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Question: Will you support Gavin's new block size limit hard fork of 8MB by January 1, 2016 then doubling every 2 years?
1.  yes
2.  no

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Author Topic: Gold collapsing. Bitcoin UP.  (Read 1803800 times)
rocks
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February 04, 2015, 11:51:33 PM
 #21041

The "buy-and-replace" is not really something everyone can afford.

Sorry brg, but I don't get this.

If someone wants to buy something for $50 on website A, they can:
1) Pay $50 directly, or
2) Pay $50 worth of held BTC, then purchase $50 of BTC at the same moment.

The results are exactly the same in both cases, the person pays $50 and ends up with the exact same amount of BTC. "buy-and-replace" is a wash and perfectly affordable by anyone.

"Anytime BTC is transfered to recipient not interested in holding our objectives are being diminished"
https://www.youtube.com/watch?v=zAnBm0WweDw

Again, I don't get this.

Take the 1) and 2) example above. In both cases the held BTC by the original purchaser are identical. There is an additional chance that some BTC on the merchant side is held. This means that the action of #2 increases BTC ownership, while the action of #1 does not.
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brg444
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Bitcoin replaces central, not commercial, banks


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February 05, 2015, 12:02:25 AM
 #21042

The "buy-and-replace" is not really something everyone can afford.

Sorry brg, but I don't get this.

If someone wants to buy something for $50 on website A, they can:
1) Pay $50 directly, or
2) Pay $50 worth of held BTC, then purchase $50 of BTC at the same moment.

The results are exactly the same in both cases, the person pays $50 and ends up with the exact same amount of BTC. "buy-and-replace" is a wash and perfectly affordable by anyone.

Option 2) implies that an additional portion of that someone's money is available and can be allocated to what can be considered a risky/volatile investment

If I spend 50$ of my BTC today I may not have an additional 50$ in liquidity to allocate to BTC. It's only a wash if we pretend that the $50 remains stable in value

"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
rocks
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February 05, 2015, 12:47:55 AM
 #21043

The "buy-and-replace" is not really something everyone can afford.

Sorry brg, but I don't get this.

If someone wants to buy something for $50 on website A, they can:
1) Pay $50 directly, or
2) Pay $50 worth of held BTC, then purchase $50 of BTC at the same moment.

The results are exactly the same in both cases, the person pays $50 and ends up with the exact same amount of BTC. "buy-and-replace" is a wash and perfectly affordable by anyone.

Option 2) implies that an additional portion of that someone's money is available and can be allocated to what can be considered a risky/volatile investment

If I spend 50$ of my BTC today I may not have an additional 50$ in liquidity to allocate to BTC. It's only a wash if we pretend that the $50 remains stable in value

I'm sorry but this makes no sense. Buy-and-replace by definition assumes the person starts with both BTC and dollars.

Starting assumption in this example. Person holds the following and wants to buy shoes:
- 1 BTC (and plans to keep holding 1 BTC)
- $50

Option 1) Pay $50 directly - Here the person keeps the 1 BTC and transfers $50 directly to the merchant. Ends up with 1 BTC, shoes and no dollars.

Option 2) Pay with Bitcoin through buy-and-replace - Here the person transfers 0.25 BTC (assume $200/BTC) directly to the merchant, they also buy 0.25 BTC for $50. Ends up with 1 BTC, shoes and no dollars.

Both cases work out the exact same. There is no change in the amount of BTC they hold or dollars they needed to spend. In both cases the person ends up with:
- 1 BTC (their original amount they planned to hold)
- Shoes

The only difference is now that merchant has 0.25 BTC instead of $50. Maybe the merchant immediately sells for dollars, but in some cases they hold a percentage. This means that Option 2 slowly increases bitcoin ownership. This is velocity.
sidhujag
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February 05, 2015, 03:23:26 AM
 #21044

M2 velocity is all that matters the rest is implied. Doesnt matter where it goes
Zangelbert Bingledack
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February 05, 2015, 04:28:16 AM
 #21045

The only difference is now that merchant has 0.25 BTC instead of $50. Maybe the merchant immediately sells for dollars, but in some cases they hold a percentage. This means that Option 2 slowly increases bitcoin ownership. This is velocity.

