Topic: Convince me that the bitcoin elite cannot become the next Rothschild family (Read 11718 times)

I'm sick and tired of people whining about how they are sick and tired of this or that and everyone else is to blame. Take some personal responsibility for your situation and quit blaming everyone else. You still have the freedom to make your own destiny, though it seems you would rather blame others than use it.


Bleak fact, but the the above applies to them as much as you. All 47 million will not become permanently middle class if all the wealth was spread around. Some people are in bad situations that they can't currently control, but some are also just looking for a handout and will put themselves right back in the same position eventually no matter how much you give them.


I'm not going to argue the human rights angles of taking out dictators, especially since you used it as a straw man argument. If you think that dictatorial regimes are the end all, be all of personal freedom and financial equality I implore you to go join one and see how you like it.

Etlase2,

You continue not to make sense. It's evident that you did not read what I wrote, or at least did not try to comprehend it. You're not interested in a debate. If you were, you would have made an effort to understand my points, which you did not. You're just rambling.

I retract what I said about this thread being great.

Why should anyone accept either?


Are you saying that the only possible form of money without government intervention is gold?


Who is saying no one will accept it? Oh, you. I'm glad you feel the need to speak for the future of money and bitcoin, but unfortunately you do not control what will happen.


Wait, wait. I thought you said transaction costs come in to play because "money proper" (from the wiki, whatever that means) has a high transaction cost. How does a note/check/EFT have a lower transaction cost compared to cash? Does cash mean "gold"?


This is fantastically useless information.


Really, care to cite something other than mises.org?


Whoa, stop the presses, there is lending! Bitcoins for everybody!


So then you have answered my question that Bitcoin is not suitable as a replacement currency. Got it.


You know, I started reading it, but I have to say, of the few articles I have read on mises.org, I seem to find inaccuracies in almost every single one.


Wat?


WAT? Wait, so I'm breaking the law if I give someone an IOU? I'm breaking the law if I use one of hundreds of non-legal tender currencies around the United States? I'm breaking the law by using bitcoin? How the fuck am I supposed to respect anything this man has to say? Because there are lots of words?


Am I supposed to say more?


This statement leads me to believe that you think FRB will work exactly the same as it does with a central bank. How could you, an apparently educated person, possibly believe this? Or are you just trying to be dramatic because you think it makes your point look better?

Anyways, I only originally said what I said about FRB running rampant because bitcoin is going to be in a constant flux of liquidity crises, and FRB would be a way to reduce that. Although FRB would be much more heavily restricted and it would be consumer choice to participate, whereas that is not the case in government fiat.

But, as you mentioned, one could take out a loan in fiat and buy bitcoins. Is this not the same as bitcoin FRB? Who, really, is going to loan money when hoarding is nearly guaranteed to provide better interest? Bitcoin, backed by fiat.™ Has a nice ring to it. Let someone else loan their money and I'll make money on it by virtue of nothing.

If FRB does not work for whatever various reasons, then bitcoin will die. The boom and bust cycles of the currency's value will constantly leave people holding the bag; poorer and pissed off as the cycle of wealth continues to flow upwards until people are finally sick of the scam. In reality, FRB is only a band-aid, not a solution to a flawed currency.

So that's why you keep repeating things that make no sense?

You're the one lacking understanding. You merely touch the surface of the issue without referring to the processes causing the shape of the surface. I have spent months thinking about it, reading books, formulating and reformulating, pitting arguments against each other, considering new phenomena unconsidered before.

(emphasis added) This is only relevant for Bitcoin if governments decide to heavily interfere with it. Even if they forced an exchange ratio (e.g. by monopolising exchanges), unless Bitcoin is legal tender, it would not have the expected effect. Have you thought about this really more than 5 seconds?

Are Bitcoins legal tender? Is anyone forced to accept them if they don't want them? If not, then why should anyone accept "government Bitcoins" instead of actual Bitcoins? Can someone else than government declare legal tender?

Explain to me how this can be done without legal tender status. Are you suggesting that government will make Bitcoins legal tender?

Again, you did not get the point. This is an argument against credit expansion, of which FRB is a subset.

If noone accepts a payment using this certificate, then it's not suitable for the purpose of lending. Exactly as my example with apples and oranges.

