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Topic: "Failure to Understand Bitcoin Could Cost Investors Billions" (Bitcoin's flaws) (Read 43189 times)

hero member
Activity: 518
Merit: 521
Cross-posting from the following linked post:

https://bitcointalksearch.org/topic/m.6501774


It is time to squash Proof-of-Stake once and for all. It can NEVER remain decentralized. Satoshi's Proof-of-Work is the only known solution to the Byzantine General's Problem (was a known unsolved problem since at least the 1970s).

Apologies I've been busy and hadn't had time to squash bytemaster's latest N.A.O.D. (nonsense algorithm of the day).

First of all, he never was able to address the issues I raised about Transactions as Proof-of-Stake quoted as follows.

This proposal appears to be flawed, unless I am missing something. I have only read the first 4 pages thus far.

1. You propose to decrease the coin rewards as coin-days-destroyed volume increases, so this makes it less costly for an attacker to obtain > 50% of the hash rate assuming the attacker includes all the transactions. You apparently are attempting to imply there is no useful attack to do if the attacker is including the most coin-days-destroyed? Please confirm or deny then I will dig into more analysis of this vector.

2. Also how do you choose between someone who generates a proof-of-work hash with lower coin-days-destroyed several times sooner than the network propagation delay versus another who generates it that much delayed with a higher coin-days-destroyed? If you choose the latter, then you've killed the proof-of-work incentive because it means it will always pay to be later and wait for more transactions to arrive.

3. You claim to defeat my Transactions Withholding Attack, by blacklisting those who send blocks with transactions that were not recently seen by all miners. I retorted against this recently. This centralizes the network (all for one and one for all outcome) by requiring every miner to be responsible for the incoming network connectivity of other miners. And it centralizes the network in other ways, such it can't tolerate a temporary partitioning of the network due to connectivity outages.

P.S. By coin-days-destroyed, I assume you mean coin value x days, otherwise you would motivate proliferation of dust.

The most significant flaw of any proof-of-stake system and any system that diminishes coin rewards, is it can't distribute currency from the hoarders to the users of the currency, thus it will end up with the hoarders (the banksters) accumulating all the coin and the currency usage dying.

This is because the wealthy spend a much lower % of their net worth than the masses do.

[snip]

Whereas those who actually mine are proactively using their time, ingenuity, initiative and capital to secure the network, thus it seems more capitalistic they should receive the redistribution from the hoarders. Besides it may beis the only viableplausible way to secure the public ledger.

The other attacks you describe all derive from the fundamental reason I declared all non-proof-of-work systems to be insecure back in April.

My logic was mathematically fundamental. The input entropy set is quite deterministic and well known and thus can be preimaged. For example, accumulating a lot of coin-days-destroyed and then targeting them in clever ways to subvert the security.

The randomness (entropy) of each proof-of-work is fundamental and mathematical and it can not be preimaged. It can only be surely defeated with > 50% of the network hash rate. Note I recently offered what I believe to a solution to the selfish-mining attack (the one at hackingdistributed.com that claims 25 - 35% attack).

I am skeptical that you can characterize all possible attack vectors of proof-of-stake in one coherent mathematical proof. Thus you will not know formally what the security is; instead a list of adhoc attacks and counter-measures.

[snip]

Edit: Perhaps coin-days-destroyed in some attack vectors motivates not transacting for long periods of time.



The bottom line is that no proof-of-stake system can ever remain decentralized.

They all will require some sort of delegation of reputation to achieve consensus. I would have to go through a laundry list of examples to cover all the cases. For example, in Transactions as Proof-of-Stake it is required to delegate trust of propagation to the other nodes as I explained above. Thus there needs to be some reputation system to enforce this, e.g. blacklisting, whitelisting, etc.. All the other proof-of-stake systems have a requirement for some form of delegated reputation.

I have many times explained to bytemaster and others the fundamental problem is that any system that attempts to replace proof-of-work will rely on some form of reputation, and reputation is centralization. And centralization is precisely what decentralized crypto-currency is not supposed to be because centralization will always end up control and manipulated (i.e. it is a fiat system).

Trust is orthogonal to reputation and centralization. I can trust Proof-of-Work, which is decentralized trust without reputation. Reputation isn't needed in Proof-of-Work, because the input entropy is fresh (can't be preimaged) on every new TB.

You can 75% attack it if you like, but your nodes wont have any trust, so that block chain will just be ignored.

(In any non-Proof-of-Work design, ) It is mathematically impossible for there to be external consensus trust of the honest chain if the dishonest chain is controlled by more than 51% of the peers. We've covered some of the scenarios upthread, and it always boils down to that the external viewers can not know who to trust except by trusting the majority of peers.

The only mathematical way around this is to centralize the network, by placing more trust in some peers than others over time.

Indeed long-term reputation is a mathematically viable alternative to Proof-of-Work. This is centralization. There are tradeoffs.

So this is not "7 billion individually watching the network", but rather a fewer # of peers with reputation being trusted. This is just the political power vacuum all over again with its contingent problems of vested interests Olsen power scramble:

https://bitcointalksearch.org/topic/no-money-exists-without-the-majority-226033 (No Money Exists Without the Majority)

Notwithstanding the above, any non-Proof-of-Work system can be attacked with much less than 51% of the peers, due to the fact that the input entropy is preimageable, as I explained upthread. Again the only way to work around this is to trust some established peers to guard against this.

Financial transactions must be recorded in a public or private ledger trusted by both the spender and the recipient, otherwise funds could be unspent or double-spent to a plurality of recipients. To provide a ledger that can't be captured, Satoshi described a proof-of-work (PoW) scheme where transaction peers communicating over the network compete to be the first to solve a computational puzzle which is unique for each block of transactions added to a public ledger. The security of this ledger against double-spends has three (3) essential requirements.

1. The computational puzzle can't be preimaged, i.e. nothing can be known about solving the puzzle until the prior block's puzzle is solved.

2. Without at least 50% of the aggregate computational power of all transaction peers, it is not possible to create a modified chain of blocks starting from any present or past block, which would contain more blocks than the block chain controlled by the remaining cooperating peers. Thus the longer chain is trusted.

3. The block chain is cryptographically linked in forward order, such that the historical proof-of-work and transactions can be independently verified at any time in the future. Thus the transaction peers may leave and rejoin the network at will without need for a trusted centralized storage.

Note security point #1 eliminates from consideration PoW schemes in which the puzzle is some real-world computational work because the puzzles are known a priori and are thus pre-imageable. Non-PoW voting and membership schemes disqualify because the ordering of designation of authority (to decide which transactions are in each block) to transaction peers is pre-imageable, or requires peers trusted by reputation which is centralizing on a slippery slope towards Olsen capture.

You must also consider the negative impacts of design features when you state the positive impacts.

Reputation has many downsides:

a. It can be stolen, e.g. threaten first to extort private key, then kill, and keep key.
b. Censorship based on metadata which doesn't always correlate rationally.
c. Discriminate against early adopters out of jealously, i.e. retribution for #b.
d. Regulatory authorities can require the BitName same as they now do Social Security # and Id. They can now establish the BitName is real, because it has (duration) reputation.

The high cost to transfer or revoke a name also has many downsides, e.g. see #d.

I thinking the pool operator (server) does so little relative to work of the pool miners that it doesn't need to charge a very high fee. Thus there isn't much ability (incentive for pool miners) to undercut competitors based on fee.

So there just needs to be a slightest incentive to encourage pool miners to seek out another pool as a pool grows large. This will encourage a poliferation of pools.

How do pool miners know that a pool server isn't cheating them by paying some of the earnings to themselves pretending to be a pool miner?

Go down that line of thought and you will discover what I am thinking.

The only way you can prove a pool isn't cheating is by estimating the hash rate of the pool and comparing it to the number of blocks found.  Unfortunately, you could probably still skim a couple of a percent this way.

Modern protocols (GBT & Stratum) both have the full coinbase transaction visible to the miners, meaning you can verify that the block being built will be paid to a certain address or has a certain message encoded in the block that identifies the pool.  This allows you to audit if the pool is trying to skim blocks if certain users start seeing work without a coinbase message that identifies the pool.  In the case of BTC Guild, it's both, they always pay to the same address and always include "Mined by BTC Guild" in the coinbase message.

It's not no-trust, but all it would take is a few % of users monitoring this to determine if a pool was trying to skim blocks by sending a certain % of work that doesn't include identifying marks.

How could anything less than 100% of the pool miners know if some of the coinbase transactions were to addresses not owned by pool miners who contributed shares?

Since you can never know if you are the 100% (because mining pool shares* are not recorded in the block chain), thus seems to me there is no way to verify if there is skimming or not, as bytemaster and I wrote.

*For those who don't know the terminology, a pool share is a proof-of-work hash below some threshold that is easier than the current network difficulty. It might also be a block solution.

Why don't you just use P2Pool? Is there any reason?

