Topic: Gold collapsing. Bitcoin UP. - page 458. (Read 2032286 times)

Well, Richard Brown does understand the spectrum of decentralization, at least (eg, he acks that Ripple is not like Bitcoin in terms of credible decen, etc). My own feeling right now, though, is that there's far less room for middle-ground projects (wrt level of decentralization) than people think (incl Mr. Brown). Essentially, I think people will begin to realize that if a system (eg Fedcoin) fundamentally cannot exhibit "pure" decentralization like Bitcoin, it might as well just be a centralized application and not bother with the blockchain stuff. Too many people think you can have both worlds, but I don't think that actually makes sense. All you get is the worst of both, not the best.

The other sort of decentralization you can do (such as with practical byzantine consensus - which was effectively solved in 1999) is for redundancy, not explicitly attack resistance or credible anonymous decentralization. So I think you get three main buckets that have utility longrun:

1) Centralized systems. Like fiat money.

2) Redundant systems, that run some sort of practical byzantine consensus (pdf) alg, or alt-consensus like Ripple. Something which doesn't make a good independent money at all (since its "rules" couldn't be considered credible), but which might be fine for some other uses. This stuff, to me though, is thoroughly in the not-that-interesting pile, since it basically amounts to an evolution in ways to redundantly link server clusters. That's it. The guys running HyperLedger and Eris will spout off about how much more it is, but I really don't see. As Vitalik notes, this stuff is just a "friggin database technology". And for this class of system, that's *all* it is.

3) Bitcoin-style pure credible decentralization. For when you can't trust anyone. Money, permanent global record of authority, etc.


[disclaimer: above thoughts are very rough....I'm in a hurry right now]

yeah, i think i agree with the bolded part.  the more forks, the more fragmentation of the community.  we need numerical concentration in the long run.

and the fact is, Bitcoin is almost where it needs to be in terms of economic properties.  ideally, we might have faster tx times and better anonymity but what we have currently is pretty good and accomplished with a little effort.

to your point about why did gold get co-opted; the answer is simple.  gold is simply a poor form of money and has been failing the people for decades now.  you can only store it and hope it retains its value.  meanwhile, gold has no means of regular auditing nor of transacting across distances, let alone in a timely manner.  the best you can do with it is bury it in a vault after digging it up, as Wences is fond of saying.  Bitcoin, otoh, truly exists across time and space while its supply is hard coded.  transacting across the globe in an instant is commonplace.  hiding it and securing it, i would submit, is easier than gold with the proper knowledge.  thus, it's money properties vastly exceed those of gold and will thus make it much more resilient to any nation state attempting to kill it.  

furthermore, b/c it is global, it harnesses the natural governmental conflict that exist today and for evermore.  this is why i think the Chinese gvt has not killed all the branches of the Bitcoin economy within its borders.  it probably realizes that one day they might have no choice but to acquiesce to Bitcoin, which would be the next best choice if they can't have the yuan become the world reserve currency.  knocking the dollar off its mantle would be good enough.  having both the mining and exchange majority volume will come in handy should that day come.

Here is where I personally think this runs into problems. Again I'll use the gold default as a historical example. Here after FDR defaulted it was perfectly possible for a minority of people to refuse the new fiat system and still transact with each other using the old system (physical gold). The problem was the minority of people (gold bugs) was too small to be effective, they were marginalized and the majority of the world moved on without them.

I don't think the "community of people who agree with their values" will necessarily be large enough, if history is any guide (which I believe it is).


The problem is Bitcoin exists within a system of demographically elected governments (supposedly), and this system will try to impose it's will either on bitcoin or on the population. The easier and more common it is to change bitcoin, the easier it is for a demographically elected government (or any gov) to co-opt bitcoin.

This thread started with a statement that making bitcoin easy to fork often will be a good thing. My argument is be careful what you wish for because it there are powerful forces which will try to change it into something against it's founding principles.

This is why I stated I prefer that bitcoin remains a rules based system as much as possible outside of the influence of man. The more we enable forking to be common, the more that breaks down and the easier it become for governments to push regulation/etc in.

Actually it is. What did you expect? The government to make something that would actually be helpful to the people?  
They've been manipulating, spying, using us and whatnot.

This was not a 'if question' but a 'when'.

Oh, you got it.

They are going to try and create a centralized black-box system that has all the negatives of fiat money combined with the negatives of bitcoin (trace-ability, etc), and a demographic majority will go along. (You're not for terrorism, child molesters or drug dealers are you). It's not a matter of if, but when.

I don't get it... Isn't this taking the worst of both worlds?

Isn't this just the difference between a geographically selected community where a central government is in control (the US population) and a non-territorial self-selected community where the economic-majority "decentralized governance" is in control (Bitcoin)?

In other words, isn't this in some sense just the question of statism vs. anarchy, or centralization vs. decentralization, restated? The whole idea of economic majority control only works because of the exit dynamic afforded by the decentralized nature of cryptoledgers.

