitcoin wouldn't be allowed probably. There would be a fair suspicion of people using it to send anonimously funds to the other party. There would be barriers and firewalls bigger than those on china or north korea to block and filter internet connections. Only a few chosen could probably use internet during a serious war conflict (i mean an all out war effort, not just a war against a small country) Possible for them? maybe not but bitcoin would probably be a hidden economy (at national scale) then and there could be forks from parts of the world not connecting to the rest of the network?

[dmartig]

Another issue. What would happen on a war economy. We have been living a long period without wars but that won't continue for long (i hope that is not true). On a war economy and under war laws states could exert extreme violence to anyone using bitcoin or entire regions of countries could just shutdown the internet like north korea or lybia during revolts. What would happen? many forks?

Haven't we been at war for the last 12 years?

we the US,  has been at war since ww2

[telemaco]

Another issue. What would happen on a war economy. We have been living a long period without wars but that won't continue for long (i hope that is not true). On a war economy and under war laws states could exert extreme violence to anyone using bitcoin or entire regions of countries could just shutdown the internet like north korea or lybia during revolts. What would happen? many forks?

Haven't we been at war for the last 12 years?

we the US,  has been at war since ww2

But ya that wont ever really be a problem in my lifetime, we have two very large oceans that do a damn good job of protecting us from wars on our land. Barring an EMP from some terrorist/China/NK(hahahahaha ya right, you need a functioning ICBM for that)/Russia/Iran?all-the-other-palces-that-hate-us we should be ok.

I wouldn't put much faith on those canadians, you never know 

[acoindr]

There is a difficulty target which recalculates about every two weeks to see whether the difficulty should rise or be lowered. A single retarget never changes by more than a factor of 4 to prevent large changes in difficulty.

Difficulty is recalculated every 2016 blocks regardless of the time it took to make them. It's *suppose* to be 2 weeks, but in the context of some cryptographic super horsepower device that can do googolhashing, it only lasts a very short while. only about 8000 blocks can be generated in a short time before it goes back to 10 minute blocks at that hash power.

Yes every 2016 blocks is right. I included the target link but I probably should have put that in parentheses too.

The super horsepower device would quickly be detected and probably provoke a response from the Bitcoin network of support. The super device might win a fair number of blocks before the Bitcoin network caught and surpassed it, but it wouldn't mine all the bitcoins which is the original point.

[BCB]

Ah, the chicago school of economics...  Fascist scumbags, brainwashed idiots, and psychopathic criminals.

I will contact them again. I spoke to them in 2011 and was invited to come back. Let's charm them, not hate on them. If they can be brainwashed once, then I can do it to them also.  

http://www.chicagobooth.edu/alumni/events/showEvent?eventId=2868
Look at this.

RodeoX

That would be awesome if you could go bank and help them UNDERSTAND!

[marcus_of_augustus]

"Since the proposed system relies on the completely voluntary participation of Bitcoin users, the incentive to hold on to Bitcoins creates a serious problem."

Can't believe this guy wrote this statement. Do they have a cookie-cutter for producing facists in economics somewhere?

"Bitcoin is our currency, but it is your problem" ... fits about here I think.

[wachtwoord]

"Since the proposed system relies on the completely voluntary participation of Bitcoin users, the incentive to hold on to Bitcoins creates a serious problem."

Can't believe this guy wrote this statement. Do they have a cookie-cutter for producing facists in economics somewhere?

"Bitcoin is our currency, but it is your problem" ... fits about here I think.

To them, voluntary is a swear word apparently. Who put them in charge again?

