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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1805120 times)
sidhujag
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October 19, 2014, 05:52:39 PM
 #14061

When bitshares was just starting I spent hours proving on this forum why it wouldn't work.  I think things have changed since then based on my input I hope..  For example the original formulation had no oracle.  Goldshares was supposed to track gold just because of its name.  But at that time the devs were not really capable of doing a theoretical analysis of the system to prove it would work.  So I STRONGLY recommend you do your own diligence or hire someone who can before putting value in the system.
ya I remember that.. and oracles are used now to feed price which filters shorts by not allowing shorting below 10% medium or buying about 10%.. so it keeps a band. The black swan type event is what it tries to avoid.. but its probably the best solution I've seen so far.
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sidhujag
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October 19, 2014, 05:55:49 PM
 #14062

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

What..

...You will always be able to exchange one bitgld for one ounce of real gold.


Similar to how this was supposed to always be redeemable for real gold?



...that is, until the guys in charge of the gold vault said they weren't gonna do that anymore.




Who is in charge of bitshares?


Doesn't matter. The point is that there necessarily has to be some centralized management of the physical to virtual connection somewhere, be it the guy at the gold vault, or an Oracle (or set of Oracles) providing a price feed.

This is not really a problem with Bitshares so much as "backing" is simply a stupid idea to begin with.

I perhaps shouldn't say "stupid"; it was a somewhat reasonable stopgap for a century or so, but now we can do credible digital scarcity natively, so the backing hack (and monetary use of PMs) is no longer necessary at all.

Why the hell are we trying to replicate the folly of backing in the very blockchain idea that fundamentally makes backing unnecessary?


The world won't change overnight... so you have backed assets with price feeds... until you don't. It's called the network effect. Both sides must adapt not just one.
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October 19, 2014, 05:59:38 PM
 #14063

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)
what do you mean by this?  is this a 1x fee or something?
Quote
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.

still amazing to me Buterin raised all that BTC yet doesn't even have this fundamental strategy resolved yet
Quote

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).
you hope they come along
Quote
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).
i'll disagree with this.  just b/c there might be larger #'s of delegates doesn't mean they're more decentralized.  many could be owned by same individual.  i don't believe voting necessarily solves this either b/c it sounds like that could be gamed.
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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.
of course there is incentive.  no work needs to be done.  just get the votes from either your buddies or already vested interests in the POS system then get paid to simply sign blocks.  sounds like centralization to me even worse than Bitcoin mining. btw, i think there's a chance we've seen the last time a miner gets to 50% of the network hashrate as we're getting commoditization of hardware with 10x lower prices to the small miner.  this is good and could reverse the swing of the pendulum back towards increasing decentralization as a result.  the other evidence this is happening is the hashrate is leveling off and we could be stuck at 14nm ASICS for a few years.  that's a good thing.
Quote
.  

this is an insider club from the outset 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).

so how can this be successful in the long run? there is a tremendous incentive to own several delegate nodes. insider club=ponzi scheme.
Quote

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.

can u explain how the btcx interface with the BTC blockchain?  is it using the 40 byte op_return and for what purpose?
Quote
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.
since eventually the original BTC needs to be paid back along with BTC interest, how does the system continue long term as BTC doesn't inflate?
Quote
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.
holding bitBTC privkeys is not the same as holding BTC privkeys. be careful.
Quote


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.

at the very best then it sounds like someone would just want to hold btsx as its supply will be decreasing.  the whole thing sounds dicey to me.  none of these overlays will take off until Bitcoin itself is solidified and accepted as a bonafide currency/money.
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October 19, 2014, 06:07:27 PM
 #14064

still amazing to me Buterin raised all that BTC yet doesn't even have this fundamental strategy resolved yet
First things first.

Ethereum house needed to make sure they were fully stocked with herbs.
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October 19, 2014, 06:22:10 PM
 #14065

the other thing about Bitshares is that you have to assume btsx will gain and keep any value at all.  why would it?

1.  it isn't money
2.  it has no network effect
3.  do ppl really want to trade all these overlay assets on top of the blockchain?  it could become quite costly depending on how high a price BTC attains and how high a tx fee might go.
4.  if Bitcoin's destiny is to become a world reserve currency that supports and disciplines (maximum 10x leverage) the existing fiat system, there would never be a need for Bitshares.
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October 19, 2014, 06:23:56 PM
 #14066

is this real?