More to the point, you bought 0.25 BTC, bidding up the price. If the merchant immediately sells the BTC, it's a wash as far as bidding the price of BTC up or down (but the merchant sees greater value in BTC, incentivizing them toward holding in the future). If the merchant doesn't immediately sell, for the duration that they do hold - whether just a day or a month or long term - there are fewer bitcoins available on the market, pushing the price up.

So a purchase made through buy-and-replace is at worst slightly positive for the BTC price, and at best substantially positive.

Simpler way to think about it: The more bitcoins "in the pipeline" of transaction processing, the less available on the market, hence the higher the price. Like if you had a bunch of buckets of water with hoses running between them. The more hoses and the more full they are, the less water will be in the buckets at any given time. Less water available means water is scarcer, dearer, more expensive.

What about people just spending their coins? Insofar as this is understood (consciously or unconsciously), any spending that happens will merely be in lieu of selling, by holders who are looking to unload some in order to rebalance their Bitcoin-to-fiat portfolio. In that case the same applies: at worst slightly positive, at best substantially positive.

But what about the case of an impulse buy where a holder acts temporarily against their own portfolio balancing target and spends their coins even though they are already low on BTC? Well there is no obvious reason to think there wouldn't be an equal number of holders who temporarily act against their portfolio target in the opposite direction. It's a wash.

Overall, then, merchant adoption is at worst slightly positive for the price, just in terms of the economics, not even taking into account the positive publicity effects and the increased value in the eyes of merchants who are now getting a revenue stream via Bitcoin.

All that said, I don't think merchant adoption is the main thing that will drive the price higher for the next few years. The main thing is good old fashioned hoarding.

Conclusion: Don't worry about merchant adoption. If it happens, good, it will just add a little extra boost to the exponential growth. If it doesn't it's nothing to worry about. Investors are the ones that will drive the lion's share of growth for the foreseeable future.
justusranvier
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February 05, 2015, 04:32:56 AM
 #21046

This is a really cool service:

https://mailchuck.com/
majamalu
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February 05, 2015, 05:26:03 AM
 #21047

James Rickards seems to be afraid of (gold losing against) Bitcoin: http://dailyreckoning.com/islamic-state-bitcoin/

"The future of Bitcoin and other crypto-currencies is uncertain. One problem is that the value of a Bitcoin is not constant in terms of U.S."

(...)

"It seems unlikely that most Bitcoin users are reporting these [capital] gains. Those who do not may be involved in tax evasion."

(...)

"The U.S. has the finest military in the world capable of defeating any threat including new threats arising from the blend of technology and finance."

(...)

"In the end, it may be the case that Bitcoin will fade as a currency, but survive as a technology."  Roll Eyes


http://elbitcoin.org - Bitcoin en español
http://mercadobitcoin.com - MercadoBitcoin
sidhujag
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February 05, 2015, 07:06:57 AM
 #21048

http://dailyreckoning.com/peter-thiel-explains-backs-u-s-dollar/
Everything is fine! Usa is in best shape ever! Lol if it takes theories to understand our financial system there must be something wrong.. If it were in perfect shape the metrics would be laid out and so would the model., yet we cant even get a sense of when the rates will rise for interest..
Melbustus
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February 05, 2015, 07:53:59 AM
 #21049

D&T with a treatise on why the blocksize must be raised: https://bitcointalk.org/index.php?topic=946236.0

Hopefully between that and https://bitcoinism.liberty.me/2015/01/21/economic-fallacies-and-the-block-size-limit-part-1-scarcity/ this stupid argument is over.

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
lunarboy
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February 05, 2015, 09:37:26 AM
 #21050

Federated version of the Sidechains will be released in 1-2 months

http://insidebitcoins.com/news/gregory-maxwell-demo-sidechains-to-be-available-in-a-few-months/29531

Quote
Testing sidechains before the soft-fork

After explaining how this federated, demo version of sidechains would work, Maxwell went on to explain what happens after this version of sidechains has been tested in the wild:

“Beyond [federated sidechains], we have to see where it goes from there. It’ll take some time for the initial system to mature and for people to gain confidence enough to start saying, ‘OK. Well where can we start introducing the soft-forking, additional scrypt opcodes to make it so you can do it without the functionaries — without the federation.”

can't wait to see some of this in the wild. 
cbeast
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February 05, 2015, 09:43:13 AM
 #21051

