Gold collapsing. Bitcoin UP.

[Zangelbert Bingledack]

It is true that we can't simply rely on charity for full nodes. There has to be an incentive structure.

[1714079098]

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[iCEBREAKER]

Bitcoin price has gone down even more than gold in the last 12 months.

Risk of holding bitcoin is high as it has no fundamental value with many competitions.

... gold went down yesterday too, so there. 

who opened this board to pre-schoolers?

Touchy touchy.

You don't have to disavow 5000 years of gold-based civilization in order to hype Bitcoin.

In fact, it makes you look fanatical.

Trolling cypherdoc when his OP thesis looks shaky is a time-honored tradition on this thread, so lighten up.   

[Zangelbert Bingledack]

On incentives...

If you take seriously Daniel Krawisz's point here, it starts to become clear that none of the parameters in the Bitcoin protocol are anything more than first approximations. As the protocol runs up against real world use cases and limitations, some things will have to change. It sounds scary, thinking that even the coin limit could change..."What about hard money?" Here's the thing: Bitcoin is always at the mercy of the market, it is always controlled by the market, always shaped by the market. Sure the presets matter, they function like Schelling points and the market is wont to change them lightly. But it will if absolutely necessary.

As gold's price history shows, "hard money" is still always subject to the market. If the market decides Bitcoin needs 23 million coins instead of 21 million, it will be done. You can keep your coins on the original 21M fork as their price plummets because, ex hypothesi, the market only endorsed the change if it was absolutely necessary, meaning the old fork is pretty useless. Most like this will never happen, and for the very reasons that we wouldn't want it to happen. But it could, if and only if circumstances are so dire that it *should*. None of this should be disturbing, though, because almost everything in our lives already depends on the market. People don't push you into traffic, even though they could. The free market doesn't price for your daily necessities at tens times more than usual, at least without a damn good reason that you would ultimately agree with.

Bitcoin will be restructured as necessary to make it work, to preserve the value of the Universal Ledger of Civilization at all costs. Because that's what the market wants. Insofar as that means no change, it will undergo no change; insofar as it means change, there will be change.

Every classic document of Voice and Exit references this reality. In the Declaration of Independence it says, "Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes." This is analogous to the fact that the market will not readily deviate from what was set in stone by Satoshi at the start, but that this should not be mistaken for an absolute guarantee. The market simply guarantees that changes will only be made when they are beneficial, according to the wisdom of the entire investing population weighted by those best understand it, which has the legendary accuracy of a prediction market (for example, in 2012 the Intrade prediction market correctly predicted 49 out of 50 electoral outcomes in the US states).

Hence really taking Krawisz's point seriously, considering all its ramifications, we find that Bitcoin is solely controlled by the market, and will be whatever the market deems most useful, with the initial presets as only one factor, albeit an important one. We haven't seen this come to the fore yet simply because the limits of scarcity and so forth have not yet been approached. As rubber meets road, more and more this way of thinking will become critical to adopt. It will confuse and disturb many, but really we have all been at the mercy of the market all along, and this is just the full revelation of the extent of that reality.

In the case of full nodes, for instance, any changes that may be necessary to incentivize them will be made, if and only if needed. Nothing is really set in stone: it is better than set in stone; it is maintained by the wisdom of the market, even the wisdom to guard against the vicissitudes of temporary market swings by reacting with appropriate ponderosity, except in a true emergency when the change can be lightning fast. There only need to be infrastructural changes to enable fork arbitrage on exchanges so that the market can work with minimal friction when the time comes. And probably these infrastructural changes will not be made until a small crisis has forced them. Antifragility works in this way.

[iCEBREAKER]

As gold's price history shows, "hard money" is still always subject to the market. If the market decides Bitcoin needs 23 million coins instead of 21 million, it will be done. You can keep your coins on the original 21M fork as their price plummets because, ex hypothesi, the market only endorsed the change if it was absolutely necessary, meaning the old fork is pretty useless. None of this should be disturbing, though, because almost everything in our lives already depends on the market. People don't push you into traffic, even though they could. The free market doesn't price for your daily necessities at tens times more than usual, at least without a damn good reason that you would ultimately agree with.