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October 19, 2014, 06:46:00 PM
 #14067

the other thing about Bitshares is that you have to assume btsx will gain and keep any value at all.  why would it?

1.  it isn't money
2.  it has no network effect
3.  do ppl really want to trade all these overlay assets on top of the blockchain?  it could become quite costly depending on how high a price BTC attains and how high a tx fee might go.
4.  if Bitcoin's destiny is to become a world reserve currency that supports and disciplines (maximum 10x leverage) the existing fiat system, there would never be a need for Bitshares.
For 1 and 2 people could have said the same thing about Bitcoin in the early days. Rome wasn't build in a day.

3. The transaction fees on Bitshares doesn't depend on the Bitcoin one. The DPOS system scale very well, cost of transaction will not be an issue.

4. These are all problems which are not solved by Bitcoin :
- hedge and speculate without counterparty risk
- earn an (rather high) interest rate without counterparty risk
- diversify one wealth (you will be able to keep X% of you wealth in wheat with BitWheat, Y% in JPY with bitJPY, Z% in GOOG with bitGOOG, etc.) while being government-proof since the purchasing power remain in the custody of a blockchain.

And if BitAssets are useful then BTSX will have value because you need BTSX to create BitAssets.
sidhujag
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October 19, 2014, 06:54:55 PM
 #14068

the other thing about Bitshares is that you have to assume btsx will gain and keep any value at all.  why would it?

1.  it isn't money
2.  it has no network effect
3.  do ppl really want to trade all these overlay assets on top of the blockchain?  it could become quite costly depending on how high a price BTC attains and how high a tx fee might go.
4.  if Bitcoin's destiny is to become a world reserve currency that supports and disciplines (maximum 10x leverage) the existing fiat system, there would never be a need for Bitshares.
For 1 and 2 people could have said the same thing about Bitcoin. Rome wasn't build in a day.

3. The transaction fees on Bitshares doesn't depend on the Bitcoin one. The DPOS system scale very well, cost of transaction will not be an issue.

4. These are all problems which are not solved by Bitcoin :
- hedge and speculate without counterparty risk
- earn a (rather high) interest rate without counterparty
- diversify one wealth (you will be able to keep X% of you wealth in wheat with BitWheat, Y% in JPY with bitJPY, Z% in GOOG with bitGOOG, etc.) while being government-proof since the purchasing power will be within a blockchain.

And if BitAssets are useful then BTSX will have value because you need BTSX to create BitAssets.

Also they may make btsx the snapshot chain so any new dacs will get you allocations of new assets as they have respected with ags pts before. This meant that as a social consensus you raise awareness by allocating shares of new assets (a percentage of) to holders of pts and ags which were used to fund growth of bitshares. Now the thought is to merge in btsx so btsx will be useful for snapshots of new dacs.. the goose that keeps on giving.. while also providing utility through the gateway for assets and the physical world.

Doc I will answer your questions later im out right now.
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October 19, 2014, 07:03:13 PM
 #14069

the other thing about Bitshares is that you have to assume btsx will gain and keep any value at all.  why would it?

1.  it isn't money
2.  it has no network effect
3.  do ppl really want to trade all these overlay assets on top of the blockchain?  it could become quite costly depending on how high a price BTC attains and how high a tx fee might go.
4.  if Bitcoin's destiny is to become a world reserve currency that supports and disciplines (maximum 10x leverage) the existing fiat system, there would never be a need for Bitshares.
For 1 and 2 people could have said the same thing about Bitcoin. Rome wasn't build in a day.

3. The transaction fees on Bitshares doesn't depend on the Bitcoin one. The DPOS system scale very well, cost of transaction will not be an issue.

4. These are all problems which are not solved by Bitcoin :
- hedge and speculate without counterparty risk
- earn a (rather high) interest rate without counterparty
- diversify one wealth (you will be able to keep X% of you wealth in wheat with BitWheat, Y% in JPY with bitJPY, Z% in GOOG with bitGOOG, etc.) while being government-proof since the purchasing power will be within a blockchain.

And if BitAssets are useful then BTSX will have value because you need BTSX to create BitAssets.

Also they may make btsx the snapshot chain so any new dacs will get you allocations of new assets as they have respected with ags pts before. This meant that as a social consensus you raise awareness by allocating shares of new assets (a percentage of) to holders of pts and ags which were used to fund growth of bitshares. Now the thought is to merge in btsx so btsx will be useful for snapshots of new dacs.. the goose that keeps on giving.. while also providing utility through the gateway for assets and the physical world.