Federated version of the Sidechains will be released in 1-2 months

http://insidebitcoins.com/news/gregory-maxwell-demo-sidechains-to-be-available-in-a-few-months/29531

Quote
Testing sidechains before the soft-fork

After explaining how this federated, demo version of sidechains would work, Maxwell went on to explain what happens after this version of sidechains has been tested in the wild:

“Beyond [federated sidechains], we have to see where it goes from there. It’ll take some time for the initial system to mature and for people to gain confidence enough to start saying, ‘OK. Well where can we start introducing the soft-forking, additional scrypt opcodes to make it so you can do it without the functionaries — without the federation.”

can't wait to see some of this in the wild. 
Maybe The History Channel will do a show about that someday.  Grin

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
justusranvier
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February 05, 2015, 02:59:25 PM
 #21052

By the way, part 2 will be out... soonish.
sickpig
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February 05, 2015, 03:40:01 PM
 #21053


Great! I'm waiting for it eagerly.

Bitcoin is a participatory system which ought to respect the right of self determinism of all of its users - Gregory Maxwell.
Adrian-x
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February 05, 2015, 05:11:24 PM
 #21054

I Lol,ed Check out @BankableInsight's Tweet: https://twitter.com/BankableInsight/status/540925405142999041?s=09

Could be Photoshop bit on second thought by comparison noob Bitcoin traders are not superstitious.

This is where fiat is heading.

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
Adrian-x
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February 05, 2015, 05:24:51 PM
 #21055

Federated version of the Sidechains will be released in 1-2 months

http://insidebitcoins.com/news/gregory-maxwell-demo-sidechains-to-be-available-in-a-few-months/29531

Quote
Testing sidechains before the soft-fork

After explaining how this federated, demo version of sidechains would work, Maxwell went on to explain what happens after this version of sidechains has been tested in the wild:

“Beyond [federated sidechains], we have to see where it goes from there. It’ll take some time for the initial system to mature and for people to gain confidence enough to start saying, ‘OK. Well where can we start introducing the soft-forking, additional scrypt opcodes to make it so you can do it without the functionaries — without the federation.”

can't wait to see some of this in the wild. 

I like federated pegs, but every time I read confident statements like bold above I feel compelled to cash out a little early.

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
rocks
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February 05, 2015, 05:55:16 PM
 #21056

Federated version of the Sidechains will be released in 1-2 months

http://insidebitcoins.com/news/gregory-maxwell-demo-sidechains-to-be-available-in-a-few-months/29531

Quote
Testing sidechains before the soft-fork

After explaining how this federated, demo version of sidechains would work, Maxwell went on to explain what happens after this version of sidechains has been tested in the wild:

“Beyond [federated sidechains], we have to see where it goes from there. It’ll take some time for the initial system to mature and for people to gain confidence enough to start saying, ‘OK. Well where can we start introducing the soft-forking, additional scrypt opcodes to make it so you can do it without the functionaries — without the federation.”

can't wait to see some of this in the wild.  

I like federated pegs, but every time I read confident statements like bold above I feel compelled to cash out a little early.

I've come around to your concerns in that federated pegs in the long run may pull enough transactions off the main chain that it weakens the network. i.e. What happens if people only use various SCs and the main chain is only used to settle value between them? Does that generate enough fees?

Of course bitcoin has the same issue with centralized services. Take changetip as an example, all of their transactions happen off chain and do not contribute. They only interact with the main chain and provide fees when BTC is eventually withdrawn from the changetip service.

Over time Bitcoin could very easily turn into a collection of centralized services that all enable people to function off the main chain, and the main chain is only used for transferring value between these services. Maybe that is enough to protect the network, maybe not.

Federated pegs and side chains could actually improve this situation, but only if they are structured so that their transactions support the main chain as well. Merged mining is one possible solution, I'm sure there are others. The key is to structure them as child chains, not side chains. Essentially bitcoin needs to maintain its self-contained structure with no external dependencies, child chains that are dependent on the main chain and also contribute their economic value to the main chain (through merged mining) do that.
brg444
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February 05, 2015, 07:28:07 PM
 #21057

