Topic: Early speculator's reward antidote - page 3. (Read 22161 times)

Fungibility does not require that the units be indistinguishable, just that they can be seen as such. Notes have serial numbers and coins have mint dates, some people discriminate based on this but they are a minority.

casascius's proposition is exploiting what is, in my opinion, a weakness in bitcoin as a currency, that they are not truly fungible. (And it is related to the fact that they haven't got true anonymity either.)

His proposal is to selectively value bitcoins generated from different difficulty eras at different rates for conversion to the new system. If bitcoins were truly fungible each would be indistinguishable from the other and this process would not be possible. There would be no question about devaluing the early adopters gold because gold would just be gold, wherever and whenever it was found. After it is all melted down in a big pot there is no new gold and old gold.

As a currency, quasi-fungibility is a weakness and he is proposing an exploit, what are we going to do about it?

Let's see if I can recast this in Ayn Rand terms...

1) OP can afford a Ferrari.
2) OP wants a Lear jet (go OP!)
3) OP is insightful, daring, and innovative (my hero!)
4) The cloud of seigniorage threatens the market value of OP's portfolio.
5) OP wants to create and profit from something of greater value than all the world's BTC.

Does that look better?

Getting back to the "antidote" that this post is about, I really don't see the need to support BTC destruction as a way to create BCP.  It is complicated and probably controversial, as it seems to attack BTC in an unfriendly, not to say unfair way.  A little patience with minting the new currency would, in my opinion, pay off better in the long run.  A BTC<->BC2 exchange would be very straightforward to set up (technically, not to say legally) and would be the way to distribute the new currency to non-miners.

I also no longer feel the need to "poll" miners prior to working on a genesis block as I outlined in another thread.  The initial difficulty should be on the order of 10,000 to 100,000 (or 2-20% of BTC difficulty at the time).  And the project (and supporting software) should be widely advertised among Bitcoiners, so anyone who might be interested can make a conscious decision whether to join at the outset.  Apart from that, we do not have to regulate the generation speed of the first blocks.

In a few years' time, assuming ASIC mining or quantum mining overtakes GPU mining, there may arise a perception that yet another startup currency would hold more value than BC2.  And that would be fine.

I have no problem with others creating alternate block chains with whatever rules they want. It is my opinion that competition is always good and I applaud anyone that expends the effort to do so. Even if I didn't want there to be alternate chains, there's nothing I or anyone else could do about it.

However, to claim that early adopters did nothing to deserve their easily mined bitcoins is fucking preposterous. If they had not invested time and resources into the bitcoin community, you would not be here now in order to complain.

So go and create your own chain, or use your considerable amount of unearned exploited wealth to pay someone to do it for you. Put your money where your mouth is, so to speak. The constant complaining about the unfairness of the rules of the main chain just makes it sound like you're bitter that you didn't get in earlier and you want to punish the early adopters for taking a risk. Come back when you have something of substance, I'm sure you will be more warmly welcomed.

casascius isn't claiming any kind of authority, nor is he proposing any kind of centralisation. i wish people criticising him would read more carefully and think more sensitively about subjects they expound on, rather than staying in the realm of idealised theory and apparently assuming that anyone who proposes something new must be a communist.

he's made what's at heart the same point many others have made: the seigniorage of bitcoin is arbitrary, is probably not priced into the value of coins in the current block chain because of informational asymmetries, ultimately serves no productive function, and has contributed to what is likely a functional pyramid scheme from the public's perspective. this is not a crazy or extreme point; it's consistent with almost all economic literature on productive rather than unproductive investment.

What I'd like to know, casascius, is where you get the authority to determine what is fair?
And where do you get the authority to determine what is valuable work and what is parasitism?
And what makes you think you know the exact rate at which old btc should be converted to your BCP?
Anyway, why should later adopters be rewarded either?  Maybe some central authority should simply distribute all btc equally over the planet.

You say you've done well outside of bitcoin, presumably in your software business.  You haven't indicated that you feel you've been over-compensated in that realm, but how do you know you haven't?  Just because you've provided a 'valuable service'?  But maybe that 'valuable service' could have been obtained more cheaply from somewhere else or someone else.  Have you therefore stolen some portion of what you have, even though it was given to you voluntarily?

You feel bitcoin approximates a pyramid scheme.  But at the end of the bitcoin pyramid scheme everyone will still have their bitcoin.  The problem is you have greater faith in the USD than in BTC.  You think that a few years down the road the USD will be worth more in BTC terms than it is now, and that it will be that way by design.  I'm afraid that most people here believe that BTC>USD in a few years, and if it isn't, it won't be because Satoshi designed it that way.

