Topic: Gold collapsing. Bitcoin UP. - page 643. (Read 2032266 times)

Great point,

I don't understand the fear of alts. I'm into Bitcoin because it's better money, in our history it's the best yet.
Competition is what will make it better. Alts can out innovate Bitcoin on every metric except one, the Network Effect, and this is what makes it useful as a SoV.

All alts trade for Bitcoin before any other competing means of exchange this is huge it ensures Bitcoin's success. With DarkCoin when it went through an enormous growth curve new comers had to learn how to use Bitcoin before they could invest. I was surprised but this was the biggest obstacle to DarkCoins growth. Any scheme that tries to launch in fiat will fail looking more like a scam. Furthermore when pricing all these assets people default to Bitcoin, like we price things in USD today.

Alts are more they are Bitcoin's whack a mole, they could absorb fiat manipulation in Bitcoin, they will protect Bitcoin there will be an alt to circumvent every block Bitcoin encountered.  

I expect during the next growth stage more wealth will be invested in Alts than in Bitcoin relative to the market cap. Many don't accept Bitcoin and feel better investing in a better alt, but little do they know the SoV function is a direct result of Metcalfe's law (aka the network effect) that wealth will flow into Bitcoin (as alts will be volatile more so than Bitcoin, they will crash)

All this grows Bitcoin and makes it better money.
 

Gold served precisely this purpose for about 4000 years, silver too for more common folks.
We are in a practically unique time in the history of history where people are being convinced that gold is not money (oddly enough, mostly loudly by the folks that are buying it all).

Employing a monetary model with endogenous search and random consumption preferences, we
find that the government’s refusal to accept bitcoin is not typically sufficient to prevent their acceptance
in equilibrium. The government must be of a particular size to prevent the circulation of bitcoin and
the size threshold depends crucially on the fraction of agents willing to accept currency. Interestingly,
our work suggests that bitcoin might continue on as a niche money, even if the government proactively
discourages its use, so long as some individuals are sufficiently committed to accepting bitcoin.

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2531518

And what if the coin itself fails, perhaps for economic rather than technical reasons? Or if having multiple blockchains (or other such technologies) too tightly interconnected by a single coin allows for contagion type effects? This is not unprecedented.

We don't have a single currency in the world today, and not even a single reserve currency (where presumably the network effect of liquidity could reign supreme, unfettered by legal tender laws, etc.). I doubt in the history of civilization we ever really have, except perhaps in some isolated simple economies. If the dollar fails, then we can turn to sterling, or bitcoin, or renminbi, or gold. The world has a way of recognizing fragile over-optimization and avoiding it, though sometimes this process takes the form of going to far and having a catastrophic failure first.

One single coin to rule them all is a catastrophe waiting to happen. I doubt that happens though. People recognize the risk and avoid it, which is likely why something like LTC has any value at all (though LTC isn't really the best for this and will likely be overtaken). It isn't for features or even marketing.

There absolutely should be one coin/ledger but is it imperative that there be one protocol/chain to update it?

Maybe multiple chains could allow us to manage the risk of one failed blockchain bringing its coin down with it?

Let's game this out. Is a year long enough? Two years? Three years? Twenty years? How can you even know that tail risks don't remain?

I don't think it is possible.

If investment and network effects shift to the alt than this would also be a highly informative and interesting result.  If the proposal is meritorious, the VC's would do better financially with an alt anyhow, if we are looking at ROI.  A 1$MM buy in on an alt goes a long way.
(So much free advice for them!)

We just don't know how it would play out, that's the point.  We have plenty of time to do it later if all the evidence shows that there is no unmanaged risks.

I'd rather get rich slowly rather than quick anyhow.  When we have the opportunity to change everything for posterity, why sell out for a few cookies?


By that I meant long enough to see some of the tail risks manifest, and to see the recovery from it (if it does).  We identified some pernicious ones already.
There is a lot of talk about what "will" happen, but if we are honest with ourselves, we don't know what will happen.

That's the problem with tail risks. How do you know what is a "long enough time?"

This is why the catastrophic failure issue suggests there shouldn't really be one coin after all, and trying to maximize "network effect" may be over-fitting. Monoculture is fragile.

