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Author Topic: The current Bitcoin economic model doesn't work  (Read 79946 times)
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October 06, 2011, 12:14:00 PM
 #401

The current design is a failure so why not simply transform it instead?

And retain compatibility with the existing system? It seems like a contradiction. Isn't the whole point of the proposal to use other rules?

Under normal circumstances (read: flexible supply) the total demand will almost never shrink. That's as unlikely as having a negative GDP growth in a given year. What will occasionally shrink however is the increase rate of total demand.

So under stable circumstances with demand determined only by, say, 3% economic growth wealth equal to 3% of the value of the money supply will be transfered from current coin holders into waste heat. Whoever the ones are that burn the resources will get the new coins. (IMO this is wasteful and distorts the incentives for investment but this is the old inflation good or bad argument; let's not go there.)

By putting a cap on the price this way you'd get rid of speculation in higher prices but but only by wasting the same amount of wealth that successful speculators would have received. Why is that better?

Speculation in lower prices would not be affected.

Isn't this just trading swings both up and down for even larger swings down? Without a price cap temporary demand spikes will be absorbed by short sellers. With a price cap they will be absorbed by new money but then there will be a price drop. A drop both from the lower demand and from the greater supply of coins. And not dampened by speculators anticipating it.
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October 06, 2011, 12:35:40 PM
 #402

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The current design is a failure so why not simply transform it instead?
And retain compatibility with the existing system? It seems like a contradiction. Isn't the whole point of the proposal to use other rules?
I detailed in the first post exactly how's this possible. Both systems are fully compatible.

Under normal circumstances (read: flexible supply) the total demand will almost never shrink. That's as unlikely as having a negative GDP growth in a given year. What will occasionally shrink however is the increase rate of total demand.
So under stable circumstances with demand determined only by, say, 3% economic growth wealth equal to 3% of the value of the money supply will be transfered from current coin holders into waste heat. Whoever the ones are that burn the resources will get the new coins. (IMO this is wasteful and distorts the incentives for investment but this is the old inflation good or bad argument; let's not go there.)
Who said anything about inflation? If you have 100 people and $100 on an island, and then the population increases to 110 people producing 10% more, shouldn't we print 10 more dollars to keep prices constant? If we don't prices will simply decrease to compensate for the increased supply of goods and services relative to money. It's the same situation with bitcoins. Say we originally have 100 users and 100 coins, but then next year we have 102 users, then next year 115 users, then next year 120 users, then the next year 150 users, but the increase in supply is always constant at 10 coins/year. How do you expect speculation and price bubbles not to be rampant? Well under the current system it's even worse because the new supply shrinks each year till it reaches zero!

By putting a cap on the price this way you'd get rid of speculation in higher prices but but only by wasting the same amount of wealth that successful speculators would have received. Why is that better?
You're essentially saying that stealing some money from a random person and giving it to another random person isn't a bad thing for society. But it is. Sure, there's a 50% you might be the lucky guy who gets the free lunch, but overall you want to know what to expect to plan ahead properly. That's why most people don't like gambling even if it was at a 50-50 chance. The current bitcoin market condition is only attractive for addictive gamblers.

Without a price cap temporary demand spikes will be absorbed by short sellers.
Historical evidence doesn't indicate this at all. I mean look:


With a price cap they will be absorbed by new money but then there will be a price drop. A drop both from the lower demand and from the greater supply of coins. And not dampened by speculators anticipating it.
The whole point of the alternative model is kicking speculators out of the game. The result would be having a natural, ever-growing bitcoin economy with a slightly-increasing supply matching it. The price will hardly rise or drop because supply will react to demand changes. It is the current system with its fixed supply and crazy demand (due to speculation) which renders the price stability impossible. And as long as people don't see price stability they won't store their wealth confidently in bitcoins. In other words, they will stay away from it.
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October 06, 2011, 12:49:22 PM
 #403

Thanks to the (stupid) limited supply model which results in perpetual price bubbles and bursts, Bitcoin users have come under the mercy of exchangers. The reason is simple: One cannot trust their very own bitcoin wallet. If you have $100 worth of coins today on your computer, they could be worth $90 tomorrow, and then $80 the day after, which means you need to keep them in the form of fiat currency at the bitcoin exchanger's website or at a service linked to it such as Dwolla or LR to ensure your ability to utilize their full worth as bitcoins later.

