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Author Topic: Gold collapsing. Bitcoin UP.  (Read 2031529 times)
FNG
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October 18, 2014, 07:04:08 PM
 #13981

Money as a Ledger


Nice one. I really believe this is the key for the masses to understand bitcoin. They must understand what money is first..a ledger. A ledger controlled by centralized entities with full control over how many units are allowed on the ledger, with the ability to move your entries whenever they feel like it, and / or confiscate said entries.

This is why gold is / was important. Gold is a distributed, trustless, fungible unit on a distributed scarce ledger.

Bitcoin completely destroys the credit / money ledger and has additional properties that the gold ledger cannot compete with (trasmission)

Therefore..it is the perfect money. I don't think it will completely eat gold's SoV role anytime soon but the SoV role of currency will be destroyed.

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October 18, 2014, 07:19:24 PM
 #13982

...
I'll end with this comment that made me smile:



----------------
By the way, I've become a big fan of David Andolfatto since discovering his blog a few days ago.  He is an independent and critical thinker, asks questions when he doesn't understand something, and has a wealth of knowledge and insight to share.  He has three interesting articles related to bitcoin that I suggest you check out http://andolfatto.blogspot.ca



Thanks for this post and the links to David Andolfatto's works and comments. He came on my radar for the first time a few days ago and seemed to have some real interest in and understanding of bitcoin, despite some skepticism in a few areas. That quote you posted means I shouldn't have been particularly surprised that he was favoriting tweets which suggested that bitcoin was an effectively ideal implementation of Kocherlakota's money as memory thesis. Smiley

I've noted previously that if bitcoin fails ultimately for some reason, it will nevertheless have served to get possibly millions of people thinking harder about the financial system and the nature of money. Hopefully an understanding of money-as-memory will proliferate.


Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.
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October 18, 2014, 07:56:21 PM
 #13983

Money as a Ledger

without the need for physical tokens (gold) [or the need for trust].

Great post.

I was never quite aware of this concept of money as memory until I stumbled upon Bitcoin. Needless to say it has radically changed my view on a lot of thing economic.

Moreover, I think it needs to be emphasized more why it is that the bitcoins are so vital to this system : they are the only units trust-less units within this decentralized ledger.

This all seems obvious to most of us yet so many still hang on to the idea of issuing an "asset-backed" unit that would be traded within this ledger. This is asinine and defeats the whole purpose of having a trustless ledger.




"I believe this will be the ultimate fate of Bitcoin, to be the "high-powered money" that serves as a reserve currency for banks that issue their own digital cash." Hal Finney, Dec. 2010
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October 18, 2014, 08:02:02 PM
 #13984


This all seems obvious to most of us yet so many still hang on to the idea of issuing an "asset-backed" unit that would be traded within this ledger. This is asinine and defeats the whole purpose of having a trustless ledger.

It is a decent way to begin marketing it to the masses though.

Most people can't comprehend why we would need a new currency. Oh..we can trade "stuff" on this ledger, cheaper. bitcoin the blockchain has value
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October 18, 2014, 08:20:13 PM
 #13985

So who can explain how Bitshares or Counterparty is going to issue shares on the Blockchain?

Will a company issuing 1M shares attach these permanently to 1M Satoshi's? How does the market trade an independent value for the shares if a Satoshi goes to $100 per or if a tx free goes to $100 per?
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October 18, 2014, 08:32:21 PM
 #13986

So who can explain how Bitshares or Counterparty is going to issue shares on the Blockchain?

Will a company issuing 1M shares attach these permanently to 1M Satoshi's? How does the market trade an independent value for the shares if a Satoshi goes to $100 per or if a tx free goes to $100 per?

I think, they use their own crypto BTSX, XCP as currency. -> Company shares are backed by BTSX.
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October 18, 2014, 08:37:27 PM
 #13987

So who can explain how Bitshares or Counterparty is going to issue shares on the Blockchain?