I was waiting for bytemaster to answer because I wanted to know his thoughts. Seems to me that you have no way to stop the Share Withholding Attack since it is decentralized. And every peer has to run more of a full client if I am not mistake. And there is a lot more overhead I believe. And perhaps also much less resistance against denial-of-service flooding. Frankly I didn't analyze for long enough to be very sure of my initial intuition which is to stay away from it.

I know it is generally impossible to enforce reputation on a 100% decentralized system. So I am intuitively skeptical of P2Pool.

P.S. I won't have time to go back here and debate. I am technically qualified and I am 100% sure I am correct.
hero member
Activity: 518
Merit: 521
It is roughly saying we won't significantly surpass $1000 in 2014. I don't know where the correctly fitted curve would be right now, so I can't project where the price should be now and where it will be nominally. I think the slope projection is more close to accurate, so we can say that if the theory is correct (that distribution of money holders is a power law distribution as the cited research and common knowledge says it always is), then price appreciation will slow down specifically to 0.05 units on the log 10 chart per month where 1 unit is 10X appreciation. So if we bottom at $400, then price after 20 months should be $4000. Again this is a very rough eyeballed fit and would expect the refined fit to have a slightly higher slope maybe 0.06, so make that 16 months instead.




The red line below is a power law distribution for B=0.5 which you can see above is the value of B I fitted.



What that distribution says is that the rich hold most of the percentage of wealth, which we know is in fact always true. And the fitting of the cumulative distribution function to BTC price is the theoretical claim that earlier adopters will be more wealthy (by now) than later ones.

The research I cited points out is that the masses use money as a unit-of-exchange, not as a store-of-value.

However does the Metcalf's law value of money (which Peter R has shown BTC mcap and thus price is tracking) where the value is proportional to the square of the number of nodes in the network nullify my use of a power law distribution? I.e. do the wealthy not create (proportional to their wealth) more network nodes (e.g. unique active BTC addresses) than the masses?

I see the really diehard power users (e.g. SlipperySlope and Peter R) are both talking about creating a new node every day. Thus this anecdotally supports that the power law distribution applies correctly here.

Thus I think we need to take this theory seriously. It might be the correct growth curve. The linear one with a least squares fit seems really out-of-touch with historical data. It totally ignores the shape of the earliest adoption curve up to July 2011. Risto's explanation was the early adopters were bad speculators and bid the price up too much, but my interpretation is they are the most wealthy now and they were the most powerful because they are early adopters. The least squares fitting of a line to a curved adoption could possibly be (confirmation bias in play as) an (emotional "to the moon") attempt to force a linear projection on a growth curve which obviously was not always linear. Has it become linear since January 2012?

I very much doubt it!

Convince me? Risto how do you analytically defend your linear least squares fit that makes you so sure of everything and gives you the audacity to browbeat all the bears?

Add: why don't stocks follow this log-logistic curve? Maybe they do (?), if we don't compress the early adopters into a single event IPO. Also can a stock issue have network effects, i.e. does Metcalf's law apply to company shares? Seems to me yes if the shareholders network amongst themselves, but much less so than a network of money holders.

Add: Fact is the slope during the runup to July 2011 was 0.33 per month. Since Jan 2012, it has been 1/4 of that 0.08 roughly. Why should we expect the slope to not decline again? Why should the pace of adoption remain constant? Seems intuitively unlikely to me. Pace of adoption should slow as we slog into the less astute demographics. Larger mass with more inertia grows more slowly than smaller mass with nimble inertia.






That is irrelevant as I have explained. What it does is reduce the network effects (merchants accepting and holding Bitcoin thus being nodes in the Metcalf law valuation) within the Bitcoin ecosystem that those holding fiat must buy BTC to attain. If everything they can buy with BTC they can also buy with fiat, then there is no great need to buy BTC with their fiat.

That was precisely my point about why lose 3-5% on double exchange, when one can just buy with their credit card for 0%.


Many people prefer to use BTC rather than credit cards, even though they can use either, because BTC is faster and more convenient for online payments. They buy, wait for the price to increase, then spend when needed. It's that simple. I do not think this 3-5% double exchange loss you are talking is a significant factor in whether or not people choose to use or accept Bitcoin.

The 3 - 5% is an ancillary argument and not the core one. If they wish to be irrational and waste 3-5%, it doesn't mean they are part of a trend of new adopters who love to waste money. Whether Bitcoin holders continue to be interested in Bitcoin is irrelevant to the point I was making. I was making the point that if we don't create more merchants that accept only BTC, i.e. hold BTC and not just a useless facade for fiat, then there is no compelling need for non-Bitcoin owners to decide to acquire Bitcoin (if we are speaking about its demand as a currency and not as an investment).

On the investment demand side, the adoption is slowing and thus due to Metcalf's Law's correlation P = 1.5 x n^2, the rate of price growth (increase) has and will continue to slow. There is no linear growth on the log 10 chart "to the moon". Price growth will moderate and we won't exceed $10,000 before 2016. (note that is still a very nice gain, just not as "to the moon"). Bitcoin's price increase after 2015 will further slow, will not exceed gold. (assuming gold bottoms around $1000 in 2015 as I expect) Remember Risto was the guy calling for $300,000 by now (I've seen others write this, I wasn't around when he purportedly made that projection). How did that work out for him?

Buffet is correct, Bitcoin is just a facade for fiat. Bitpay and Peter Thiel have just put that future in concrete.

Now I sit back and watch my observations wreck havok on Risto's net worth expectations and confidence.


Add: slowing rate adoption can still be very large nominally, e.g. if going from 1 million to 100 million takes 3X longer it still happens. You see as Peter Thiel helps to convert Bitcoin to the government coin, the masses will come in as it will become essentially be a form of fiat with offchain services that Peter Thiel creates. Everything is running exactly to plan as how I expected it to go when I wrote Bitcoin : The Digital Kill Switch in March 2013 and first joined this community.

P.S. Mining is now concentrated in one pool with greater then 51% attack hash power. And there are individual miners with 7 - 10% of the entire hash power. Everything is going exactly how I predicted. Yet people still think I am wrong.
hero member
Activity: 518
Merit: 521
BTC is likely headed below $400 (possibly with a dip below $300) and the recovery will not likely be swift rather a U bottom.


https://medium.com/p/ba5f3fcce103

Finding Equilibrium : Searching for the true value of a Bitcoin

Vinny Lingham, CEO of Gyft, discusses some of the current forces affecting the price of bitcoin. A very worthwhile read imho.

Excellent article. I agree with everything he wrote.

I also have made the point that Bitcoin asymmetrically favors merchants at this stage. And he points that out well.

Risto you should read that article above. Then you will understand where the selling pressure is coming from and what has changed.



Did you read the article or not?
yes I did read the article. he said it will form a base in the next quarter, not crash. as for the range he describes, why would you believe he has the formula to predict $350 bottom?  436 bottom has given us all the signals we need.
all the past bubbles have consolidated in a wedge. thats a sequence of 5. if the price dropped to 350, this one would break that rule. wedges have significant meaning in consolidation.

Did you read his points about why there is now more structural selling? Specifically that there are too many retailers and retailers convert immediately to fiat. And consumers are not growing as fast. Because Bitcoin is wonderful for merchants (no chargebacks) but sucks for consumers .




This is why it is going lower, much, much lower:

http://www.businesswire.com/news/home/20131211005909/en/BitPay-Exceeds-100000000-Bitcoin-Transactions-Processed#.Uzp95qIryho

This is why it is going lower, much, much lower:

http://www.businesswire.com/news/home/20131211005909/en/BitPay-Exceeds-100000000-Bitcoin-Transactions-Processed#.Uzp95qIryho

Quote
processed over $100 million in transactions this year, and has increased its merchant base to over 15,500 approved merchants in 200 countries

http://seekingalpha.com/news/1465461-bitcoin-bitpay-volume-triples-m-m-european-regulators-weigh-in

Quote
BitPay volume triples M/M in November after the roll-out of a new pricing plan and integration with Shopify. Transaction volume tripled during the same period

Thus using an geometric series, I can estimate their December sales were $40 million, January, $120 million, February $360 million, March over a $1 billion. Now surely their Xmas surge was greater than normal M/M growth, but you can clearly see this is much larger now and very significant.


Oh fuck look what just happened under our nose while we were not paying attention!

https://www.goldsilverbitcoin.com/bitpay-worlds-first-zero-transaction-fee-payment-processing/

I believe you are too preoccupied with USD. The feedback loop of (lower USD price -> less users -> even lower price) has never before held true with Bitcoin, and I have no reason to believe it would now.

What about 2011?

In between 7-11/2011, the number of non-dust addresses grew by 30%.

Even if we assume that there is such a negative feedback loop, 2011 was a proof that it was reversed and did not self-immolate.

So far we have one vicious bear market that was reversed, and 5 years of gains. My theory is that Bitcoin has a self-reinforcing positive loop which will eventually consume fiat totally, and all the bear markets are temporary. If you say otherwise, the burden of proof is on you because such an assertion is not supported by neither history nor reason.

