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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 1955582 times)
Melbustus
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March 16, 2015, 07:41:01 PM
 #22001

Fiatcoin is nearly here:

http://www.reuters.com/article/2015/03/12/us-bitcoin-ibm-idUSKBN0M82KB20150312\

Quote
Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said.

"These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."

Nice.  Now they won't even have to turn on the printing presses.  Just type in a big number and hit enter.

I'm assuming this means we then get accurate insight into exactly what the money supply is. No more shadowstats! No more government handwaving about inflation!

Not such a bad thing?

Just a guess but fiatcoin's blockchain will probably be private, all clients essentially just client/server so money supply is obfuscated.  Likely devices won't hold their private keys, or there will be a master private key that can spend from all accounts.  No other way for the government to freeze accounts, implement asset forfeiture, etc.


Fedcoin is obviously a dumb idea. It's effectively the same level (or worse) of why-are-you-bothering-with-a-blockchain as doing a gold or silver "backed" cryptocurrency. If you have a fundamentally centralized system, then adding a blockchain just makes it more complex for no reason. Just fire up some servers and make a good API instead.

People *still* don't understand the problem that blockchains actually solve.

Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.
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March 16, 2015, 07:47:48 PM
 #22002

Fiatcoin is nearly here:

http://www.reuters.com/article/2015/03/12/us-bitcoin-ibm-idUSKBN0M82KB20150312\

Quote
Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said.

"These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."

Nice.  Now they won't even have to turn on the printing presses.  Just type in a big number and hit enter.

I'm assuming this means we then get accurate insight into exactly what the money supply is. No more shadowstats! No more government handwaving about inflation!

Not such a bad thing?

Just a guess but fiatcoin's blockchain will probably be private, all clients essentially just client/server so money supply is obfuscated.  Likely devices won't hold their private keys, or there will be a master private key that can spend from all accounts.  No other way for the government to freeze accounts, implement asset forfeiture, etc.


Fedcoin is obviously a dumb idea. It's effectively the same level (or worse) of why-are-you-bothering-with-a-blockchain as doing a gold or silver "backed" cryptocurrency. If you have a fundamentally centralized system, then adding a blockchain just makes it more complex for no reason. Just fire up some servers and make a good API instead.

People *still* don't understand the problem that blockchains actually solve.

Yep, we are still so early.

Frankly, I'm amazed at the low level of sophisticated analysis coming out of IBM regarding Bitcoin. But then again, I bet much of it is being driven by Richard Gendal whom I have been even less impressed.

Perhaps IBM is a quintessential example of a big corporation who's benefited so greatly from inflation that they've been blinded.
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March 16, 2015, 08:22:09 PM
 #22003


As you stated, bitcoin is a more democratic form of money, where the economic majority have a voice and a small group cannot control the system. This is one of the most beautiful aspects of the system. Additionally any minority of users can always choose to stay on the ledger/path they choose.


Any democratic system of money is far inferior to Bitcoin.  It is fundamentally the opposite of that, it is an economic system.
An occurrence of democratic action is seen as a threat to Bitcoin, AKA 51% attack.

Voting is in all cases the supreme failure of an attempt to create quality.  Where there is quality, voting is not needed.  Voting is for avoiding violent conflict by replacing it with as much as possible with social conflict.  It is the use of law against others, and it is for subjugating minorities.  We in democratic societies are taught how wonderful it is to have democracy, and it is better than most any other option, but it is also utter crap.  I do not wish for a "democratic" system of money and I am very happy that Bitcoin isn't one.

It is a failing of Gold, that there exists a gold fix, where a small group vote on the price.  There is only democracy in a monetary system to the extent that the system lacks quality.  It is a sign of failure, not success.

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Zangelbert Bingledack
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March 16, 2015, 08:35:52 PM
 #22004

Disagree that the limit will remain because the economic majority will protect the limit. If that was true, please explain how they broke the gold standard?

Isn't this just the difference between a geographically selected community where a central government is in control (the US population) and a non-territorial self-selected community where the economic-majority "decentralized governance" is in control (Bitcoin)?