[bitzox]

we the US,  has been at war since ww2

+ like several thousand to this...fucking military industrial complex

[jedunnigan]

Wrote about it a few days ago. Pulled out the highlights. Some commentary at the end: https://btcgsa.wordpress.com/2013/06/03/bitcoin-and-the-imf-friends-fornever/

[johnyj]

Who wrote this article??? Lack of basic understanding of shorting a currency. If IMF really helped, Soros won't beat the bank of england by shorting Pounds, won't attack the southeast asia by shorting their currency either. Speculative attack typically happens when a country is overly loaned and there are plenty of fiat can be borrowed at a low interest

To short a currency, you just borrow it and then sell, in forex trading you can use leveraged trading to add to your power, and buy it back at a lower price. You can always short a currency on forex market, no matter there is bitcoin or not. And there is no such thing like you must support the currency exchange price by using bitcoin to buy your currency, you can always use USD reserve to support your currency exchange price

The only valid concern is that BTC might have devastating power over some small countries if its value gained too much, but that is another topic: What rich people will gain by destroy poor people's life???

[cypherdoc]

"Bitcoin is our currency, but it is your problem" ... fits about here I think.

Lol!

Best post of the month year !

[darkmule]

Other possibility. What happens with bitcoin when there is no internet, when 3G lines are switched off and there are not even mobile lines for failing infrastructures or in zones with inhibitors? What would happen with Bitcoin?

What happens when pigs grow to gigantic sizes, grow enormous wings, and start dropping nuclear pig shit on all of us?

[xavier]

Screw all of them!!

Bitcoin will win eventually, just you see..

[pimms4london]

The author also had a lot of good things to say about Bitcoin. For example, he said that digital currencies are a superior medium of exchange, a superior measure of worth, and a superior store of value. Those are the core principles of any currency.

And, my favorite:

Hayek’s predictions about private currencies seem to be coming true before our very eyes: as the world struggles to recover from the recent global economic crisis, more and more people are losing confidence in traditional currencies and turning to Bitcoin as a private, easy-to-use, digital alternative.

[eMansipater]

Agreed.  How on earth could this paper be spun as anti-Bitcoin?  Who all here actually read it before jumping on the FUD bandwagon?

Both proposals for how the IMF member countries can reduce their risk with respect to Bitcoin require them to purchase bitcoins at market rates.  This paper is incredibly forward-looking and valuable, even if it is in an obscure journal.  Some slight misunderstanding of the block chain, mining, and the mt gox hack, but overall not too shabby.  This person's understanding of Bitcoin will only increase over time, and it's valuable to have people who understand Bitcoin publishing papers on opportunities for the IMF.

[pimms4london]

I agree. I feel like BTC supporters are so used to being a misunderstood minority that we react with hostility to things we don't really understand (another example: Ripple). Despite the negative reactions here, I think that this is overall a positive article.

[bitcoinism]

Who wrote this article??? Lack of basic understanding of shorting a currency. If IMF really helped, Soros won't beat the bank of england by shorting Pounds, won't attack the southeast asia by shorting their currency either. Speculative attack typically happens when a country is overly loaned and there are plenty of fiat can be borrowed at a low interest

To short a currency, you just borrow it and then sell, in forex trading you can use leveraged trading to add to your power, and buy it back at a lower price. You can always short a currency on forex market, no matter there is bitcoin or not. And there is no such thing like you must support the currency exchange price by using bitcoin to buy your currency, you can always use USD reserve to support your currency exchange price

The only valid concern is that BTC might have devastating power over some small countries if its value gained too much, but that is another topic: What rich people will gain by destroy poor people's life???

I don't understand that either. Does anyone know why bitcoin would make such an attack more feasible? I guess maybe it's just that the IMF has plans in place to try to stop a traditional attack but hasn't spent much time thinking about bitcoin.

[Anenome5]

There is an easy way for them to deal with bitcoin, all they have to do is buy them all and erase the wallets.

Actually we could run the entire world economy on one bitcoin. I don't think they'd be able to buy them all by any means. The attempt would only make the price shoot through the roof and speed adoption of bitcoin.

But alt currencies are like potato chips, we'll make more.

Indeed. They're likely to try their best to saddle bitcoin with fetters rather than trying to destroy it because bitcoin the idea is a hydra with a thousand heads, and lopping off the first will avail them nothing except to rile up users who will fight back at the injustice of it with renewed energy. They don't want to make a martyr of bitcoin, they want to make a compromiser out of it, to adopt it into the fold and corrupt it with pernicious choices. They don't understand it, and they won't outright destroy that which they don't understand for fear of provoking the sleeping beast to anger by a misdirected attack.