Strawmen avoid the points made.

1. Why can't a "vicious bear market" repeat? You admitted before that the 2011 bear market was caused by tech geeks early adopters who overextended because they are poor at speculation. Recently we've had a huge influx of n00bs into Bitcoin investing.

2. Who is arguing that Bitcoin won't continue to go up (i.e. "self-immolate") after the bottom? Not me.

3. What proof do you have that Bitcoin is different from every investment in the history of mankind, in that all investments are limited to a market segment and eventually peaked without reaching every man and woman on earth? You do no market demographics analysis. You just assume that Bitcoin will jump the chasm even though it currently lacks a compelling feature set to do so.




An anonymous coin would be great. Be sure to note it here when you find someone(s) to launch it.  A well thought out alt could grow very quickly compared to bitcoin. The market is ready established, and crypto-funded.

Note that the developer of Darkcoin admitted to me yesterday that I was correct and Darkcoin breaks anonymity by trusting the master node with your identity.

I provided him a suggestion, but it is not my best idea of how to do anonymity (which requires a different design than Darkcoin has).




Even if you are correct the US isn't the only country in the world.

I don't know to what extent tax issues (if at all) will affect European masses in adopting Bitcoin. I lack domain knowledge of those jurisdictions.

Capital gains tax is a non-issue in the developing world (masses here don't files tax returns). Yet they also are not currently the target demographic of Bitcoin.

The other issues I enumerated (look 2 posts up) should prevent Bitcoin from adoption of the masses for use as a daily currency every where on earth. Whether those issues will be fixed and whether they will be fixed in Bitcoin, offchain services, and/or an altcoin, is something that remains to be seen.

Right now Bitcoin is mainly adopted as a self-reinforcing (i.e. those who invest are supporting the rise in price, i.e. a sort of pyramid scheme of sorts but not entirely) speculative investment and some genuine use as a means to transfer value over distance. Also there are cases where one needs to use Bitcoin, e.g. buying drugs over the internet, registering domains anonymously (if you are very careful), etc.. Mostly Bitcoin is used to speculate in Bitcoin and altcoins. It is an investment unit-of-exchange. But none of that is really widespread mainstream use. I am still searching for that compelling need for the broader population.

One of the big needs I expect is when the confiscations begin, there will be a rush into crypto-currencies. Yet I expect an anonymous coin will get most of that, if that anonymous coin is respected and well established and is competing very strongly with Bitcoin (i.e. perhaps 1/10 or more of Bitcoin's market cap). Otherwise Bitcoin will get most of it.




This is an interesting point.  In the long run, this IRS opinion that miners need to report income when they mine, is frankly absurd, and will definitely be reversed in a tax court, if they don't revise it before then.

How do you figure? The network is paying them for their services of mining. Seems correct to me and it is the ruling I expected and predicted since long-time ago.

I can freely produce a work with a market value, and the act of production does not result in a taxable event, in every precedent case.  Selling the work produces a taxable event.

Mining isn't producing a unique work. It is providing a repetitive service that is scripted by the network. The litmus test is that the network is the manager, not the miner. The network sets the difficulty, the protocol, etc..

A network cannot manage anyone.  Management flows in the opposite direction.  Mining a block produces a novel work.

The network dictates which hash to solve. Which is what the miner is paid for doing. Everything else the miners do is optional in the protocol and thus incidental.



there are 12 million millionaires in the world, and 1500 billionaires. there are only 21 million bitcoins, and I imagine most of those people dont have any.

That 21 million will never stand as the asymptotic limit (actually it isn't asymptotic because the finite limit of divisibility is 1 Satoshi), because there is no way the world's billionaires will hand power to Risto et al (of course not!). That is pure fantasy like slumber party of overgrown, naive children playing a board game. There are multiple ways it can be increased.

  • Off chain is the only way Bitcoin will go mainstream. Coins will be created just as the private banks did with gold certificates in the 1800s with gold on deposit.
  • It is impossible that altcoins won't proliferate because Bitcoin can't offer every feature.
  • One pool controls 50+% of the hash power, even one ASIC miner controls 10%. Government control of that pool (and a few miners) can force more coins to be created. This won't be done now, instead later when the lockdown is more ubiquitous and you have no way to avoid this control.



OK, no-one has still bothered to state what 'n' stands for (I'm assuming p = price) but it all sounds highly plausible.

I wrote that upthread. Here it is again.

It is the number of unique addresses from the blockchain.info chart. And Peter R showed that n^2 correlates with price p. This is Metcalf's Law and Reed's Law.

I had explained in an upthread post that if we use a ruler on the n chart along the bottoms since 2012, then should currently be at 100,000 yet it is currently at 150,000.

Also there was a divergence since February where p declined but n rose. That divergence must be resolved. Will p rise or n decline?

If n must drop by 33%, then p price could drop to 0.67 x 0.67 = 45% of recent p (inconclusive to determine which recent p to multiply by .045, perhaps $450 - $600).

I also projected the bottom from July 2012 using compounding and I also get a $300 to $350 target for the bottom within next 2 weeks.

$450 is a lot closer to the bottom than $600 was. Risto is correct about that.




AnonyMint is concerned about mass adoption, because he wants to save the world.  More power to him.  Being in the world, I think it could use some saving.  But his particular form of mass adoption is not necessary or to be expected during the time between now and the next two or three hype cycles.  IRS treatment of bitcoin can be harmful to mass adoption in the medium term, but good for institutional adoption in the near term.

Medium-term I'm concerned about those who are adopting Bitcoin now, and that they have no anonymity and they can't spontaneously mine it any more (without a serious investment in mining). And I am concerned that the mass adoption of Bitcoin will come in the form of off chain  (to fix the slow transaction speed and other issues which INTENTIONALLY won't be fixed on chain) and government control over mining and off chain coin supply, and that we Bitcoin adopters won't have any other option. We will be trapped in the new digital slavery NWO. My perspective is viewed by many as extreme and paranoid.

For next week or two, I think the tax ruling can deflate the confidence of some of the n00b investors who bought at $600 - $1000 if the price breaks down through $400. Capitulation would then come when they lose resolve to hodl. I could be wrong about this bottom call. I have presented some ways of looking at the chart of adoption to support my short-term perspective.

I also presented a new theory of the adoption curve being log-logistic instead of logistic. They key distinction is the rate of adoption would be declining since the launch of Bitcoin and not after 50% have adopted. The chart of n seems to support my view, but (from eyeballing it only) there are not enough data points yet to reliably conclude.

Because of my negative view on the potential outcome of Bitcoin on us, I have a very bad taste in my mouth if I buy BTC as an investment. I feel like I am a traitor to humanity and I would be better served to invest my time in an alternative instead. So it would take a very low bottom price to maybe cause me to potentially incriminate myself (assuming totalitarian effects of debt crisis subsequently emerge). I realize I am being somewhat irrational if my goal is to maximize return on capital. Also no man is an island.

I suppose I am not appreciating Risto as much as I used to because he preaches what I believe to be the NWO coin, and he uses hyperbole such as claiming it is at a fraction of adoption of world's population as if he can be sure how Bitcoin can morph to be compelling to masses. The only way I see it doing that is with government blessing. And this outcome is not the way investments usually work. Yeah it is always "different this time". Yet I am trying to not let this affect my feelings about any person. Frankly I need to do less talking and more working. (Mea Culpa)^1000000.

Correction: Note if I remember correctly Risto wrote 99.5% of adoption remaining, which would mean 200 x 2 million = 400 million target. Actually that is not too far from my expection of the current white male demographic target market. That is qualitatively not mass adoption by the entire world. That is 1 in 17 people in world. So I am not clear if Risto is arguing for mass adoption as a currency or for white male adoption as an investment bubble? His numbers are straddling the two. My expectation is either Bitcoin will top out as an investment bubble at up to one or two hundred million, or it will be prodded by the government to become the digital fiat. I don't see another outcome for Bitcoin, because I see no relevant development at all on the block chain protocol.

Certain developers who you know their name spend more time meeting with the CIA and the Council on Foreign Relations than developing the protocol improvements.

Since when should a programmer be a political liaison  Huh

Fishy smell.




Please don't ignore the question.

...

Do you really think the government is going to give up its control over money?

I think this is a very good question, and I think the answer is no, they will not give up control over money. At least, not on purpose. So in my mind the question becomes: does the government regard cryptocurrencies as a threat to their control over money? A few years ago I might have predicted yes, but recently I have been leaning more towards no, based on less-than-hostile comments from various people like Ben Bernanke, Janet Yellen, Alan Greenspan.

Propaganda. Have you followed what Larry Summers said? They want digital currency so they can easily confiscate. The establishment is supporting Bitcoin because they can more easily track where all the money is.

....but bitcoin is not as high on that list as early enthusiasts (like me) used to think. In an ideal world, bitcoin will not topple the central banking system, something else will; and when that happens, bitcoin will save us all from chaos. I am sure my thinking on this question will continue to evolve.