I already explained my reasoning. Transaction costs. Transaction costs are the reason why people accept, say, a bank note, cheque or EFT instead of cash. With Bitcoin, this difference in transaction costs is not only absent, but also tends to work in the opposite direction. Have you even read the wiki article? I explain it there. I could provide references from books, which explain that transaction costs are the reasons why money substitutes came to existence, but I'm on a laptop now and it's more difficult to do these quotations with just one monitor and without a mouse. Some sources even say that FRB came chronologically after money substitutes, whereas I even consider it possible for them to arise simultaneously.

First of all, you mistake credit with expansion of credit. Second of all, lending and borrowing without expansion of credit works fine. In fact, there already is Islamic Bank of Bitcoin and Global Bitcoin Stock exchange. Also, as long as Bitcoin is competing with other currencies, you can still take a loan with the other currency and then trade that on the market for Bitcoin. With respect to hard supply and/or recessions, read e.g. Deflation and Liberty by Jörg-Guido Hülsmann.

The utility of Bitcoin is multifaceted. It can decrease transaction costs, be used for savings / investment, and yes of course for credit. Furthermore, as the markets grow, it is possible that the demand will rise so much that even people who own a huge amount of Bitcoins wouldn't be able to change it much. The bid-ask graph would simply look very steep on both slopes.

Let me ask you a counterquestion. If there was credit expansion with Bitcoin, would that make it more or less difficult to crash the market? Huh?

It is not my place to tell Bitcoin users what they should be doing. My purpose, as an economist, is to analyse things how they are or will be, not how they should or should not be.

If you want to create a currency based on credit expansion, there are economic papers you can read which analyse such systems. For example, Fischer Black: Banking and Interest Rates in a World without Money. Other authors that analyse this to some extent include Tatsuo Tanaka, Michael Woodford, Malte Krüger (as I said, it's difficult to quote on a laptop so google for them yourself, also the last one is in German and I don't know if you understand that). I personally don't think that credit-based currency is possible without either pegging such a currency (for example to a commodity or another fiat currency) or legal tender laws. Without either of these, there is no way of making sure that people do not expand the supply willy-nilly, and this would drop the market price. Even technology can't fix this, because at some stage, a decision needs to be made whether to extend credit or not, based on empirical data. And empirical data can be twisted to the desired aim. The supply of Bitcoin, on the other hand, depends on time and computational resources. Twisting time is so difficult that we can ignore it, and if the other empirical factor, computational resources (SHA hashing performance), fails, then the only result on the supply would be that the 21 million would be issued prematurely. Which would be bad, but not a catastrophe. With credit expansion, on the other hand, the supply is unlimited so the price would equilibrate at zero.

All so easely prooven wrong!
i) It was a coalition of allied forces not England alone defeating the french plus ii) the Rothschilds had loads of money collected before.
 ...  uhm to be honest again.  

i) doesn´t matter even if the french had won, Rothschilds would have just played the other way round.
ii) does matter. (btw. Hawker is right here, as they made a fortune then)
But why? They controlled the monetary system!
How could they? ... simple as that, everybody else was playing game.

Everybody knew those Rothschilds to have the better and faster spys. So they would know the outcome of that battle first.
While the Rothschilds (a bit like Spy vs. Spy) were very well aware of this.
So as soon as they heard Napoleon is defeated they started to sell, falling prices and Rothschilds sell, everybody now realized it is about time to rush ...
While they started to pick up the shattered pieces, for much less than the money just earned shortly before by selling some shares.
They ended up with more money plus more shares than before.

This game is still going on in various performances.
Al long as we play game (whilst not really necessary), we can be controlled.
The more blame you put on Rothschild, Bill Gates, Satoshi Nakamoto or whom what so ever, realize it is likely more your fault than theirs.

This assertion is highly questionnable.
Its easy to create what is known as market confusion: this affects negatively all innovations.
Again the whole concept of merged mining is counterproductive unless its applied with a distinct purpose like namecoin.
Namecoin and bitcoin complement each other instead of competing head to head.

There is no downward pressure unless silver becomes a viable alternative. And if that is the case, the downward pressure would be exerted whether or not you are mining for silver. A competing alternative with merged mining wouldn't care what the eventual outcome was for bitcoin, it is only part of the bootstrapping process so that early adoption doesn't have to be as hard.

Convince me that the downward pressure applied on "gold" (bitcoin) prices by the availability of a competing commodity ("silver") is offset completely by the amount of silver I would mine (remembering that your "silver" will be worthless until it is "adopted", bitcoin still struggling for adoption 3 years after its inception).