You really have no clue. If you're in Bitcoin for the long run (storing value long term), price bubbles and bursts don't matter, and you keep your own wallet. At least, that's what I do. If you want to play the game, then play the game, but don't pretend like everyone has to.

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The current design is a failure so why not simply transform it instead?

Because not many people agree with you. Start your own fucking currency rather than trying to change ours.

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as long as people don't see price stability they won't store their wealth confidently in bitcoins. In other words, they will stay away from it.

Invalid assumption.
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October 06, 2011, 01:13:24 PM
 #404

Thanks to the (stupid) limited supply model which results in perpetual price bubbles and bursts, Bitcoin users have come under the mercy of exchangers. The reason is simple: One cannot trust their very own bitcoin wallet. If you have $100 worth of coins today on your computer, they could be worth $90 tomorrow, and then $80 the day after, which means you need to keep them in the form of fiat currency at the bitcoin exchanger's website or at a service linked to it such as Dwolla or LR to ensure your ability to utilize their full worth as bitcoins later.
You really have no clue. If you're in Bitcoin for the long run (storing value long term), price bubbles and bursts don't matter, and you keep your own wallet. At least, that's what I do.
Who cares about what you do? You can burn your money down or invest in pink cats for all I care. The current design has proved incapable of keeping the price reasonably stable for one single month in a row since April. I don't understand how you think it's practical to ask non-adopters to trade their money for a medium of exchange which they potentially won't fully retrieve its value before months or even years, if ever.

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as long as people don't see price stability they won't store their wealth confidently in bitcoins. In other words, they will stay away from it.
Invalid assumption.
Really? So you're saying we can have a perfectly average Joe looking at such a graph and then deciding Hey you know what, I'll remove my cash from the local bank and put it in bitcoin instead? I'm not talking about investors and gamblers here, I'm talking about normal folks who wanna use something like paypal and dwolla. You don't lose half of your dwolla deposits in a couple of weeks do you?

The current design is a failure so why not simply transform it instead?
Because not many people agree with you. Start your own fucking currency rather than trying to change ours.
Alternatively you can give me one fucking reason for repeatedly coming back to this thread to only whine and swear. Here's a tip buddy: If you don't like it here you can stay out and leave room for sane people who're actually willing to discuss ideas instead of mindlessly cussing. Oh and I'll help you achieve just that in case you don't know how: I'm ignoring you.
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October 06, 2011, 01:16:07 PM
 #405

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The current design is a failure so why not simply transform it instead?

Because not many people agree with you. Start your own fucking currency rather than trying to change ours.

Additionally the poll in the topic may very well be rigged, as SMF currently does not support blocking votes of people with less than X posts and registered longer than Y days.

Also, it is pointless to discuss with Suggester, as he just doesn't get it.

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October 06, 2011, 01:20:31 PM
 #406

Additionally the poll in the topic may very well be rigged, as SMF currently does not support blocking votes of people with less than X posts and registered longer than Y days.
So why can't it be rigged against me then? If I was gonna rig something I'm gonna make sure it appears like I have the support of 2/3rds of the community (hint hint).

Also, it is pointless to discuss with Suggester, as he just doesn't get it.
But it's not pointless to come to a thread only to say it's pointless to argue with its poster?
I'm really thankful to whomever added this fantastic ignore button. Keep barking boys, you gotta have at least 2k posts before Christmas.
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October 06, 2011, 01:43:10 PM
 #407

Additionally the poll in the topic may very well be rigged, as SMF currently does not support blocking votes of people with less than X posts and registered longer than Y days.
So why can't it be rigged against me then?