It is very high on their list if it can grow.

They are trial ballooning different ways to bring the world onto a digital ledger so they can confiscate by pressing a button. Off chain on Bitcoin will be the mechanism to achieve this control.

They have nothing to fear from Bitcoin, because one pool already controls 50% of the mining. They could easily blacklist coins tomorrow if they needed to.

Now they just to manage their baby well to keep you all supporting their desired outcome of slavery.

Proof is in the facts. Bitcoin is not decentralized. You all are controlled by propaganda. The mining is already controllable by the government.

The key now is to manage it so you all don't wake up and move to an anonymous coin. To keep you all locked in by your greed and the thought the largest market size is best.




The less totalitarian governments (I include the US here) have no immediate plans to do any crazy-ass confiscations. But, if and when they decide to borrow a page from FDR ... it will be too late. Bitcoin will be entrenched.

The head of the USA Treasury department that oversees FinCEN has said in recent interview (have a link to it on my thread) they are monitoring adoption very closely. He specifically said that government oversight will increase if it becomes possible to move large amounts of money with Bitcoin and/or you can live by spending only Bitcoin. And that was only the financial crimes division. He said other departments were watching it with other mandates. This will not fly past their radar. He specifically mentioned anonymity as a threat many times. He also said they have people tracking the block chain.




The other near-term implication of the tax ruling is the margin call on miners who have to get cash before April 15.

Ditto in China apparently with April 15 deadline to sell and get out before exchanges close.

So we have perhaps persistent selling for next 2 weeks.

About the tax planning+timing issue. You just don't get it. Normal people already have no incentive to use Bitcoin and now they will really stay away from it. Why fuck with the hassle? Most people don't even know what a Schedule D is.

New software? Have you tried using H&R Block? I do every year, and they are the experts on simplification. My ex can't figure it out. I have to do her taxes this week.

Do you realize how stupid Americans are? They voted for Obama.  Cheesy

None of that affects the fundamental adoption by fanatical white males, but it is enough to bust the bubble run we've had and cause capitulation among all the weak hands.

And I think there are a lot of newbies that bought at $600 - $1000 who are sweating it right now.

Then there are those who are sure it can't go lower than $400. Some of them might capitulate as it breaks down from there.

We don't have the system of Sweden. IN the USA, everyone is afraid of the IRS. Or at least they don't want to add hassle with IRS just to use some stupid technobabble money that they don't need any way.




http://www.wired.com/2014/03/bitcoin-currency_martin/

Bitcoin Is Pointless as a Currency, But It Could Change the World Anyway

Quote
Why Bitcoin May Be Different

If history is a guide, it is here that bitcoin’s real potential lies: in its hybrid payments technology. As Europe’s medieval merchant-bankers proved, a brilliant new means of recording and verifying money transfers can indeed be a revolutionary event — not just in economic, but in political terms.

The existing, bank-based payments system is expensive and antediluvian — but also profitable and therefore jealously guarded by its powerful owners. Other technologies co-exist — such as cash payment face-to-face, or the developing world staple of hawala for international transfers — but they cannot seriously compete with banks. If Bitcoin’s technology is as cheap, as scalable, and as secure as its advocates claim, it may be different.

That last point, of course, is crucial. One reason that cash, that most archaic of payments technologies, still exists, is because it really is anonymous. Anonymity in transactions can be abused, of course. But it remains a basic civil liberty. Payments systems that use ledgers rarely offer the same assurance. Efficiency and economy are nice to have: but not at the cost of our right to privacy.
If history is a guide, it is here that bitcoin’s real potential lies: in its hybrid payments technology.

It was thirty-five years ago — long before bitcoin, the internet, or even the Macintosh — that the French philosopher Jean-Francois Lyotard warned that “the computerization of society…could become the ‘dream’ instrument for controlling and regulating the market system, extended to include knowledge itself and governed exclusively by the performativity principle.” An unreasonably dystopian vision, perhaps, given the enormous increases in prosperity and individual freedom that the web has brought. But it is only now that computerization is transforming money — the most basic institution of all in our market societies. So it is a dystopia we must make all the more certain does not become reality.
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A wallet that tracks your fiat cost base is important to develop so that U.S. people can pay taxes, but "discussion" about it among people who don't have the capability to make it (not to say it is difficult because it is a standard requirement for enterprise accounting since 1800s) is moot.
The issue is not just record keeping and calculation, but also planning and timing. The timing on planning interferes with the timing-fungibility of money. This is one of the reasons why investments are not money.

He missed the point. If everyone has to factor the timing of tax planning into the timing of spends, then money sometimes loses the main reason it existed, which was to remove the gridlock caused by barter due to mismatches of the timing of what trading parties wanted to trade. For example, you want to buy that $1000 item, but this would move you into a higher tax bracket for the year, so you must wait until after Dec. 31.

You set up your wallet software such that it automatically spends the last earned coins, which makes it a wash generally (or yields a small gain for which you need to pay taxes and be happy that you get to keep about 60-90% of the purchasing power that would have been 100% lost to inflation in the case you had been using USD instead of Bitcoin). This is similar to using currency.

If you are spending more than you earn, then your wallet spends the coins that were accumulated earlier, in which case you suffer a larger tax hit. This is similar to selling your investments for profit, and paying taxes.

Can someone else explain why this is the end of Bitcoin because I fail to see it?

You still don't get it. It may have nothing to do with minimizing BTC gains.

The issue is that tax law is complex. For example there is a $1000 Tax Credit where if you earn less than a certain amount or more than another higher amount, you don't get the credit. So it happens that you are ready to spend BTC on Dec. 23rd for Xmas gift, but it would push over the bracket and you lose $1000. So you need to decide to not spend until Jan 1 (much too late for Xmas). Thus Bitcoin wasn't money for you.


I never had to do that with dollars."  THAT'S BECAUSE YOU HAD NO GAINS BEFORE.

Read my post above this one, so you can have an epiphany.

The issue is that gains impact tax brackets and credits and all sorts of tax planning.

So you can't just take all the gains you can get.

You have to restrict yourself to scenarios.

This ruins the timing of being able to spend money when ever you want to.

At least this is how impacts some people. Maybe your tax situation is different and you take all the gains you can get, because you are in an investor class. But the common man is not. He has all sorts of things to balance, such as reporting his unemployment assistance, tax credits, solar installation energy credit, alternative minimum tax, etc....
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sgbett, perhaps we may find we agree more than we both realized on our initial exchange.

I don't view this as one aristocratic lineage in control. There is much competition and failure amongst those who vie to capture the power vacuum of democracy. And they may fail entirely during epochs, e.g. the Dark Age returned it to feudalism so warlords had more power than Kings.

Rather I think the NWO is the natural evolutionary outcome of human desire for collective governance. This power vacuum of democracy forces centralization of power.

I covered this process in more detail (made an analogy to organisms in a Petri dish) in my essay which CoinCube referred to in his Economic Devastation thread:


In any case, this is why I am trying to eliminate (or reduce is more realistic) the ability of society to tax. I think that is the only way to break free from that power vacuum and arrive at a society based on free market competition.

There is much fear and misunderstanding from readers who think this would be worse. For example they conflate crony capitalism with the free market, etc..

This is all covered in great detail in my past writings on this forum. And I don't have time to repeat the discussion again.

Hope that helps our misunderstanding and apologies for losing my cuth upthread.

I am hoping CoinCube will write a book on all this, because I am obviously not patient and articulate enough to prevent misunderstandings.

P.S. perhaps you can detect from my writings today, I am not feeling ill today. Happy productive day and I can concentrate.


Add: I forgot to insert this motivation in one of my posts today. If we become wealthy, we can avoid the terrorism tsuris when we travel. A free market is developing to serve us.
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If you feel the need to comment on this post, you can click the link to the following thread to reply there. For the moment, I am discouraging replies by keeping this thread locked because I am trying to not get involved in long debates. Have work to do.

Can you have perfect trust with perfect anonymity? Or are they dynamic dualities
I'm having trouble conceiving how trust might work with perfect anonymity and vice versa

Let's differentiate between anonymity and privacy.

Anonymity means that no one can know some aspect of your identity, e.g. you might decide to reveal the name of your company but never who runs that company.

Privacy means only some people know some aspect of your identity, e.g. the merchants you buy from may know your account number but otherwise not public unless revealed by one of those merchants.

Anonymity is a more secure form of privacy because there is no trust involved, because no one knows what you have not revealed to anyone.

So I can choose to trust a merchant who reveals its name and stakes its reputation on that name, without needing to know who owns that merchant. The key here is that prior bad outcomes don't follow the owner to new ventures. So history of performance of a merchant becomes paramount.

If I don't want to trust a merchant to deliver the goods, the merchant and I can agree on a 3rd party escrow agent with multisig on payment (both I and escrow agent must sign for payment to be transferred to merchant). Again no need for the escrow agent to reveal his/her true name rather the historical reputation of a pseudonym will suffice.