In other words, isn't this in some sense just the question of statism vs. anarchy, or centralization vs. decentralization, restated? The whole idea of economic majority control only works because of the exit dynamic afforded by the decentralized nature of cryptoledgers.

It seems to me that insofar as you buy the argument that decentralization or non-territorialism, wherein this voice/exit dynamic gets maximum play, is superior to centralization and territorial monopolies of power wherein you cannot exit without physically emigrating, you would also buy my argument in the long post above that there is nothing to fear from forkability.

As an example, if when the gold standard was broken people could choose to fork off and keep the gold standard, regardless of being geographically located in the United States, the legislation could not have passed, or if it did it wouldn't have been effective - at least not for those in the population who care about sound money. The economic majority among US citizens may have supported going off the gold standard, but then there is still a minority who want to keep the gold standard. In a statist system, the minority is the minority and gets overridden; in an anarchic system, the economic minority simply becomes the economic majority of a smaller community and retains the system they prefer. (If they deem their differences sufficient to make it worth breaking away.)

The economic majority of physical gold holders were against it, they massively lost out in the default, and yet it still happened.

Reiterating the above point for clarity, this tragedy happened because the gold holders weren't allowed to "exit in place," and I assume they weren't in fact allowed to exit US territory at all (with their gold). This is a problem of statism, but Bitcoin is not a statist system. In Bitcoin the economic majority, or perhaps we can refine the phrasing even further and say each economic community (defined by their similar beliefs about what is ideal money), can always choose their own fork.

My "economic majority" phrasing becomes a little confusing here because we must continually ask, "A majority among whom?" A large enough minority with enough difference of opinion from the majority will break away and become the economic majority of a community of people who agree with their values. There are still reasons why each little economic community with varying beliefs about ideal money will not necessarily fork off: size is an advantage, voice can still work if the minority makes convincing arguments, etc.

The main thing I want to point out is that there is a set of implications in this shift from mostly voice-only territorial democratic control to fully-enabled location-independent voice+exit control,* in other words there is a set of implications of the exit dynamic getting full play for the first time, and I think these implications haven't been fully understood or at least not fully internalized.

Note: Although I'm arguing in this vein, I don't even think I myself have fully internalized the implications of now having a real exit option available at all times. I feel like I can see some of them implicitly but I'm not sure I could articulate the full set of implications yet. I'd like the above arguments hinting at some of the counterintuitive implications to be fleshed out and made more explicit, perhaps through further debate. The semantic challenges this new idea poses are also pretty formidable: the term "majority" becomes fluid in a way we aren't used to, for instance, as mentioned above, and even the term "Bitcoin" develops a dynamic character that at first feels unsettling.

*I'll quit using the term "exit-democracy" for this, to avoid confusion, because I think the associations of the word democracy to voting (voice) are just too strong.
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March 16, 2015, 08:56:30 PM
 #22005

Fiatcoin is nearly here:

http://www.reuters.com/article/2015/03/12/us-bitcoin-ibm-idUSKBN0M82KB20150312\

Quote
Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said.

"These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."

I don't get it... Isn't this taking the worst of both worlds?

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rocks
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March 16, 2015, 09:06:52 PM
 #22006

Fiatcoin is nearly here:

http://www.reuters.com/article/2015/03/12/us-bitcoin-ibm-idUSKBN0M82KB20150312\

Quote
Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said.

"These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."

I don't get it... Isn't this taking the worst of both worlds?

Oh, you got it.

They are going to try and create a centralized black-box system that has all the negatives of fiat money combined with the negatives of bitcoin (trace-ability, etc), and a demographic majority will go along. (You're not for terrorism, child molesters or drug dealers are you). It's not a matter of if, but when.
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March 16, 2015, 09:08:06 PM
 #22007

Fiatcoin is nearly here:
http://www.reuters.com/article/2015/03/12/us-bitcoin-ibm-idUSKBN0M82KB20150312\

Quote
Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said.
"These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."

I don't get it... Isn't this taking the worst of both worlds?
Actually it is. What did you expect? The government to make something that would actually be helpful to the people?  Cheesy
They've been manipulating, spying, using us and whatnot.

