oda.krell
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October 01, 2014, 04:47:21 PM |
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Playing devil's advocate, for a moment (2nd time today, I just notice)
Not challenging the 'minimum valuation required to perform as medium of exchange' argument. But why can't the ledger be separated from the currency function? For a number of imaginable functions in the future, a minimal share of the supply would be enough to perform the ledger function (e.g. contracts).
In order not to gloss over this: there's still the valuation through required security. If contracts on blockchain have a certain total value, the network needs to be at least protected to make an attack economically unfeasible. Since miners are economically motivated as well, this will provide a security-based minimum valuation of Bitcoin in the process.
Still, the two values need not be the same, so the question remains: why can't the 'ledger' function not be separated from the 'currency/money' function?
You could separate the currency from the ledger, but to what end? Seems to me like that would be making the system and incentives needlessly complicated and would still require you to purchase tokens in order to pay your way into the ledger. In some ways, that is exactly what Ethereum has done. Either way the tokens are still required to make the ledger function, so why make them separate? Perhaps someone has an idea as to why this would be desirable? My mistake... could have phrased that more clearly, I guess: I don't suggest we "split up" Bitcoin. My question was, "what prevents the rest of the world from adopting Bitcoin, the distributed ledger, but (mostly) ignoring Bitcoin, the currency"? The usual argument goes "the two functions cannot be separated, so the above is impossible". I'm asking, why? To me it looks like a possibility, and the implications for total valuation in the long term would be drastic.
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impulse
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October 01, 2014, 04:56:50 PM |
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Playing devil's advocate, for a moment (2nd time today, I just notice)
Not challenging the 'minimum valuation required to perform as medium of exchange' argument. But why can't the ledger be separated from the currency function? For a number of imaginable functions in the future, a minimal share of the supply would be enough to perform the ledger function (e.g. contracts).
In order not to gloss over this: there's still the valuation through required security. If contracts on blockchain have a certain total value, the network needs to be at least protected to make an attack economically unfeasible. Since miners are economically motivated as well, this will provide a security-based minimum valuation of Bitcoin in the process.
Still, the two values need not be the same, so the question remains: why can't the 'ledger' function not be separated from the 'currency/money' function?
You could separate the currency from the ledger, but to what end? Seems to me like that would be making the system and incentives needlessly complicated and would still require you to purchase tokens in order to pay your way into the ledger. In some ways, that is exactly what Ethereum has done. Either way the tokens are still required to make the ledger function, so why make them separate? Perhaps someone has an idea as to why this would be desirable? My mistake... could have phrased that more clearly, I guess: I don't suggest we "split up" Bitcoin. My question was, "what prevents the rest of the world from adopting Bitcoin, the distributed ledger, but (mostly) ignoring Bitcoin, the currency"? The usual argument goes "the two functions cannot be separated, so the above is impossible". I'm asking, why? To me it looks like a possibility, and the implications for total valuation in the long term would be drastic. I suppose that is possible if we were primarily using the Bitcoin blockchain for contracts and properties, a la colored-coins or Mastercoin. But it seems to me that the primary use of Bitcoins will still be as an object of value in and of itself, used for the purpose of wealth storage and transfer. If you wanted to use the blockchain as a contract or property ledger only, you would then have to transact the value portion of that contract outside of the Bitcoin system, which then removes the real advantages of using Bitcoin in the first place.
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brg444
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October 01, 2014, 05:03:41 PM |
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Playing devil's advocate, for a moment (2nd time today, I just notice)
Not challenging the 'minimum valuation required to perform as medium of exchange' argument. But why can't the ledger be separated from the currency function? For a number of imaginable functions in the future, a minimal share of the supply would be enough to perform the ledger function (e.g. contracts).
In order not to gloss over this: there's still the valuation through required security. If contracts on blockchain have a certain total value, the network needs to be at least protected to make an attack economically unfeasible. Since miners are economically motivated as well, this will provide a security-based minimum valuation of Bitcoin in the process.
Still, the two values need not be the same, so the question remains: why can't the 'ledger' function not be separated from the 'currency/money' function?
You could separate the currency from the ledger, but to what end? Seems to me like that would be making the system and incentives needlessly complicated and would still require you to purchase tokens in order to pay your way into the ledger. In some ways, that is exactly what Ethereum has done. Either way the tokens are still required to make the ledger function, so why make them separate? Perhaps someone has an idea as to why this would be desirable? My mistake... could have phrased that more clearly, I guess: I don't suggest we "split up" Bitcoin. My question was, "what prevents the rest of the world from adopting Bitcoin, the distributed ledger, but (mostly) ignoring Bitcoin, the currency"? The usual argument goes "the two functions cannot be separated, so the above is impossible". I'm asking, why? To me it looks like a possibility, and the implications for total valuation in the long term would be drastic. Because there would be no incentives for the miner to secure and maintain that ledger? Maybe I have your argument wrong but this is how I understand it
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"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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brg444
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October 01, 2014, 05:07:47 PM |
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Playing devil's advocate, for a moment (2nd time today, I just notice)
Not challenging the 'minimum valuation required to perform as medium of exchange' argument. But why can't the ledger be separated from the currency function? For a number of imaginable functions in the future, a minimal share of the supply would be enough to perform the ledger function (e.g. contracts).
