Topic: Bitcoin is to people what the internet is to computers. (Read 2237 times)

This is a nice blurb actually should have it revive for a bit so more people read it

man I love the title of this thread.  The moment I read it my brain smiled haha..  It was that Eureka moment people wait for.  I should have posted this in a thread where OP asked "what is bitcoin used for"?

There is open hardware too. You can take an open design of a SoC and submit it to a silicon plant. They will fabricate your design and send it to you.

I think I prefer calling Bitcoin the Honeybadger of Money

.exactly what I was thinking. I just want to buy a t-shirt with bitcoin, I'll start working on my OS now.

Yes, I am restricting my definition.  Yes, I am breaking the world up into "public bits" and "private bits", but bitcoins are a special subset of "private bits" if it becomes the world's protocol for storing and transferring a limited class of "private bits".  Their limited nature makes them different from most other examples of "private bits". For example there is no limit to the number of movies you can make. You can make alternative coins, but there are alternative network protocols too, which is why I am comparing it to the most popular network protocol, the internet (TCP/IP).

This allows me to take the duality as far as I have in saying:

Bitcoin is to "value" what the internet is to "bits".
and more accurately:
Bitcoin is to people what the internet is to computers.

I require that there be a limit to the number of the "secret bits" in a standard, universally accepted method of storing and transferring the "secret bits".  In this way, bitcoin is the world's most standard ledger as to the owners of assets in the world.  Not all computers are connected to the internet and not all people will be part of bitcoin.  The "value" is it's ability to control the bitcoin world's resources which are available for humans to use.  "Monetary Value" is the ability to control services, products, and other assets.  The world that is control by bitcoin has a finite amount of these things, so the bitcoin needs to be finite.  

The outside world does not know the sender's private key. To see "all" of a bitcoin, you have to see that, same as to see and send the bits in a bank account, you need the password.

But that leaves out lots and lots of bits that are not free for anyone to download.

Not true, i can show you all the bits that represent any bitcoin as this information is contained in the blockchain.
What you cannot know is the key that can be used to change this puclic information. But looking at the bitcoins is not a problem and that information is 'free'.
I thought that the only thing unkown to the outside world is how to properly change the owner of the already known ammount of bitcoin. The change of ownership is also public information. And this ownership signage cannot contain arbitrary information so is useless for storing value itself.

Still makes no sense to me.
Any DRM system would be somewhat anti-bit. Any form of encryption would be somewhat anti-bit. My CD is very anti-bit, because noone can just copy it because i have it locked up in a safe.
In fact, I cannot access the memory contents of my remote control and yet it is full of bits. Are those anti-bits as well?
I think your definition of 'bits' is way to exclusive. In reality there are so many ways bits can be in a state between completely free and not free at all that i don't think you can speak of complementarity.
What if i have a scheme that makes the bits available to a certain subset of the world and under certain conditions?
That would be perpendicular to the free/non-free duality, a third option if you will. And this third option (both free and non-free at the same time) has vastly more posibilities. So the dualistic extremes you propose are a very very small subset of possible combinations of freeness and non-freeness of a bit.

I don't agree, you see the whole movie just fine in the blockchain. It's just that without the proper private key you never get to be the actor.



I think you are just arguing that in this universe there are bits that are known and bits that are unknown. It seems to be the basis for your duality. This is how secrets work and what underlies any protection (or restriction of freedom) of bits. It is not restricted to free internet bits and is just a consequence of what information is.

I am categorizing "internet bits" as "those that are free for everyone to download". Each download is a copy.  I hope you'll agree that this definition is only very weakly contrived.  Maybe you have a different intuitive view of what "the internet" is. To me, it is all about freedom of the bits.

You can't show me all bits that represent any bitcoin on Earth, or the bitcoin will no longer belong to you.  Bitcoins are very unusual in that they are not a constant string of bits except to the current owner, and that those bits are required to change if the owner changes. Only the current owner can know all the bits through his private key.  Bitcoins are in a very real sense anti-bits, if you define bits as being copy-able and transferrable to different owners.  The bits that constitute a bitcoin can't.  If you show me the current ledger from the block chain and point to various bitcoins and say "See? There's one" then that is like telling me the name of a movie without showing me the movie.  

If money goes from one bank to another, they probably have a different way of storing the "bits" to identify the money.  But it is not inherently required that they change the bits.  But what is required is that they be able to log in to their system with a password, a "private key", to "unlock" those bits for viewing and transferring.  So banks have a different way of "encrypting" the money.  But look how far bank money-bits are from internet bits.  Pretty much the opposite, or rather "compliments".

I don't buy this complementary theory.
First of all, not all bits on the internet are free. Some are locked up and some cost real money. Some bits are valued by communities or in a social context. So that part is clearly nonsense.
And as your comparison of bitcoin to bits, well bitcoin is a subset of bits. Something cannot be complementary to something it is part of.

