Gold collapsing. Bitcoin UP.

[NewLiberty]

Interesting discussion and analysis on the possibly of Russia backing the rubble with gold and reinstituting a gold standard.

http://www.goldmoney.com/research/analysis/russia-s-monetary-solution

Essentially Russia was previously backing it with oil (and nukes and taxation-or more broadly external and internal force and threat, just like any nation state).
So this is more akin to acknowledgment of adding gold to the basket.

[traderCJ]

Technology solves problems. Bitcoin is digital. Soon my hot wallet is gonna do all of the accounting for me and I should have no problem reporting and conforming with the tax code.

Uh huh, sounds very user friendly.  Speaking of which, I really hate it when I have to calculate capital gains whenever I use my Visa.

[NewLiberty]

Interesting discussion and analysis on the possibly of Russia backing the rubble with gold and reinstituting a gold standard.

http://www.goldmoney.com/research/analysis/russia-s-monetary-solution

I don't understand how a gold-standard could be considered credible. Whether it's the Switzerland, Russia, China, or anywhere, how is it not obvious that after implementing a gold-exchange standard at some fixed peg, they'll eventually just move or eliminate the peg?

Not only is it obvious in theory, but there's historical precedent.

Pegs don't work. Clinging to the idea that a peg somehow conveys credibility is ludicrous.

Yes.  Pegs are completely discredited in economics simply by their history of abuse.  It seems a poor choice of term to recycle for use to describe the Side Chain exchange process, but then... they didn't ask our opinion. 

[sickpig]

On monoculture and diversity...

TL;DR: Monoculture in protocols may introduce weaknesses; monoculture in a having a single ledger doesn't, and is pretty much the point of having money at all.

on bitcoin monoculture, an external to bitcoin point of view:

http://cointelegraph.com/news/113036/vitalik-buterin-challenges-the-idea-of-bitcoin-dominance-maximalism-op-ed

Vitalik is brilliant and understands code. Unfortunately, he doesn't fully understand money or human nature. I think that comes more with age/experience.

Yep you're right. Though, I have to say that reading his blog posts is always stimulating (lately he was quite prolific, 4 posts on ethereum blog in Nov alone).
E.g. after having read his "The Search for a Stable Cryptocurrency" I was
eventually barely able to understand what "seignorage shares" is

[Erdogan]

Interesting discussion and analysis on the possibly of Russia backing the rubble with gold and reinstituting a gold standard.

http://www.goldmoney.com/research/analysis/russia-s-monetary-solution

Essentially Russia was previously backing it with oil (and nukes and taxation-or more broadly external and internal force and threat, just like any nation state).
So this is more akin to acknowledgment of adding gold to the basket.

They could strengthen the ruble by selling some government property, buy rubles for the proceeds and destroy them, or, these days of debt, repay some debt or stop rolling it over. They could probably cut all taxes and run the government on selling land for a decade or so, while using the timeout to fire all government officials. It will be done if it is in the interest of the current powers, which it isn't.

[Zangelbert Bingledack]

One thing we have going for us though is greed. If there is money to be made holding your wealth in Bitcoin then people will gravitate toward that option.

Had the exact same thought last night. If a new form of sound money is created from nothing, the potential for the largest transfer of wealth in possibility humanity's history will be so tremendous that human greed will have the strongest influence of all. It would only take a few senators on the right committees aligned to Bitcoin's speculative waves, to gum up state attempts to block Bitcoin. They would position themselves as the good guys, but it would really just be greed.

Bitcoin is an auto-immune virus that diseases the incentive structure of the state. Gold couldn't do this, because it is too difficult to hold and transport gold without people finding out you have it. Once higher-ups figure out how to covertly hold bitcoins, the incentive structure disintegrates from the inside out.

[Zangelbert Bingledack]

The first wave of alts were simple clones, it was almost a given that network effects would hold them back here. However the next wave of alts are going to
a) come with real innovations and then
b) come with government sanctioned force

i think a) and b) are oxymorons.  force precludes the need to innovate.  thus Bitcoin will always have that advantage.  we've already seen the failure of MintChip due to just this dynamic.