In order not to gloss over this: there's still the valuation through required security. If contracts on blockchain have a certain total value, the network needs to be at least protected to make an attack economically unfeasible. Since miners are economically motivated as well, this will provide a security-based minimum valuation of Bitcoin in the process.
Still, the two values need not be the same, so the question remains: why can't the 'ledger' function not be separated from the 'currency/money' function?
You could separate the currency from the ledger, but to what end? Seems to me like that would be making the system and incentives needlessly complicated and would still require you to purchase tokens in order to pay your way into the ledger. In some ways, that is exactly what Ethereum has done. Either way the tokens are still required to make the ledger function, so why make them separate? Perhaps someone has an idea as to why this would be desirable? My mistake... could have phrased that more clearly, I guess: I don't suggest we "split up" Bitcoin. My question was, "what prevents the rest of the world from adopting Bitcoin, the distributed ledger, but (mostly) ignoring Bitcoin, the currency"? The usual argument goes "the two functions cannot be separated, so the above is impossible". I'm asking, why? To me it looks like a possibility, and the implications for total valuation in the long term would be drastic. Moreover, as suggested above, this is another attempt at suggesting other applications of the distributed ledger are more useful than the money application which is patently false.
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"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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cypherdoc (OP)
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October 01, 2014, 05:11:24 PM |
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good sign. some idiot tried to trigger a sell off with a 1400 BTC sell/short but has failed:
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cypherdoc (OP)
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October 01, 2014, 05:14:30 PM |
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Moreover, as suggested above, this is another attempt at suggesting other applications of the distributed ledger are more useful than the money application which is patently false.
imo, the money function is paramount and foremost, which is why i often say "The Blockchain may only ever be applicable to Bitcoin as Money".
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cypherdoc (OP)
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October 01, 2014, 05:15:43 PM |
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Dow -222
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oda.krell
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October 01, 2014, 05:18:48 PM |
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Playing devil's advocate, for a moment (2nd time today, I just notice)
Not challenging the 'minimum valuation required to perform as medium of exchange' argument. But why can't the ledger be separated from the currency function? For a number of imaginable functions in the future, a minimal share of the supply would be enough to perform the ledger function (e.g. contracts).
In order not to gloss over this: there's still the valuation through required security. If contracts on blockchain have a certain total value, the network needs to be at least protected to make an attack economically unfeasible. Since miners are economically motivated as well, this will provide a security-based minimum valuation of Bitcoin in the process.
Still, the two values need not be the same, so the question remains: why can't the 'ledger' function not be separated from the 'currency/money' function?
You could separate the currency from the ledger, but to what end? Seems to me like that would be making the system and incentives needlessly complicated and would still require you to purchase tokens in order to pay your way into the ledger. In some ways, that is exactly what Ethereum has done. Either way the tokens are still required to make the ledger function, so why make them separate? Perhaps someone has an idea as to why this would be desirable? My mistake... could have phrased that more clearly, I guess: I don't suggest we "split up" Bitcoin. My question was, "what prevents the rest of the world from adopting Bitcoin, the distributed ledger, but (mostly) ignoring Bitcoin, the currency"? The usual argument goes "the two functions cannot be separated, so the above is impossible". I'm asking, why? To me it looks like a possibility, and the implications for total valuation in the long term would be drastic. Because there would be no incentives for the miner to secure and maintain that ledger? Maybe I have your argument wrong but this is how I understand it Again, apologies. Maybe not phrased clearly enough. The side remark in my original post ("In order not to gloss over this") was meant to address exactly this point: even if the world only makes use of the ledger function of Bitcoin (and as such, no significant valuation floor is provided by that use), keeping the "ledger only" network secured will provide such a floor. However, valuation in that world could be substantially lower than in the one that includes usage cases medium of exchange / store of value. a) Valuation from the above two usage cases is missing. b) Effort needed to provide security of the network could well be not in a linear relation to total value of ledger usage: - double spends are less of a concern if contracts are to be settled (confirmation time less of a problem) - there is more than just a monetary requirement to overcome to successfully mount an attack on a network the scale of Bitcoin (hardware procurement, mounting the attack without raising suspicion) The point I'm getting at is that the total value of contracts settled through the ledger can be higher than the total cost to secure the network, as long as the cost to mount a successful attack on the network is prohibitively high for any individual actor. So the total valuation / market price per unit could well be below the current (optimistic) estimates that include the medium of exchange / store of value usage cases, even though the security requirements for the ledger usage alone provides some valuation.
