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Question: Would you support a change to bitcoin that would make 50BTC the standard reward for a block, forever?
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Author Topic: Would you support moving to a system with controled inflation?  (Read 11833 times)
ShadowOfHarbringer
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March 29, 2011, 12:35:38 PM
 #101

Yes, there are a lot of problems with my assumptions, and I ran out of fingers and toes while sorting it out, so I can't vouch for the accuracy of my figures... But it was enough for me to say... Nah...

Yeah, but my goal is to create a sustainable medium of exchange, not get rich into the stratosphere by mining coins and having them go up in value exponentially.

There is nothing wrong with a coin being worth 2 cents if that's it's value as determined by uninhibited supply and demand.

I don't know what your goal is, but whatever you want to do, do it separately from the current network.
If your actions will start supplying invalid blocks to the current network, then that may be seen as an attack on Bitcoin by some people (me included).

BTW,
I don't recall any situation in history where increasing inflation would solve any problem, especially currency stability.
So i still don't understand what are your motives in this.

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March 29, 2011, 05:51:44 PM
 #102

I too, have also devoted some thought to the probability of success with the use of BitCoin. For short term transactions, in and out of the market, the BitCoin provides some attraction for use. However, we will not be able to get away from our nature and reasoning of the system.

People will want to "stuff their mattresses" with BitCoin. This is not possible. There is no physical representation of the BitCoin, a lack of security and accountability. If someone steals your BitCoin, you may never reacquire it. If someone steals your IRL wallet, you have a chance of recovery. (someone to look for and/or towards)

People deal in the physical, we want to touch, feel, and see objects of worth. However, we also like the private. We like to conduct transactions in private.

So, I see the BitCoin as becoming a transitory monetary system into and out of the physical. We will buy bitcoins to make a transaction, use them, and then get out of the market.

This will give the advantage to the Exchanges. The first exchange able to extend the privacy of transactions will succeed.

Net Worth = 0.10    Hah, "Net" worth Smiley
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March 29, 2011, 06:20:03 PM
 #103

People deal in the physical, we want to touch, feel, and see objects of worth. However, we also like the private. We like to conduct transactions in private.

So, I see the BitCoin as becoming a transitory monetary system into and out of the physical. We will buy bitcoins to make a transaction, use them, and then get out of the market.

For physical money there is nothing but gold.
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March 29, 2011, 08:14:59 PM
 #104

If I was gonna do it, then I probably would set it up with the following parameters.

Same 21 million just like Bitcoin.  There is nothing wrong with this number.  But instead of 50 coins for the first 210000 blocks, I would make the reward try to mimic an objective measure of the community size with a formula.

Here is an example formula (BTC per block) for that: B * (ln(difficulty)2 / 4)  where B is a percentage of coins not yet distributed (1 for 21 million, 0.5 for 10.5 million, 0 when they're all distributed).

This would result in 50 coins being given out per block once the difficulty reached 2.3 million.  Current difficulty of about 70000 would pay about 30 coins.  If I fired up just my own GPU's (eight 5970's), the difficulty would be about 700 and the payout would be about 9.50 per block.

Then I would correlate the maximum block size with the difficulty.

so, not inflata-coin, just a different block bounty distribution over time, i see.
the idea of indexing it to the difficulty is actually quite an interesting one, i think.

as long as you keep the chain separate from the main block chain (so that the mainchain clients don't have to deal with the extra traffic from your fork that would be treated as invalid), i see nothing wrong with you giving it a try to see what happens.

i still foresee some difficulty in attracting miners away from the main bitcoin chain and into the new one. early adopters need to be able to expect a higher compensation than the later adopters, in order to be convinced to put their effort in, at a time when the risk is highest. on this metric, main bitcoin still has you beat. but compared to inflata-coin, it's a lot better in this respect Smiley

if, while you are at it, you also put in some other improvements (or things that some people would perceive as improvements), e.g., more decimal places of divisibility, etc., it may have some future.

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March 29, 2011, 08:17:02 PM
 #105

People deal in the physical, we want to touch, feel, and see objects of worth. However, we also like the private. We like to conduct transactions in private.

So, I see the BitCoin as becoming a transitory monetary system into and out of the physical. We will buy bitcoins to make a transaction, use them, and then get out of the market.

For physical money there is nothing but gold.


Silver, copper? 

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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March 29, 2011, 08:26:16 PM
 #106


Silver, copper? 

Steel, aluminum, etc.

ShadowOfHarbringer
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March 29, 2011, 11:07:01 PM
 #107


Silver, copper?  

Steel, aluminum, etc.