Can be rigged both ways. That is the point.
But i would rather suspect it is rigged "your" way.


Also, it is pointless to discuss with Suggester, as he just doesn't get it.
But it's not pointless to come to a thread only to say it's pointless to argue in it?

It's not because you are not getting it.


I'm really thankful to whomever added this fantastic ignore button. Keep barking boys, you gotta have at least 2k posts before Christmas.

I am not in a hurry anywhere. I think i rather won't cross 2k posts in the next year, unless something special happens.

Also, 1k posts in over a year is really nothing extraordinary.

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October 06, 2011, 01:45:09 PM
 #408

The current design has proved incapable of keeping the price reasonably stable for one single month in a row since April.

Sorry, as much as you want it to be, "maintaining a stable exchange rate against X fiat currency" is not one of the design goals of Bitcoin. Again, feel free to start your own block chain rather than campaigning to change this one against the will of current users.

I don't understand how you think it's practical to ask non-adopters to trade their money for a medium of exchange which they potentially won't fully retrieve its value before months or even years, if ever.

You mean, like dollars, which have lost 95% of their value since the inception of the federal reserve?

Really? So you're saying we can have a perfectly average Joe looking at such a graph and then deciding Hey you know what, I'll remove my cash from the local bank and put it in bitcoin instead?

Maybe not. So what? That time will come. Bootstrapping a new system of money is an iterative one, not instantaneous.

I'm not talking about investors and gamblers here, I'm talking about normal folks who wanna use something like paypal and dwolla. You don't lose half of your dwolla deposits in a couple of weeks do you?

Nor do you lose any of your Bitcoins. If the dollar fluctuates against the euro, OH NOES! Bitcoin is a much smaller market, as it grows it will stabilize. Do you understand this?

Alternatively you can give me one fucking reason for repeatedly coming back to this thread to only whine and swear. Here's a tip buddy: If you don't like it here you can stay out and leave room for sane people who're actually willing to discuss ideas instead of mindlessly cussing. Oh and I'll help you achieve just that in case you don't know how: I'm ignoring you.

Oh no, I used a bad word. Sorry, I get angry when people campaign to change Bitcoin instead of just making their own fucking version. Seriously, you have all the tools available to you. Grow up.
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October 06, 2011, 01:51:19 PM
 #409

Also, it is pointless to discuss with Suggester, as he just doesn't get it.
But it's not pointless to come to a thread only to say it's pointless to argue in it?
I'm really thankful for whomever added this fantastic ignore button. Keep barking boys, you gotta have at least 2k posts before Christmas.

Is it pointless to come to a thread to explain why it is pointless to argue with you?  It probably is, but I'm going to give it a try anyway.

Your thinking is hopelessly linear.

The real world is a messy, complicated place.  Many factors come together to interact in complex ways, non-linear ways.  Real understanding of the world is very difficult, often actually impossible.  So we simplify and approximate.  We make models where A causes B, and B causes C.  But these models are wrong, and we poison our thinking when we forget that.

Bitcoin is a system with dozens of variables, and hundreds of relationships.  We know a couple of these exactly.  We know a few more to a decent approximation.  Quite a few more are just vague assumptions.  The vast majority of them are so unknown that we don't even know what we are missing.

In summary, your entire conclusion is based on simple linear extrapolations.  Ponder this:


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October 06, 2011, 01:58:00 PM
 #410

Also, it is pointless to discuss with Suggester, as he just doesn't get it.
But it's not pointless to come to a thread only to say it's pointless to argue in it?
I'm really thankful for whomever added this fantastic ignore button. Keep barking boys, you gotta have at least 2k posts before Christmas.

Is it pointless to come to a thread to explain why it is pointless to argue with you?  It probably is, but I'm going to give it a try anyway.

Your thinking is hopelessly linear.

The real world is a messy, complicated place.  Many factors come together to interact in complex ways, non-linear ways.  Real understanding of the world is very difficult, often actually impossible.  So we simplify and approximate.  We make models where A causes B, and B causes C.  But these models are wrong, and we poison our thinking when we forget that.