The get rich quick crowd will pump and dump these experimental coins from the alt coin. Nothing more. They would be the ones jumping on them from Bitcoin as well. The waters will be muddied either way, it might as well be the altcoins. The network effect would still prefer the stability of Bitcoin over smaller forks. Besides, the side chains are about counterparty risk, so they are unlikely to even be accepted until Bitcoin itself gains wider acceptance. Let ApplePay experiment with SC technology, it could be their chance to break into crypto.

Almost all GSM pay as you go accounts can receive SMS's free of charge Canada and the US being exceptions, but it looks like they have 2 way communication so someone has to pay the carrier charge. I'm not sure who pays.

Would it be correct to think of this idea as a sig-safe that uses multisign by validating your fingerprint?

By the time such a trial test had enough time to prove out the various risks of having a multitude of side chains offering new functionality below an established coin, you might just find that usage and gravity inadvertently shifted to that altcoin over bitcoin. I still believe alts are the highest potential threat to the whole experiment. Network effects and the economic need for interoperability between users have successfully kept alt coins at bay so far, but if SC's prove successful network effects might just shift to the tested altcoin.

If Side Chains run adequately on say LTC for long enough to see some of the tail risks play out, and we figure out how to handle those, then I would see that as a beneficial outcome.

On the other hand, some of the pernicious effects may take a very long time to work out, but we'd see them on LTC well before we'd see them on BTC.  (Or even better some new coin designed with this as its purpose.)

Say for example, what happens when a SC becomes more valuable than its MC and stays more valuable?
What happens when it approaches this circumstance and it upsets the equilibrium (where it may become profitable to attack a SC with already sunk resource from merge mining ASICs that are funded through MC emission)?

These are economic circumstances that would be highly disruptive, but might not manifest for possibly many years after it were implemented.

The point here is that the big win should not be jeopardized for tertiary wins, (I think we agree on this at least), especially when the same thing can be accomplished without such jeopardy.  A Side Chain valuation may approach LTC valuation much more swiftly and there are enough economic analogs that the experience of handling it could be highly instructive.  We may learn that the currently proposed side chain structure isn't viable, or that it is.
We may get to see the reaction from the various regulatory entities that attempt to govern securitisation.   Throwing it onto Bitcoin without a proof of concept elsewhere would be a non-voluntary "taking" (also true for LTC).

At a minimum, this is the sort of thing that a responsible development team would engage.
I like the innovation.  I think it holds great promise.  It is not the big win, but it is a very significant win none the less if it works.

tl;dr
Fools rush in where angels fear to tread.

Yup, but considering that sending and receiving transactions is a matter of kb I can see that model being adopted by Case to fit the need of their device.

It's a very nice proposition in fact and I would certainly be willing to pay a premium for this.

Bought the wife a Kindle DX while we were living in Asia. At the time she spent 2-3 hours a day on buses and subways traveling to various jigs.

The Kindle DX connectivity was both free and worked flawlessly everywhere she went. It was one of the few times we've been pleasantly surprised by how well something worked beyond our expectations.

But the connectivity was only useful for purchasing and downloading kindle ebooks and not much else. That's a several MB's per month at most and why the model works. Doubt you'd be allowed to run a Bitcoin node over that free connection...

IIRC these are capped at 50 mb (per month?). The logic is they can cover the data charges by selling you more book from the Amazon bookstore.

I could see Case being able to cover the costs considering the amount of data consumed by an hardware wallet is likely to be very small.

Note that we don't know the price yet of the device yet so that could come into play.

It looks good. The server key could be lost of course, and the fingerprint could also be compromised. And the device is kind of complicated. Expensive. But probably good, probably comparable to the trezor in security. This one could be better for point-of-sale operation.

wow, seems ripe for exploitation.

i'm interested in the signature scheme.  i know that Trezor was delayed for all that time since they decided, at the last minute, to convert to the HMAC deterministic nonce generation scheme.  i think this was stimulated by the Android hack of non-random PRNG.

http://tools.ietf.org/html/rfc6979

Amazon does something similar for Kindle readers (they claim 100 countries). I don't know who is being paid or what the payment model looks like.

Yes, that's very cool! 

What's unfamiliar to me is how the device gets mobile internet access, in over 60 countries, without roaming or monthly fees:


Does the hardware manufacturer somehow pay the carriers so that the devices "just work"? 

Here's some literature on multi-IMSI SIM cards:

http://www.racowireless.com/multi-imsi-sim/