Doc I will answer your questions later im out right now.

So if I want to buy 2,000,000 bitBTC who creates this 2M bitBTC ? (What if I want to buy 30M bitBTC)
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October 19, 2014, 07:03:51 PM
 #14070

is this real?






Not sure why you 'shopped that.

I just google-image searched for "gold certificate" to find the image. Here's the source: http://barrygoldberg.net/photos/coins/Series_1928_Twenty_Dollar_Gold_Certificate_Obverse1.jpg

Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.
But Bitcointalk & /r/bitcoin are heavily censored. bitco.in/forum, forum.bitcoin.com, and /r/btc are open.
Best info on Casascius coins: http://spotcoins.com/casascius
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October 19, 2014, 07:11:19 PM
 #14071

is this real?






Not sure why you 'shopped that.

I just google-image searched for "gold certificate" to find the image. Here's the source: http://barrygoldberg.net/photos/coins/Series_1928_Twenty_Dollar_Gold_Certificate_Obverse1.jpg
No need to search it, just look at all the pixels and the nice round sixes stick out like a sore thumb
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October 19, 2014, 07:18:46 PM
 #14072

the other thing about Bitshares is that you have to assume btsx will gain and keep any value at all.  why would it?

1.  it isn't money
2.  it has no network effect
3.  do ppl really want to trade all these overlay assets on top of the blockchain?  it could become quite costly depending on how high a price BTC attains and how high a tx fee might go.
4.  if Bitcoin's destiny is to become a world reserve currency that supports and disciplines (maximum 10x leverage) the existing fiat system, there would never be a need for Bitshares.
For 1 and 2 people could have said the same thing about Bitcoin. Rome wasn't build in a day.

3. The transaction fees on Bitshares doesn't depend on the Bitcoin one. The DPOS system scale very well, cost of transaction will not be an issue.

4. These are all problems which are not solved by Bitcoin :
- hedge and speculate without counterparty risk
- earn a (rather high) interest rate without counterparty
- diversify one wealth (you will be able to keep X% of you wealth in wheat with BitWheat, Y% in JPY with bitJPY, Z% in GOOG with bitGOOG, etc.) while being government-proof since the purchasing power will be within a blockchain.

And if BitAssets are useful then BTSX will have value because you need BTSX to create BitAssets.

Also they may make btsx the snapshot chain so any new dacs will get you allocations of new assets as they have respected with ags pts before. This meant that as a social consensus you raise awareness by allocating shares of new assets (a percentage of) to holders of pts and ags which were used to fund growth of bitshares. Now the thought is to merge in btsx so btsx will be useful for snapshots of new dacs.. the goose that keeps on giving.. while also providing utility through the gateway for assets and the physical world.

Doc I will answer your questions later im out right now.

So if I want to buy 2,000,000 bitBTC who creates this 2M bitBTC ? (What if I want to buy 30M bitBTC)
You will need to buy 2,000,000*389$ worth of BTSX that you will sell against bitBTC (within the GUI client) to the person who is shorting against you (assuming you find someone who is willing to take a short position on BTC as big as your long position).  Then the blockchain will take from the guy who is shorting 200%*2,000,000*389$ worth of BTSX , collaterize it, and automatically create the 2,000,000 BitBTC, and give them to you.

If you are asking if you can create more BitBTC than there are BTC in circulation, then the answer is yes. It's not suppose to be redeemable in something else than BTSX, it's just a mechanism by wich you are able to gain exposure to the price movement of the real asset. You can think of bitBTC as a CFD where the underlying is BTC, and where the unit of account is BTSX.

(And if you want to buy 30 million bitBTC the only thing that will happen is that the market cap of BTSX will become superior than the market cap of BTC.)
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October 19, 2014, 07:40:49 PM
 #14073


So if I want to buy 2,000,000 bitBTC who creates this 2M bitBTC ? (What if I want to buy 30M bitBTC)
You will need to buy 2,000,000*389$ worth of BTSX that you will sell against bitBTC (within the GUI client) to the person who is shorting against you (assuming you find someone who is willing to take a short position on BTC as big as your long position).  Then the blockchain will take from the guy who is shorting 200%*2,000,000*389$ worth of BTSX , collaterize it, and automatically create the 2,000,000 BitBTC, and give them to you.