It seems to me that insofar as you buy the argument that decentralization or non-territorialism, wherein this voice/exit dynamic gets maximum play, is superior to centralization and territorial monopolies of power wherein you cannot exit without physically emigrating, you would also buy my argument in the long post above that there is nothing to fear from forkability.

As an example, if when the gold standard was broken people could choose to fork off and keep the gold standard, regardless of being geographically located in the United States, the legislation could not have passed, or if it did it wouldn't have been effective - at least not for those in the population who care about sound money. The economic majority among US citizens may have supported going off the gold standard, but then there is still a minority who want to keep the gold standard. In a statist system, the minority is the minority and gets overridden; in an anarchic system, the economic minority simply becomes the economic majority of a smaller community and retains the system they prefer. (If they deem their differences sufficient to make it worth breaking away.)


Reiterating the above point for clarity, this tragedy happened because the gold holders weren't allowed to "exit in place," and I assume they weren't in fact allowed to exit US territory at all (with their gold). This is a problem of statism, but Bitcoin is not a statist system. In Bitcoin the economic majority, or perhaps we can refine the phrasing even further and say each economic community (defined by their similar beliefs about what is ideal money), can always choose their own fork.

My "economic majority" phrasing becomes a little confusing here because we must continually ask, "A majority among whom?" A large enough minority with enough difference of opinion from the majority will break away and become the economic majority of a community of people who agree with their values. There are still reasons why each little economic community with varying beliefs about ideal money will not necessarily fork off: size is an advantage, voice can still work if the minority makes convincing arguments, etc.

The main thing I want to point out is that there is a set of implications in this shift from mostly voice-only territorial democratic control to fully-enabled location-independent voice+exit control,* in other words there is a set of implications of the exit dynamic getting full play for the first time, and I think these implications haven't been fully understood or at least not fully internalized.

Note: Although I'm arguing in this vein, I don't even think I myself have fully internalized the implications of now having a real exit option available at all times. I feel like I can see some of them implicitly but I'm not sure I could articulate the full set of implications yet. I'd like the above arguments hinting at some of the counterintuitive implications to be fleshed out and made more explicit, perhaps through further debate. The semantic challenges this new idea poses are also pretty formidable: the term "majority" becomes fluid in a way we aren't used to, for instance, as mentioned above, and even the term "Bitcoin" develops a dynamic character that at first feels unsettling.

*I'll quit using the term "exit-democracy" for this, to avoid confusion, because I think the associations of the word democracy to voting (voice) are just too strong.

Any democratic system of money is far inferior to Bitcoin.  It is fundamentally the opposite of that, it is an economic system.
An occurrence of democratic action is seen as a threat to Bitcoin, AKA 51% attack.

Voting is in all cases the supreme failure of an attempt to create quality.  Where there is quality, voting is not needed.  Voting is for avoiding violent conflict by replacing it with as much as possible with social conflict.  It is the use of law against others, and it is for subjugating minorities.  We in democratic societies are taught how wonderful it is to have democracy, and it is better than most any other option, but it is also utter crap.  I do not wish for a "democratic" system of money and I am very happy that Bitcoin isn't one.

It is a failing of Gold, that there exists a gold fix, where a small group vote on the price.  There is only democracy in a monetary system to the extent that the system lacks quality.  It is a sign of failure, not success.

Yep, we are still so early.

Frankly, I'm amazed at the low level of sophisticated analysis coming out of IBM regarding Bitcoin. But then again, I bet much of it is being driven by Richard Gendal whom I have been even less impressed.

Perhaps IBM is a quintessential example of a big corporation who's benefited so greatly from inflation that they've been blinded.

Fedcoin is obviously a dumb idea. It's effectively the same level (or worse) of why-are-you-bothering-with-a-blockchain as doing a gold or silver "backed" cryptocurrency. If you have a fundamentally centralized system, then adding a blockchain just makes it more complex for no reason. Just fire up some servers and make a good API instead.

People *still* don't understand the problem that blockchains actually solve.

Just a guess but fiatcoin's blockchain will probably be private, all clients essentially just client/server so money supply is obfuscated.  Likely devices won't hold their private keys, or there will be a master private key that can spend from all accounts.  No other way for the government to freeze accounts, implement asset forfeiture, etc.

Or likely to come to pass!

I'm assuming this means we then get accurate insight into exactly what the money supply is. No more shadowstats! No more government handwaving about inflation!

Not such a bad thing?

bitshares already has this and ive created cart plugins using it quite nice actually no volaltility risks.. u stay in the base currency.. ofcourse this assumes the peg holds which it has so far.. We dont need a centralized solution when decentralized fiat on blockchain exists

Nice.  Now they won't even have to turn on the printing presses.  Just type in a big number and hit enter.

Fiatcoin is nearly here:

http://www.reuters.com/article/2015/03/12/us-bitcoin-ibm-idUSKBN0M82KB20150312\

but it's still loadsa money! 

The tldr for me was skimming to find that he was using the n(log n) interpretation of Metcalfe's Law, which is far more reasonable than n^2.

Good grief that was long winded. Can we get a tldr concise version for the viewers or those that couldn't bare it? I read most of it and scanned the rest but most of the pricing charts were just lol boring and just plain .