Bitcoin will be restructured as necessary to make it work, to preserve the value of the Universal Ledger of Civilization at all costs. Because that's what the market wants. Insofar as that means no change, it will undergo no change; insofar as it means change, there will be change.

Every classic document of Voice and Exit references this reality. In the Declaration of Independence it says, "Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes." This is analogous to the fact that the market will not readily deviate from what was set in stone by Satoshi at the start, but that this should not be mistaken for an absolute guarantee. The market simply guarantees that changes will only be made when they are beneficial, according to the wisdom of the entire investing population weighted by those best understand it, which has the legendary accuracy of a prediction market (for example, in 2012 the Intrade prediction market correctly predicted 49 out of 50 electoral outcomes in the US states).

Good post, but the crypto sector (unlike intrinsically monopolistic government) is not zero sum.  Canonical Bitcoin doesn't need to be devalued and abolished in order for innovation to occur.  Supplementation by forks/altcoins is already well underway, and those processes are functionally (albeit externally) a deviation from Satoshi's magic numbers.

Also, the "Universal Ledger of Civilization" paradigm is flawed by its pretentious Tower of Babel/Third Temple hubris.  With rare exception, the phrase 'natural monopoly' is an oxymoron (given time and free market competition/substitution).

[Zangelbert Bingledack]

Good post, but the crypto sector (unlike intrinsically monopolistic government) is not zero sum.  Canonical Bitcoin doesn't need to be devalued and abolished in order for innovation to occur.  Supplementation by forks/altcoins is already well underway, and those processes are functionally (albeit externally) a deviation from Satoshi's magic numbers.

Also, the "Universal Ledger of Civilization" paradigm is flawed by its pretentious Tower of Babel/Third Temple hubris.  With rare exception, the phrase 'natural monopoly' is an oxymoron (given time and free market competition/substitution).

There is no problem with alt-protocols. The problem with altcoins is that they are not just alt-protocols, but also alt-ledgers. That's a no-no from the market's perspective. To make an alt-protocol, you fork Bitcoin as it stands, not fork it and start all over with a new ledger.

As for Tower of Babel hubris, you'd need to show specifically how a market-chosen standard has any of the ill effects of a monopoly on power. That sounds like arguing that gold is a monopoly so we need silver and platinum as well or something bad will happen. As a backup in case gold becomes counterfeitable, sure, that makes sense, but anything beyond that seems pointless (excepting some niche uses, which may be your point).

[iCEBREAKER]

There is no problem with alt-protocols. The problem with altcoins is that they are not just alt-protocols, but also alt-ledgers. That's a no-no from the market's perspective. To make an alt-protocol, you fork Bitcoin as it stands, not fork it and start all over with a new ledger.

As for Tower of Babel hubris, you'd need to show specifically how a market-chosen standard has any of the ill effects of a monopoly on power. That sounds like arguing that gold is a monopoly so we need silver and platinum as well or something bad will happen.

Airdrops patterned on current BTC distribution have been tried, and have been soundly rejected by the market.  GavinCoin is still highly controversial vaporware with a rough road ahead of it.

New ledgers are valuable for their hot swappable backup utility and as platforms for innovation.

The gold standard is inferior to a bimetallic one including silver; that's why the Founding Fathers you quoted in their supreme wisdom choose to specify both as legal tender:

The United States Constitution declares, in Article I, Section 10, "No State shall... make any Thing but gold and silver Coin a Tender in Payment of Debts"

Your mention of novel, exotic platinum is a straw man, but yes, copper/nickle/zinc are important as 2nd tier monetary metals.  They also kill/deactivate pathogens via the oligodynamic effect, just not as effectively as silver.  Hence the phrase 'health is wealth.'

[sickpig]

It is true that we can't simply rely on charity for full nodes. There has to be an incentive structure.

Justus wrote about it at length and even propose a brilliant (imho) solution:

http://bitcoinism.liberty.me/2015/01/21/economic-fallacies-and-the-block-size-limit-part-1-scarcity/
http://bitcoinism.liberty.me/2015/02/09/economic-fallacies-and-the-block-size-limit-part-2-price-discovery/

[cypherdoc]

It is true that we can't simply rely on charity for full nodes. There has to be an incentive structure.