Paladium, Titanium, Molybdenum, Plutonium, Uranium, etc

Wink

grondilu
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March 30, 2011, 03:07:53 AM
 #108

For physical money there is nothing but gold.


Silver, copper? 

Try to put a significative amount of wealth with copper or even silver in your pocket.
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March 30, 2011, 03:28:09 AM
 #109


...Plutonium, Uranium...

Wink

Some people might find these commodities unacceptable as stores of value as they have built-in inflation imposed by nature due to their half-life.  Grin

Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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March 30, 2011, 03:56:05 AM
 #110


...Plutonium, Uranium...

Wink

Some people might find these commodities unacceptable as stores of value as they have built-in inflation imposed by nature due to their half-life.  Grin

You mean deflation, right?
grondilu
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March 30, 2011, 03:57:14 AM
 #111


...Plutonium, Uranium...

Wink

Some people might find these commodities unacceptable as stores of value as they have built-in inflation imposed by nature due to their half-life.  Grin

I personnally prefer not to store any radioactive element.


There is an article here where a chemist explains why gold beats other elements as a form of money.
MoonShadow
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March 30, 2011, 04:40:32 AM
 #112

For physical money there is nothing but gold.


Silver, copper? 

Try to put a significative amount of wealth with copper or even silver in your pocket.


Okay....

Done.

Now what?

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
MoonShadow
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March 30, 2011, 04:41:50 AM
 #113


...Plutonium, Uranium...

Wink

Some people might find these commodities unacceptable as stores of value as they have built-in inflation imposed by nature due to their half-life.  Grin

You mean deflation, right?

Some people are easily confused.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
casascius
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March 30, 2011, 05:09:47 AM
 #114


...Plutonium, Uranium...

Wink

Some people might find these commodities unacceptable as stores of value as they have built-in inflation imposed by nature due to their half-life.  Grin

You mean deflation, right?

Some people are easily confused.

No, I mean that your value is slowly being eroded and dwindles to zero, which is more like inflation than deflation.


Companies claiming they got hacked and lost your coins sounds like fraud so perfect it could be called fashionable.  I never believe them.  If I ever experience the misfortune of a real intrusion, I declare I have been honest about the way I have managed the keys in Casascius Coins.  I maintain no ability to recover or reproduce the keys, not even under limitless duress or total intrusion.  Remember that trusting strangers with your coins without any recourse is, as a matter of principle, not a best practice.  Don't keep coins online. Use paper wallets instead.
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March 30, 2011, 05:32:58 AM
 #115


...Plutonium, Uranium...

Wink

Some people might find these commodities unacceptable as stores of value as they have built-in inflation imposed by nature due to their half-life.  Grin

You mean deflation, right?

Some people are easily confused.

No, I mean that your value is slowly being eroded and dwindles to zero, which is more like inflation than deflation.



Now I'm confused.

If/When a true thorium fuel cycle is established in India, thorium coins become a viable alternative because thorium isn't very dangerous and the energy content provides for the most basic of use values.  Honestly, I'd be kind of surprised if someone like the Hunt or Koch brothers don't already have thorium bullion waiting for the shift.  Thorium is radioactive, but it's half-life is so long it was only theoretical for 100+ years until it could be observed.  99% would still be here when the Sun overtook the Earth as a red giant.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
MoonShadow
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March 30, 2011, 08:36:51 PM
 #116


...Plutonium, Uranium...

Wink

Some people might find these commodities unacceptable as stores of value as they have built-in inflation imposed by nature due to their half-life.  Grin

You mean deflation, right?

Some people are easily confused.

No, I mean that your value is slowly being eroded and dwindles to zero, which is more like inflation than deflation.



Now I'm confused.

If/When a true thorium fuel cycle is established in India, thorium coins become a viable alternative because thorium isn't very dangerous and the energy content provides for the most basic of use values.  Honestly, I'd be kind of surprised if someone like the Hunt or Koch brothers don't already have thorium bullion waiting for the shift.  Thorium is radioactive, but it's half-life is so long it was only theoretical for 100+ years until it could be observed.  99% would still be here when the Sun overtook the Earth as a red giant.

The problem with gold, silver, copper, or thorium coins/bullion is still divisibility, which would result in a relatively inelastic money supply. The problem with representing them with certificates to get around this problem is that it makes them just as easy to fractionalize, which has probably already happened with many gold/silver accounts. Physical representations of currency, like metals, will always have this problem. As such they are best suited as a store of value, not as a currency. This is fine and dandy, this long term store of value can still function as a component of the overall money supply, but there are better things to use for currency.