As information can mean different things to different people/machines i would even say that there is no clear distinction between 'free' bits and 'protected' bits. It's in the eye of the beholder and what she/he makes of the information.

It seems pretty contrived to compare the two like this.

Bitcoin is to "people" what the internet is to "computers".

Nice analogy.

I believe the n-of-m system could also be used to ensure fair switching of your value to other coins that also have n-of-m capability.  I would stay away from any coin that can't inherit n-of-m rules and not "enslaved" at some point in the future to a set n-of-m rules.  A coin without the n of m feature would be like a TCP/IP protocol that does not allow other protocols to ride on top of it. Instead of blocking information, it would be blocking value.  There can and will be competing n-of-m protocols riding on top of each coin and enabling themselves to easily transfer at constant value to other coins, but the people making the n or m rules should come together in an agreement because instead of different coins competing for the available "currency space" these protocols would be competing against each other.

Cryptocurrencies change everything for "value" in the same way the internet changed everything for "information".  

Bitcoins are the logical COMPLIMENT of traditional bits due to being un-copyable.

Compare:
PUBLIC "internet bits" are FREE and have a value judged by the INDIVIDUAL reader.
PRIVATE bitcoins have COST and have a value judged by the SOCIAL exchanges.

Cryptocurrency protocol's are to "value" what the internet is to "information" because of this complimentary nature.  

Will Bitcoin Win?
Bitcoin is a specific cryptocurrency protocol for storing and transferring "value", but it could become THE protocol for doing so in society as a whole. Certainly there seems to be a benefit to being first-to-market. There is nothing to stop similar protocols from operating at an exchange rate with it, or completely outside of it for things other than currency or asset value such as electing political and intellectual leaders more intelligently. The over-arching feature is that the cryptocurrencies prevent "double-voting" aka "double-spending". Banks and other cooperating entities with large assets like a housing industry could legally agree to hold and transfer assets in a different coin (or in subset of bitcoins isolated from the "wild" bitcoins as allowed by the bitcoin protocol) and declare among themselves through contracts that those coins are worth more. In this way bitcoin can be prevented from representing the world's assets, about $250 trillion ($120 million per coin).  This can't prevent bitcoins from achieving the value of (i.e., replacing) the world's combined "M2" money supply (about $20 trillion which would be $1 million per bitcoin as a minimum value since bitcoins will be lost and others will be locked into contracts via the bitcoin protocol and can't escape into the "wild" exchanges). Alternative currencies will continue to make life "interesting" for bitcoin holders, preventing this high value as well as other competitors like cash and silver coins. The superior coin will win, and the degree to which a superior coin is not identified is the degree to which cryptocurrencies will fracture the world's M2 money supply.

Scripting Value Into bitcoins
Just as bitcoin is a protocol running on top of the internet protocol that allows the storage and transfer of value, the bitcoin protocol has features built into it that allow other protocols to ride on top of each coin. Protocols can be defined that ASSIGN current and future value to the coin rather than depending on the exchanges.

Bitcoin does not dictate value, but it has a simple FORTH-like scripting language Script ( https://en.bitcoin.it/wiki/Script ) (up to 10 kB, about 100 words, not Turing complete, no loops) and n of m transaction feature built into it that anyone can apply to their coins (or piece of coin) and force inheritance to all future owners in order to define the current and future value of a coin.  It has no value if counterparties do not like what you've scripted into your enslaved coin.  You can see Mike Hearn describe these features of bitcoin: https://www.youtube.com/watch?v=mD4L7xDNCmA

Consequences of Enslaving Coins to a Common "Value-Plan"
A large group of people could enslave their coins to a predictable dollar value that rises at a desired rate to reach a final value according to the script.  They can't sell their coins unless the protocol is adhered to and the coins' script would require inheritance of the script by all subsequent owners, thereby assuring future owners of the value of the coin PROVIDED they like script enough to buy it.  Alternatively, a coin could evenly pay all previous owners any excess profits that future owners acquire based on how long they held the coin, minus what they made when they sold it, to be finalized at the final sale that occurs after some fixed date.  By writing an intelligent script you are adding intelligence to the coin and thereby creating value in the coin itself, above the value of other coins.  If too many similar coins are enslaved this way with too fast a rate of value rise, and if holders abandon these similarly enslaved coins faster than newcomers are willing to buy them, then the coins could lose all value and be lost forever.  Coins can be ruined forever with a bad script, but the script could allow for this and de-slave the coin accordingly.  On the other hand, if the enslaved coins sell faster or at a higher price than the free coins this would encourage other coin owners to enslave their coins or cause their coins to be bought at a lower price in order to be scripted and then sold for a profit.  Enslaving coins could increase the value of all other coins, which the enslaved coins could benefit from when they are freed, if they are freed before a flood of freed coins.