Bitcoin is a system with dozens of variables, and hundreds of relationships.  We know a couple of these exactly.  We know a few more to a decent approximation.  Quite a few more are just vague assumptions.  The vast majority of them are so unknown that we don't even know what we are missing.

In summary, your entire conclusion is based on simple linear extrapolations.  Ponder this:



Your "argument" against my suggestion wasn't very informative to say the least. I'll try to explain why:

Your thinking, kjj, is hopelessly linear.

The real world is a messy, complicated place.  Many factors come together to interact in complex ways, non-linear ways.  Real understanding of the world is very difficult, often actually impossible.  So we simplify and approximate.  We make models where A causes B, and B causes C.  But these models are wrong, and we poison our thinking when we forget that.

Bitcoin is a system with dozens of variables, and hundreds of relationships.  We know a couple of these exactly.  We know a few more to a decent approximation.  Quite a few more are just vague assumptions.  The vast majority of them are so unknown that we don't even know what we are missing.

In summary, your entire conclusion is based on simple linear extrapolations.  Ponder this:




Did that convince you that you were wrong and I am right? No? Why not? Perhaps because it wasn't very convincing? Or perhaps even because I haven't actually said one single useful sentence?

I'd really like to start hearing arguments against (or for) my proposal just for a change. Preferably from members who aren't trying to increase their post count by replying even when they have nothing to say.
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October 06, 2011, 02:57:18 PM
 #411

I'd really like to start hearing arguments against (or for) my proposal just for a change. Preferably from members who aren't trying to increase their post count by replying even when they have nothing to say.

Maybe you can more succinctly present your proposal so I don't have to spend an hour refuting things like...

Quote
That free money will encourage people to hoard BTCs forever

What would be the point of hoarding any kind of money forever? Are you going to eat it? Are you going to build a house out of it? You don't understand incentives. The only reason to hoard money is to later spend it.

Quote
And no, sorry, early adopters didn't take any risk to deserve a reward. Running a computer program which pops deflationary money isn't a risky activity, not one that warrants a 1,000,000% profit anyway.

They spent time and money building infrastructure. Who are you to say that their time and money is worthless? What have you contributed? Why don't you start your own currency if there's so little risk?

So, please summarize your proposal, say in a paragraph or less, and I will respond directly to it.
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October 06, 2011, 02:59:17 PM
 #412

Did that convince you that you were wrong and I am right? No? Why not? Perhaps because it's not very convincing? Perhaps because I haven't actually said one single useful sentence?

I'd really like to start hearing arguments against (or for) my proposal please just for a change. Preferably from someone with a post count under 1,000.

I had a post count under 1,000 once, but I don't any more.  Feel free to check my details though, if you think that I'm some old money dude trying to defend his hoard.  I've earned about 125 BTC since I got started, and I've spent about half of that on goods and services, and I've lost a fair chunk more by gambling (both on actual gambling sites, and on the exchanges).  Oh, and I'll be spending another 30ish (depending on the exchange rate) in the next week or so, which will leave me nearly bitpennyless.

Every four years a miner needs to exert double the virtual effort to create the same amount of coins,

You are confusing the subsidy (creation) with the reward (income).  If this was a paragraph about coin creation, it would be right, in that every 4 years halves the number of coins created.  But the rest of the paragraph makes it very clear that you are really thinking of income, and income does not decrease linearly with time the way creation does.

which means he'll be constantly demanding higher prices to compensate for his costs. Which also means that bitcoins won't generally be spendable. Why? Because only an idiot spends a currency which he is certain its price will double within 4 years, effectively granting him about 19% real annual interest--significantly better than any bank or mutual fund.

Linear.  You are assuming that the cost of mining pushes the value, and that the value does not push the cost of mining.  This is not true.  If we ignore all other factors, we end up with something similar to the Lotka-Volterra equations where the cost of mining and the value of the coins have a complex non-linear effect on each other.

