Adam's plan to create a store that offers a discount for paying with BTC is a result of the deflationary nature of BTC. But ware he's sees this as a good thing it is in fact a very bad development (not his fault of course, he is just doing the logical and inevitable thing under deflation). As a merchant he is essentially trying to race ahead of the deflation rate, this will inevitably result in an acceleration of deflation, just as in a inflationary environment the merchant is trying to raise prices and race ahead of inflation and this creates even more inflation.
When the bulk of merchants adopt this kind of pricing strategy (as they inevitably must in a deflationary environment), the result is to drive more deflation as the 'discounts' now effectively become the true value of BTC, exchange for USD will try too catch up but because these discounts will most likely be by a percentage they will remain forever above the BTC/USD exchange rate and act to pull it upwards perpetually.
Now how do merchants ever actually make money if they are offering huge discounts? The only way for the merchant to close that gap is to hold BTC for a long enough period for the coins appreciation to put them back in the black (or just accumulate private hoards). Now ignoring all the risks they now have of a crash in exchange rates the merchant now has very low turn over of money, this is effectively removing large portions of BTC from circulation which leads to yet more deflation. And no the higher rates of deflation won't decrease the time the merchant holds coins because the customers will demand an even deeper discounts, as the size of the discount needed to stimulate the consumer is proportional to the rate of deflation.
The logical end result is hyper deflation and the collapse of all commerce and investment.
Topic: Let’s Talk Bitcoin! Episode 19 - "Making It Up As You Go" June 29, 2013 - page 2. (Read 4783 times)
May 24, 2013, 12:48:22 AM
May 22, 2013, 01:10:11 PM
Your points are well taken, it's on the list.
In the meantime, our interview with Erik Voorhees is now live
http://letstalkbitcoin.com/post/51080936970/bitcoin-2013-conference-coverage-interview-with
Topic list:
Why Satoshi Dice is Gone from the land of the free
Why Panama?
Bitcoin based autonomous region, and the lesson of the Honduras free zone
Behind the man, history and hopes
Why Join, then Leave the Free State Project?
Why this time really is different
What's the scenario that keeps you up at night?
What do you think of Ripple in its current iteration?
Are Bitcoin Businesses Possible in the US?
What's Wrong with Mt Gox?
Is Bitcoin the future, or is it just Cryptocurrencies in general?
What do you think of Alt-Coins?
In the meantime, our interview with Erik Voorhees is now live
http://letstalkbitcoin.com/post/51080936970/bitcoin-2013-conference-coverage-interview-with
Topic list:
Why Satoshi Dice is Gone from the land of the free
Why Panama?
Bitcoin based autonomous region, and the lesson of the Honduras free zone
Behind the man, history and hopes
Why Join, then Leave the Free State Project?
Why this time really is different
What's the scenario that keeps you up at night?
What do you think of Ripple in its current iteration?
Are Bitcoin Businesses Possible in the US?
What's Wrong with Mt Gox?
Is Bitcoin the future, or is it just Cryptocurrencies in general?
What do you think of Alt-Coins?
May 22, 2013, 11:20:54 AM
This was from Reddit, and my response
That's a really good point about mixing the coins before they're tainted, and given the speed at which that could be possible (fast enough to the point of being considered automated) it seems difficult to deal with.
Perhaps the solution is for legitimate mixer-services to not accept coins that have been transferred within the last say 2-7 days. Shorter would work, but the less buffer you have the more likely the freeze hits an innocent.
Quote
The taint problem exposes a coming political era for Bitcoin, where each miner must decide what to do with a stolen coin. It is a very dangerous transition for us, because we move from a pure consensus of clients based on packets and fees, to arguing about crime reports. Needless to say, crime report collection, verification, and final judging are currently geographically monopolized.
Accept that taint claims will be available, for your use, if you choose; but beware any miner that would block a transaction.
One critical factor in coin theft is information asymmetry. The thief can mix the coins well enough before anyone knows they're gone. Unwitting parties in transaction might bear most of the cost of any coin-blocking movements.
tl;dr: coin freezing bad
Accept that taint claims will be available, for your use, if you choose; but beware any miner that would block a transaction.
One critical factor in coin theft is information asymmetry. The thief can mix the coins well enough before anyone knows they're gone. Unwitting parties in transaction might bear most of the cost of any coin-blocking movements.
tl;dr: coin freezing bad
That's a really good point about mixing the coins before they're tainted, and given the speed at which that could be possible (fast enough to the point of being considered automated) it seems difficult to deal with.
Perhaps the solution is for legitimate mixer-services to not accept coins that have been transferred within the last say 2-7 days. Shorter would work, but the less buffer you have the more likely the freeze hits an innocent.
the thing you're missing Adam is proving that which is stolen from that which is allegedly stolen.
i could donate 100 BTC to your podcast today. you might happily then spend that BTC immediately on needed expenses for production and expansion. i could then come to you a month later and ask you for special favors related to advertising my business. you would rightly decline from an ethical standpoint. the disagreement escalates and then i go public accusing you of stealing my 100 BTC via a hack. after all, i have the private key from the donation address proving it came from me to you.
how can anyone prove who's right? should those coins be tainted forever? and should your suppliers be able to ask you to repay with non tainted coins as a result?
