I have a Chance to Talk to Jim Rickards Tomorrow

[westkybitcoins]

• With Bitcoin, the money supply can be subdivided indefinitely as market forces demand.

What do you mean by this? I know that it can be divided down to 10^-8 units, but no further. Are you referring to something different?

We could change the code to allow further subdivisions if necessary. It would still maintain the 21 million bitcoin cap.

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[RaggedMonk]

I would suggest you read this article before talking to him: http://www.libertariannews.org/2011/06/21/against-the-gold-standard/

Great article, thanks.  Just bought currency wars, which I am looking forward to reading..

[FreeMoney]

A&M?

Yeah!

• With Bitcoin, the money supply can be subdivided indefinitely as market forces demand.

What do you mean by this? I know that it can be divided down to 10^-8 units, but no further. Are you referring to something different?

Two possible meanings of that. Off-chain accounting could go smaller, but we can only settle (for now) to 10^-8. The protocol can be modified for extra precision, I don't know how hard of a change that is. So it's fair to say that Bitcoin as we have it has limited precision.

[MyBitcoinMint]

I'd love to hear an update as to what Rickards had to say about Bitcoin...

[Clark]

I'd love to hear an update as to what Rickards had to say about Bitcoin...

Ok, so he entertained questions about the IMF and SDRs most of the time, but I asked him about Bitcoin at the end, and his response was pretty basic:

"Bitcoin looks great as an exchange currency, but not as a reserve currency."

He had heard of it before, so I didn't have to explain it to him. Very interesting talk overall, but it was focused more on how a global currency crash would happen rather than exploring options for new currencies.

[adamstgBit]

One very strong argument against Bitcoin is the public transaction ledger: corporations / governments / individuals would not be able to conduct secret transactions.

Funny, I've always thought of that as a plus, not a minus.

well you dont need to send coins through the network to give someone some bitcoins

so ya corporations / governments / individuals will still be able to conduct secret transactions.

but they will need to exchange the bitcoins in person

[tvbcof]

I'd love to hear an update as to what Rickards had to say about Bitcoin...

Ok, so he entertained questions about the IMF and SDRs most of the time, but I asked him about Bitcoin at the end, and his response was pretty basic:

"Bitcoin looks great as an exchange currency, but not as a reserve currency."

He had heard of it before, so I didn't have to explain it to him. Very interesting talk overall, but it was focused more on how a global currency crash would happen rather than exploring options for new currencies.

Color me unsurprised that Rickards was familiar with Bitcoin.  I'd wager that he understands even the technical details better than a majority of those on this board.

Lamentably, I must agree with Rickards that Bitcoin is not a very suitable reserve currency.  Although I sense that Satoshi might have had some impulse in this direction, the focus on making it a decent exchange currency both initially and more significantly as a goal of it's recent evolution have simply not been in that direction.

I do have hope that Bitcoin will inspire a purpose oriented and successful reserve currency solution and have hope that it will come into fruition prior to Bitcoin's collapse.  A collapse which, although I dearly hope does not occur, I expect will be assisted when the timing is most opportune.

Thanks for the update, BTW.

[BkkCoins]

One very strong argument against Bitcoin is the public transaction ledger: corporations / governments / individuals would not be able to conduct secret transactions.

Funny, I've always thought of that as a plus, not a minus.

well you dont need to send coins through the network to give someone some bitcoins

so ya corporations / governments / individuals will still be able to conduct secret transactions.

but they will need to exchange the bitcoins in person

Why in person? All they really need to do is encrypt a private key and attach it to an email or some other messaging system. Or dead drop a flash stick. But there's little difference between that and sending it normally on the network as any receiver would still want to transfer funds into a new address.

One could send the funds to a Cassacius coin and then dead drop the coin (or FedEx it). That way the private key is not exposed. No different than just sending on the network.

[hashman]

I would suggest you read this article before talking to him: http://www.libertariannews.org/2011/06/21/against-the-gold-standard/

Great article, thanks.  Just bought currency wars, which I am looking forward to reading..