But in reality, we can't ignore all other factors, because bitcoin gets value from exchange, not creation.  So we need a third non-linear differential equation to show how mining relates to supply.  And then we need a fourth, to show how value and creation relate to demand.  And then we need a fifth, to show how value relates to saving.  And then a sixth, to show how...

See where I'm going with this?

That free money will encourage people to hoard BTCs forever or until another wishful investor buys them, fueling speculation and price bubbles. Bitcoin will ultimately be regarded as a phony investment with no real value, just like the good ol' Pyramid (Ponzi) Scheme where everyone purchases a ticket just to sell it to someone else later for a high profit until the whole system collapses when it runs out of new victims.

A conclusion drawn from your previous linear mistake.  You are assuming a system with no feedback, and then shocked (shocked!) to find that it runs away to a singularity.

This scenario can only be avoided if the cost of generating new BTCs got constant. Which can only happen if participating nodes needed to exert a more or less constant amount of work (cost) to generate a given amount of BTCs. Only then will people be inclined to actually spend their coins, and they can finally serve their purpose as a stable medium of exchange.

You are totally correct that your fictional linear model can only be saved by adding feedback.  But your model isn't reality.  Reality already has feedback in place.

But that's not it. The very fact that the newly-generated coin supply dwindles as its user base (hopefully) continues to grow will raise that 19% deflation rate even higher. Let alone that many coins are forever destroyed via HDD failures and lost thumb drives, pushing the deflation even higher and higher. High deflation is bad because nobody spends their money, they only save it because it gains value over time. Can you imagine what would've happened if, say, the Japanese government hasn't printed any (or very few) Yens during the last century while the population exploded? One 1911 Yen would have been more than enough to buy a house today. Who then would've spent their Yens in 1911? Why, almost noone of course! This scenario is only avoidable if the number of available BTCs continues to grow with its user base at least proportionally. If both figures match, we won't have deflation nor inflation.

Yawn.  Do I even need to say it?  Linear extrapolation with no feedback once again races to the moon.  Also, bitcoin isn't atomic.  We are free to divide it.  Even if a single bitcoin will someday be worth eleventy billion dollars, it doesn't mean that we can't peel off a fraction to buy a loaf of bread today.

I'm going to stop here.  The later part where you want the equivalent of 12 billion new coins produced per day left me nearly speechless.

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October 06, 2011, 03:46:00 PM
 #413

I had a post count under 1,000 once, but I don't any more.
It's nothing personal, but from experience it seems that people with ridiculous number of post counts take it as their personal duty to respond to just about anyone saying anything on the board whether they've got something valuable to add or not. That's why their replies, generally speaking, don't tend to be very useful or well-thought. And I've seen three examples today already.

Feel free to check my details though, if you think that I'm some old money dude trying to defend his hoard.
There's no way to ever verify otherwise but it doesn't really matter. We're discussing abstract ideas not personal motives.

I'm going to stop here.  The later part where you want the equivalent of 12 billion new coins produced per day left me nearly speechless.
Then you better remain speechless. Because if people are spending $12 billion/day on electricity to produce coins (wtf?) then they deserve $12 billion worth in stable coins per day. At the current price of about $5/coin and the daily 144 blocks*50 coins the daily new supply is worth about $36,000.

There's no point going through the technical details about whether the price will perpetually deflate since the last 20 pages pretty much cover all the for and against arguments on that and they're available for people to read if interested. Rather, it's more constructive if we focus on the main much simpler problem: the instability of the bitcoin's price. I don't think you have any doubts that the current model does not produce a stable currency, do you?

If we agree on that, then I hope we also agree that stability is an important if not an essential feature of a medium of exchange. It would then be established that we have a problem in the current design, and we'll start thinking about how to deal with it.