Will a company issuing 1M shares attach these permanently to 1M Satoshi's? How does the market trade an independent value for the shares if a Satoshi goes to $100 per or if a tx free goes to $100 per?
I can explain how Open-Transactions is going to do it...
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October 18, 2014, 08:38:55 PM
 #13988

I agree that separating the currency from the ledger makes no sense.  Suppose Bitcoin (the ledger) was separated from bitcoin (the unit of account).  All we would have left is a messaging protocol susceptible to spam and no way to maintain the currency.  Granted this  protocol would have a permanent public record with cryptographic proof of ownership of messages but some sort of spam prevention would have to be implemented such as hashcash, allowing proof of work to creep back in. 

Further, how do you control the supply of currency or specific currency attributes in a decentralized manner?  I suppose proponents of this separation would like to keep centralized control over the unit of account but that, of course has proven to be a failure because the very memory of "who owes who" and "who owns what" becomes corrupt and distorted when the supply of a currency is manipulated by a central entity.  It's hard to see how this separation would even work for digital assets.

Counterfeit:  made in imitation of something else with intent to deceive:  merriam-webster
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October 18, 2014, 09:01:32 PM
 #13989

So who can explain how Bitshares or Counterparty is going to issue shares on the Blockchain?

Will a company issuing 1M shares attach these permanently to 1M Satoshi's? How does the market trade an independent value for the shares if a Satoshi goes to $100 per or if a tx free goes to $100 per?

Derivates built out of thin air.
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October 18, 2014, 09:12:10 PM
 #13990


http://www.vox.com/xpress/2014/9/25/6843509/income-distribution-recoveries-pavlina-tcherneva

my my..
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October 18, 2014, 09:22:14 PM
 #13991



impressive
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October 18, 2014, 09:44:18 PM
 #13992

Bitshares
Yet another fad? Why do people care? I look at coinmarketcap and everything below Bitcoin is a joke.
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October 18, 2014, 10:39:45 PM
Last edit: October 18, 2014, 10:51:22 PM by sidhujag
 #13993

So who can explain how Bitshares or Counterparty is going to issue shares on the Blockchain?

Will a company issuing 1M shares attach these permanently to 1M Satoshi's? How does the market trade an independent value for the shares if a Satoshi goes to $100 per or if a tx free goes to $100 per?

Bitsharesx is an eco system... that allows you to create assets, some are backed by a peg and some are not.. freely traded. The ones backed by a peg (costing about 300k btsx right now) are meant to be tracked via a feed fed in through the delegates, which gets itself around security issues of POS (Delegate-POS is the algo name). Which Larimer/Buterin seem to agree is the best one moving forward away from POW.

Anyways one of these assets backed by pegs is the bitUSD which is meant to track USD so a price feed is fed in(how many USD each BTSX is worth on an average of exchange price feeds) so to keep bitUSD trading at roughly $1, and thus people can trade btsx for bitUSD and vice versa knowing that they are essentially going to and from USD because you will be able to trade bitUSD back to USD at some time (for legal reasons this was left out until third parties come along and offer this service which are regulated as money transmitters). Another one is bitBTC which tracks BTC... so you can go to and from BTC to BTSX.. same way as going from USD to BTSX and back.. however BTC <--> BTSX. The idea is that many businesses can use bitUSD to offer services to customers and be able to transfer these bitUSD across the chain quickly and efficiently without having to pay fees , and use the built-in bitshares privacy features for annonymous transactions etc etc you get the picture...

There are 101 oracles (and more lining up as backups incase of some going down) doing this feeding and yet it is a more decentralized model than bitcoin (in the way of large concentrated mining pools). These oracles or delegates get paid to sign blocks as a job. Because of this there is incentive to provide this service.. as it is profitable to do so at these prices. In order to become a delegate you must set up a delegate as yourself and get voted to become an official bitshares delegate.. people have to beleive in you and there is an in-chain voting mechanism used to figure out who are qualified to become delegates based on popularity of votes (there are obvious safe-gaurds to avoid people from getting them selves voted in easier).