Ultimately what I expect is for their own activities to lead them into crisis on their own terms and bitcoin to simply take over from the resulting chaos. When the crowd moves they have no choice. It will be a grand day when that happens.

[Anenome5]

...which means that IMF's member countries (ie the world over, the exception being North Korea) would have to buy ... you guessed it ... bitcoins!!!

$1mil per bicoin anyone?

Yeah! I actually expect they'll choose to do this at some point. That will make today's price look cheap. Again, the incentives regarding bitcoin urge early adopters to move fast and hard. The first central bank to buy a substantial reserve of bitcoin is likely to see that reserve double and triple in value by the time the news hits. And I would expect China to be the first one to do it, just as a wild guess.

[Anenome5]

I think bitcoin would be far more secure if there were some kind of open wifi or similar project around the world to provide internet no matter what happens.

/r/meshnet?

[cdog]

If you want to know more about the IMF, this is an interesting read: http://www.amazon.com/Confessions-Economic-Hit-John-Perkins/dp/0452287081

[Luckybit]

Just ran across this paper by University of Chicago professor Nichloas Plassaras, titled "Regulating Digital Currencies: Bringing Bitcoin Within the Reach of the IMF." Hope you've got your barf bags ready:

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2248419

Things get interesting (not in a good way) starting with page 17: "The Dangers of an Unregulated Bitcoin." It begins, "As Bitcoin continues to grow in popularity and value, it poses an increasingly serious threat to the stability of the foreign currency exchange and, by extension, international commerce. Recall that the IMF was created to tackle two global economic problems: the artificial devaluation of one’s currency to gain an economic advantage; and unstable exchange rates between various currencies. Bitcoin cannot trigger the first concern because the algorithm that supports it prohibits users from artificially manipulating its value. Bitcoin does, however, have the potential to create severe and possibly irreversible fluctuations in the foreign currency exchange. Specifically, Bitcoin poses a liability to the IMF and its member nations in the event it is used in what is referred to as a 'speculative attack' on another currency."

Did anyone catch that little slight of hand? It took me a couple readings before it dawned on me: "Bitcoin cannot trigger the first concern [artificial currency devaluation] because the algorithm that supports it prohibits users from artificially manipulating its value. " In other words, bitcoin is IMPOSSIBLE to devalue by direct manipulation—the oldest and most powerful destabilization tool in the IMF's playbook!—which is precisely WHY bitcoin is such a threat to the global central banking system. This paper is teeming with this kind of Orwellian doublespeak.

Now, I don't fancy myself the least bit knowledgeable about currencies, or about the IMF's role in managing global currency exchanges; if I had to hazard a guess I'd say that the IMF's boilerplate description of its own role is probably a gross distortion of its true purpose, at best. However, I DO know a bit about the IMF's record in other arenas, which generally involves looting the economies of underdeveloped nations by saddling them with unsustainable debt and then attaching draconian "conditionalities" to their repayment plans—forcing them to sell off public infrastructure and utilities, slash public payrolls, raise taxes and fees, etc.—all so that their victim's budget can replace these "luxuries" with astronomical debt service. I also know it's played a major role in destabilizing countries' currencies over the last 4 decades, particularly in South America (in direct contradiction of its stated mission, obviously). So needless to say a paper begging for the IMF's intervention into bitcoin made the hairs on the back of my neck stand up.

While there's too much nonsense here to parse paragraph by paragraph, check out some of the absolutely absurd assertions in this paper (page 18, last graph):

"Herein lies the threat posed by Bitcoin. In the event that a wealthy Bitcoin investor—or a number of Bitcoin investors—launch a speculative attack on a currency, what can be done to counter it? In theory, individual countries could diversify their reserve portfolio by purchasing Bitcoins from an online exchange. But if a central bank’s reserve is unable to absorb the maturity mismatches suffered by its central banks, who can it turn to? The IMF has no supply of Bitcoins; indeed it has almost no way to obtain them directly. The IMF obtains currency via the quota system and the IMF can only collect quotas from its members. Bitcoin is neither a member of the IMF, nor could it become one if it wanted to—IMF membership is only open to nation-states. The IMF could try to purchase its own reserve of Bitcoins, but whose money would it use? Which part of the IMF’s general fund would it deplete? In short, Bitcoin’s potential to become a major player in the foreign currency exchange raises a number of substantial questions for the IMF. In its current state, the IMF would be unable to supply the currency needed to counter the destabilizing effect of a speculative attack by Bitcoin users on a member nation’s currency."