Ditto on contracts, arbitration agents can be chosen on contract signing.

In short, our personal identity can be orthogonal to our business performance identity.

This allows us to fail and start over again. It is very forgiving. And it keeps the government, conniving attorneys, and the Kangeroo court system out of our business.
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And this is why ASICs suck and why we need cpu-only mining.

Meet the manic miner who wants to mint 10% of all new bitcoins

Recently one pool surpassed 50% of the total mining power of Bitcoin. As well, the individual miners are a just a few people. The rest of the world is left out.

This makes it very easy to regulate and control the transaction processing in Bitcoin. Blacklisting of coins could be easily implemented by the government. I warned about this a year ago.
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The discussion on China is intriguing. You all appear to be looking at it only from the perspective of Bitcoin. You all appear to continue to have this tunnel vision which is forced on you by your vested interest. I think we need to fight our vested interest in order that we don't miss the bigger picture.

Am I correct that Chinese masses are more open to black market investments than Westerners? They have this shadow banking underground sub-economy wherein relatives refer each other to non-standard investments.

Thus is China Inc. forced to regulate more strongly because unlike in the west where Bitcoin appears to mostly limited to white males who hate central banking or high tech merchants who hate credit card payments, in China perhaps they see the seeds of a mass movement towards Bitcoin, i.e. not as a currency for normal purchases but as an investment vehicle and an investment currency?

Bear in mind that Chinese haven't been able to easily invest outside of their country and their culture really values investing excess income and the participation rate in the stock market and condo bubbles was apparently very high. Also the real interest rate paid on savings accounts is even more negative than in the west, so this forces the middle class to invest instead of save. Also the mainstream investment bubbles are popping already (not yet in the west). Michael Pettis's (mpettis.com) main point is that China's consumption share of GDP is 38% (with investment share at 58%) whereas normal is 50% and in the USA it is 70+% (thus investment share is much lower).

The differing regulation might tell us the different adoption demographics in each country. This might be a very insightful proxy.

If that assumption is correct, then apparently the Communist party are pushing Bitcoin further towards the underground economy (which I am hoping becomes the dominant economy).

This seems to play perfectly towards decentralized exchanges and anonymous coins.

I had already pondered that China (Asia) would be potentially the largest market for an anonymous altcoin due to the extremely high levels of corruption and bribery, e.g. Philippines still has a bank secrecy law for domestic citizens (for now although the IMF et al are working to get it removed ... no conspiracy eh?). Note as a foreigner the bank secrecy doesn't apply to you, the Philippines already has agreements with for example the IRS to share data on any foreign owned local bank account.

Interested to read your thoughts. Hopefully someone can dig up some data.
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Discussion going on in another thread:

https://bitcointalksearch.org/topic/m.5971226


Anonymint - Don't bother with your standard (arrogant) "you don't understand" response just because I don't lap up your every word.

Breaking News! Smoking gun! Eyewitness account released by well known Jim Rickards (former intelligence agent turned analyst and author of best seller, Currency Wars) who was in the room when the CIA was doing the insider trading on option puts against the two airlines involved in 9/11. Corroborated by Max Keiser who was talking to Cantor Fitzgerald brokers who told him they were betting short against bombings and airplane attacks imminent on New York.

So STFU mofo! You dumb ass white boy slave.

You've had all these prior examples of false-flags, e.g. Pearl Harbor, Reichstag fire, etc. and you see the clear motivation for 9/11 was the Patriot Act and subsequent executive orders and laws that have created all seeing police and tax slavery state exposed by Edward Snowden. Yet you still want to believe your white world isn't so corrupt as it is. You want to live in your fantasy bubble.

The only thing you might understand is "Mooo. Mooo".

Arrogance? No. Just don't want to join dumb ass fools. I prefer humble, but am I supposed to just fall into the queue with you chattel.

It has nothing to do with lapping up my word. It has to do with you being too lazy to actually research. If you did the research, you would understand why it is physically impossible for the steel buildings to entirely collapse from fire and debris. Add to that free fall velocity of collapse, meaning no resistance. The only way for WTC7 to collapse the way it did was demolition. And if you are not an engineer then maybe you don't understand that, but we engineers understand why. And yes in fact the building was evacuated several times for long periods leading up to this. And in fact there were dozens of workers in the elevator shafts of the twin towers (where the structural steel beams were) for many weeks leading up to the demolitions. If you did some research and capable of understanding engineering and science, then you would know this.

This is another example of what I was explaining upthread (about Bitcoin's white male nerd demographic) wherein we can be separated from the masses who will never be able to comprehend the engineering about 9/11 and so will believe the government's impossible concocted whitewash (or in Bitcoin's case masses are not adopting, only white males against central banking are). We see the same ignorance of science or facts mechanism in play with all the current things white people are fooled into fighting for (to do what the elite want), e.g. Bitcoin, man-made climate change, discrimination, feminism, environment, etc.. The elite lull you into your comfort zone where you can be manipulated with emotional propaganda, e.g. "save those cute polar bears or cute little African kids".

Cantor Fitzgerald traders were insider-trading the options on the attacks that killed them.  Unbelievable.  Insider information provided by Jim Rickards in his new book The Death of Money reveals the CIA was aware of trading on targeted airlines leading up to 9/11.  Max Keiser corroborates this with his own experience.  Amazing.

https://www.youtube.com/watch?v=sI0GUdYwS68&list=UUvsye7V9psc-APX6wV1twLg

People always ask why 9/11 whistleblowers don't come forward.  This is why.  They are afraid to speak out too soon.  Many have been killed.  But enough people are out there, keeping themselves in the public view so that they can safely reveal their piece of the puzzle when the time is right.


If i can´t proove that Kennedy wasn´t killed by a talking green horse it might as well be as true as every other explanation!

I am just really curious if you understand the engineering of a steel beam structure?

I mean you speak with such venom and ridicule, then certainly you must be knowledgeable?

So can I give you some test engineering questions and expect you to answer?

Don't get shy now fonzie. I remember you as an outgoing cool guy from Happy Days.

Can you tell me how fires and debris could bring the Eiffel tower down vertically in free fall entirely with not any portion standing nor falling off center?

Add: I will have to go restudy my reasons from before if you decide to get into this with me. As I remember offhand when I had studied it before the finite element analysis of the NIST model made assumptions which were impossible.

Basically it boils down to common sense. You can't get domino failure across a lattice structure and free fall.
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http://www.youtube.com/watch?v=MGsalg2f9js#t=499

Quote from: Mark Suckerberg
Before most people were anonymous...

http://www.youtube.com/watch?v=MGsalg2f9js#t=813

Quote from: Mark Suckerberg
We succeeded because we cared more about doing it...
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AnonyMint, what are your thoughts on the development of ZeroCash?

https://www.youtube.com/watch?v=l7LSSE0bRRo&feature=youtu.be

I was aware of the ZeroCash innovation over ZeroCoin with more details to be forthcoming May 18, but your video added some new details for me now specifically from the following linked time forward to the end:

https://www.youtube.com/watch?v=l7LSSE0bRRo#t=492

Both ZeroCash and ZeroCoin have the following weaknesses:

  • The don't make your IP address anonymous, i.e. others can still see that your computer sent a transaction (and Tor and VPNs are honey pots). The government has the law to compel you to reveal your passwords or throw you in jail if you don't.
  • They require we trust someone to generate the master key and never use it maliciously. If the master key is compromised, unlimited new coins can be created and we won't know which coins these are (anonymity is not compromised), thus the entire crypto-currency comes crashing down. I think this is too much of a risk to put in a currency. Would you trust you money if you can never prove if someone is creating more coins? In other words, we will never know what the coin supply is. That for me is a step backwards to fiat central banking. They may claim they will generate the master key at a ceremony where it is destroyed in front of all viewers, but there is no way to know that the computer used isn't somehow backdoored. The NSA even has means of using electromagnetic sensors to eavesdrop on air-gapped computers.
  • Their ZK (zero knowledge) system uses bilinear pairings so this means it is vulnerable to potential secret NSA cryptanalysis and any future quantum computer. I would much prefer we use Lamport signatures on the block chain and helped generalize an improvement for them recently. I haven't yet seen a ZeroCash type zero knowledge employing McEliece binary Goppa codes which are thought to be resistant to quantum computing, even then I would still prefer Lamport because very unlikely cryptanalysis can ever break it.
  • Even with ZeroCash's improvement to 9ms per transaction verification speed (ZeroCoin was 400 - 500 ms), this can't scale to Visa scale without requiring that mining be highly centralized. Bitcoin already has the horrific weakness that one pool controls more than 50% of the hash power and thus could blacklist coins...
  • It is brand new cryptography and often weaknesses are found in new cryptography. It is premature to put this on the block chain wherein if it is later broken, then it is too late to undo it and the currency potentially collapses. New crypto (especially this complex Pinocchio SNARKs stuff which is a higher order polynomial abstraction of Span Programs) requires 5 - 10 years to be fully vetted.
  • If ever the crypto is broken, all the historical anonymity is lost because it is sitting on the block chain.
  • It appears to be incompatible with a Mini block chain design.
  • There is no way to make mixed anonymous transactions indistinguishable from regular unmixed transactions.
  • ZeroCash adds 3 minutes to the transaction time (from time you click checkout) whereas ZeroCoin only added less than 1 second, and this is for all transactions unless you give up the anonymity of the transaction amount for ZeroCash so that you can do some of the transactions outside of ZeroCash (and do anonymity mixing only when you need to) in which case might as well do it offchain as I explain below.