The real danger here isn't that some early adopters will profit (in USD terms).  The danger here is that even after a 70 year experiment with the Soviet Union, even after a 40 year side-by-side comparison between East Germany and West Germany, even after the fantastic demonstration of the power of the free market in China over the last 2 decades we still have people who think they know better than everybody else.  People who feel they can plan things for the rest of us so it turns out more 'fair', 'equitable', sunshine & rainbows.  That type of thinking, given free reign, always ends in utter disaster and usually a great many deaths.  That type of thinking is the very antithesis of the bitcoin project.

You may have good intentions, but there is a reason that is the pavement on the road to hell.

Since we are speculating.

It's more likely that people will ignore "Plus" because it was never bootstrapped, and probably wouldn't have bootstrapped at all because of the massive amount of inflation that would have had to occur to make the early Bitcoins worth less, and is only attempting to ride on the coattails of Bitcoin while pretending that bootstrapping a new currency is not worth anything.

But you should really make it anyway. 

1) OP have 25000 BTC.
2) OP wants to create a second block chain, but to offer a way to transfer BTC from one block chain to the other (which involves creating a transaction that looks like a "destroy" to the original client)
3) OP won't convert his BTC, and also expects that nobody would convert BTC mined with an easy difficulty because it would yield so little.  Only recently mined BTC during high difficulty would make sense to transfer because the yield is directly related to the difficulty.
4) The BCP will become more valued than the BTC because there aren't millions of easily-acquired BCP out there waiting to pop the market.

1) OP have 25000 BTC.
2) OP wants to destroy some part of BTC mined.
3) OP won't destroy his BTC.
4) The less total BTC we have, the more they are valuable.

Conclusion?

Mixers need a float to work with, the big oldsters could send their coins through mixers constantly, or even run mixers of their own keeping newer coins and dumping old ones on other people.

Its stupid.

-MarkM-

this. over time as bitcoin climbs in value it makes little sense to sit on large hordes when cashing out a portion can catapult you into a higher living standard (not working).

We'll see medium hordes get dumped on the market at various psychologically significant price levels (I'm assuming a short term price ceiling of $10 due to this actually).

http://www.forexfreeway.net/trading-online/forex-trading-the-importance-of-round-numbers

I'm running out of things to say here. I think the issue of distribution will sort itself out. The exchange rate is fluctuating wildly. Bitcoin has been, is, and will continue to be a risky investment. Sooner or later some of the bigger hoarders will start to chicken out and sell their Bitcoin. They may cause the exchange rates to drop a lot, or maybe they'll be sly about it and sell over time. Either way, the coins get redistributed.

If some of them do not sell and instead hold on to their coins, even at, say, USD10/BTC, or USD 100/BTC, they're taking big risks. No-one knows the outcome. No-one knows how the exchange rates would recover from a crash back to pre-dollar-parity days. It's entirely possible for a panic to decimate the exchange rates. Anyone with a few hundred thousand BTC has to have balls of steel not to think about unloading significant amounts of those sooner or later, unless they're already loaded, of course.

In your Bitcoin folder, there are numerous files.

The ones with an extension of .cpp, .h, and such, are where the true gold is, the part that has really caught my interest.

The ones with an extension of .dat are where my criticism is pointed.

What does the price of BTC have to do with jobs?  Jobs are created by matching labor with market needs.  If I start a useful BTC-related business and hire people to help me run it, then I have created jobs.  But simply driving up the price through speculation doesn't accomplish that.


I agree with you - I could be diminishing my own BTC.  But the way I see it, I have already sold enough to recover well more than my initial investment, and if somehow my forum postings were to tank away my opportunity to make take more money from people, then oh well.  It's not money that was ever my God-given right to take in the first place, no different than if I find your wallet and beat myself up over the chance I missed to take your money before I gave it back.


Yep you're right, but the idea isn't to punish early adopters, it is to remove the collective leverage they have over the wealth of future participants.  Besides, the reward is already pretty random as it is.  I could sell 100 BTC on June 10th, and I have no clue whether I will get $1 or $50 per coin.  So I'm not really shaking anyone's fate far from their expectations to begin with.


That's essentially what I have proposed - while maintaining full compatibility with BTC so as to make it attractive to those who are currently stuck with a relatively buggy and very non-intuitive client.  I am essentially proposing riding the coattails and exploiting the fact that development on the client is at a snail's pace and is lacking numerous important features.