The IMF has no way to obtain bitcoins, because it can't decide which of its funds to tap, and it's physically incapable of buying them? A few wealthy bitcoin investors have the juice to bring down entire currencies? What a load of horseshit. The true meaning of this paper should be absolutely clear: bitcoin has the potential to be a direct threat to the global central banking regime because it is immune their manipulation/politicization, and it must be regulated or controlled before it becomes big enough to be a serious competitor. Take this proposed "solution" to the "danger" of bitcoin (page 21):

"There are, however, two ways to incorporate Bitcoin into the IMF’s regime. The first option is to grant the IMF indirect control over Bitcoin by expanding the interpretation of an already-existing provision of the IMF. This approach requires the least amount of change and leaves the overall IMF framework mostly intact. The second option is to grant the IMF more direct control over Bitcoin by granting it and other digital currencies quasi-membership status. This more radical approach would require and amendment of the Articles of Agreement and would fundamentally alter the existing framework’s conception of a non-state actor’s role in the IMF."

Again, I don't claim any special knowledge about global currencies, economics, or finance; however, when a professor from a neo-liberal training ground like UC makes a statement like "the first option is to grant the IMF indirect control over bitcoin" (on what authority?)—and suggests that the financial powers-that-be should be willing to consider re-writing IMF treaties and bylaws and literally RESTRUCTURING THEIR ORGANIZATION in order to assimilate bitcoin—you'd better believe that the digital p2p currency revolution has the full attention of the global financial terrorists.

Thoughts?

All the IMF has to do to protect itself from that mythical threat is to buy Bitcoins. No one is stopping them. Most of the Bitcoin community would welcome them to do it because the values would go up. I don't see the issue. The IMF has billions and can become a Bitcoin shareholder itself.

[prof7bit]

To clarify: difficulty adjusts every 2016 blocks. There is no time limit on this. If 2016 blocks were mined in one minute - the difficulty will adjust such that the next 2016 will be mined roughly 10 minutes apart from each other.

but if they then switch off this monster miner again and hashing goes back to previous speed then difficulty will remain to be 20160 times too high, it will then take 201600 minutes to mine a block, this is 140 days per block or 2.3 years for 6 blocks. It will take 773 years until the next difficulty adjustment.

[Mageant]

To clarify: difficulty adjusts every 2016 blocks. There is no time limit on this. If 2016 blocks were mined in one minute - the difficulty will adjust such that the next 2016 will be mined roughly 10 minutes apart from each other.

but if they then switch off this monster miner again and hashing goes back to previous speed then difficulty will remain to be 20160 times too high, it will then take 201600 minutes to mine a block, this is 140 days per block or 2.3 years for 6 blocks. It will take 773 years until the next difficulty adjustment.

if that happens the software developers can always make a hard fork,
this kind of situation has already happened in alt-chains.

[jjdub7]

I took a few classes in money/banking and currencies for my upper-level electives and really, the best features (or worst, if you're a major govt or the IMF) of BTC is that it allows individuals to circumvent currency/capital controls, deepens economic sanctions in situations like US-Iran (Iran can't set up a currency price floor if unregulated trading is allowed via a floating rate like BTC via the internet), and also removes the ability of govts to tax any capital gains in related markets.