Yes, I was saying they are different coins and different attempts. The first wave were the clones (which we've already had), the next wave a) will have some level of actual innovation, and the wave after that b) would be government attempts to resist Bitcoin and regain control.

the creation of USDCoin would be a tacit admission by the govt that Bitcoin has merit and, paradoxically to their wishes, money will always flow to that platform which treats it best.  that can't happen with an inflationary, violent coin.

It would be an admission by the government that Bitcoin has merit. It would also be sold to the public as having all the benefits of Bitcoin with all the security of government money. Given the history of money, this has worked. It did for the FED in the 1930's.

The very first thing to understand about Bitcoin is that its store of value function is at least an order of magnitude more important than its payment or remittance functions. Very roughly speaking, something like 90% of the value of Bitcoin is in something the government cannot possibly replicate without relinquishing control of the money supply. They could create digital money, but that wouldn't touch the lion's share of Bitcoin's value proposition.

[Zangelbert Bingledack]

This makes it clear that we must be careful to distinguish between the ledger (a conceptual spreadsheet keeping track of who owns what percentage of the economic community known as "the Bitcoin ecosystem" and later perhaps just "the global economy") and the protocol for updating that ledger.

We're back to this silly idea of separating the currency from from the blockchain. You can't, they are one in the same.

This "ledger" rhetoric is a paraphrase of the false idea they are separable.

The system is the blockchain is the currency is the protocol is the ledger.

You're not reading.

The Bitcoin protocol specifies the parameters of the ledger (including coin issuance schedule) and how it is updated, but that doesn't mean you can't have a different protocol that maintains the same ledger and issuance schedule but that accomplishes this task differently under the hood. This has nothing to do with the "separate the currency from the blockchain" meme that is floating around.

Mining fees do introduce some ambiguity if they are set extremely high by the protocol and somehow cannot be user adjusted, because the effect would be similar to changing the coin issuance schedule. But that seems a moot point because users would find a way around the default setting if fees were so high as to make a difference.

[jmw74]

The very first thing to understand about Bitcoin is that its store of value function is at least an order of magnitude more important than its payment or remittance functions. Very roughly speaking, something like 90% of the value of Bitcoin is in something the government cannot possibly replicate without relinquishing control of the money supply. They could create digital money, but that wouldn't touch the lion's share of Bitcoin's value proposition.

I agree with this, but I think a better term for the value proposition is "neutral money", instead of "store of value".  Bitcoin eliminates trusted authorities.  If the system has trusted authorities, it does not compete with bitcoin.

I wrote a short article about this here: https://gist.github.com/weissjeffm/ab8e157e7d7943b07310

[smooth]

This makes it clear that we must be careful to distinguish between the ledger (a conceptual spreadsheet keeping track of who owns what percentage of the economic community known as "the Bitcoin ecosystem" and later perhaps just "the global economy") and the protocol for updating that ledger.

We're back to this silly idea of separating the currency from from the blockchain. You can't, they are one in the same.

This "ledger" rhetoric is a paraphrase of the false idea they are separable.

The system is the blockchain is the currency is the protocol is the ledger.

You're not reading.

The Bitcoin protocol specifies the parameters of the ledger (including coin issuance schedule) and how it is updated, but that doesn't mean you can't have a different protocol that maintains the same ledger and issuance schedule but that accomplishes this task differently under the hood. This has nothing to do with the "separate the currency from the blockchain" meme that is floating around.

Mining fees do introduce some ambiguity if they are set extremely high by the protocol and somehow cannot be user adjusted, because the effect would be similar to changing the coin issuance schedule. But that seems a moot point because users would find a way around the default setting if fees were so high as to make a difference.

Yes I already acknowledged that some aspects can be changed but neither can arbitrary changes be made, as you point out.

Other changes one might imagine are include the sorts of variable demand-sensitive block rewards as described in Vitalik's post. With fixed block rewards Bitcoin is inherently subject to enormous price volatility in the presence of any demand volatility, and that may over time turn out to be non-viable.

It is foolish and short sighted not to realize that bitcoin is an experiment in progress, and may have gotten one or more fundamental things seriously wrong.