If you are asking if you can create more BitBTC than there are BTC in circulation, then the answer is yes. It's not suppose to be redeemable in something else than BTSX, it's just a mechanism by wich you are able to gain exposure to the price movement of the real asset. You can think of bitBTC as a CFD where the underlying is BTC, and where the unit of account is BTSX.

(And if you want to buy 30 million bitBTC the only thing that will happen is that the market cap of BTSX will become superior than the market cap of BTC.)
[/quote]

a) And what happens if I'll buy bitBTC and tomorrow morning the price of BTC will be only $100
b) or I'll create some ALT and bitALT (I'll be guy buying BitALT and at the same time guy who is shorting) then I'll pump ALT 10x over night.

EDIT:
c) I'm early adopter of BTSX (big stash) and will slowly convert all BTSX -> BitBTC -> BTC
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October 19, 2014, 08:08:40 PM
 #14074

Nice and short presentation from Mike Maloney that shows stock prices heading upwards while volume is decreasing. 

http://hiddensecretsofmoney.com/blog/massive-market-divergence-mike-maloney
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October 19, 2014, 08:16:22 PM
 #14075

the other thing about Bitshares is that you have to assume btsx will gain and keep any value at all.  why would it?

1.  it isn't money
2.  it has no network effect
3.  do ppl really want to trade all these overlay assets on top of the blockchain?  it could become quite costly depending on how high a price BTC attains and how high a tx fee might go.
4.  if Bitcoin's destiny is to become a world reserve currency that supports and disciplines (maximum 10x leverage) the existing fiat system, there would never be a need for Bitshares.
For 1 and 2 people could have said the same thing about Bitcoin in the early days. Rome wasn't build in a day.

3. The transaction fees on Bitshares doesn't depend on the Bitcoin one. The DPOS system scale very well, cost of transaction will not be an issue.

4. These are all problems which are not solved by Bitcoin :
- hedge and speculate without counterparty risk
- earn an (rather high) interest rate without counterparty risk
- diversify one wealth (you will be able to keep X% of you wealth in wheat with BitWheat, Y% in JPY with bitJPY, Z% in GOOG with bitGOOG, etc.) while being government-proof since the purchasing power remain in the custody of a blockchain.

And if BitAssets are useful then BTSX will have value because you need BTSX to create BitAssets.

RE: 1. What is the distribution model of BTSX? How limited is the supply?

RE4. The problems are simply not YET solved by Bitcoin:

-hedge and speculate without counterparty risk : platforms can be built on top of the bitcoin blockchain to that effect. recent example : http://www.hedgy.co/ multi-sig derivatives contract.
- earn an interest rate without counterparty risk : Bitcoin's deflation is a form of interest
- diversify one wealth : see above, evolution of the technology will allow for decentralized platform built on top of the blockchain to perform these functions without counterparty risks

"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 19, 2014, 08:19:47 PM
 #14076

Quote

So if I want to buy 2,000,000 bitBTC who creates this 2M bitBTC ? (What if I want to buy 30M bitBTC)
You will need to buy 2,000,000*389$ worth of BTSX that you will sell against bitBTC (within the GUI client) to the person who is shorting against you (assuming you find someone who is willing to take a short position on BTC as big as your long position).  Then the blockchain will take from the guy who is shorting 200%*2,000,000*389$ worth of BTSX , collaterize it, and automatically create the 2,000,000 BitBTC, and give them to you.

If you are asking if you can create more BitBTC than there are BTC in circulation, then the answer is yes. It's not suppose to be redeemable in something else than BTSX, it's just a mechanism by wich you are able to gain exposure to the price movement of the real asset. You can think of bitBTC as a CFD where the underlying is BTC, and where the unit of account is BTSX.