For the lulz: It's incredibly funny seeing Bittertea and SoH keep posting "This user is currently ignored." I bet they're still yelling about how pointless it is to keep posting in this pointless thread. It's like these retards literally can't stop typing.
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October 06, 2011, 04:10:03 PM
 #414

I had a post count under 1,000 once, but I don't any more.
It's nothing personal, but from experience it seems that people with ridiculous number of post counts take it as their personal duty to respond to just about anyone saying anything on the board whether they've got something valuable to add or not. That's why their replies, generally speaking, don't tend to be very useful or well-thought. And I've seen three examples today already.

Sorry, but if i had 100 posts, not 1000, i would still say that your argumentation is a complete bullshit.

I really admire kjj and BitterTea for wasting time with you. You just don't get simplest things. Your whole point is illogical, false and based on wrong assumptions and facts.

But keep going, just let me grab some popcorn.

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October 06, 2011, 04:29:46 PM
 #415

There's no point going through the technical details about whether the price will perpetually deflate since the last 20 pages pretty much cover all the for and against arguments on that and they're available for people to read if interested. Rather, it's more constructive if we focus on the main much simpler problem: the instability of the bitcoin's price. I don't think you have any doubts that the current model does not produce a stable currency, do you?

If we agree on that, then I hope we also agree that stability is an important if not an essential feature of a medium of exchange. It would then be established that we have a problem in the current design, and we'll start thinking about how to deal with it.

I think it is way too early to say whether or not the system is going to produce a stable currency or not.  I suspect that it will produce enough stability, but for, I think, very nearly the exact same reasons that you think it won't.

I'm also not sure that total stability (or really even more than a little stability) is a necessary feature of a medium of exchange.  For example, I don't consider the dollar to be very stable at all, except in relation to a limited subset of goods and services over very, very short periods, but the dollar is still a very useful medium of exchange.

The value of everything floats.  Things that are more useful today than they were yesterday will become more valuable.  Things that are easier to produce today will become less valuable.  Hoping for real long term stability is childish.  Expecting it is madness.  History tells us that state sponsored violence isn't enough to create stability.  What makes you think you are clever enough to design an algorithm in advance that will achieve it no matter what tomorrow brings?

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October 06, 2011, 04:45:13 PM
 #416

Had Bitcoin used a flexible supply model which anchors a single coin's price to the amount of electricity needed to generate it, the community's reliance on such services would've been very limited. We'd only use them to get money in and out of the system, but not for storage over long periods of time...

This seems very similar to what Etlase2 is trying to design for EnCoin.

I'm absolutely sure the coin price (equals) and absolute quantity of electricity argument is impossible to implement. (Feel free to see that and the previous EnCoin thread for details of why.)

However,

Suggester, Bitcoin can't be changed that way but a similar competing currency could be created. How would the flexible supply work? When demand shrinks whose money will be destroyed? When demand grows who will get the new money?

In the process, I identified (the beginnings of) a pretty trivial mechanism for keeping *coin prices stable. It uses the price of electricity as a constraint. It has varying minting based upon economic changes.

I don't want to deliberately sidetrack Etlase2 threads. But if there is interest, I don't mind starting a new thread to discuss the feasibility of the concept.

This post has a brief summary.
This post gives a few more details.

I'm not saying this exact idea is finished or perfect. I noticed few unintentional flaws in the details myself. But if anyone is willing to discuss the plausibility of creating stable *coins using a variant of this mechanism, then give me a ping in PM.

If you want me to understand that a fixed number of coins and depreciating prices are better... Trust me, I've already heard you! Nothing to see here. Move along...
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October 06, 2011, 05:30:16 PM
 #417

I spend an unhealthy amount of time lurking around this forum, and I noticed a trend -- that people like Suggester pop up every now and then to ... "suggest" changes to BTC that would make it more like regular physical centralized currencies.  Their suggestions hardly if ever add any value to our beloved crypto-currency, and when refuted and politely told why exactly they don't, these people just continue to plug their original argument.  Even when it is suggested to the suggester to just start his/her own damn currency, they often pass right over that possibility.