As for the UC prof's paper, any attempt on the IMF's part to take over BTC would easily be mitigated when everyone raises their ask prices to obscene amounts in response to the attack...everyone has their literal 'price' at which they'd sell out, but if you were to model the situation from a game theory perspective, the holders of BTC would still collectively see gains while the non-holders and the IMF would see heavy losses.  Essentially, what it would amount to would be another redistribution of wealth into the hands of BTC holders.  And even if the IMF did manage to buy out the required 51%, what's to stop the BTC community from just re-creating BTC, switching to LTC, or switching to another altcoin, etc?  As much as they hate to admit it, the IMF is pretty much up the creek without a paddle on this one...

[pimms4london]

I don't understand that either. Does anyone know why bitcoin would make such an attack more feasible? I guess maybe it's just that the IMF has plans in place to try to stop a traditional attack but hasn't spent much time thinking about bitcoin.

The only reason that Bitcoin would make an attack like this more feasible is because none of the IMF member countries own any BTC. To counter a "speculative attack," the country's commercial banks need to be able to sell their own country's currency for Bitcoin using a central bank. Solution: the central banks need to buy bitcoin (or mine their own).

[e4xit]

To clarify: difficulty adjusts every 2016 blocks. There is no time limit on this. If 2016 blocks were mined in one minute - the difficulty will adjust such that the next 2016 will be mined roughly 10 minutes apart from each other.

but if they then switch off this monster miner again and hashing goes back to previous speed then difficulty will remain to be 20160 times too high, it will then take 201600 minutes to mine a block, this is 140 days per block or 2.3 years for 6 blocks. It will take 773 years until the next difficulty adjustment.

I think a few people in here need to read this about how the target is drawn up:

For reasons of stability and low latency in transactions, the network tries to produce one block every 10 minutes. Every 2016 blocks (which should take two weeks if this goal is kept perfectly), every Bitcoin client compares the actual time it took to generate these blocks with the two week goal and modifies the target by the percentage difference. This makes the proof-of-work problem more or less difficult. A single retarget never changes the target by more than a factor of 4 either way to prevent large changes in difficulty.

Note that this shoudl be combined with this statement for full understanding:

The difficulty is adjusted every 2016 blocks based on the time it took to find the previous 2016 blocks. At the desired rate of one block each 10 minutes, 2016 blocks would take exactly two weeks to find. If the previous 2016 blocks took more than two weeks to find, the difficulty is reduced. If they took less than two weeks, the difficulty is increased. The change in difficulty is in proportion to the amount of time over or under two weeks the previous 2016 blocks took to find.

Taken from
https://en.bitcoin.it/wiki/Difficulty and
https://en.bitcoin.it/wiki/Target

Edit: This means, that no single entity can mess with the difficulty more than a single factor of 4 at a time. This would give people(devs) time to notice that something was up and code/propose a fork.
The attacker could, slowly (at each difficulty increase), bring their hardware online, increasing in hashing power multiples of 4. This would increase the difficulty by the maximum 4x every 3.5 days, up to the maximum achieveable level of their hardware hashrate. It would then be possible for them to perform the aforementioned switch-off, to leave the blocks unmined for (potentially) a long time, which again might require a hard fork of some kind to rectify.

[RoadToHell]

This means, that no single entity can mess with the difficulty more than a single factor of 4 at a time. This would give people(devs) time to notice that something was up and code/propose a fork.
The attacker could, slowly (at each difficulty increase), bring their hardware online, increasing in hashing power multiples of 4. This would increase the difficulty by the maximum 4x every 3.5 days, up to the maximum achieveable level of their hardware hashrate. It would then be possible for them to perform the aforementioned switch-off, to leave the blocks unmined for (potentially) a long time, which again might require a hard fork of some kind to rectify.

Actually, the factor of 4 limit means that the attacker can initially mine the crap out of coins unless there is a hard fork intervention.  But the factor of 4 takes a pretty quick toll on their advantage.