Hmm I am still waiting for a good translation from this one

http://en.wikipedia.org/wiki/Currency_Wars

[realnowhereman]

If bitcoin ever became the number one exchange currency; it would inevitably become a reserve currency too.

"Reserve" fundamentally means that huge numbers of people (traditionally governments) hold it for its store of value properties.  In which case it's a popularity contest, and is nothing to do with fundamental currency characteristics.

In short: it doesn't matter.  Bitcoin can do its thing and might become popular enough to become a "reserve".

[cypherdoc]

I'd love to hear an update as to what Rickards had to say about Bitcoin...

Ok, so he entertained questions about the IMF and SDRs most of the time, but I asked him about Bitcoin at the end, and his response was pretty basic:

"Bitcoin looks great as an exchange currency, but not as a reserve currency."

He had heard of it before, so I didn't have to explain it to him. Very interesting talk overall, but it was focused more on how a global currency crash would happen rather than exploring options for new currencies.

Color me unsurprised that Rickards was familiar with Bitcoin.  I'd wager that he understands even the technical details better than a majority of those on this board.

Lamentably, I must agree with Rickards that Bitcoin is not a very suitable reserve currency.  Although I sense that Satoshi might have had some impulse in this direction, the focus on making it a decent exchange currency both initially and more significantly as a goal of it's recent evolution have simply not been in that direction.

I do have hope that Bitcoin will inspire a purpose oriented and successful reserve currency solution and have hope that it will come into fruition prior to Bitcoin's collapse.  A collapse which, although I dearly hope does not occur, I expect will be assisted when the timing is most opportune.

Thanks for the update, BTW.

there is no reason it cannot become the global reserve currency (as long as the code remains secure). 

in fact, i'd argue it would function better than the USD as a reserve currency.  the reason is b/c it is not controlled by any one gov't to that gov'ts advantage.  the Fed/US gov't constantly manipulate the USD to its own benefit.

with Bitcoin, this can't happen.

[cypherdoc]

the reason Bitcoin would function as a global reserve currency better than gold is to understand how gold functioned in the past.

countries had to ship gold bullion from country to country over the seas when a particular country got too far out of balance with its money supply.  piracy was in vogue back then.  not to mention the lag effects.  

then countries decided to store their gold at places like the LBMA or at Fort Knox.  that hasn't worked out so well either due to the opacity and risk of storing the gold within one countries borders.

these problems cease to exist with Bitcoin as gov'ts could instantly rebalance their books every nite and instantaneously if need be.

[tvbcof]

Color me unsurprised that Rickards was familiar with Bitcoin.  I'd wager that he understands even the technical details better than a majority of those on this board.

Lamentably, I must agree with Rickards that Bitcoin is not a very suitable reserve currency.  Although I sense that Satoshi might have had some impulse in this direction, the focus on making it a decent exchange currency both initially and more significantly as a goal of it's recent evolution have simply not been in that direction.

I do have hope that Bitcoin will inspire a purpose oriented and successful reserve currency solution and have hope that it will come into fruition prior to Bitcoin's collapse.  A collapse which, although I dearly hope does not occur, I expect will be assisted when the timing is most opportune.

Thanks for the update, BTW.

there is no reason it cannot become the global reserve currency (as long as the code remains secure). 

in fact, i'd argue it would function better than the USD as a reserve currency.  the reason is b/c it is not controlled by any one gov't to that gov'ts advantage.  the Fed/US gov't constantly manipulate the USD to its own benefit.

with Bitcoin, this can't happen.

Having Bitcoin:

 - serve as an exchange currency for 6 billion people buying skittles

 - serve as a reserve currency with as solid a support as gold and it properties or the USD and nearly half of the world's military expenditures

 - operate in a decentralized manner with minimal reliance on corp/gov sponsored/controlled infrastructure

is, in my opinion, a pipe dream.  It may be theoretically possible to achieve 1 and 2, or 2 and 3, but not all three.