I think it would be easier to put effort into creating an alt-chain than to defend political stances.  I don't think this sort of "defense" is any kind of thing any normal person does in his/her spare time, or as a kind of "labor of love".

It's probably not a novel idea, and it definitely and admittedly borders on paranoia, but:

I think these people are paid agents of organizations that have averse intent toward Bitcoin, and possibly the concept of crypto-currency in general.

One such organization could be whichever shadowy one is led by The Manipulator.

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October 06, 2011, 05:41:43 PM
 #418

For example, I don't consider the dollar to be very stable at all, except in relation to a limited subset of goods and services over very, very short periods, but the dollar is still a very useful medium of exchange.
Your definition of "a limited subset of goods and services" seems to mean just about every consumer good and service out there, while your definition of "very, very short periods" seem to mean around 5+ years. And that's all nice and dandy till we find that you've got no problem with bitcoins' price shooting up and down several folds within weeks. You're weird, you know?

Hoping for real long term stability is childish.  Expecting it is madness.  History tells us that state sponsored violence isn't enough to create stability.
Drama aside, I pointed out in the initial post that the proposed model will tie the coin's price to the average worldwide electricity costs. That's certainly not 100% stable on the long term, but I can promise you it won't double over a month nor lose half its value over 10 days. Let's just say it's significantly more stable than the current design. Got a better idea? Be my guest.

I think these people are paid agents of organizations that have averse intent toward Bitcoin, and possibly the concept of crypto-currency in general.
One such organization could be whichever shadowy one is led by The Manipulator.
Crypt_Current, you've just made The Manipulator very, very angry. By exposing His agents you have sealed your fate. Let that be a lesson to all of you. Background music followed by a cut scene

Red, Encoin sounds like a very promising idea. While by no means Etlase2 was the first member to point at the dreaded problems of limited supply as many people have cried out loud against it over the last year and a half, it's the first practical implementation of the concept I've seen. I'll look into it right away (then report back to The Manipulator, of course).
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October 06, 2011, 05:44:23 PM
 #419


Crypt_Current, you've just made The Manipulator very, very angry. By exposing His agents you have sealed your fate. Let that be a lesson to all of you background music followed by a cut scene


HE ADMITTED IT!


Then you better remain speechless. Because if people are spending $12 billion/day on electricity to produce coins (wtf?) then they deserve $12 billion worth in stable coins per day. At the current price of about $5/coin and the daily 144 blocks*50 coins the daily new supply is worth about $36,000.

...

If we agree on that, then I hope we also agree that stability is an important if not an essential feature of a medium of exchange.

Just because you mine BTC doesn't mean you spend anything to do it, or care where the electricity comes from / who's paying it.  SETI and Folding@Home people do what they do for the same reason I mine BTC -- two things coupled together:  1) I believe in the concept more strongly than I believe in most things, and 2) I have an opportunity to support that belief tangibly.

For miners like me, it's not really about the value of the currency (BTC, USD, whatever) -- it's about the core principles and the concept.

Your valuation of BTC against USD shows that you do not think the same way about crypto-currencies as people like myself do.

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October 06, 2011, 06:08:02 PM
 #420

For miners like me, it's not really about the value of the currency (BTC, USD, whatever) -- it's about the core principles and the concept.

Your valuation of BTC against USD shows that you do not think the same way about crypto-currencies as people like myself do.
What's wrong with you folks? I thought I was a conspiracy nut job till I saw people on this forum. Does a crypto-currency need to be stupidly volatile to be a good crypto-currency? Does anchoring its price to the average global electricity price means we're selling our souls to OPEC or something? Do you see Bitcoin ever going mainstream when one cannot even ensure it'll keep half of its worth by next week?

The premise of bitcoin is:
1- Anonymity
2- Control

My proposed model doesn't even touch these concepts. It's a purely economic suggestion. An unstable medium of exchange is a bad medium of exchange.

And you know what? By insisting on making Bitcoin fail it's probably you who's working for The Manipulator!
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