Scheduling the Increase in Value
An intelligent script could be a meme that spreads to all coins quickly, if people find the script appealing.  Ironically and contrary to current exchanging, early adopters of the script could be rewarded equitably instead of outrageously so that latecomers are not penalized.  There should be a definite "good-for-society" plan for script-enslaved bitcoins (i.e. value-enslaved bitcoins) to replace other currencies.  The script must be noble with the ultimate goal of helping humanity which can be part of its selling point.  But not done in a tricky way simply for the purpose of profit or fast adoption, but really and truly for the goal of helping humanity.  A script that adopts, implements, and advertises  this goal will beat out all other coins and scrypts by being able to work together more effectively than un-enslaved coins.  Cancerous scrypts might win at first.  The noble enslaved coins' goal should be to enable intelligent world-wide commerce more than profit for the holders, but they seem to need a selfish and cancerous aspect at the beginning in order to advertise themselves for adoption better than more cancerous versions.

The script might allow holders to vote themselves out of the enslavement by bitcoin's n of m feature.  Late adopters should not be overly penalized.  Early adopters should be rewarded with a logarithmic instead of exponential increase in profit. Like a good religion, maybe it should be easy for coins to join and leave.  Maybe the enslavement should be gentle, but it also seems required that the team have a level of commitment to the value-plan. The value assignment has everything to do with defining what humanity wants as a whole from its economics. In artificial intelligence you can "feed" the program more computer resources when it is achieving the desired goals.  More on this in a section below.

Enslaved coins can't be bought and sold on existing exchanges (the "wild" exchanges).  Bitcoins that have not been enslaved to a value are "wild and free".  Along with each method of enslaving coins, it seems like an exchange would need to be set up. A coin could free itself if the script detects that its exchange has failed.  

Methods of Enslaving Coins
Mike describes scripts looking at outside data to make decisions about the coin's value.  You might be able to join a "club" of human owners such that the script assigned to each coin requires that no one in the "club" can sell the scripted coins unless say 7 out of 10 of the other owners agree to the price to which you want to sell.  Or the script could do nothing more than request the assigned value from an intelligence-seeking coin or coins (n of m) that operate independently of the enslaved coins. The external value-assigning coin could simply be a vote system, but it seems like each voter would then need to be rigidly identified to prevent the value assignment from being hijacked.  Or maybe the largest holders of the enslaved coins could dictate value (which does not seem like a wise method).  A consensus could be reached to determine enslaved bitcoin "value", just as a consensus is reached in determining that coins are correctly transferred by proof-of-work.  Would proof-of-work be needed to assign value?  Could proof-of-stake be used?  I can't think of a reasonable way for a script to assign its own coin's value witout looking at external data.

Hierarchies that Discover Intelligent Solutions (highest profit)
These "value scripts" can be placed one inside the other operating under different rules but within a hierarchy. This would be like a company, government (local, regional, national), or religious hierarchical system.  It can assist or replace our current structures.  These structures are meant to encourage higher intelligence in the system by encouraging internal competition at all levels while achieving a higher level of system-wide profit.  For example in companies there is a competitive selection going on for employees, teams, divisions, and companies. This also follows A.I. company Numenta's cortical learning algorithm (CLA which replaced their HTM white paper) that tries to mimic the human cortex where synapses, segments, cells, and then cortical regions continuously compete at all levels for computing resources to do the best pattern prediction (the profit).

Basket of Commodities for Measuring Changes in Value
We could enslave our personally-held bitcoins to predictably rise and be finally pegged to a basket of commodities.  Most economists from Hayek to Keynes agree on using a basket of commodities.  Hayek even said it was better than gold, but the implementation would be difficult. Keynes tried to implement it, probably with too much government control thrown in.  Warren Buffett's mentor Benjamin Graham wrote two books on it. This prevents bubbles automatically by restricting the money supply when commodities are in short supply.  If commodity production becomes more efficient with technology then everyone would get an automatic increase in the value of their coins.  As technology increases the efficient USE of those commodities, there would not be an additional price deflation, but the products and services we buy would be improved.