(And if you want to buy 30 million bitBTC the only thing that will happen is that the market cap of BTSX will become superior than the market cap of BTC.)

a) And what happens if I'll buy bitBTC and tomorrow morning the price of BTC will be only $100
b) or I'll create some ALT and bitALT (I'll be guy buying BitALT and at the same time guy who is shorting) then I'll pump ALT 10x over night.
a) (389-100)/389 = 0.74% decrease, so you will exit the position by getting only 0.26% of the BSTX you initially exchanged against bitBTC
b) You will win money on your long position but the gain will be offset by the losses on your short position. Eventually you will lose transaction fees and your time.
Quote
EDIT:
c) I'm early adopter of BTSX (big stash) and will slowly convert all BTSX -> BitBTC -> BTC
What's the point? You can make BTSX > BTC directly
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October 19, 2014, 08:26:33 PM
 #14077

Quote

So if I want to buy 2,000,000 bitBTC who creates this 2M bitBTC ? (What if I want to buy 30M bitBTC)
You will need to buy 2,000,000*389$ worth of BTSX that you will sell against bitBTC (within the GUI client) to the person who is shorting against you (assuming you find someone who is willing to take a short position on BTC as big as your long position).  Then the blockchain will take from the guy who is shorting 200%*2,000,000*389$ worth of BTSX , collaterize it, and automatically create the 2,000,000 BitBTC, and give them to you.

If you are asking if you can create more BitBTC than there are BTC in circulation, then the answer is yes. It's not suppose to be redeemable in something else than BTSX, it's just a mechanism by wich you are able to gain exposure to the price movement of the real asset. You can think of bitBTC as a CFD where the underlying is BTC, and where the unit of account is BTSX.

(And if you want to buy 30 million bitBTC the only thing that will happen is that the market cap of BTSX will become superior than the market cap of BTC.)

a) And what happens if I'll buy bitBTC and tomorrow morning the price of BTC will be only $100
b) or I'll create some ALT and bitALT (I'll be guy buying BitALT and at the same time guy who is shorting) then I'll pump ALT 10x over night.
a) (389-100)/389 = 0.74% decrease, so you will exit the position by getting only 0.26% of the BSTX you initially exchanged against bitBTC
b) You will win money on your long position but the gain will be offset by the losses on your short position. Eventually you will lose transaction fees and your time.
Quote
EDIT:
c) I'm early adopter of BTSX (big stash) and will slowly convert all BTSX -> BitBTC -> BTC
What's the point? You can make BTSX > BTC directly

d) I'll start my own alt-clone of BTSX -> let's call it ATSX ... I'll create big blockchain with plenty of my transacions (it costs me nothing, using DPOS) and I'll mine trillions of ATXS with market cap at least $45M with almost ZERO cost.

EDIT:
Using botnet, I'll show you economy you have never seen.

EDIT2:
but you will not make whip from the shits
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October 19, 2014, 09:14:42 PM
 #14078

the other thing about Bitshares is that you have to assume btsx will gain and keep any value at all.  why would it?

1.  it isn't money
2.  it has no network effect
3.  do ppl really want to trade all these overlay assets on top of the blockchain?  it could become quite costly depending on how high a price BTC attains and how high a tx fee might go.
4.  if Bitcoin's destiny is to become a world reserve currency that supports and disciplines (maximum 10x leverage) the existing fiat system, there would never be a need for Bitshares.
For 1 and 2 people could have said the same thing about Bitcoin in the early days. Rome wasn't build in a day.

3. The transaction fees on Bitshares doesn't depend on the Bitcoin one. The DPOS system scale very well, cost of transaction will not be an issue.

4. These are all problems which are not solved by Bitcoin :
- hedge and speculate without counterparty risk
- earn an (rather high) interest rate without counterparty risk
- diversify one wealth (you will be able to keep X% of you wealth in wheat with BitWheat, Y% in JPY with bitJPY, Z% in GOOG with bitGOOG, etc.) while being government-proof since the purchasing power remain in the custody of a blockchain.

And if BitAssets are useful then BTSX will have value because you need BTSX to create BitAssets.

RE: 1. What is the distribution model of BTSX? How limited is the supply?

RE4. The problems are simply not YET solved by Bitcoin:

-hedge and speculate without counterparty risk : platforms can be built on top of the bitcoin blockchain to that effect. recent example : http://www.hedgy.co/ multi-sig derivatives contract.
- earn an interest rate without counterparty risk : Bitcoin's deflation is a form of interest
- diversify one wealth : see above, evolution of the technology will allow for decentralized platform built on top of the blockchain to perform these functions without counterparty risks
1. The BTSX has been distributed to AGS donators and PTS holders.
The supply may suffer dilution to finance development if shareholders agree (we are talking about of a 10 or 20% dilution, which is about the same yearly dilution rate of BTC for 2 more years).
It's not really like a crypto-money which aims to maintain a fixe supply, it's more like an corporation (distributed and autonomous) which aims to maximize the shareholders' wealth (and companies often dilute their shares to fund growth)

2. Concerning the interest rate you will be able to earn interest while having you purchasing power store in oil for example.