Before you assume I'm trashing bitcoin here and respond accordingly, note the emphasized use of "may" in both of the above paragraphs. Serious risk factors exist.

Also note that bitcoin is priced for at most a 0.1% chance to succeed in a big way on the scale of fiat. If you think the probability is actually 1% then you should bet big on bitcoin, but it can simultaneously be rational to bet on alternatives that might succeed on that scale instead of bitcoin.

[Zangelbert Bingledack]

As I said earlier, gold has not had a fixed supply, including over the thousands of years that was cited as it being something close to a monetary standard. ZB did not address this. So the historical example of gold does not support the premise that bitcoin can serve as a universal monetary standard. The experiment of a fixed supply monetary standard has never been run, and certainly not run repeatedly to determine the range of outcomes.

The very mention of "fixed supply monetary standard" shows a misunderstanding of what money is in the first place. Here I mean money the system, not the actual units. Money is a ledger tracking who owns what percentage of the total claims on goods and services in an economy. This ledger has historically been maintained using pieces of scarce metal, paper promises by a central issuer, and now in the most natural and direct way: as an actual ledger (Bitcoin).

If you keep thinking about "currency" and "money supply" you will never understand money. Thinking in terms of percentages, it is clear that "money supply" cannot be expanded - only the ratios of who owns what can be changed. When a miner gets a mining reward, no "new money" is created, even though such phrasing is familiar in everyday talk. All that happens is the percentage of the total ledger all current holders own decreases slightly, while the miner's percentage increases. The very same thing happens when a gold miner finds a nugget or the Fed prints a billion dollars. Only the ratios change.

This is why, again, the whole implication that "something untoward might happen if we do this unprecedented thing where we have a fixed money supply" or "won't something bad happen if money supply doesn't grow with the economy" is based on a pure misconception. To quote a recent reddit post, "It's like saying you need to continually increase the number of inches in a foot as your child grows in order to measure his height."

[smooth]

As I said earlier, gold has not had a fixed supply, including over the thousands of years that was cited as it being something close to a monetary standard. ZB did not address this. So the historical example of gold does not support the premise that bitcoin can serve as a universal monetary standard. The experiment of a fixed supply monetary standard has never been run, and certainly not run repeatedly to determine the range of outcomes.

The very mention of "fixed supply monetary standard" shows a misunderstanding of what money is in the first place. Here I mean money the system, not the actual units. Money is a ledger tracking who owns what percentage of the total claims on goods and services in an economy. This ledger has historically been maintained using pieces of scarce metal, paper promises by a central issuer, and now in the most natural and direct way: as an actual ledger (Bitcoin).

You're confused. When a gold miner pulls gold out of the ground (or out of the ocean, or off an asteroid), everyone else's percentage of the total declines. That doesn't happen with bitcoin. My one bitcoin is 1/21m of the total, forever. The two are not the same.

There has never been a fixed supply money, or ledger, or whatever you want to call it, because fixed supplies don't exist except as a mathematical construction.

This use of a mathematical construction as a monetary base is an unprecedented experiment. Whatever you think will happen or should happen is unproven speculation.

[Zangelbert Bingledack]

Yes I already acknowledged that some aspects can be changed but neither can arbitrary changes be made, as you point out.

Other changes one might imagine are include the sorts of variable demand-sensitive block rewards as described in Vitalik's post. With fixed block rewards Bitcoin is inherently subject to enormous price volatility in the presence of any demand volatility, and that may over time turn out to be non-viable.

It is foolish and short sighted not to realize that bitcoin is an experiment in progress, and may have gotten one or more fundamental things seriously wrong.

Before you assume I'm trashing bitcoin here and respond accordingly, note the emphasized use of "may" in both of the above paragraphs. Serious risk factors exist.

Also note that bitcoin is priced for at most a 0.1% chance to succeed in a big way on the scale of fiat. If you think the probability is actually 1% then you should bet big on bitcoin, but it can simultaneously be rational to bet on alternatives that might succeed on that scale instead of bitcoin.

We may be in agreement here. I would argue that there is a chance block rewards will need to be reworked, though not in a way that will affect current holders much, or at least not for a very long time.