Given the loose parameters laid out previously in this thread, let's say the attacker starts in with hash power that is orders of magnitude above the rest of the network.  How long does it take the rest of the community to recognize the attack, alert developers, developers formulate plan, developers implement plan and fork code, and sufficient number of miners implement the hard fork? 2 days maybe?  So if the attackers equipment is powerful enough to mine one block in say 10 seconds at the current difficulty, then it will take 20160 seconds, or 5.6 hours to mine 2016 blocks.  After that the difficulty goes up by a factor of 4.  I haven't looked at the underlying math, so what follows is an assumption.  The assumption is that the same attacker would then need 22.4 hours to mine the next 2016 blocks.  Total time so far is 28 hours.  After that the difficulty goes up again by a factor of 4 so (using same assumption) it should take 89.6 hours for the attacker to mine the next 2016 blocks.  The hard fork would go into effect about 1/3 of the way through that.  So the attacker would mine about 5000 blocks in the 2 days required to implement a hard fork.

If we instead say the attacker can mine a block in 1 second, then the scenario does not get much worse.  The times for mining 2016 blocks for the attacker go in steps of 33.6 minutes (2016 seconds), 134.4 minutes, 8.96 hours, 35.84 hours, and 143.36 hours.  In this scenario the attacker would mine just under 8100 blocks before the hard fork could be implemented.

[crumbcake]

This means, that no single entity can mess with the difficulty more than a single factor of 4 at a time. This would give people(devs) time to notice that something was up and code/propose a fork.
The attacker could, slowly (at each difficulty increase), bring their hardware online, increasing in hashing power multiples of 4. This would increase the difficulty by the maximum 4x every 3.5 days, up to the maximum achieveable level of their hardware hashrate. It would then be possible for them to perform the aforementioned switch-off, to leave the blocks unmined for (potentially) a long time, which again might require a hard fork of some kind to rectify.

Actually, the factor of 4 limit means that the attacker can initially mine the crap out of coins unless there is a hard fork intervention.  But the factor of 4 takes a pretty quick toll on their advantage.

Given the loose parameters laid out previously in this thread, let's say the attacker starts in with hash power that is orders of magnitude above the rest of the network.  How long does it take the rest of the community to recognize the attack, alert developers, developers formulate plan, developers implement plan and fork code, and sufficient number of miners implement the hard fork? 2 days maybe?  So if the attackers equipment is powerful enough to mine one block in say 10 seconds at the current difficulty, then it will take 20160 seconds, or 5.6 hours to mine 2016 blocks.  After that the difficulty goes up by a factor of 4.  I haven't looked at the underlying math, so what follows is an assumption.  The assumption is that the same attacker would then need 22.4 hours to mine the next 2016 blocks.  Total time so far is 28 hours.  After that the difficulty goes up again by a factor of 4 so (using same assumption) it should take 89.6 hours for the attacker to mine the next 2016 blocks.  The hard fork would go into effect about 1/3 of the way through that.  So the attacker would mine about 5000 blocks in the 2 days required to implement a hard fork.

If we instead say the attacker can mine a block in 1 second, then the scenario does not get much worse.  The times for mining 2016 blocks for the attacker go in steps of 33.6 minutes (2016 seconds), 134.4 minutes, 8.96 hours, 35.84 hours, and 143.36 hours.  In this scenario the attacker would mine just under 8100 blocks before the hard fork could be implemented.

Sorry if the question is silly, but if the attacker has the great majority of hash power, what's to prevent him from updating his software & repeating the attack? 

[RoadToHell]

Sorry if the question is silly, but if the attacker has the great majority of hash power, what's to prevent him from updating his software & repeating the attack? 

Ya - that would be up to the nature of the code change in the magical hard fork.

Even with no hard fork, the difficulty quickly increases to a point where even their super hashing speed is limited to 2016 blocks in two weeks.  The 2nd scenario I laid out above (attacker starts out mining 1 block per second) has almost reached that point.  They would be back to 2 weeks by the next difficulty increase.

Of course, what's not covered is that even after that is restored, then the attacker would still win the lottery for most or all of the blocks going forward.  So maybe the hard fork is that you can't mine if your hashrate is too far out of line with the rest of the network.  "can't mine" means that such blocks are invalidated by the rest of the network.

[BCB]

highly recommend this webinar today and tomorrow to anyone serious about US virtual currency regulation.

http://www.comptegrity.com/

[crumbcake]

Sorry if the question is silly, but if the attacker has the great majority of hash power, what's to prevent him from updating his software & repeating the attack? 