Justus wrote about it at length and even propose a brilliant (imho) solution:

http://bitcoinism.liberty.me/2015/01/21/economic-fallacies-and-the-block-size-limit-part-1-scarcity/
http://bitcoinism.liberty.me/2015/02/09/economic-fallacies-and-the-block-size-limit-part-2-price-discovery/

Ultimately, I think Justus will be right: no block size limit.

The whole above discussion regarding UTXO commitments should convince any skeptics against the future need for outsized storage space. That is a big relief.

As far as bandwidth, if the TX throughput grows to a size that pushes the limits, that will be a great problem to have. I'm sure the network and technological improvements will quickly respond to that demand.

Furthermore, we NEED that type of TX volume to support the miners and to further hash rate growth. The profit incentive does need to be there.

 

[Zangelbert Bingledack]

Airdrops patterned on current BTC distribution have been tried, and have been soundly rejected by the market.

I'm not aware of any major altcoin (of those deemed useful/promising even by some bitcoiners) that has tried bootstrapping off Bitcoin's ledger. I hear Stellar did a partial, but I wouldn't consider that major since its market cap is grossly inflated. It will have to be tried on a popular altcoin and executed effectively, which by the way is not a trivial problem, before we can know what the market will think of it.

As for gold and silver, sure it's in the Constitution, but why? Presumably because of limitations in sizing, like you don't want to use teensy gold dots to pay for a loaf of bread, and you don't want to lug around a kilo of silver to pay for a business suit. It's a hard trade-off: gold was too valuable for small transactions, while silver was too heavy for large transactions. Similarly, in Bitcoin there will only be a persistent fork if there is a hard trade-off that must be made. For example in the blocksize limits.

Whether or not this requires a protocol fork, it doesn't require starting a bran new ledger. At the time of the fork, every BTC holder will have their coins in both ledgers. They can sell one for the other if they way to take sides, but they can simply sit tight and have the value of their money fully retained whichever fork wins, or however their market shares split.

[Jungian]

Airdrops patterned on current BTC distribution have been tried, and have been soundly rejected by the market.

I'm not aware of any major altcoin (of those deemed useful/promising even by some bitcoiners) that has tried bootstrapping off Bitcoin's ledger. I hear Stellar did a partial, but I wouldn't consider that major since its market cap is grossly inflated. It will have to be tried on a popular altcoin and executed effectively, which by the way is not a trivial problem, before we can know what the market will think of it.

As for gold and silver, sure it's in the Constitution, but why? Presumably because of limitations in sizing, like you don't want to use teensy gold dots to pay for a loaf of bread, and you don't want to lug around a kilo of silver to pay for a business suit. It's a hard trade-off: gold was too valuable for small transactions, while silver was too heavy for large transactions. Similarly, in Bitcoin there will only be a persistent fork if there is a hard trade-off that must be made. For example in the blocksize limits.

Whether or not this requires a protocol fork, it doesn't require starting a bran new ledger. At the time of the fork, every BTC holder will have their coins in both ledgers. They can sell one for the other if they way to take sides, but they can simply sit tight and have the value of their money fully retained whichever fork wins, or however their market shares split.

Clams bootstrapped using BTC, LTC and DOGE I think.

[cypherdoc]

Snowden:

https://www.lightbluetouchpaper.org/2015/05/02/meeting-snowden-in-princeton/

[shmadz]

It is true that we can't simply rely on charity for full nodes. There has to be an incentive structure.

Justus wrote about it at length and even propose a brilliant (imho) solution:

http://bitcoinism.liberty.me/2015/01/21/economic-fallacies-and-the-block-size-limit-part-1-scarcity/
http://bitcoinism.liberty.me/2015/02/09/economic-fallacies-and-the-block-size-limit-part-2-price-discovery/

Ultimately, I think Justus will be right: no block size limit.

The whole above discussion regarding UTXO commitments should convince any skeptics against the future need for outsized storage space. That is a big relief.

As far as bandwidth, if the TX throughput grows to a size that pushes the limits, that will be a great problem to have. I'm sure the network and technological improvements will quickly respond to that demand.

Furthermore, we NEED that type of TX volume to support the miners and to further hash rate growth. The profit incentive does need to be there.