This was not a 'if question' but a 'when'.

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March 16, 2015, 09:27:02 PM
 #22008

My "economic majority" phrasing becomes a little confusing here because we must continually ask, "A majority among whom?" A large enough minority with enough difference of opinion from the majority will break away and become the economic majority of a community of people who agree with their values. There are still reasons why each little economic community with varying beliefs about ideal money will not necessarily fork off: size is an advantage, voice can still work if the minority makes convincing arguments, etc.

Here is where I personally think this runs into problems. Again I'll use the gold default as a historical example. Here after FDR defaulted it was perfectly possible for a minority of people to refuse the new fiat system and still transact with each other using the old system (physical gold). The problem was the minority of people (gold bugs) was too small to be effective, they were marginalized and the majority of the world moved on without them.

I don't think the "community of people who agree with their values" will necessarily be large enough, if history is any guide (which I believe it is).


As you stated, bitcoin is a more democratic form of money, where the economic majority have a voice and a small group cannot control the system. This is one of the most beautiful aspects of the system. Additionally any minority of users can always choose to stay on the ledger/path they choose.

Any democratic system of money is far inferior to Bitcoin.  It is fundamentally the opposite of that, it is an economic system.
An occurrence of democratic action is seen as a threat to Bitcoin, AKA 51% attack.

Voting is in all cases the supreme failure of an attempt to create quality.  Where there is quality, voting is not needed.  Voting is for avoiding violent conflict by replacing it with as much as possible with social conflict.  It is the use of law against others, and it is for subjugating minorities.  We in democratic societies are taught how wonderful it is to have democracy, and it is better than most any other option, but it is also utter crap.  I do not wish for a "democratic" system of money and I am very happy that Bitcoin isn't one.

The problem is Bitcoin exists within a system of demographically elected governments (supposedly), and this system will try to impose it's will either on bitcoin or on the population. The easier and more common it is to change bitcoin, the easier it is for a demographically elected government (or any gov) to co-opt bitcoin.

This thread started with a statement that making bitcoin easy to fork often will be a good thing. My argument is be careful what you wish for because it there are powerful forces which will try to change it into something against it's founding principles.

This is why I stated I prefer that bitcoin remains a rules based system as much as possible outside of the influence of man. The more we enable forking to be common, the more that breaks down and the easier it become for governments to push regulation/etc in.
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March 16, 2015, 09:57:47 PM
 #22009

My "economic majority" phrasing becomes a little confusing here because we must continually ask, "A majority among whom?" A large enough minority with enough difference of opinion from the majority will break away and become the economic majority of a community of people who agree with their values. There are still reasons why each little economic community with varying beliefs about ideal money will not necessarily fork off: size is an advantage, voice can still work if the minority makes convincing arguments, etc.

Here is where I personally think this runs into problems. Again I'll use the gold default as a historical example. Here after FDR defaulted it was perfectly possible for a minority of people to refuse the new fiat system and still transact with each other using the old system (physical gold). The problem was the minority of people (gold bugs) was too small to be effective, they were marginalized and the majority of the world moved on without them.

I don't think the "community of people who agree with their values" will necessarily be large enough, if history is any guide (which I believe it is).


As you stated, bitcoin is a more democratic form of money, where the economic majority have a voice and a small group cannot control the system. This is one of the most beautiful aspects of the system. Additionally any minority of users can always choose to stay on the ledger/path they choose.

Any democratic system of money is far inferior to Bitcoin.  It is fundamentally the opposite of that, it is an economic system.
An occurrence of democratic action is seen as a threat to Bitcoin, AKA 51% attack.

Voting is in all cases the supreme failure of an attempt to create quality.  Where there is quality, voting is not needed.  Voting is for avoiding violent conflict by replacing it with as much as possible with social conflict.  It is the use of law against others, and it is for subjugating minorities.  We in democratic societies are taught how wonderful it is to have democracy, and it is better than most any other option, but it is also utter crap.  I do not wish for a "democratic" system of money and I am very happy that Bitcoin isn't one.