Ya - that would be up to the nature of the code change in the magical hard fork.

Even with no hard fork, the difficulty quickly increases to a point where even their super hashing speed is limited to 2016 blocks in two weeks.  The 2nd scenario I laid out above (attacker starts out mining 1 block per second) has almost reached that point.  They would be back to 2 weeks by the next difficulty increase.

Of course, what's not covered is that even after that is restored, then the attacker would still win the lottery for most or all of the blocks going forward.  So maybe the hard fork is that you can't mine if your hashrate is too far out of line with the rest of the network.  "can't mine" means that such blocks are invalidated by the rest of the network.

Thanks, i'm just having a hard time picturing the logistics.  This megaminer is unlikely to be a single machine/single ip, so "hardcoded" banning seems at least difficult (picture something like a botnet being used as proxies -- err, something like that), so all this crunch power won't even look like one big lump?  What would the magic code look for?

[1krona]

The IMF couldn't take down Bitcoin if it tried. It's too late for that now. It will cost hundreds of millions of dollars to do such a feat, and they'd need to pay a developer that understands Bitcoin enough to write code that launches hostile blocks. Also, they will have essentially deflated the US Dollar by almost 1 Billion dollars because of the amount invested in Bitcoin. Don't worry about this.

Naah, it would at most cost a couple of tens of millions dollars. For example you could buy 350 tH/s hardware for 7 million USD from KNC and then perform a 51%-attack.
KNC/BFL could perform a 51%-attack themself if they want to when they have produced their hardware, but of course they wont do it, because they dont have any incentive to do it.

[bitzox]

The IMF couldn't take down Bitcoin if it tried. It's too late for that now. It will cost hundreds of millions of dollars to do such a feat, and they'd need to pay a developer that understands Bitcoin enough to write code that launches hostile blocks. Also, they will have essentially deflated the US Dollar by almost 1 Billion dollars because of the amount invested in Bitcoin. Don't worry about this.

Naah, it would at most cost a couple of tens of millions dollars. For example you could buy 350 tH/s hardware for 7 million USD from KNC and then perform a 51%-attack.
KNC/BFL could perform a 51%-attack themself if they want to when they have produced their hardware, but of course they wont do it, because they dont have any incentive to do it.

Realistically does KNC have $7 million worth of hardware to sell? How long would that take them to produce? While it was happening what do you think would happen to the price of bitcoin and/or the demand for hardware and rate of hardware added to the network? If some huge player were to enter the market all of a sudden mining rigs become a much more attractive investment.

[BTCLuke]

"As Bitcoin continues to grow in popularity and value, it poses an increasingly serious threat to the stability of the foreign currency exchange and, by extension, international commerce."

Can I haz T-shirt?

For an additional warm fuzzy: All the Austrians love bitcoin. Jeff Tucker has been absolutely elated by bitcoin. Anytime I feel down I check out Jeff's youtube or facebook. Charming example of what anarchy is all about.

Sadly, the oldschool Austrians, too set in their "money must be a commodity" ways, don't support bitcoin yet. Even Ron Paul said he doesn't understand how it can be money.

I wrote this blog post to rebut them:

Why Austrians are wrong about Bitcoin


This one directly confronts them too (From a Mises student):

Crypto-anarchy and libertarian entrepreneurship chapter 3 (I highly recommend all 4 parts in the series.)

But let's not forget there are *some* good folks at the IMF, let's try and win over 51%

There is no question that the IMF itself is evil to the core... Beyond evil, they are downright Diabolical!

Organizations like that would spit out a non-evil member so fast it'd look like a grasshopper flying out of the back of a lawnmower...

I am definitely concerned with the influence that something as powerful as the IMF can have on making day-to-day bitcoin usage nearly impossible for laypersons such as myself—by demonizing it globally, turning politicians and political/legal systems against it, polluting academia and media with anti-bitcoin propaganda, shutting down exchanges, etc. In my mind these are bitcoin's weak links and the idea that it's immune to such assaults is extremely naive.