A better way of making the point I want to make is that the bar for scrapping the entire ledger is extraordinarily high. If reworking the coin issuance schedule is necessary, it makes sense to do just that rather than have a completely different competing ledger.

Turning to an argument based on magnitudes, if we assume the "backup ledger" is worth 10% what Bitcoin is, the Bitcoin ledger would have to be something like 90% screwed up before it would make sense to change over. Coin issuance changes wouldn't be that level of change, at least not for maybe several hundred years(?).

[Zangelbert Bingledack]

You're confused. When a gold miner pulls gold out of the ground (or out of the ocean, or off an asteroid), everyone else's percentage of the total declines. That doesn't happen with bitcoin. My one bitcoin is 1/21m of the total, forever. The two are not the same.

There has never been a fixed supply money, or ledger, or whatever you want to call it, because fixed supplies don't exist except as a mathematical construction.

This use of a mathematical construction as a monetary base is an unprecedented experiment. Whatever you think will happen or should happen is unproven speculation.

If you're talking about 100 years from now, sure, that's a new thing. But the idea that this new thing is of any relevance stems from the idea that money supply matters at all. Before that can be seen as any kind of concern, there needs to be a reason why that might be a concern. Otherwise it's no more remarkable than the fact that it's unprecedented that a money system is named "Bitcoin" or that it starts with a B. 

[smooth]

You're confused. When a gold miner pulls gold out of the ground (or out of the ocean, or off an asteroid), everyone else's percentage of the total declines. That doesn't happen with bitcoin. My one bitcoin is 1/21m of the total, forever. The two are not the same.

There has never been a fixed supply money, or ledger, or whatever you want to call it, because fixed supplies don't exist except as a mathematical construction.

This use of a mathematical construction as a monetary base is an unprecedented experiment. Whatever you think will happen or should happen is unproven speculation.

If you're talking about 100 years from now, sure, that's a new thing. But the idea that this new thing is of any relevance stems from the idea that money supply matters at all. Before that can be seen as any kind of concern, there needs to be a reason why that might be a concern. Otherwise it's no more remarkable than the fact that it's unprecedented that a money system is named "Bitcoin" or that it starts with a B. 

There has never been a money supply that has grown at a constant predefined and unchangeable rate, without regard for monetary demand (another mathematical construction that doesn't correspond with gold). That is happening now, not 100 years from now.

But even things that happen 100 years from now can affect the present (or near future), by discounting of expectations.

As for why it is a concern, it is simply that it is structurally different in an unprecedented manner. Again, you may thing it is the greatest thing since sunlight and rainbows, and it may turn out that way, or it may not. Bitcoin is an experiment in progress, and multiple outcomes are possible. If you claim otherwise you are dishonest or deluded.

[smooth]

Yes I already acknowledged that some aspects can be changed but neither can arbitrary changes be made, as you point out.

Other changes one might imagine are include the sorts of variable demand-sensitive block rewards as described in Vitalik's post. With fixed block rewards Bitcoin is inherently subject to enormous price volatility in the presence of any demand volatility, and that may over time turn out to be non-viable.

It is foolish and short sighted not to realize that bitcoin is an experiment in progress, and may have gotten one or more fundamental things seriously wrong.

Before you assume I'm trashing bitcoin here and respond accordingly, note the emphasized use of "may" in both of the above paragraphs. Serious risk factors exist.

Also note that bitcoin is priced for at most a 0.1% chance to succeed in a big way on the scale of fiat. If you think the probability is actually 1% then you should bet big on bitcoin, but it can simultaneously be rational to bet on alternatives that might succeed on that scale instead of bitcoin.

We may be in agreement here. I would argue that there is a chance block rewards will need to be reworked, though not in a way that will affect current holders much, or at least not for a very long time.

A better way of making the point I want to make is that the bar for scrapping the entire ledger is extraordinarily high. If reworking the coin issuance schedule is necessary, it makes sense to do just that rather than have a completely different competing ledger.

Turning to an argument based on magnitudes, if we assume the "backup ledger" is worth 10% what Bitcoin is, the Bitcoin ledger would have to be something like 90% screwed up before it would make sense to change over. Coin issuance changes wouldn't be that level of change, at least not for maybe several hundred years(?).