It is meant to work in conjuction of a currency as bitUSD is doing.. and bitBTC... it is not meant to work as a currency itself as the chain is used for mor ethan just a tx ledger for payments (breaking satoshi's golden rule)... however if thought about in another way that it works in partership with bit coin.. in that bitcoin may be used as a currency and bitshares may be used to issue assets/stocks/companies that operate within clearly defined rules without corruption then it makes sense on where to draw lines between bitcoin and bitshares... and IMO it is aptly named in that regard.. bitshares for share issuance and bitcoin for coin transactions and spending.

You might ask why would I transfer my BTC to bitBTC? Well the incentive is that you get paid interest by holding, through a decentralized solution. If you hold atleast a few months then it is in the range of 10-15% per year right now.. better than any bank. It is the only true form of interest payment for bitcoins because you hold your keys.. while all other solutions cause you to send BTC to someone else thus the keys controlling your coins change... in this method you hold your bitBTC keys the same way you hold your BTC keys and essentially earn interest over time... the interest is accumulated fees that people who "short" bitUSD and other assets pay.. you can go long and short bitUSD and other assets just like any other market... market makers and arb bots do this to make money off the spreads and liquidity.. and the holders of the assets win by collecting fees.

Other fees that are paid are used to burn coins to reduce the total overall supply so anyone holding anything in btsx will become more valuable over time.
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October 18, 2014, 11:44:16 PM
 #13994

Nice summary Sidhujag

Bitshares in a nutshell:  take GLD, SLV, ect and replicate that on a decentralized, collateralized market.  The bitshares guys keep harping on bitusd but the real killer app IMO is bitgld, which tracks the price of gold and actually pays interest in gold.  For those who want a decentralized, trustless, gold backed digital currency, this is the best you are going to get without having the real thing, which obviously cant be sent over a communications channel.  In fact, any asset can be turned into a currency such as bitoil.  Of course it is still in the very early experimental stages.

Counterfeit:  made in imitation of something else with intent to deceive:  merriam-webster
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October 18, 2014, 11:50:05 PM
 #13995

The bitshares guys keep harping on bitusd but the real killer app IMO is bitgld, which tracks the price of gold and actually pays interest in gold.  For those who want a decentralized, trustless, gold backed digital currency, this is the best you are going to get without having the real thing, which obviously cant be sent over a communications channel.
This is the financial equivalent of people playing fantasy football and mistaking themselves for athletes.
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October 18, 2014, 11:59:43 PM
 #13996

The bitshares guys keep harping on bitusd but the real killer app IMO is bitgld, which tracks the price of gold and actually pays interest in gold.  For those who want a decentralized, trustless, gold backed digital currency, this is the best you are going to get without having the real thing, which obviously cant be sent over a communications channel.
This is the financial equivalent of people playing fantasy football and mistaking themselves for athletes.

 Grin
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October 19, 2014, 12:00:00 AM
 #13997

For those who want a decentralized, trustless, gold backed digital currency

What..
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October 19, 2014, 12:18:54 AM
 #13998

For those who want a decentralized, trustless, gold backed digital currency

What..
It's not gold backed. All BitAssets are backed by BTSX.

At the endgame it will allow to speculate and hedge without counterparty risk. People will also be able to earn interests on their savings while having their purchasing power store in any asset of the economy they wish, without counterparty risk. But yeah, it's just a fad.
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October 19, 2014, 02:09:42 AM
 #13999

For those who want a decentralized, trustless, gold backed digital currency

What..

Like i said it is the closest you are going to get.  You will always be able to exchange one bitgld for one ounce of real gold.

Counterfeit:  made in imitation of something else with intent to deceive:  merriam-webster
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October 19, 2014, 02:20:09 AM
 #14000

For those who want a decentralized, trustless, gold backed digital currency

What..
It's not gold backed. All BitAssets are backed by BTSX.

At the endgame it will allow to speculate and hedge without counterparty risk. People will also be able to earn interests on their savings while having their purchasing power store in any asset of the economy they wish, without counterparty risk. But yeah, it's just a fad.

bitBTC is not backed by btsx... you can buy bitBTC without btsx and get back out after earning interest... if you want to "short" bitBTC you need collateral in btsx to ensure you have sufficient margin to cover a loss.
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