The problem is Bitcoin exists within a system of demographically elected governments (supposedly), and this system will try to impose it's will either on bitcoin or on the population. The easier and more common it is to change bitcoin, the easier it is for a demographically elected government (or any gov) to co-opt bitcoin.

This thread started with a statement that making bitcoin easy to fork often will be a good thing. My argument is be careful what you wish for because it there are powerful forces which will try to change it into something against it's founding principles.

This is why I stated I prefer that bitcoin remains a rules based system as much as possible outside of the influence of man. The more we enable forking to be common, the more that breaks down and the easier it become for governments to push regulation/etc in.



yeah, i think i agree with the bolded part.  the more forks, the more fragmentation of the community.  we need numerical concentration in the long run.

and the fact is, Bitcoin is almost where it needs to be in terms of economic properties.  ideally, we might have faster tx times and better anonymity but what we have currently is pretty good and accomplished with a little effort.

to your point about why did gold get co-opted; the answer is simple.  gold is simply a poor form of money and has been failing the people for decades now.  you can only store it and hope it retains its value.  meanwhile, gold has no means of regular auditing nor of transacting across distances, let alone in a timely manner.  the best you can do with it is bury it in a vault after digging it up, as Wences is fond of saying.  Bitcoin, otoh, truly exists across time and space while its supply is hard coded.  transacting across the globe in an instant is commonplace.  hiding it and securing it, i would submit, is easier than gold with the proper knowledge.  thus, it's money properties vastly exceed those of gold and will thus make it much more resilient to any nation state attempting to kill it.  

furthermore, b/c it is global, it harnesses the natural governmental conflict that exist today and for evermore.  this is why i think the Chinese gvt has not killed all the branches of the Bitcoin economy within its borders.  it probably realizes that one day they might have no choice but to acquiesce to Bitcoin, which would be the next best choice if they can't have the yuan become the world reserve currency.  knocking the dollar off its mantle would be good enough.  having both the mining and exchange majority volume will come in handy should that day come.
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March 16, 2015, 10:10:49 PM
 #22010

...

Fedcoin is obviously a dumb idea. It's effectively the same level (or worse) of why-are-you-bothering-with-a-blockchain as doing a gold or silver "backed" cryptocurrency. If you have a fundamentally centralized system, then adding a blockchain just makes it more complex for no reason. Just fire up some servers and make a good API instead.

People *still* don't understand the problem that blockchains actually solve.

Yep, we are still so early.

Frankly, I'm amazed at the low level of sophisticated analysis coming out of IBM regarding Bitcoin. But then again, I bet much of it is being driven by Richard Gendal whom I have been even less impressed.

Perhaps IBM is a quintessential example of a big corporation who's benefited so greatly from inflation that they've been blinded.


Well, Richard Brown does understand the spectrum of decentralization, at least (eg, he acks that Ripple is not like Bitcoin in terms of credible decen, etc). My own feeling right now, though, is that there's far less room for middle-ground projects (wrt level of decentralization) than people think (incl Mr. Brown). Essentially, I think people will begin to realize that if a system (eg Fedcoin) fundamentally cannot exhibit "pure" decentralization like Bitcoin, it might as well just be a centralized application and not bother with the blockchain stuff. Too many people think you can have both worlds, but I don't think that actually makes sense. All you get is the worst of both, not the best.

The other sort of decentralization you can do (such as with practical byzantine consensus - which was effectively solved in 1999) is for redundancy, not explicitly attack resistance or credible anonymous decentralization. So I think you get three main buckets that have utility longrun:

1) Centralized systems. Like fiat money.

2) Redundant systems, that run some sort of practical byzantine consensus (pdf) alg, or alt-consensus like Ripple. Something which doesn't make a good independent money at all (since its "rules" couldn't be considered credible), but which might be fine for some other uses. This stuff, to me though, is thoroughly in the not-that-interesting pile, since it basically amounts to an evolution in ways to redundantly link server clusters. That's it. The guys running HyperLedger and Eris will spout off about how much more it is, but I really don't see. As Vitalik notes, this stuff is just a "friggin database technology". And for this class of system, that's *all* it is.