I love how many times you say that makes no sense. Perhaps you lack understanding? And by whom would be whomever wrote the wiki page. It is relevant because governments switched to being debt-based when they could not afford to finance themselves via gold/silver backing except in a few, rare instances.


Never said it was, but it would mitigate the one-sidedness.


But this is silly. This is not what brought people in in the first place--an alternative currency. The chance of a profit opportunity being realized at the beginning was very, very small. A block reward increase doesn't mean bitcoin suddenly has value, it just means you have more digital nothings in a digital wallet. And if it did become popular, by then you are competing with thousands over 50 btc rather than tens or hundreds over 10/whatever btc.


LOL it isn't, that's the whole point. Money will get squeezed to the top either way. Big business will be the machine and we its lowly cogs asking, "please, sir, may I have another?"


The hashing difficulty is independent of the number of people hashing. In fact, no hashing has to happen at all to secure the network--merchants would do this via a system of reputation. Pools would be managed by the network (randomly assigned). Difficulty increases via a moore's law concept where an increase in the speed of coin blocks produced increases the difficulty; additionally, the coin award is restricted by 33% (6 coins to 4.5 coins) every so often to encourage competition and allow more efficient miners to profit even more than less efficient miners, further increasing the difficulty--this accounts for koomey's law and decreases in energy usage. However, I've come up with some better ideas than this since then, and am working on a simpler proposal.



Well the great thing about bitcoin already existing is that any new currency can be piggy-backed on to bitcoin with merged mining. Mine for just gold, or mine for gold and silver at no additional cost. I don't have to worry about early adoption because bitcoin has already been early adopted.


The point is not to keep early adopters from profiting "too much," it is to keep them from having a stranglehold over the supply. If early adopters try to hoard instead of promote commerce, the profit opportunity arises for new people to simply mine new coins and bring the price down. The early adopters cannot control the value of the coins.

We won't have 50% of coins mined until well into 2013, right? 

Yeah some kind of even distribution based on life on earth would be great, but hey just eliminating massive systemic fraud will really help a lot. 

Well, that's the hope anyway. Depending on the scale of the curve, if done wrong, sigmoid-coin could start taking off after the first block reward decrease (kind of like bitcoin,) or it could start taking off while the block reward is still at 1.5625 BTC, and I don't think that kind of reward is going to prompt a bunch of for-profit miners... yet with a popular coin, and a low difficulty, you'd sure get a lot of "miners" jumping in with the intent of taking over and/or destroying the blockchain. Basically, there's no way a specific curve can be an automatic cure for what you're considering a problem.



True, but would you drop millions into an ad campaign for an untested new form of currency? And what if, instead of people paying attention, the only ones who did were banks and others who might find the coin a threat? The incentive for adoption is at least as important as the ad campaign... all the ads in the world won't persuade me to jump on board with a new technology that I see no advantage to getting involved with, but if the campaign is big enough it WILL broadcast the existence of that new technology to exactly the wrong people.



It would make a difference because potential miners would look at the curve, and say "meh, I'll wait until the block reward increases. No point in jumping in this early." The last thing you want is growing awareness without a growing number of new miners.



But you can't predict how long miners will wait to jump in, and hence how many coins early adopters will have. My contention is that it might be just about as many coins as they have now, relatively speaking.



I don't understand. How is one big business being the big early adopter any better than having several independent geeks be the early adopters?



A quick scan of the material at the link and at the wiki doesn't seem to address the number of participants. Could you boil it down to the essential idea? How does encoin directly address making sure the number of participants is followed by the output of coins?



I think you're underestimating what it takes to encourage early adoption.

I knew about bitcoin in 2010, yet despite the potential for profit, I waited until 2011, until I'd heard more advertising, and got the impression there was finally the beginnings of an infrastructure, before I got involved. That despite the early adopter potential.

Giving early adopters 2x the coins, but making it so that amount is meaningless, isn't going to encourage much of anything.

There are two contradictory goals you have here: (1) encourage early adoption, (2) ensure that early adopters don't profit "too much." With item (2) in effect, what exactly are you going to use to promote item (1)? And if you're not really concerned about item (1), then what's to stop just the few people who care about the coin from being the only early adopters, leading to the exact same situation we have now?