It sounds like you don't think Bitcoin is a valuable invention. Yet it seems you're very interested in it.

Hmm.  What if your investment in BTC raises the price enough to attract commerce.  Is that not indirectly providing jobs?

Your proposal misses a big sore point.  If it passes, then the value of *your* bitcoins will seriously diminish.  The guy who mined already got his profit, so the loser would be *you*, and all the other people who are buying old coins now.  You might not worry so much, but I expect that just about anybody who has invested in bitcoins will not cooperate with your proposal, i.e. everyone on this forum.  Therefore, you'd be much better off taking your proposal elsewhere and begin a whole different project, based on bitcoin, with just the btc convertability you suggest, but appealing to a whole new audience, not to those who have already invested in btc.

Another point, what about bitcoin mixers?  If I send 100 bitcoins to a mixer, then eventually I get 100 bitcoins back, but they could be newer, older, or a mix of newer and older coins.  There'd be no way to tell who got what.  The 'penalty' to early adopters would be completely random.

In the long run, I'd say you'd be simply better off starting a new block-chain, in which old bitcoinsPlus, in every transaction, are converted to new bitcoinsPlus, in proportion to the difficulty now and the difficulty when generated.  Of course, then there'd be no incentive to mine now, since you get the same reward if you mine tomorrow, or next year, so I'm not entirely certain that it would take off.  Perhaps it would be more popular amongst socialist idealists.

As for the crux of the problem, perhaps we can hope that, eventually, older bitcoins will gradually enter the market as the early adopters spend/retire.  Not unlike the gold rush of the 1800s I suppose - fortunes were made there too, and all they mined was a useless soft yellow metal.

Because when I think of providing something of value, I am thinking of the creation of goods and services, which are the true backbone of any economy, not money.  When I buy BTC at 0.80 and sell them for 8.00, I feel more like a troll on a bridge.  The troll isn't doing anything useful, unlike say a toll that goes to the people who built the bridge, which motivated them to build a quality bridge and which probably helps maintain the bridge.

Yes, I agree I am providing a valuable service (in the sense that my service is probably valued by someone), but I am not actually adding any goods and services to the economy.

Compare that to what I do for work - I make software - people pay me for that - the software satisfies a need of theirs - it's a two way win.  Put a bunch of software engineers on an island, and from that island will come products innovation and automation.

Put a bunch of farmers on an island, and from that island will come fruits and vegetables.  Put a bunch of singers and dancers on an island, and from that island will come rehearsed entertainment.

But put a bunch of bankers or trolls or traders on an island without anyone that produces goods or services, and from that island will come nothing, because their activities produce nothing and benefit nobody.  They will nickel and dime each other all day for each other's nickels and dimes, but without others who produce, none of them can so much as whip up a bowl of macaroni and cheese.  And when I resell BTC at a profit, that's how I feel, that I have only converted someone else's resources to my personal benefit while giving nothing useful in return (other than, of course, the resource I'm holding, which I didn't create).

Bitcoin came from the software engineer island, not the banker and trader island.

I think a little perspective is in order...first, if someone does have 20% of all bitcoins, the notional value of those coins is around $10 million.  However, were they to sell all those coins on any short time scale, they wouldn't get anywhere near that amount and they would crash the market.  But, let's assume they could bleed out $5 million over the span of 3 months (but I think that's still far above what the market could support today).  That's peanuts compared with the wealthiest people on this planet and I'd bet that the contribution these bitcoin pioneers have made is far greater than the vast majority of those extremely wealthy individuals (and yes, even for those that did little more than buy or mine bitcoin...because, after all, without them, there would be no "us").  If the price of bitcoin continues to appreciate, these early adopters will have increasing pressure and incentive to either lock in those gains or to invest it in some capacity (quite likely in businesses involving bitcoins).  Continuing to hold such a large hoard will make less and less sense as time passes.  

How about the next part, which refutes your constant claim that you are getting "free money" without "providing anything of value"?

When you do sell and do profit, you are providing a valuable service (selling bitcoins) at a price other people are willing to pay. How is this "free money" or "not providing anything valuable"?

Is this hard to understand, or do you have some argument that counters this point?

Am I supposed to respond to this?  It isn't even a question.  How do you know if I am or am not holding my bitcoin?  And what difference does it make?  If Bitcoin flops before I sell out then yeah, I guess I get it...no ferrari.  It should be pretty clear by now that I understand this, but hey... apparently people think my eyesight is bad too cause this thread gone past bold and on to big fonts now.