3) Bitcoin-style pure credible decentralization. For when you can't trust anyone. Money, permanent global record of authority, etc.


[disclaimer: above thoughts are very rough....I'm in a hurry right now]

Bitcoin is the first monetary system to credibly offer perfect information to all economic participants.
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March 16, 2015, 10:12:39 PM
 #22011

the more forks, the more fragmentation of the community.  we need numerical concentration in the long run.

There a conflict here though. What we need is more numerical participants, not just numerical concentration of a relatively tiny number of participants. Bitcoin at its current scale of usage will just wither and die (or be leapfrogged) if it doesn't grow a lot, so concentration of the existing users is fairly pointless. I don't think anyone disagrees with this?

The context of forking was allowing more rapid technical innovation, with the economic assumption that most participants would relatively quickly concentrate on one fork anyway, making that the successor.

If that economic assumption turns out to be untrue, then it is obviously the case that the needs of some participants or potential participants are very poorly served by one of the forks, and overall growth will suffer by failing to address those underlying needs.


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March 16, 2015, 10:25:46 PM
 #22012

the more forks, the more fragmentation of the community.  we need numerical concentration in the long run.

There a conflict here though. What we need is more numerical participants, not just numerical concentration of a relatively tiny number of participants. Bitcoin at its current scale of usage will just wither and die (or be leapfrogged) if it doesn't grow a lot, so concentration of the existing users is fairly pointless. I don't think anyone disagrees with this?

The context of forking was allowing more rapid technical innovation, with the economic assumption that most participants would relatively quickly concentrate on one fork anyway, making that the successor.

If that economic assumption turns out to be untrue, then it is obviously the case that the needs of some participants or potential participants are very poorly served by one of the forks, and overall growth will suffer by failing to address those underlying needs.




i am referring to numerical growth and concentration of participants worldwide into the exisitng Bitcoin mainchain to maximize tx fees as we transition away from block rewards.  this is essential.

forking is a tricky term and the concepts depend on how you define it.  hard forks incorporating new innovations are fine as long as they are truly needed and the only effort needed is to download new software.  but if it also forces participants to dig out cold wallets and make financial transfers to new coins or new sidechains, that is a big problem.  many ppl will get left behind and will lose money.
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March 16, 2015, 10:27:25 PM
 #22013

forking is a tricky term and the concepts depend on how you define it.  hard forks incorporating new innovations are fine as long as they are truly needed and the only effort needed is to download new software.  but if it also forces participants to dig out cold wallets and make financial transfers to new coins or new sidechains, that is a big problem.  many ppl will get left behind and will lose money.

As Zangelbert Bingledack defined it, existing participants would not need to do anything. They could just sit back with their cold storage coins and see which fork wins out, their ledger position guaranteed.
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March 16, 2015, 10:56:37 PM
 #22014

forking is a tricky term and the concepts depend on how you define it.  hard forks incorporating new innovations are fine as long as they are truly needed and the only effort needed is to download new software.  but if it also forces participants to dig out cold wallets and make financial transfers to new coins or new sidechains, that is a big problem.  many ppl will get left behind and will lose money.

As Zangelbert Bingledack defined it, existing participants would not need to do anything. They could just sit back with their cold storage coins and see which fork wins out, their ledger position guaranteed.


yeah, but to rocks point, we shouldn't want uncertainty in a money created by numerous forks causing constant choices.  ppl don't want that headache.  when you say "just sit back with their cold storage coins and see which fork wins out", you're essentially saying the forks are close in properties (or at least difficult to choose between).  one group is going to lose money as one chain continues onward and eventually peters out as it becomes clear that the other chain is superior.  that would not be good as that would result in losses.  the reason i think this happens is that when it comes to the network of global money, i think the market will converge to one out of convenience, efficiency, and simplicity. sort of how the USD has been outright adopted by many countries today.  it's easy.

hard forks are not to be created lightly.  i realize that is not what ZB was advocating.
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March 16, 2015, 11:03:45 PM
 #22015

when you say "just sit back with their cold storage coins and see which fork wins out", you're essentially saying the forks are close in properties (or at least difficult to choose between).