TL;DR - There's still no method being given that demonstrably (or even theoretically) leads to a situation of having many, many early adopters.

No, it boils down to: I provided references and a logically coherent position, connection to various other economic concepts and schools. Some people do not want to think about it so they just repeat things tangentially related to the issue.

You have not provided an argument, you just whine. Also, what you say makes no sense. Wasn't even considered a possibility by whom? How is this relevant in any way?

Your own reference supports my position. Bank notes began as debt instruments, redeemable in gold (or whatever the specie was). In several steps performed by the state (legal tender laws, suspension of specie payments, banking regulation, elimination of competition, etc.), this link was abolished. So both of my points (presence of state force and the creation of debt instruments) are confirmed.

If you attempt to perform credit expansion with Bitcoins, you'll end up with a financial instrument incompatible with Bitcoin, similar to the Mt. Gox code. On the example of Mt. Gox code, you can see that it is more difficult to use as a method of payment than normal Bitcoins.

So your point is that if an invention like bitcoin or any monetary innovation does not solve ALL the problems  of the existing banking system at once, then it should be rejected: that's a fallacy favoring the statu quo, benefiting the banking cartel.

That sounds like banking lobby propaganda to me.
The mention of a so-called " bitcoin elite" that would be comparable to bankers is also typical propaganda technique.

So it boils down to, "these people say it works" and "these people say it won't" ok man I am convinced.

BTW,


This shows an extreme bias or a lack of knowledge in the history of money. Not to mention the fact that debt-free money wasn't even considered a possibility.

http://en.wikipedia.org/wiki/United_States_Note

But my point, as I have stated several times, is that the wealth/power graph is exponential, not linear.


Ok, but you aren't getting the meta-game here. Politicians are only getting that money because it will invariably lead to more wealth for those who gave them it.


Riiiiight. You know, it sounds crazy, but at some point we are going to have to accept that not everybody can work. There is only so much production that can be achieved, and the amount that humans contribute to that production is only likely to dwindle as more processes become automated. If more people were able to live off of earlier work or off of their parents' work, they could focus on other pursuits such as art, or volunteerism, or many other things. This is the kind of revolution that could bring about unheard of changes in society. But while we are slaves to money, it will never happen.


Yeah and I think the point was you shouldn't have to be a trillionaire to be able to do it. Money devalues so quickly; interest rates expect a certain portion of every loan to default; property is amassed by the wealthy and re-sold to the middle and poor in a never-ending cycle by design.

The wealthy WILL always have more power over the unwealthy, PERIOD.
That's how everything works, and the only alternative is communism, and we all know how good that works.


Yeah, and when the politicians get paid, that original money is spent. You are not somehow magically generating money just because you got in early.


I AM a regular citizen of this world, and there is no "shit". If we are talking about most developed countries right now and don't consider failed states and such, the only thing that is causing poverty and crime is that people think it is easier to rob than to actually work. There are exceptions to this in some countries of course, like in the US which has multiple issues, with health insurance, the government bailing out unjust banks and so on...

And it's really funny how you bring up the argument of "give your children the wealth of your many years of hard work", because that's exactly what the Rothschild family members have been doing for all these years, and you somehow think that is unjust because they have more money than you.

That's exactly right. There is no magical technology or mathematical rule that is going to fix all humanity problems. Too bad, this kind of makes this whole discussion pointless.

If you really wont to fix something like that, become politician or some other public figure that can actually make a change. Right now it seems there is a very good chance to do that if someone could preach to the Occupy Wallstreet people, they don't seem to have a clue of what the hell it is they actually want, besides "more money". If someone could go there and give them ACTUAL ideas and steps for how the things should be done, that person could very well become the leader of the new party.

The majority of the coins will be mined in a few months, with all of what, 100k people having tried out bitcoin? Out of 7 billion?

I don't just rage against the pyramid because of how unfair it is, I rage against it because this silly popularity you think that would be impossible without it will EVENTUALLY BE ITS DOWNFALL.
Smart minds and great thinkers will start reviewing the history of bitcoin and will start speaking out against it. The bitcoin name will get trashed repeatedly and be called a pyramid. If there is one thing the general public understands, it is the words "pyramid scheme" regardless if bitcoin is one straight up or not. This early adopter super bonus is going to be a reason for it to fail at being a world currency.