A Basket of Commodities is Not the Best
 -- why free markets are not system-wide smart --
You could define the value of the currency in such a way that society as a whole achieves a desired goal such as preventing overpopulation and biosphere destruction. The free market without government intervention only does what's best for the two agents involved in each transaction. It does not prevent direct damage to third parties or a tragedy of the commons like resource depletion or brutal competition that leads to countries winning the free trade game from overpopulated cheap miserable labor (3rd world) or wealthy and intelligent workers who are none-the-less miserable as in South Korea (http://qz.com/153380/korea-is-the-worlds-top-producer-of-unhappy-school-children/).  Even under excellent law it seems difficult  to prevent monopolies that become harmful even when they are completely honest.  System-wide intelligence does not automatically emerge from the sum of all mutually-profitable transactions. To repeat, a purely profiting-seeking market agent cooperating honestly with other agents in every transaction does not automatically lead to system-wide profit.  A single winning agent holding all the wealth and a zero size marketplace is the most efficient outcome to a sequence of fair  transactions.  Evolution creates intelligence all all levels simultaneously (the simple selfish gene theory has been disproven: http://aeon.co/magazine/nature-and-cosmos/why-its-time-to-lay-the-selfish-gene-to-rest/  ).  Biosphere collapse is the result of a completely free market that never controls itself.  So a currency that depends only on a basket of commodities can prevent bubbles, but it can't stop itself from growing to an uncontrolled end such as biosphere destruction and human average misery through brutal economic competition. Votes are used to more evenly distribute political power which is legal power which is control of the legal tender.  Government's role is to control the money with wide strokes for large goals such as defence against pollution and other distributions of resources and wealth.  

Government is Control of Currency
--  AND VICE VERSA --
By use bitcoin scripts to control the value of bitcoins in transactions, we are initiating a GOVERNING control to achieve a system-wide GOAL.  In other words, the parallel cryptocurrency of votes I described above that intelligently decides the value of the coins that adopt the script-control is the government of that economy of coins. From examples in biology and artificial intelligence and government itself, it seems the smallest transactions of a given geographic location would follow a specific script that is different from other locations and be at the bottom rung of a hierarchy of larger transactions.  There could be a world-wide economy of scripts competing against each other. But at the top level we a single script keeping an eye over all of them that tries to increase average human happiness and prevent biosphere destruction (which still falls under "human happiness"). Otherwise, cancerous economies of coins that seek only to have cheap human labor and expand rapidly will win.

Basket of Commodities PER PERSON
A currency pegged to a basket of commodities divided by the number of people involved in that economy will FORCE an increase in the standard of living. It does not solve all ills especially not optimally, but it is an excellent broad stroke to use if you care about humanity. Since poor people need commodities as a percent of wealth more than wealthy people, it evens out the standard of living.  You could do that worldwide, but then it might subtly encourage the killing off of groups of people in countries that are not producing as much as others.  If you really want to limit the number of people you could bias the commodity basket against the production of food, but historically we have chosen the opposite by using legislation to bias the economics towards excess production of food for obvious reasons.  

Micro-Control of Coin Value
I've only thought about broad strokes but at the smallest transaction level coins could take on higher or lower value according to the scripts in order to implement the "governing" without government.  For example forcing cigarretes at the transaction level to be more expensive than they otherwise would be and offsetting this with decreasing the cost of lung cancer treatment.  So it's a tax and subsidy. We already do it but we have an enormously in-efficient system for implementing it.  

Basket Weighting
The basket should be based on a weighted proportion of the commodities currently available for sale with the weighting based on the total dollar amount of each commodity currently being used.  I would go with the top 20 commodities to keep things simple for the algorithms that would be automatically calculating the proper value and become part of the n of m consensus.

Intelligence-Seeking Coins
There should be an ECONOMY for voting who is the best political leader or for who has the best economic ideas, not 1 vote per person.   These would be used to assign value to coins at different levels in the hierarchy of value assignments.  It would be fluid as the intelligence improves.  It would draw from artificial intelligence ideas on ensembles of  dumb agents that can achieve intelligent outcmoes and evolutionary algorithms.

Closing
I doubt anything I've described will be consciously attempted, except for what Szabo and Satoshi already had in mind as bitcoin was created (see Nick Szabo's papers [Trusted Third Parties Are Security Holes](http://szabo.best.vwh.net/ttps.html) and [Secure Property Titles with Owner Authority](http://szabo.best.vwh.net/securetitle.html)if you want a further understanding of why Satoshi invented bitcoin).  What will happen is that the scripts will simply evolve to further economic development with winners and losers and the end does not promise survival or optimal happiness.  I should mention that as crypto-anarchists (aka crypto-freedom fighters) Dai, Szabo, and Satoshi might gasp at some of the things I'm suggesting their currency be used for.  Nothing in Nick Szabo's or Michael Hudson's economics blog address human happiness.  They assume an efficient marketplace with fair transactions will produce a good outcome.  Their economic philosophies, although far superior to anything else I can find, only produce a powerful economy that has no goal except expansion.  An intelligent "governing" control of the currency during transactions is needed to produce good system-wide goals, replacing banks with bitcoin and governments with the scripts that define the bitcoin values.  Already life should be a lot easier than it is for everyone. Lack of technology and lack of fuel has never been our problems.  Not intelligently working together for system-wide profit has been the problem.