This is the real thing to fear folks; not many on this thread seem to understand that the biggest weapon governments and huge organizations have against the masses is PROPAGANDA.

They won't use their printing presses to buy bitcoins with or even miners... The first play in their playbook is to buy PRESS on mainstream outlets to constantly attack bitcoin.

More "bitcoin finances terrorism" press in 3... 2... 1...

[BTCLuke]

What would happen on a war economy. We have been living a long period without wars but that won't continue for long (i hope that is not true). On a war economy and under war laws states could exert extreme violence to anyone using bitcoin or entire regions of countries could just shutdown the internet like north korea or lybia during revolts. What would happen?

What you don't seem to realize is that the world has lived under a "war economy" since WWII. Like president Eisenhower warned us, the Military Industrial Complex grew out of control and is not just an engine for US wars; but for worldwide wars, that will never be shut off again.

States already can and do confiscate anything they want. They don't need a backdrop of violence to steal your bitcoins; they have one already but never needed it in the first place.

What the states need to steal your coins is simply your lack of care. It's now a numbers game for them, and they're more likely to come after wallets by writing trojans and viruses like the theives that they are. So make a paper backup and use the long passcode on your main wallet... And certainly don't make any large buys from a place like Gox that has your ID on file.

What happens with bitcoin when there is no internet, when 3G lines are switched off and there are not even mobile lines for failing infrastructures or in zones with inhibitors? What would happen with Bitcoin?

We'll simply make our own internet. Meshnet isn't the only P2P internet replacement being built right now... I'm convinced well see the globe covered in many different flavors of wireless mesh in the next 10-15 years.

If you are on a civil war on Congo you probably would have problems using bitcoins.

Actually I believe that the Congo is one of the nations that falls within the 4 Billion cellphone users that now have the ability to use bitcoin but no ability to use internet currencies like paypal... So I'm actually expecting such places to outpace the USA in bitcoin adoption once they get started.

Now seriously on a war economy bitcoin wouldn't be allowed probably. There would be a fair suspicion of people using it to send anonimously funds to the other party. There would be barriers and firewalls bigger than those on china or north korea to block and filter internet connections. Only a few chosen could probably use internet during a serious war conflict (i mean an all out war effort, not just a war against a small country) Possible for them? maybe not but bitcoin would probably be a hidden economy (at national scale) then and there could be forks from parts of the world not connecting to the rest of the network?

Hopefully before anyone reading this gets in that kind of trouble, cryptocurrencies will have successfully starved the MIC engine of enough funding that the can no longer find such warfare profitable. (Because states can't gather enough tax money to pay for stealth bombers)

If you want to know more about the IMF, this is an interesting read: http://www.amazon.com/Confessions-Economic-Hit-John-Perkins/dp/0452287081

Quoted for Awesomeness.  Economic Hitman is an absolute, world-changing classic that every bitcoiner should read. (I'd prefer if every HUMAN read it, but I guess we can start with just the coiners...)

And even if the IMF did manage to buy out the required 51%, what's to stop the BTC community from just re-creating BTC, switching to LTC, or switching to another altcoin, etc?  As much as they hate to admit it, the IMF is pretty much up the creek without a paddle on this one...

Yeah, they're never going to win against cryptocurrencies taking any approach like that, and I'm sure they know this.

Sadly, nations and organizations like the UN or IMF don't play on your turf. They do really evil shit like turn the world's media against you and make people disappear without a trace. While I'm sure there is no one or even five people they could use the latter tactic on to hurt bitcoin, the former is still a good option for them, so I'd bet that is what they'll do.

Our challenge is now to get out ahead of them and introduce as many ppl to bitcoin as possible before they start that campaign.

[bitzox]

If you want to know more about the IMF, this is an interesting read: http://www.amazon.com/Confessions-Economic-Hit-John-Perkins/dp/0452287081

Quoted for Awesomeness.  Economic Hitman is an absolute, world-changing classic that every bitcoiner should read. (I'd prefer if every HUMAN read it, but I guess we can start with just the coiners...)

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