So we should judge bitcoin by how successful the current history of money is? Do you not believe the current monetary system to be flawed? Then why mitigate bitcoin's faults by saying "well this is how money already works"? The history of gold is the history of kings. Do you really want more kings?


The coins would start coming into abundance as bitcoin increased in popularity. Posting a message on a crypto board that had all of 10 posts in an entire year is not exactly a big way to get the word out. You say there is no incentive, but if the early adopters could prove its use as a currency such as selling a pizza for 50 BTC instead of 10,000, how would that make any difference? If it had still not taken off by the time the distribution reached maximum (probably 50 btc/10 min) then it was unlikely to take off anyway. But, if it did start working, then as the curve approached 50 btc, you'd have thousands upon thousands of people mining as you do now, and the early adopters would still have a very large sum of bitcoins worth a significant amount of money, but they would not have a complete stranglehold over the supply.


The point of avoiding a Rothschild family is looking to the far future and saying "what could happen if this becomes the world currency?" If all the non-material wealth is stored in bitcoin, 375k BTC is worth trillions. When you have trillions, you don't spend it, you manipulate. Look at politicians, ever bending to the will of corporations because they will get piddly sums for their campaigns.

Don't you, as a regular citizen of the world, get sick of this shit? Isn't the root of most crime simply due to the fact that many people cannot sustain a life above poverty? When you die, don't you want to be able to give your children the wealth of your many years of hard work?

I don't see how bitcoin fixes any of these meta-problems. I don't think bitcoin ever intended to. And I think that is really sad. It isn't the governments manipulating the wealth as so many of you want to believe. It is a very small group of individuals/businesses that are doing so. And bitcoin has this very same capability built in, no central bank required.

So you're right, knightmb would never be able to sell his 375k for 2 mil because the market would crash. But is this not the same thing as printing money?

Why can't you people understand that the true beauty and innovation of the bitcoin is that there are no external controls over who owns what. The whole point is to make a system where if you have the private key and coins on that in the block chain, and if the key itself does not get compromised, NOTHING CAN FUCKING HAPPEN TO IT. Nobody can come and take it or ban it or whatever, for whatever reasons. Nobody can come and call those coins "dirty", or unjust, on unfairly generated. There is no "fair" concept in the real money, or in the actual universe for that matter. Only the true open market, probably for the first time in human history.

And yes, the generation rate was the same, and that's also the part of it, making the generation rate completely predictable and known beforehand. It doesn't listen to any complaints, rants, beggings, just like pure math doesn't. And it does not matter who is originating those rants, a government, a wealthy person, or an angry group of poor people. And coins on an address are just as good as any other coins on any other address. No discrimination for whatever reason.


Also, I am assuming most people understand this, but if there is a person that owns "375k BTC", and current price on mtgox is 5USD/BTC, that does not actually mean that the person owns 375'000*5=1'875'000 dollars. Would he try to sell all of them, the price would drop during that time, and even if he would try buy stuff/services for those bitcoins, that would also make the price drop because many retailers will sell off those bitcoins pretty fast. So while it maybe difficult to actually determine how much that is worth, it is definetely worth a lot less than just the amount times current price.

The problem wasn't the difficulty. The problem was the lack of people who knew about the system, which meant few people mining, which is what kept difficulty low in the first place (and which meant those coins were split among the few people.)

The problem was there wasn't a national ad campaign so that everyone could have jumped in, and the early coins could have been distributed among more people.

That said...

The problem I've come to see with the sigmoid curve is that there's no incentive for anyone to be an early adopter, even with a national ad campaign.

If tons of people had started flooding into mining bitcoin early, they would have done so when the inflation rate was the highest, and the most coins were coming into circulation. Early adoption was encouraged.

With the sigmoid curve, why would anyone go in first? They would all be fighting over scraps of coins, and all the electricity they burned would be much more efficiently utilized past -2 on the horizontal line, when the coins start coming in abundance. Waiting would encouraged.

That suggests to me that either sigmoid-coin would never get off the ground (so few people would be involved early on it would flounder) or that only a handful of people, out of sheer love of the project, would be mining right up until the -2 point.... and you'd still have millions of coins in the hands of a few.

I admit, it sounds good, but I don't think it fixes the real "problem": the coins flowing into the hands of a few right up until they have a significant number of them.

I'd really like to hear a method that directly addresses the number of participants, and then their subsequent share of coins.