Any way, the immediate solution to all this is to use ZeroCoin offchain (not ZeroCash because ZeroCoin is simpler, much faster to generate transactions, and open source code already exists) and decentralized (no risk of coin loss nor need to trust as with centralized mixers). More details will be forthcoming. The only feature that would be lost is ZeroCash's ability to hide the transaction amounts with Pour transactions, i.e. we'd be stuck with fixed denominations for mixing.

I'd rather see a conservative strategy and give time for something like ZeroCash to mature and solve the weaknesses I enumerated. In the meantime, ZeroCoin could be used offchain decentralized very effectively. So we don't lose much and we don't take the big risks. And we gain some other capabilities.
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I wanted to share this discussion from another sub-forum. Here is a link to the first post of the discussion repeated below:

https://bitcointalksearch.org/topic/m.5953406



P.S. I stand by my expectation of a revisit to $400 and probably a bottom under $300. The chart resembles silver's fall. Why? Because pigs get slaughtered in permabull markets (of tinfoil hat white males) where everyone wants to buy always.

All the things I've been warning about have come true.

http://www.theregister.co.uk/2014/03/28/bitcoin_china_pboc_ban/



Scenario analysis forward is there is a possibility that offchain services will increase mass adoption of Bitcoin. They might lobby the government for say an exclusion to capital gains for up to say $600 per year of gains due to transactions or say up to $100 per transaction. In return, they would offer the government regulators control over the offchain solvency. This could come in stages as Bitcoin transitions from an ideal of non-fiat, on chain currency to an offchain, fiat currency.

The early adopters will not gain from this (see quote below). The institutional players will. These white beta-males will be slaughtered once again by the collective system. The institutional players know how the game is played to manipulate the masses to the desired outcome so that control remains in the elite hierarchy.

http://armstrongeconomics.com/2014/03/27/obama-lagarde-destroying-the-world-economy-a-lethal-combination/

Agreed we shouldn't drop itBitcoin. We must push on and continue to improve our technological options. And Bitcoin serves an important function even if there were other options, e.g. it drives market awareness and provides a liquid unit-of-exchange for investors in the ecosystem including altcoins. This is a dynamic system. I am arguing to be open to the dynamism in spite of the lack of serious altcoins to date. There isn't only one scenario (false prophets lead you to that wrong conclusion). And it doesn't mean no one will retain some gains from the mess. As they say, "don't put all your eggs in one basket".

To win, we need the antithesis of top-down thinking, e.g. stop this monotonic thinking that we need one unit-of-exchange to get global economies-of-scale. The goal should be more akin to the bimetallic standard, a bifurcation (or perhaps multifurcation) is much more dynamic and dynamism is our strong hand against top-down control (read at my signature why top-down control can't anneal). Whether it happened by chance or was planned, Litecoin is a weak silver to Bitcoin's gold, i.e. it doesn't offer the common man some compelling strengths.

Peace.





- If the depopulationists ("TPTB") have enough power to finish off the intelligentsia, they don't need bitcoin to do it. Every totalitarian regime has found a way to quickly sanitize the population, fully without bitcoins, facebooks or anything. Just set quotas for the local psycho-sociopathic sheriff and go.

This wakes up the masses. They operate by more subtle means of deception, e.g. Bitcoin. The trick is to have people enslave themselves without knowing it. This is how the elite avoid losing their heads and retain control. Chaotic uprisings are very risky for them. They prefer nationalistic pride wars, where the foolish masses believe they are fighting for something justified (e.g. see the posters from WW2 in the USA, "let's go finish off them japs" and of course it was a false-flag honey pot trap called Pearl Harbor that caused the Americans to think this way).



The foolish white males think they are fighting for something justified with Bitcoin, while they've been deceived and are doing the elite's desired outcome.

The new memes include fighting for feminism, fighting for the environment, etc.. You see how offended this makes you feel when I say this? Because you are a slave who stopped applying the scientific method (for if you did you would understand certain natural facts) and replaced it with top-down controlled emotional propaganda.

- If they do not have the power for draconian activities, then targeting bitcoin owners does not give them much, but is a very great thing for the freedom people who get to tighten their ranks and perhaps wake up more and more people down the road.

No matter how I think about it, it looks like that the depopulationists have lost. I will have to write more about it for you to understand it,

No need to write more. You don't understand.




The problem with people like you are that almost all your theories assume one blatant falsehood - that there are super intelligent, cunning, strategic, and complex humans that pull the strings on society in some elaborate and complex ways.

And lucky for them most people are easily deceived like you, despite historic records showing that Pearl Harbor was a false-flag planned to get USA isolationists into supporting the war.

Despite the overwhelming evidence that 9/11 was a false-flag to launch all this tracking of everyone's wealth for the big $223 trillion debt implosion coming.

Despite the copious evidence that Anthony Sutton provided (see video below to educate yourself):

Regarding the illuminati fears... superstitious is the end of reason.

Those who confuse superstition with exquisitely researched facts have lost rationality.

For those who think there is no global conspiracy, you are apparently not aware of Anthony Sutton:

http://www.youtube.com/watch?v=xSVWXmZB1wc

Carry on slave, there is nothing I can do to help someone like you.




There are, instead, simply systems that have been created over the years as humans have fought for more "security" (another basic need) that now enable certain classes to have advantages over others. This is kind of a economic darwinian evolution of sorts. But the players who take advantage of these systems today act much more out of tactics than strategy.

And you give them WAY TOO MUCH CREDIT.

This is 100% correct.

Are there false flag events,behind doors conspiracies and all kind of other evil doings like Anonymint suggests ?  Sure there are.
Are there people in the "elites"  that think they are smart enough and strong enough to do some of these things? Sure.

But a worldwide global conspiracy run buy a small group of people capable of long term thinking and execution of a plan ( 100 years ?). No.

It doesn't matter the result is the same regardless. The top-down system is how I described and the people are slaves and commit to things that enslave them more.

The propaganda is actually in control. The purveyors of it adjust as needed over 100s of years to keep the masses confused. The purveyors compete with each other and get replaced by those who can deceive better in each new epoch.

Think about it like this. The purveyors of the propaganda don't have to be omniscient about the future, they can change the propaganda at will.

Example is their global warming temperature predictions utterly failed, so now they are changing the propaganda to "man-made climate change" and trying to blame global cooling on it.

The conspiracy is not a grand one of being able to predict the future, rather it is the power vacuum of top-down control and the ability of propaganda to defeat propaganda.

Truth is never going to win for the collective.

Truth and knowledge are an individualized phenomenon. Refer to the "Information Is Alive!" blog entry you can find from the link on my signature.

There isn't one truth, rather everyone's truth is customized to their situation.

Thus collective anything will always be a destruction of individual fitness.

This is why anonymity is so crucial. We used to have it with cash and postal mail, now we are losing it.




But a worldwide global conspiracy run buy a small group of people capable of long term thinking and execution of a plan ( 100 years ?). No.

If one did not exist by design, it would arise by an evolutionary process.  It is an ecological niche in ideological space, and a rich one.  It will necessarily be filled.

Also, you overstate the case to create a strawman.  No actors need more than a short planning horizon in order for a community to persist.  

Clearly there are open conspiracies of vast scope which have been enormously successful for millennia.,  Why should there not be some which are clandestine, perforce, since their culture, their deeds, are so offensive to the mainstream that they would be destroyed but for stealth?

Clearly there are also many spurious, fantastical, or perhaps supernatural, conspiracies for which no material evidence will ever be provided, and thus which do not positivistically exist.  But the historical evidence of many conspiratorial communities is abundant, and among them some are persistent.  The degree of coordination among them is probably not great.

Supporters of a depopulationist agenda will act according to that agenda, whether by plan or by coincidence.  No conspiratorial hypthesis is required in order to oppose them in that agenda.






aminorex, compliments to your superior communication skills. Okay back to TA now. I am done. Thanks for the discussion all.

The reason he hates sin so much is sin really is anything that causes harm to others.

What do you do when you can't do anything without harming someone. It is impossible to never harm someone due to the Butterfly effect. You are basically asking for gridlock and communism.