Bitcoin would have to do a 180 degree turn to be the kind of reserve currency that I envision, but even then it would be carrying significant baggage and I very much doubt that it would survive the stress very gracefully.  But there is no real reason to try to hammer this square peg into that round hole in my opinion.

[Phinnaeus Gage]

Bitcoin would most certainly solve the Triffin Dilemma.

[miscreanity]

the reason Bitcoin would function as a global reserve currency better than gold is to understand how gold functioned in the past.

I couldn't have said it better myself!

There's still plenty of room for various financial systems to interoperate on a global basis, just as there is a range of political systems that work to varying degrees of success depending on an indigenous society's biases (i.e. there is no one-size-fits all in the same way teenagers can't be managed the same way as older adults). I especially think a Bitcoin/gold hybrid as reserve platform may offer the best possible foundation for most of the world.

Having Bitcoin:

 - serve as an exchange currency for 6 billion people buying skittles

 - serve as a reserve currency with as solid a support as gold and it properties or the USD and nearly half of the world's military expenditures

 - operate in a decentralized manner with minimal reliance on corp/gov sponsored/controlled infrastructure

is, in my opinion, a pipe dream.  It may be theoretically possible to achieve 1 and 2, or 2 and 3, but not all three.

Bitcoin would have to do a 180 degree turn to be the kind of reserve currency that I envision, but even then it would be carrying significant baggage and I very much doubt that it would survive the stress very gracefully.  But there is no real reason to try to hammer this square peg into that round hole in my opinion.

Your opinion is understandable. I'm curious as to what the reasoning is, though.

As an exchange currency, theoretically unlimited divisibility supports that, either directly or indirectly as highlighted by FreeMoney:

Off-chain accounting could go smaller, but we can only settle (for now) to 10^-8. The protocol can be modified for extra precision, I don't know how hard of a change that is. So it's fair to say that Bitcoin as we have it has limited precision.

Functioning as a reserve currency relies upon the existence of modern telecommunications infrastructure, again offering a base from which derivative currencies can operate in the off-chain method suggested above. By operating in a hybrid manner alongside gold, wherein gold acts as the physical link to the abstract reserve crypto-currency, gold can be held locally or distributed as seen fit by respective owners while Bitcoin is used for large-scale balance-of-payment transfers.

Gold would only need to be physically moved when the owner decides a threshold has been met; gold stores would follow Bitcoin flows. Also, the potential of infrastructure collapse is largely mitigated, since the independent wealth store can provide a fall-back until the crypto-currency system is restored.

Decentralized operation of the system precludes complete elimination of Bitcoin by any known, conventional methods of attack by established institutions. As for physical infrastructure reliance, the move is already aimed toward mesh networks that cannot be shut down by central authorities. Adoption of such a distributed hardware environment to match decentralized software platforms is likely to occur much more rapidly than the shift from wired to wireless networking. This will remove the "kill-switch" that centralized institutions currently hold over the telecommunications infrastructure.

I think the key to all three of your points being met is the physical hardware paradigm.

If you have links to prior discussion/explanation on your position, I'd be glad to check them out.

[tvbcof]

...

Having Bitcoin:

 - serve as an exchange currency for 6 billion people buying skittles

 - serve as a reserve currency with as solid a support as gold and it properties or the USD and nearly half of the world's military expenditures

 - operate in a decentralized manner with minimal reliance on corp/gov sponsored/controlled infrastructure

is, in my opinion, a pipe dream.  It may be theoretically possible to achieve 1 and 2, or 2 and 3, but not all three.

Bitcoin would have to do a 180 degree turn to be the kind of reserve currency that I envision, but even then it would be carrying significant baggage and I very much doubt that it would survive the stress very gracefully.  But there is no real reason to try to hammer this square peg into that round hole in my opinion.

Your opinion is understandable. I'm curious as to what the reasoning is, though.

After the above post, I started a set of documentation which explains my thoughts better.  It probably won't be ready for initial display for a few weeks (and perhaps never.)  If/When it is, I would be utterly delighted to get your and anyone else's feedback, critique, input, etc.