 

As long as the price continues to increase ten fold every other year , then the block reward will be sufficient for at least the immediate future (next 5-10 years)

Long term, I think justus' proposed payment structure, or something like it, will be necessary for miners and full nodes to continue to be viable.

Might as well give it a try now while the network is *only* worth a few billion... (if this is gonna fail, sooner is better than later)

[cypherdoc]

Grinding higher

[solex]

It is true that we can't simply rely on charity for full nodes. There has to be an incentive structure.

Justus wrote about it at length and even propose a brilliant (imho) solution:

http://bitcoinism.liberty.me/2015/01/21/economic-fallacies-and-the-block-size-limit-part-1-scarcity/
http://bitcoinism.liberty.me/2015/02/09/economic-fallacies-and-the-block-size-limit-part-2-price-discovery/

Ultimately, I think Justus will be right: no block size limit.

The whole above discussion regarding UTXO commitments should convince any skeptics against the future need for outsized storage space. That is a big relief.

As far as bandwidth, if the TX throughput grows to a size that pushes the limits, that will be a great problem to have. I'm sure the network and technological improvements will quickly respond to that demand.

Furthermore, we NEED that type of TX volume to support the miners and to further hash rate growth. The profit incentive does need to be there.

 

As long as the price continues to increase ten fold every other year , then the block reward will be sufficient for at least the immediate future (next 5-10 years)

Long term, I think justus' proposed payment structure, or something like it, will be necessary for miners and full nodes to continue to be viable.

Might as well give it a try now while the network is *only* worth a few billion... (if this is gonna fail, sooner is better than later)

Agreed. And perhaps JR's node services payment structure could be progressed via a Lighthouse funding process. It might get traction if it was divided into broad phases, such as:

detailed technical  specification,
alpha/test version,
beta/production-ready version

The last of which would eventually need integrating with Bitcoin Core.

[cypherdoc]

Rally rally

[cypherdoc]

Oh it feels so good... moar, mosr!

[BlindMayorBitcorn]

Oh it feels so good... moar, mosr!

Don't freak your calm, bro. We've only just now stopped collapsing. 

[zanzibar]

Really doesn't matter the price, BTC cannot be stopped at this point.

[fox19891989]

Bitcoin doesn't care about our human concepts of possession and ownership and control.

Bitcoin is a self-contained system of rules. Those rules say that we have a blockchain containing a list of precise, cryptographic conditions which are necessary and sufficient to transform the blockchain in particular ways.

If we want Bitcoin to behave in in a manner that matches our preconceived notions of property and ownership, the onus is on us to use Bitcoin's rules in a way that achieves what we want.

Bitcoin is in no way limited to only behaving in ways that match our expectations. Bitcoin can do anything which is allowed by its rules, including operations that have no equivalent in our existing property and ownership paradigms.

Gold collapsing.  Bitcoin DOWN, too. 

[smooth]

Airdrops patterned on current BTC distribution have been tried, and have been soundly rejected by the market.

I'm not aware of any major altcoin (of those deemed useful/promising even by some bitcoiners) that has tried bootstrapping off Bitcoin's ledger. I hear Stellar did a partial, but I wouldn't consider that major since its market cap is grossly inflated. It will have to be tried on a popular altcoin and executed effectively, which by the way is not a trivial problem, before we can know what the market will think of it.

As for gold and silver, sure it's in the Constitution, but why? Presumably because of limitations in sizing, like you don't want to use teensy gold dots to pay for a loaf of bread, and you don't want to lug around a kilo of silver to pay for a business suit. It's a hard trade-off: gold was too valuable for small transactions, while silver was too heavy for large transactions. Similarly, in Bitcoin there will only be a persistent fork if there is a hard trade-off that must be made. For example in the blocksize limits.

Whether or not this requires a protocol fork, it doesn't require starting a bran new ledger. At the time of the fork, every BTC holder will have their coins in both ledgers. They can sell one for the other if they way to take sides, but they can simply sit tight and have the value of their money fully retained whichever fork wins, or however their market shares split.

Clams bootstrapped using BTC, LTC and DOGE I think.

No it didn't. They paid an equal amount per-output not based on output value which has some "interesting" properties. In any case it wasn't a spin off.