No I'm kind of saying the opposite. If they are not close in properties then one will quickly win out, and I think we all agree that is not a problem at all. It isn't a problem for passive participants, nor active ones.

The minority of cases where the choice is more difficult, you basically have two choices. One is to pick one or the other (including status quo) essentially by fiat, or recognize that these decisions are difficult and let a market sort it out. I argue it is more important to do that now, when Bitcoin is tiny, rather than suffer long term from having made the wrong choice earlier when the costs of change were relatively insignificant.

I don't think we disagree that stability is important, I just think that stability at the multi-trillion dollar cap scale is better served by letting things sort out robustly and dynamically at the billion dollar scale, even if that introduces more risk short term (indeed that risk is what allows it to happen).

Take this whole block size thing. It's pretty clear no consensus will ever be reached. Doing nothing is an arbitrary decision. Making a change to 20 MB or 20 MB + {some growth rate} is also arbitrary. We're not going to "figure this out." I say let the market play out with the toy system we have today and whichever system thrives will be far stronger at the trillion dollar scale.

Also, with respect to new participants losing money, that is fairly easy for them to avoid. Just buy both forks in equal proportion. That puts them in the same immunized position as existing holders with cold storage. If you don't do that you are making a bet on which fork is going to win. There is nothing wrong with making bets, but no one is forced to make this bet, and every bet has a winner and a loser.

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March 17, 2015, 12:51:53 AM
 #22016

Fiatcoin is nearly here:

http://www.reuters.com/article/2015/03/12/us-bitcoin-ibm-idUSKBN0M82KB20150312\

Quote
Unlike bitcoin, where the network is decentralized and there is no overseer, the proposed digital currency system would be controlled by central banks, the source said.

"These coins will be part of the money supply," the source said. "It's the same money, just not a dollar bill with a serial number on it, but a token that sits on this blockchain."

Nice.  Now they won't even have to turn on the printing presses.  Just type in a big number and hit enter.

I'm assuming this means we then get accurate insight into exactly what the money supply is. No more shadowstats! No more government handwaving about inflation!

Not such a bad thing?

Just a guess but fiatcoin's blockchain will probably be private, all clients essentially just client/server so money supply is obfuscated.  Likely devices won't hold their private keys, or there will be a master private key that can spend from all accounts.  No other way for the government to freeze accounts, implement asset forfeiture, etc.


Fedcoin is obviously a dumb idea. It's effectively the same level (or worse) of why-are-you-bothering-with-a-blockchain as doing a gold or silver "backed" cryptocurrency. If you have a fundamentally centralized system, then adding a blockchain just makes it more complex for no reason. Just fire up some servers and make a good API instead.

People *still* don't understand the problem that blockchains actually solve.

Yep, we are still so early.

Frankly, I'm amazed at the low level of sophisticated analysis coming out of IBM regarding Bitcoin. But then again, I bet much of it is being driven by Richard Gendal whom I have been even less impressed.

Perhaps IBM is a quintessential example of a big corporation who's benefited so greatly from inflation that they've been blinded.

If IBM manages to create fiatcoin then it will be great step for bitcoin.
 - Using atomic swaps  bitcoin <-> fiatcoin we do not need 3d party exchanges.  It is 1. step how to convert fiat into Bitcoin.
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March 17, 2015, 12:55:01 AM
 #22017

when you say "just sit back with their cold storage coins and see which fork wins out", you're essentially saying the forks are close in properties (or at least difficult to choose between).

No I'm kind of saying the opposite. If they are not close in properties then one will quickly win out, and I think we all agree that is not a problem at all. It isn't a problem for passive participants, nor active ones.

so to be clear, i want to avoid the situation where 2 lengthy chains (20 blocks or more) get created repeatedly and frequently by protocol changes that aren't well thought out and not subjected to consensus building.  sort of like what happened March 2013.  that is the situation where ppl lose money.  the only reason Eleuthria didn't lose out on all the blocks BTCGuild mined during that true "fork" was that Gavin, the BF, and the community donated BTC to make up for the lost block rewards they had mined.  ppl like you and me who didn't have tx's layered on top of one another in those 20+ blocks didn't lose money but i think those who did (like many ongoing businesses that transact continuously) should have or did lose money despite the rollback.  certainly they would have if the chain hadn't been rolled back and been left to die.

if you've never mined and lost a 50 BTC block reward from orphaning, it is painful, take my word.  and that is just from a one or two block fork with orphan from everyday normal activity.  