My concerns about Bitcoin scalability is rooted in my study of this document and it's directly linked material:

  https://en.bitcoin.it/wiki/Scalability

For one thing, I consider 'keeping up with Visa' to be potentially a very low bar to set.  Another thing that I have significant concern about is the ideas of 'supernodes' and certain things about the bandwidth provisioning.  Although I do find it technically plausible to arrange supernodes as clusters of processing units with load balancers distributing work, I do *not* believe that I will feel compfortable with the function of my currency system relying on the function of such hardware (and software) in light of the potential for coordinated attack by the state and corporate adversaries.

A crypto-currency solution, or set of solutions which do not anticipate and actively guard against a coordinated attack such as I've eluded to are a much less interesting solution to me than ones which do.  Frankly, I feel that any crypto-currency solution which operate within a free and semi-functional economy are mostly just interesting novelties.  But the world is full of interesting novelties and there are many which are far more interesting than crypto-currencies.  We see much less interest in Bitcoin at this point than I would have expected, and I believe that a fundamental reason is that it is simply not a necessary thing at this point in time.  If and when it is, I want it to have a good potential to live up to it's promise.

...
Decentralized operation of the system precludes complete elimination of Bitcoin by any known, conventional methods of attack by established institutions. As for physical infrastructure reliance, the move is already aimed toward mesh networks that cannot be shut down by central authorities. Adoption of such a distributed hardware environment to match decentralized software platforms is likely to occur much more rapidly than the shift from wired to wireless networking. This will remove the "kill-switch" that centralized institutions currently hold over the telecommunications infrastructure.

I think the key to all three of your points being met is the physical hardware paradigm.

If you have links to prior discussion/explanation on your position, I'd be glad to check them out.

I researched the state of mesh network development a few months ago and was horrified to be honest.  To the extent that mesh networks might work at all, I think that anyone who is anticipating a network experience which remotely resembles the Internet that we all know today is in for a fairly big shock.

My best hope is that a handful of people are able to achieve something which harkens back to UUCP if the 'Internet kill switch' is ever flipped.  (In fact, I suspect that it actually would be UUCP initially.)

[tvbcof]

Your opinion is understandable. I'm curious as to what the reasoning is, though.

After the above post, I started a set of documentation which explains my thoughts better.  It probably won't be ready for initial display for a few weeks (and perhaps never.)  If/When it is, I would be utterly delighted to get your and anyone else's feedback, critique, input, etc.

I puttered around with some documentation this weekend.  It is not close to ready for presentation, but has enough material to potentially be of some interest to the handful of people following this thread:

  http://www.bakcoin.org

[miscreanity]

I puttered around with some documentation this weekend.  It is not close to ready for presentation, but has enough material to potentially be of some interest to the handful of people following this thread:

  http://www.bakcoin.org

Good points about mesh nets, and I agree with the current assessment. I think that could change pretty quickly, though.

I haven't had a chance to read through your page yet; I'd be glad to discuss further - might be good to start a different thread.

[tvbcof]

...
My concerns about Bitcoin scalability is rooted in my study of this document and it's directly linked material:

  https://en.bitcoin.it/wiki/Scalability

For one thing, I consider 'keeping up with Visa' to be potentially a very low bar to set.  Another thing that I have significant concern about is the ideas of 'supernodes' and certain things about the bandwidth provisioning.  Although I do find it technically plausible to arrange supernodes as clusters of processing units with load balancers distributing work, I do *not* believe that I will feel compfortable with the function of my currency system relying on the function of such hardware (and software) in light of the potential for coordinated attack by the state and corporate adversaries.
...

Hah!  Inspired by the 2013 conference, I was just trying to find more info about Kaminsky and his recent proof-of-work projection and discover that I was not the only one who was underwhelmed by that document:

  http://www.youtube.com/watch?v=bifnDbPdCTI  (around 4:20)

I watched the whole thing and it reminded me that I was going to fuck around with 'nooter' one of these days.  In fact, it reminded me that it even existed.

Didn't find much about what I was originally seeking though.