It's cool if these feature appears with Bitcoin and on top of it, but I don't think the world should cease to innovate and just wait stuff will appear one day on top of Bitcoin. Competition is healthy and give more options to the end user/consumer Smiley

@Odalv I don't understand what are you talking about. It's not you who decides that you will have a market cap of $45m, it's the market.
Melbustus
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October 19, 2014, 09:15:01 PM
 #14079

...

yep, he's got it upside down.

the concept is a total anathema to what this whole thread has been arguing in the first place.
Cypherdoc you think Bitcoin will replace gold, right? Me too.

What gold was use for? Backing stuff...

So you should think in the future BTC will be used to back stuff too. So this is not an anathema to think a blockchain token is useful to back various things.

The only anathema from you point of view is to use another digital scarce token than BTC to back something, but it appears that BTC cannot be collaterized in its own blockchain so there was a need to make another blockchain to allow the features that Bitshares makes available.


No! This is the primary misconception. Gold was useful as money because it was scarce, fungible, portable, etc, etc... It was *directly* traded because its properties very nicely provided a physical implementation of a distributed ledger.

"Backing" only came about as a convenience because as society got more advanced, gold became more of a pain to transport quickly. Backing was a good-enough solution for a while: The supposedly inviolate convertibility provided the scarcity that paper otherwise lacked, and paper provided the quick and easy portability that gold lacked. Obviously the weak link is the entity guaranteeing the backing, and history has proven that the guarantor will eventually default somehow.

Bitcoin, for the first time in human history, merges scarcity with portability in a near-perfect way (along with all the other key properties of an ideal money). Why do we keep having to repeat this point in this thread? Have you read the whole thread?

tldr: "backing" is not the ideal use for gold; it was historically a necessary inelegance/hack that bitcoin solves.


[ Note: I'm not talking about the bitshares use-case of trading company shares or some such, I'm primarily commenting on your misunderstanding of the purpose and nature of gold backing. ]

Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.
But Bitcointalk & /r/bitcoin are heavily censored. bitco.in/forum, forum.bitcoin.com, and /r/btc are open.
Best info on Casascius coins: http://spotcoins.com/casascius
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October 19, 2014, 09:39:15 PM
 #14080

...

yep, he's got it upside down.

the concept is a total anathema to what this whole thread has been arguing in the first place.
Cypherdoc you think Bitcoin will replace gold, right? Me too.

What gold was use for? Backing stuff...

So you should think in the future BTC will be used to back stuff too. So this is not an anathema to think a blockchain token is useful to back various things.

The only anathema from you point of view is to use another digital scarce token than BTC to back something, but it appears that BTC cannot be collaterized in its own blockchain so there was a need to make another blockchain to allow the features that Bitshares makes available.


No! This is the primary misconception. Gold was useful as money because it was scarce, fungible, portable, etc, etc... It was *directly* traded because its properties very nicely provided a physical implementation of a distributed ledger.

"Backing" only came about as a convenience because as society got more advanced, gold became more of a pain to transport quickly. Backing was a good-enough solution for a while: The supposedly inviolate convertibility provided the scarcity that paper otherwise lacked, and paper provided the quick and easy portability that gold lacked. Obviously the weak link is the entity guaranteeing the backing, and history has proven that the guarantor will eventually default somehow.

Bitcoin, for the first time in human history, merges scarcity with portability in a near-perfect way (along with all the other key properties of an ideal money). Why do we keep having to repeat this point in this thread? Have you read the whole thread?

tldr: "backing" is not the ideal use for gold; it was historically a necessary inelegance/hack that bitcoin solves.


[ Note: I'm not talking about the bitshares use-case of trading company shares or some such, I'm primarily commenting on your misunderstanding of the purpose and nature of gold backing. ]
Well, you could back a loan with a house for example. Another example, the Confederation, during the US Civil War, backed its loans on the London bond market with cotton.
 
Backing doesn't necessarily involve reducing transportation costs, it's also a way to reduce the riskiness of a liability. And gold was often used as the backing asset because it's was the most widly accepted money/ledger.

And to say backing is obsolete is the same thing than to say liabilities are obsolete. While debt exists, backing will play a role in human transactions.
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