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Not sure which Bitcoin wallet you should use? Get Electrum!Electrum is an open-source lightweight client: fast, user friendly, and 100% secure. Download the source or executables for Windows/OSX/Linux/Android from, and only from, the official Electrum homepage.
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justusranvier
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October 01, 2014, 05:21:46 PM |
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"The Blockchain may only ever be applicable to Bitcoin as Money". I think you can make an even stronger statement: "A distributed consensus ledger can only survive if it is successful as money." Note that Bitcoin did not solve the Byzantine Generals Problem because that problem is unsolvable. Bitcoin made it so that any successful attack is uneconomical. That only works if bitcoins are valued as money. This means anything that tries to replace Bitcoin's functionality will either do so by being better money or else won't be a distributed consensus ledger.
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cypherdoc (OP)
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October 01, 2014, 05:41:55 PM |
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"The Blockchain may only ever be applicable to Bitcoin as Money". I think you can make an even stronger statement: "A distributed consensus ledger can only survive if it is successful as money." Note that Bitcoin did not solve the Byzantine Generals Problem because that problem is unsolvable. Bitcoin made it so that any successful attack is uneconomical. That only works if bitcoins are valued as money. This means anything that tries to replace Bitcoin's functionality will either do so by being better money or else won't be a distributed consensus ledger. i think we're making the same argument only in slightly different ways. i've already expounded on the details as to why i believe this in past posts. also, i think your statement is only stronger b/c you left out the word "may", whereas i intentionally include it as i can't be totally sure.
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cypherdoc (OP)
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October 01, 2014, 05:42:17 PM |
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Dow -255
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justusranvier
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October 01, 2014, 05:49:17 PM |
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also, i think your statement is only stronger b/c you left out the word "may", whereas i intentionally include it as i can't be totally sure.
That is precisely why it is stronger. Given that we know the BGP is mathematically unsolvable, I'm sure we can't do better than an economic solution.
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cypherdoc (OP)
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October 01, 2014, 05:52:02 PM |
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Given that we know the BGP is mathematically unsolvable
i've heard this a few times already. can u give a simple layman's description to why this is?
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cypherdoc (OP)
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October 01, 2014, 05:56:25 PM |
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cypherdoc (OP)
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October 01, 2014, 06:00:28 PM |
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i love the smell of fear in the morning:
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cypherdoc (OP)
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October 01, 2014, 06:13:22 PM |
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another potential support breaker; oil
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Peter R
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October 01, 2014, 06:23:09 PM |
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I don't suggest we "split up" Bitcoin. My question was, "what prevents the rest of the world from adopting Bitcoin, the distributed ledger, but (mostly) ignoring Bitcoin, the currency"?
Nothing prevents it. And I hope we see greater use of the blockchain as a global trustless ledger moving forward (e.g., colored coins, oracle-based sidechains, etc.). But it's important to remember that the only asset that can exist on that ledger free from counter-party risk are bitcoins. In times of crisis in this blockchain-based future you're imagining, market participants will tend to trade out of assets with counterparty risk, as well as out of oracle-based sidechains, in favor of the one asset that is itself its own backing: bitcoin. I image bitcoin then as an attractor within a complex dynamical system; there's a constant flow of capital in and out of various blockchain assets, but these just circle around bitcoin. Bitcoin naturally becomes the reference point 1 from which to measure the value of everything else. In other words, bitcoin becomes money. 1And the value of bitcoin is tethered to the cost of real resources due to the great physical efforts (mining) required to produce them.
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cypherdoc (OP)
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October 01, 2014, 07:15:54 PM |
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rocks
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October 01, 2014, 08:05:44 PM Last edit: October 01, 2014, 08:42:56 PM by rocks |
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"The Blockchain may only ever be applicable to Bitcoin as Money". I think you can make an even stronger statement: "A distributed consensus ledger can only survive if it is successful as money." Note that Bitcoin did not solve the Byzantine Generals Problem because that problem is unsolvable. Bitcoin made it so that any successful attack is uneconomical. That only works if bitcoins are valued as money. This means anything that tries to replace Bitcoin's functionality will either do so by being better money or else won't be a distributed consensus ledger. Most early Bitcoin adopters agree that Bitcoin's properties make it money and that "BTC as valuable money" is necessary for the blockchain to function. An issue for the next phase of adoption though is the next set of adopters do not agree with this largely due to different political views on what constitutes money. Most people I know believe money can only be defined by a government and only functions if it is "managed" by a central body with the power to "expand supply to grow with the economy". (Nevermind this is never actually implemented in practice.) And so refuse to trust in anything else. The argument that Bitcoin is money is not going to drive adoption, that only served to kick start adoption with politically aligned individuals. Instead Bitcoin's usefulness as money will have to be the next driver for adoption. Either people find it easier to use online, or merchants offer BTC discounts, or people use Bitcoin to engage in illegal forms of trade, or automated services (bots) find BTC useful to trade, etc. This is where Bitcoin as a superior technology over fiat (a hundred year old technology) becomes a dominate factor.
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