Yes we are in agreement to a large extent. But what "makes sense" is not always what happens, nor can we foresee all the possible issues that might arise and know with certainty, in the dark, that "reworking" will be feasible at all.

But yes, I agree it is more likely than not that bitcoin can be tweaked in some manner or another to fix most problems in a way that is not catastrophic.

[Zangelbert Bingledack]

The very first thing to understand about Bitcoin is that its store of value function is at least an order of magnitude more important than its payment or remittance functions. Very roughly speaking, something like 90% of the value of Bitcoin is in something the government cannot possibly replicate without relinquishing control of the money supply. They could create digital money, but that wouldn't touch the lion's share of Bitcoin's value proposition.

I agree with this, but I think a better term for the value proposition is "neutral money", instead of "store of value".  Bitcoin eliminates trusted authorities.  If the system has trusted authorities, it does not compete with bitcoin.

I wrote a short article about this here: https://gist.github.com/weissjeffm/ab8e157e7d7943b07310

Good thought, and I like where that article is going.

There are many relics from the old way of thinking about things. From the days of gold to fiat, the idea of "backing" became important. Then Bitcoin, analogous to gold, came along with the 21M coin limit. That said loudly to those familiar with gold vs. fiat that "no politician can inflate this at their whim." However, ultimately what matters isn't that there's a hard limit, but that the limit is neutral, as you say, and (as a consequence of neutrality) quite predictable with low inflation.

I say "quite" predictable because if (if!!) there were ever an absolute need to change the issuance schedule, say due to sidechains disrupting mining, it could would only be done in a neutral way since people would freely decide which schedule to adopt so it wouldn't be political. The result would never be chaotic or result in high inflation or the enrichment of some politically connected people at the expense of others. That doesn't sell quite as well as the 21M coin limit (which is sort of false because of mining fees), but since ultimately people just need sound money (neutral money), and we have decades to go between now and then, the nuances should be more appreciated by then, especially when Bitcoin is mainstream and not fighting just to be noticed.

[tabnloz]

Mastercard head of SE Asia goes all out with every myth, stereotype and piece of FUD he could possibly fit into 4.30 of attacking bitcoin.

This is scripted propaganda and it is excellent to watch. It really shows how worried they are that they have to make such an anti bitcoin informerci that can easily be taken apart. The part about what their core business is shows just how stupid they think their customers are

https://m.youtube.com/watch?feature=youtu.be&v=bO4jHXjCXw8

[BldSwtTrs]

Mastercard head of SE Asia goes all out with every myth, stereotype and piece of FUD he could possibly fit into 4.30 of attacking bitcoin.

This is scripted propaganda and it is excellent to watch. It really shows how worried they are that they have to make such an anti bitcoin informerci that can easily be taken apart. The part about what their core business is shows just how stupid they think their customers are

https://m.youtube.com/watch?feature=youtu.be&v=bO4jHXjCXw8

".. ensuring greater transparency [...] in the way people live their life..."

"Why somebody need to be anonymous? I certainly don't want somebody mining technology or mining financial services away from my control."

Fuck you Mr. Matthew Driver, you are dangerous.

[sickpig]

Mastercard head of SE Asia goes all out with every myth, stereotype and piece of FUD he could possibly fit into 4.30 of attacking bitcoin.

This is scripted propaganda and it is excellent to watch. It really shows how worried they are that they have to make such an anti bitcoin informerci that can easily be taken apart. The part about what their core business is shows just how stupid they think their customers are

https://m.youtube.com/watch?feature=youtu.be&v=bO4jHXjCXw8

".. ensuring greater transparency [...] in the way people live their life..."

"Why somebody need to be anonymous? I certainly don't want somebody mining technology or mining financial services away from my control."

Fuck you Mr. Matthew Driver, you are dangerous.

What can I say? I concur with you.

They aim to eliminate cash entirely, be it electronic or not, and move toward a world based on their electronic
payment system. Wow. Every time I hear something like this I wonder how they can be so full of themselves.