Quote
The Observer has learned that this would not be the first time that Wells Fargo has expressed deep concern about crypto, specifically singling out Mr. McCaleb for special scrutiny. Until the beginning of 2014, Wells Fargo had a whole task force at its highest level comprising 20 of its top executives and advisors, including Susan Athey, a Stanford economics professor who sits on Ripple Labs’ board. They were marching forward to be the first U.S. bank to dive into crypto. All of a sudden, in March, just after the February collapse of Mt. Gox, they did a complete 180, shutting down the entire program that had been exploring crypto.

http://observer.com/2015/02/the-race-to-replace-bitcoin

"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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February 05, 2015, 07:38:58 PM
 #21058

Good stuff: http://www.safehaven.com/article/36601/how-will-hackers-help-build-a-libertarian-21st-century

Like this post? you can tip me (BTC) 1LGi2DMhectdFSkBid5srrnHk8WHgD3V1d or very WoW (Doge) D9p6FZQb1sKkq9hApy4tnjSduYfdnc74bb
LewiesMan
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February 05, 2015, 07:42:40 PM
 #21059


Hackers = Bad for bitcoin.

And I was like nothing you idiot, Dr. Dre's dead, he's locked in my parent's basement
Adrian-x
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February 05, 2015, 08:07:27 PM
 #21060

Federated version of the Sidechains will be released in 1-2 months

http://insidebitcoins.com/news/gregory-maxwell-demo-sidechains-to-be-available-in-a-few-months/29531

Quote
Testing sidechains before the soft-fork

After explaining how this federated, demo version of sidechains would work, Maxwell went on to explain what happens after this version of sidechains has been tested in the wild:

“Beyond [federated sidechains], we have to see where it goes from there. It’ll take some time for the initial system to mature and for people to gain confidence enough to start saying, ‘OK. Well where can we start introducing the soft-forking, additional scrypt opcodes to make it so you can do it without the functionaries — without the federation.”

can't wait to see some of this in the wild.  

I like federated pegs, but every time I read confident statements like bold above I feel compelled to cash out a little early.

I've come around to your concerns in that federated pegs in the long run may pull enough transactions off the main chain that it weakens the network. i.e. What happens if people only use various SCs and the main chain is only used to settle value between them? Does that generate enough fees?

Of course bitcoin has the same issue with centralized services. Take changetip as an example, all of their transactions happen off chain and do not contribute. They only interact with the main chain and provide fees when BTC is eventually withdrawn from the changetip service.

Over time Bitcoin could very easily turn into a collection of centralized services that all enable people to function off the main chain, and the main chain is only used for transferring value between these services. Maybe that is enough to protect the network, maybe not.

Federated pegs and side chains could actually improve this situation, but only if they are structured so that their transactions support the main chain as well. Merged mining is one possible solution, I'm sure there are others. The key is to structure them as child chains, not side chains. Essentially bitcoin needs to maintain its self-contained structure with no external dependencies, child chains that are dependent on the main chain and also contribute their economic value to the main chain (through merged mining) do that.

Centralized services should use things like federated pegs (without SPV proofs) and OT Servers, that have a central controller, one then needs to trust the service, and there in lies the risk that makes the market system work. Ultimately we need to trust the people we give our money too to deliver and we need to trust the money, making a trust less system like SideChains for those to manage out money does very little to improve the trust in the goods and services, it allows for more complexity like the FED hides inflation. Bitcoin solves the trust in money, SideChains in part propose to solve the trust how the money is managed, but does nothing to solve the trust in actors and there goods and services, trusting in the goods and services is an inherent risk in business, trust is earned by being a good actor, not by using a SideChain.

yes SideChains can make new types of products viable but those are fringe, not the function of over 95% of human labor and consumer products the bulk of what the economy needs to function, those are best served with nothing more than trust in money, heaven forbid a Sidechain ever becomes a Bitcoin money substitute.  

I'm not concerned with centralized services, like ChangeTip, they will have a balancing act to follow managing PR, Value, overheads and the underlying infrastructure they depend on there will come a time for disruption when they become top heavy and start making mistakes.

SideChains don't make a service like ChangeTip better, (federated pegs or OT type services could) OT for example would aloe me to trust ChaingeTip more than say r/bitcointip who appear to have destroyed a lot of bitcoin, but a SideChain with SPV proofs merge mined by Bitcoin miners or worse managed by a PoS could turn it into a Bitcoin cancer at the protocol level.

Thank me in Bits 12MwnzxtprG2mHm3rKdgi7NmJKCypsMMQw
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