Divisibility isn't really an issue, because these days we can encapsulate metals down to grains.  So you could use thorium coins struck down to dimes, and anything smaller coudld be sealed into clear Pyrex glass.  Sure, one would have to destroy the glass case in order to audit the mint, but that would still be a workable solution.  On some level, metal coins still require some level of trust that the mint that produced it is honest, and isn't trying to pull a fast one by wrapping a depeleted uranium coin i na 2 mm layer in gold; and the only way to know is to occasionally cut such a coin in half.  Granted, Bitcoins are much more divisable and much easier to audit, which is why bitcoins make such a great currency.  But bitcoins are not a money, and probably make a poor store of value in the long run.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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March 30, 2011, 09:50:04 PM
 #117


The problem with gold, silver, copper, or thorium coins/bullion is still divisibility, which would result in a relatively inelastic money supply. The problem with representing them with certificates to get around this problem is that it makes them just as easy to fractionalize, which has probably already happened with many gold/silver accounts. Physical representations of currency, like metals, will always have this problem. As such they are best suited as a store of value, not as a currency. This is fine and dandy, this long term store of value can still function as a component of the overall money supply, but there are better things to use for currency.

Divisibility isn't really an issue, because these days we can encapsulate metals down to grains.  So you could use thorium coins struck down to dimes, and anything smaller coudld be sealed into clear Pyrex glass.  Sure, one would have to destroy the glass case in order to audit the mint, but that would still be a workable solution.  On some level, metal coins still require some level of trust that the mint that produced it is honest, and isn't trying to pull a fast one by wrapping a depeleted uranium coin i na 2 mm layer in gold; and the only way to know is to occasionally cut such a coin in half.  Granted, Bitcoins are much more divisable and much easier to audit, which is why bitcoins make such a great currency.  But bitcoins are not a money, and probably make a poor store of value in the long run.

It does not help the argument for jingly currency by saying that divisibility isn't really an issue... And then to proceed with a description of how divisibility is an issue.

It does not matter how small an accountable unit a metal is divided into. To do so adds to the overhead for minting, counting, transporting, storing, and verifying such a currency... Beyond a certain scale it becomes infeasible. This problem of divisibility is one that digital money systems such as Bitcoin seek to solve. And it is a problem which commodity currencies will always have.

Perhaps I should have said that it wasn't an insurmountable issue.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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March 30, 2011, 09:51:50 PM
 #118

Correct, there is an energy content in attaining the divisibility of gold, which can btw be beaten into wafers that are on order of angstroms thick.

Bitcoin has very little energy content (work done) required for divisibility, so yes better in that sense.

I like to think that long term the value of BTC and gold will be closely correlated, but not sure just yet.

A Gold-BTC global hawala would have good prospects, transmitter puts gold into merchant at one end, they bitcoin it across to other side of globe to another merchant and receiving guy on other side gets gold out.

EDIT: Actually hawalla merchants may be a very receptive target market for bitcoin, has anybody approached them? Ready made exchanges, right around the world.

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March 31, 2011, 02:20:31 PM
 #119

IRL Money is divisible, just not in the ways people think of it.

The amount of money in circulation must be proportional to the resources it can purchase. But it get more complex based on the number of people using it. In other words, as population grows money grows, as population dwindles money dwindles, but in relation to inflation of resources.

How ever, it might not be feasible to divide a troy oz of gold, one can switch the unit based on available need. If the divisibility required is more than the amount of gold necessary, switch to the sea shell, bird feathers, sand (we're in trouble then).

But Gold has shown its ability to withhold the pressures of population growth and inflation, it should not be discounted so lightly.

Divisibility is proportional to population, that won't be a problem for long.

Net Worth = 0.10    Hah, "Net" worth Smiley
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March 31, 2011, 02:39:02 PM
 #120

IRL Money is divisible, just not in the ways people think of it.

The amount of money in circulation must be proportional to the resources it can purchase. But it get more complex based on the number of people using it. In other words, as population grows money grows, as population dwindles money dwindles, but in relation to inflation of resources.

How ever, it might not be feasible to divide a troy oz of gold, one can switch the unit based on available need. If the divisibility required is more than the amount of gold necessary, switch to the sea shell, bird feathers, sand (we're in trouble then).

But Gold has shown its ability to withhold the pressures of population growth and inflation, it should not be discounted so lightly.

Divisibility is proportional to population, that won't be a problem for long.

As a store of value "Gold has shown its ability to withhold the pressures of population growth and inflation", but it has not been able to compete as a currency for the reasons mentioned.

Granted there are problems with supply of Gold, but when/and if it hits the fan. There will be two classes of people. Those with Gold, those without. Whom do you think will have an easier time until a new system gets set up.


Net Worth = 0.10    Hah, "Net" worth Smiley
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