I call BS on that. Although your intentions are good, the recurrent outcome of your stated ideology is horrific genocide which is the antithesis of your intention. As far as I can see, the Bible doesn't talk about not harming (although harming shouldn't be and helping should be an individualized goal but not a global requirement, e.g. I can help someone individually whose situation I know), rather it pushes the value of individualism and focusing on what you can do rather than judging others (c.f. Matthew 7). The point of the 10 Commandments is that individualism is destroyed by disrespecting property rights. Then you need a government (idol) to enforce (collective) theft.

When the Bible says there is only one King and only one law, what it means is a one-on-one relationship between you and your creator (c.f. Matthew 6:5). For scientists and atheists, let's look at this from the perspective of knowledge spawns accretively from individual fitness to individual situations. I got more in depth on this when I was working out the type theory of computer languages (yeah I know you wonder what in the heck would type theory have to do it). Here is the link:

https://groups.google.com/forum/#%21msg/scala-debate/vysv97J0xok/ikiNtik33QsJ
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Apologies I am keeping this thread locked for now, because I don't have time to reply to others at this time. Maybe in the future I will open the thread again when I have more time.



I see in the Bitcoin news that others still don't get the point of what I wrote in my prior post.

http://www.forbes.com/sites/timworstall/2014/03/28/the-taxation-of-bitcoin-wont-mean-that-bitcoin-fails-as-a-currency/

Quote
Does that mean that the two $20 bills are not fungible, each one exactly the same as the other?

No, it doesn’t, not at all. For they are exactly the same at the time I want to spend them: each one will get me exactly the same $20′s worth of goods. It is in the earning of them that they are not fungible: a $20 bill earned from capital gains is more valuable to me, after tax, than one earned through wage labour.

So it is with Bitcoin. Each and every Bitcoin will, at the moment I spend it, purchase me exactly and only 1 Bitcoin’s worth of goods. So Bitcoin is entirely fungible when it’s being spent. It isn’t fungible as to where and how and at what price I earned it, this is true, but then the same also isn’t true about our $20 bill.

And I think we do all agree that a $20 bill works pretty well as a currency despite this problem?

He missed the point. If everyone has to factor the timing of tax planning into the timing of spends, then money sometimes loses the main reason it existed, which was to remove the gridlock caused by barter due to mismatches of the timing of what trading parties wanted to trade. For example, you want to buy that $1000 item, but this would move you into a higher tax bracket for the year, so you must wait until after Dec. 31.
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I had been pointing out this problem over the past weeks and months (remember upthread I pointed out that automating this computation was not realistic):

http://www.theatlantic.com/technology/archive/2014/03/why-bitcoin-can-no-longer-work-as-a-virtual-currency-in-1-paragraph/359648/

Quote
If I have to figure out which particular Bitcoin in my wallet I want to spend and what the tax treatment will be, Bitcoin just doesn't work as a commercial medium of exchange.

But that article points out another problem with the fact that Bitcoin is not untaxable as legal tender:

Quote
The price at which a particular Bitcoin was acquired (and this is traceable) determines the capital gains on that particular Bitcoin when spent.  If I spend Bitcoin A, which I bought at $10, but is now worth $400, I’ve got a very different tax treatment than if I spend Bitcoin B, which I bought at $390. […] This means Bitcoins are not fungible, and that makes it unworkable as a currency.

The reason this destroys fungibility is that people will need to think about tax timing and implications when spending money, i.e. they have to bind their money to their total tax planning.

That is the antithesis of money, because you reduce the degrees-of-freedom and remember the entire point of money was to eliminate the gridlock of barter and make it easy to transact without the requirement to find matching scenarios.

This is major! This just destroyed Bitcoin. If you don't understand this, you really better take some deep thought time.

Actually I think I may have pointed this out last year in the thread by deisik in the Economics forum.

You are coming to my bandwagon whether you like it or not. Because I saw these problems early and began formulating the solutions many months ago. So am quite far along already.

Those who were friendly to me are now being rewarded and handed the resources to be leaders, because they showed that they were astute and possess a group-think filter so as to think out-of-the-box. And they now know something you don't. Wink
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On the recent IRS ruling that BTC is property subject to capital gains on disposal of coins, and that miners must additionally pay income tax on the value of the BTC when mined, someone thinks being outside the USA will help but they are sorely mistaken...

The IRS has gotten it all wrong. All their statement will do is push onshore people to offshore services and companies where they cannot be taxed. I live and work in an offshore country where there are no capital gains taxes and cryptos aren't taxed in any shape or form. I'm already seeing a rise in what can best be described as "offshore crypto farms"...

As a former Treasury official was purported to have said, "we will burn the fingers of the goldbugs up to their armpits". And he also said, "its our dollar and your problem".

http://armstrongeconomics.com/2014/03/24/the-real-conspiracy-the-imf-tax-agenda/

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Obama is on board fully with the IMF agenda to raise taxes substantially French style. The IMF has been behind the scenes going to every former tax shelter and threatening them to turn over data. They have hit the Caribbean islands right down to Panama. Obama has laced the Ukrainian aid with the IMF Poison Pill. The IMF wants a shit load of money to tear apart the global economy in search of unpaid taxes. The Obama Administration has conspired with the IMF behind closed doors and entirely out of the Congress to pursue this secret agenda. They are on the path to destroy Western Civilization as we know it. This is no joke.


...thus we headed into a crazy period where the governments will try to fund the $150223 trillion global debt bubble [4] by hunting down all private capital (G20 announced a database for this today, NSA will contribute and note this is the bankster business model for them to own everything), then as Bitcoin is taken over top-down then the alternative coin with the above features will take over and become the surviving private sector. For this new virtual economy...


I hope you also understand that FATCHA will compel the nations of the banks in all nations to comply and remember the developing world is short the dollar due to massive bond issues in dollars to the ZIRP carry trade. The USA is still in control of the world as we go into this implosion 2016ish.


My understanding is FATCHA does not require us to declare assets we hold overseas which are not in an "account", i.e. Nestmann said we probably do not need to report bullion that we hold in our homes, yet we would need to report (even allocated) bullion in any overseas account.

Are Bitcoins a private asset or an account? And where do they reside in our possession or in the public ledger? And where does the public ledger reside?

The problem is that governments (IRS in particular) invariably interprets laws in the way that brings them the most income. So I think they can argue (in their Kangaroo rigged courts) that since the public ledger resides in at least one computer overseas, then it is reportable under FATCHA.

Okay so no big deal right? Just report it. Well what about all of you who did not report on time already and held an account that was ever worth more than $10,000? You are already liable for 5X the maximum value of the unreported account in penalties plus 5 years jail time.

And reporting marks us in the IRS computers as "potential tax avoiders". The chance of audit drastically increases.

This is one of those issues that caused me to think it just isn't worth investing in Bitcoin without 100% reliable anonymity.

I am eager for someone to refute my analysis on this.


Disclaimer: consult your own tax attorney, I am not providing tax advice, merely discussing this issue.





Regarding the illuminati fears... superstitious is the end of reason.

Those who confuse superstition with exquisitely researched facts have lost rationality.

For those who think there is no global conspiracy, you are apparently not aware of Anthony Sutton:

http://www.youtube.com/watch?v=xSVWXmZB1wc


See below on what the former IRS Commissioner told Aaron Russo when he was making the movie about there being no income tax law in the USA.


Martin Armstrong's position has been there is no proof of a global conspiracy, and he doesn't speculate. That is an acceptable position, except that he continues to assert there is no global conspiracy, which is thus speculation, since he doesn't have any proof to support that assertion. So I urge him to stop being disingenuous and appearing to be a tool of the elite towards a one world currency which he has proposed as a solution to this crisis.

As for proof of a global conspiracy, we got a big chunk of proof from Aaron Russo as follows.

https://bitcointalksearch.org/topic/m.3497509

Quote from: AnonyMint
As a Treasury official said some decade ago about the time he also said, "we will burn the fingers of the goldbugs up to their armpits", it has always been the plan to go after the millionaires and steal back all their gains to the elite (skip to 36:35 min of the linked video) who run the fiat system. And Bitcoin is an amazingly great tracking tool to aid them in this coming global confiscation via taxation of the rich process. Note the elite super rich are always excluded from such gestapos.

Former (Jewish?) IRS Commissioner and the man who wrote much of the tax code law, said to (Jew) Aaron Russo (producer of Bette Midler, The Rose, Trading Places, etc) in Ashkenazi Jewish Yiddish language, "nothing will help you". Skip to the 37 min point in the linked video.

The elite know exactly what they are doing by launching Bitcoin via the fictitious anonymous identity "Satoshi".

Nick Rockefeller told Aaron Russo what the goal is.

P.S. The Ashkenazi Jews have a much higher average IQ of 117, and many elite are Ashkenazi Jews. The says nothing against all Jews however.