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The minority of cases where the choice is more difficult, you basically have two choices. One is to pick one or the other (including status quo) essentially by fiat, or recognize that these decisions are difficult and let a market sort it out. I argue it is more important to do that now, when Bitcoin is tiny, rather than suffer long term from having made the wrong choice earlier when the costs of change were relatively insignificant.

again, letting the market sort it out means letting the losing chain die out resulting in losses for those who made the wrong choice out of hubris or ignorance.  too much of that isn't good for confidence and growth.
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I don't think we disagree that stability is important, I just think that stability at the multi-trillion dollar cap scale is better served by letting things sort out robustly and dynamically at the billion dollar scale, even if that introduces more risk short term (indeed that risk is what allows it to happen).

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Take this whole block size thing. It's pretty clear no consensus will ever be reached. Doing nothing is an arbitrary decision. Making a change to 20 MB or 20 MB + {some growth rate} is also arbitrary. We're not going to "figure this out." I say let the market play out with the toy system we have today and whichever system thrives will be far stronger at the trillion dollar scale.

Also, with respect to new participants losing money, that is fairly easy for them to avoid. Just buy both forks in equal proportion. That puts them in the same immunized position as existing holders with cold storage. If you don't do that you are making a bet on which fork is going to win. There is nothing wrong with making bets, but no one is forced to make this bet, and every bet has a winner and a loser.



that strategy of buying both chains means they will lose money at some level when the dominant chain eventually wins.  the exchange price would start to reflect that first as the coins on the losing chain start dropping in price.  one could try to sell the losing chain coins and jump back over to the other chain but certainly there will be losers and then bigger losers.  too much of that is not good for Bitcoin.
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March 17, 2015, 01:11:02 AM
 #22018

that strategy of buying both chains means they will lose money at some level when the dominant chain eventually wins.

Look at it not as individual assets but as a global ledger. If the global ledger represented by the combination of both (temporarily viable) chains, then if you buy say 1% of both chains, and one chain dies (goes to zero), you still own 1% of the global ledger. Any value that disappears from your coins on the losing chain would be redistributed to your coins on the winning chain.

I'll comment on the other points later, kind of busy now.
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March 17, 2015, 01:24:55 AM
 #22019

that strategy of buying both chains means they will lose money at some level when the dominant chain eventually wins.

Look at it not as individual assets but as a global ledger. If the global ledger represented by the combination of both (temporarily viable) chains, then if you buy say 1% of both chains, and one chain dies (goes to zero), you still own 1% of the global ledger. Any value that disappears from your coins on the losing chain would be redistributed to your coins on the winning chain.

I'll comment on the other points later, kind of busy now.


maybe.

lots of moving parts in that one that could invalidate the assumption.  for starters, constant forking like i've described could decrease the value of the entire network from the getgo.
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March 17, 2015, 01:37:59 AM
 #22020

that strategy of buying both chains means they will lose money at some level when the dominant chain eventually wins.

Look at it not as individual assets but as a global ledger. If the global ledger represented by the combination of both (temporarily viable) chains, then if you buy say 1% of both chains, and one chain dies (goes to zero), you still own 1% of the global ledger. Any value that disappears from your coins on the losing chain would be redistributed to your coins on the winning chain.

I'll comment on the other points later, kind of busy now.


maybe.

lots of moving parts in that one that could invalidate the assumption.  for starters, constant forking like i've described could decrease the value of the entire network from the getgo.

Yes I agree if done in poorly conceived and chaotic manner it would be destructive. Zangelbert Bingledack's original message indicated that exchanges would need to be set up to handle this properly in order to treat forks as a market question. Likewise wallets, etc. It is a significant undertaking, but in many ways likely less challenging, less complicated, and possibly with less risk of people losing money, than side chains.

More later.
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