Also it is rather incredulous to discount the fact that all the transition to AML, KYC which is enabling this hunt for capital which Martin admits and writes about, was engineered starting with 9/11. And it pretty difficult to discount that 9/11 was not done by 16 guys on camels and was rather engineered by ... (much circumstantial evidence points to Dick Cheney as key cog in the wheel). They evidence that the buildings were not downed with airplanes is overwhelming, even 1000s of architects and engineers have signed a petition saying the government's story is implausible. And this terrorism false flag farce is being used to keep the world locked into a non-default increasing debt trajectory with a hunt for all capital. Precisely what is necessary to drive the world into a severe economic contagion which can usher in a one-world currency type result after destroying the nation-state concept.

I am not sure there is a global conspiracy. And it doesn't really affect my actions nor goals any way. So I don't really care. But I am skeptical of a guy (Armstrong) who says speaks against decentralized cryptocurrencies, speaks for a one-world currency solution (with national or regional currencies floating relative to it), and who speaks against the possibility of the global conspiracy without any proof.

Just because Armstrong is aware of manipulations at the lower-level echelon of the NY bankers club is not proof that the higher echelon doesn't exist. Logic 101 really.


Update: Armstrong writes today about the $2.3 trillion missing from Pentagon accounting and paperwork was conveniently destroyed at the Pentagon on 9/11.
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Cross posting an excerpt from an ongoing discussion in another thread...

...

From my discussions with various community members, I think the general feeling is that hashers are paid for the services they provide to a mining pool whereas miners create bitcoins based on their own initiatives and the acceptance of their efforts by their peers.

...

Based on existing laws, I believe miners (but not hashers) are free to recognize gains on any coins they create when a gain is realized, and a court challenge would rule in their favour.


Yes, I agree with this observation. I have legacy coins that I CPU solo-mined back in 2010. I figure my tax basis is essentially zero dollars for these.


I emphatically disagreed as follows and if you don't rush to report, you are just increasing your eventual pain. And thus selling pressure coming now before April 15 filing deadline as miners scramble to sell coins to raise revenues to pay taxes that are due immediately! What ever China news you all are referring to may be incidental.

The coinbase transaction sends you coins from the network, so this must be reported as income.

When you dispose the coins, you must report capital gains (or loss).

I saw my accountant long ago and discussed Bitcoin at length, and our assumptions based on existing law were pretty much exactly in line with this IRS guidance. 

Can you explain to me the logic behind the taxable event of block creation by miners? AFAIK, entities that mine physical gold don't have a taxable event when they pull it from the ground, do they? Isn't the taxable event when they sell the gold?

My rationale is the network of all users paid the coins to you in exchange for you providing a mining service.

Besides I wouldn't risk it on some flimsy interpretation you prefer, because fees and late penalties could be tacked on later. The IRS will always rule for the interpretation that nets them the most tax soonest. Good luck trying to defeat them in tax court.

Btw, I had this interpretation immediately upon learning of Bitcoin. It was obvious to me, well maybe that is because my sister and grandfather were both CPAs, my father is an attorney, and I self-taught myself double-entry cash and accrual accounting and tax accounting (when my sister and grandfather died).



it would mean that mining on P2P pool imposes no reporting requirements on you, whereas mining at a pool like GHash.io does.

Note my point above applies also to mining on a P2P pool. Also I hope you are aware that P2P pools are vulnerable to "share withhholding attack" (don't conflate that with my "transactions withholding attack") which was detailed in a whitepaper by Meni Rosenfeld in 2011 and Meni Rosenfeld's oblivious share fix couldn't be applied to P2P pools:

https://bitcointalksearch.org/topic/m.3715641
https://bitcointalksearch.org/topic/m.3719385

So for an anonymous coin you can forget P2P pools, because they would surely be attacked by the governments.
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Cross posting an excerpt from an ongoing discussion in another thread...

1. I generally disagree with this one. Never in the history of mankind has the average Joe won in mass, IMHO. Somehow I don't believe it will magically happen now that Bitcoin is around.

Bitcoin is a technology. Most every time the benefits of a new technology, properly applied, have benefited the average Joe sooner or later.

Risto it appears you excel on "counting" games, but when it comes to logic it appears you over generalize (or choose the simplest understanding for efficiency) and this causes you to make mistakes. I suck at board games but I appear to excel at seeing all the conceptual issues in full range of depth and extracting the generative essence. Our brains appear to be wired differently. That appears to make you better at finding arbitrage opportunities than me (but gives you no advantage in timing market moves), but my skill appears to make me a superior visionary than you. I don't excel mentally with anything that requires me to interact with my external sensors. I excel with short I/O tape and then let my mind run on it, although normally my reading comprehension is very high but don't expect me to interact in parallelized real-time with my I/O i.e. that game you mentioned upthread (I tried while getting sleepy and only managed 16000 after several tries perhaps I would do better if I put some thought into how I should be calculating the move probabilities on that grid, but it appears to come naturally to you?).

I had the following insight before, but no one prompted me to share it. It is difficult for me to keep track of all my ideas.

Contemplate that the technologies which benefit the masses are those which have individual scope; whereas, those which subject the masses to greater extortion via the collective have collective scope. For example, washing machines have only individual scope and were rapidly (logistically) adopted across the breadth of the developed world. Whereas, nuclear power and nuclear weapons can't be individualized and have further enslaved us in the collective.

The internet (networking in general) is a mix of individual empowerment and collective enslavement.

What does anonymity do in theory? In theory it makes it possible to have all the individual empower without any (most) of the collective enslavement.

This is why I am so obsessed with making sure we have anonymity, not just in our money but in every aspect of the internet. The technology I am working on is not only applicable to crypto-currency. I want to change the entire internet to make it asymmetrically more of an individual empowerment.

Throughout history we had anonymity in our money because it was physical. Now Bitcoin comes along with a fully traceable public ledger and we give up asymmetric power to the collective. This alarmed the shit out of me!!!!!!!!!!!!!!!!!!!!!!!!!!!! I said to myself a year ago, "hell no! not if I can do anything about it".

In geek speak, "you just don't get it".

The other asymmetric problem specific to Bitcoin is it uses ASICs thus mining is in the hands of the few, and also there is nothing in the design which economically discourages large pools thus one pool now controls more than 50% of the hash rate. Bitcoin has already fallen and can NEVER be a benefit to the individual. Sorry! Just wishing it to be not so is foolish. I don't have a vendetta against crypto-currency, rather I am logically analyzing the situation. And attempting to fix it. I was frankly initially shocked that you were so dismissive and uninterested (and others even attacked me for wanting to improve the situation), but then I realized it is because you guys don't think on a deep level as I do or you are blinded by your speculative fever and vested interests as owners of Bitcoins. And thus you walk right into the honey pot so designed to trap you. (And there are both technical and political reasons improvements to these issues can NEVER be back ported into Bitcoin. Sorry!)

P.S. the other fundamental driver of asymmetric power of the collective on the internet is the client-server model instead of P2P.

It is a fact that a physical multifurcating network is more efficient than a fully connected mesh topology, i.e. running a smaller pipe from the water district to each house increases the cost and back pressure than running a main line and then multifurcating branches off it (cross-sectional area reduces by the square of the proportional diameter decreases). However, the transfer of data on the internet does not obey that physical law because we don't charge for data according to the path it takes. However the challenge is the efficient, redundant DHT storage and serve of data for a purely P2P internet. That is a more difficult technical hurdle.

P.S.S. I predicted a couple of weeks ago the IRS ruling would be what it is and that it would cause the price to dive. The post is some where in my public archives on bitcointalk.
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Miners are not bankers.  Miners are NOT the entire security model of Bitcoin (or any cryptocurrency).  Miners simply set the consensus ordering of transactions nothing more.   It would be the equivalent of showing which power companies supply power to the major banks and crying centralization because 90% of banks are now powered by less power companies than fifty years ago.

Control 50+% of miners, you can blacklist coins. True or false and why?

If the majority agree with that blacklisting (of illegal activity and theft of their coins), then the argument that it would cause the ecosystem to die is incorrect. Rather it would facilitate adoption by the masses.

OP's graphic is the result of a hierarchical system, cryptocoins are decentralized.

The masses use sites such as Coinbase and Mt.Gox. That is not decentralized.

In order to get instant transactions, chargebacks, consumer protection, etc. they will choose to pay from something like coinbase and Bitcoin the block chain will eventually be irrelevant.

Also the block chain is not decentralized. It is controlled by a few pools, and a very tiny % of the world's population who own most of the ASICs.
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US regulator hates anonymity:

http://www.bloomberg.com/video/cohen-regulation-will-support-virtual-currencies-WJJdkFdPTxemGaHivNvMhg.html
http://www.businessweek.com/articles/2014-03-18/if-bitcoin-remains-impractical-treasury-will-let-it-be

He also says:

  • They will regulate merchants if Bitcoin becomes widely accepted by them.
  • They are coordinating regulation with the G20.
  • At 47min, he says they will not likely be concerned with an anonymous coin which is only for virtual goods.

This is what I expected. They are focused on the tangible goods, industrial economy. They don't see a threat from commerce in the Knowledge Age. I think they will leave an anonymous coin alone until it becomes at least several $billion market cap.
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