So false accusations long after the fact as a means to essentially create chargeback risk? I see the point, we'll talk about it on the show (once we burn through the backlog a little)
essentially yes.
the other problem could come from combining multiple inputs into a single output of a tx.
once you combine tainted with non tainted coins into a single address, let's say Let's Talk Bitcoin's donation address
, how do you distinguish btwn them when it comes to you wanting to spend them? you should check your address; you might be surprised just how many are tainted using blockchain.info.perhaps we should blacklist your address?
i could even take it one step further. let's say i'm a competitor of yours. i'm a bad guy too and i decide to donate to your address to sabotage it. what do we do then? afterall, you must be a money launderer having accepted and spent the coins on supplies.
May 22, 2013, 11:02:37 AM
This was from Reddit, and my response
That's a really good point about mixing the coins before they're tainted, and given the speed at which that could be possible (fast enough to the point of being considered automated) it seems difficult to deal with.
Perhaps the solution is for legitimate mixer-services to not accept coins that have been transferred within the last say 2-7 days. Shorter would work, but the less buffer you have the more likely the freeze hits an innocent.
Quote
The taint problem exposes a coming political era for Bitcoin, where each miner must decide what to do with a stolen coin. It is a very dangerous transition for us, because we move from a pure consensus of clients based on packets and fees, to arguing about crime reports. Needless to say, crime report collection, verification, and final judging are currently geographically monopolized.
Accept that taint claims will be available, for your use, if you choose; but beware any miner that would block a transaction.
One critical factor in coin theft is information asymmetry. The thief can mix the coins well enough before anyone knows they're gone. Unwitting parties in transaction might bear most of the cost of any coin-blocking movements.
tl;dr: coin freezing bad
Accept that taint claims will be available, for your use, if you choose; but beware any miner that would block a transaction.
One critical factor in coin theft is information asymmetry. The thief can mix the coins well enough before anyone knows they're gone. Unwitting parties in transaction might bear most of the cost of any coin-blocking movements.
tl;dr: coin freezing bad
That's a really good point about mixing the coins before they're tainted, and given the speed at which that could be possible (fast enough to the point of being considered automated) it seems difficult to deal with.
Perhaps the solution is for legitimate mixer-services to not accept coins that have been transferred within the last say 2-7 days. Shorter would work, but the less buffer you have the more likely the freeze hits an innocent.
the thing you're missing Adam is proving that which is stolen from that which is allegedly stolen.
i could donate 100 BTC to your podcast today. you might happily then spend that BTC immediately on needed expenses for production and expansion. i could then come to you a month later and ask you for special favors related to advertising my business. you would rightly decline from an ethical standpoint. the disagreement escalates and then i go public accusing you of stealing my 100 BTC via a hack. after all, i have the private key from the donation address proving it came from me to you.
how can anyone prove who's right? should those coins be tainted forever? and should your suppliers be able to ask you to repay with non tainted coins as a result?
So false accusations long after the fact as a means to essentially create chargeback risk? I see the point, we'll talk about it on the show (once we burn through the backlog a little)
May 22, 2013, 10:57:20 AM
This was from Reddit, and my response
That's a really good point about mixing the coins before they're tainted, and given the speed at which that could be possible (fast enough to the point of being considered automated) it seems difficult to deal with.
Perhaps the solution is for legitimate mixer-services to not accept coins that have been transferred within the last say 2-7 days. Shorter would work, but the less buffer you have the more likely the freeze hits an innocent.
Quote
The taint problem exposes a coming political era for Bitcoin, where each miner must decide what to do with a stolen coin. It is a very dangerous transition for us, because we move from a pure consensus of clients based on packets and fees, to arguing about crime reports. Needless to say, crime report collection, verification, and final judging are currently geographically monopolized.
Accept that taint claims will be available, for your use, if you choose; but beware any miner that would block a transaction.
One critical factor in coin theft is information asymmetry. The thief can mix the coins well enough before anyone knows they're gone. Unwitting parties in transaction might bear most of the cost of any coin-blocking movements.
tl;dr: coin freezing bad
Accept that taint claims will be available, for your use, if you choose; but beware any miner that would block a transaction.
One critical factor in coin theft is information asymmetry. The thief can mix the coins well enough before anyone knows they're gone. Unwitting parties in transaction might bear most of the cost of any coin-blocking movements.
tl;dr: coin freezing bad
That's a really good point about mixing the coins before they're tainted, and given the speed at which that could be possible (fast enough to the point of being considered automated) it seems difficult to deal with.
Perhaps the solution is for legitimate mixer-services to not accept coins that have been transferred within the last say 2-7 days. Shorter would work, but the less buffer you have the more likely the freeze hits an innocent.
the thing you're missing Adam is proving that which is stolen from that which is allegedly stolen.
i could donate 100 BTC to your podcast today. you might happily then spend that BTC immediately on needed expenses for production and expansion. i could then come to you a month later and ask you for special favors related to advertising my business. you would rightly decline from an ethical standpoint. the disagreement escalates and then i go public accusing you of stealing my 100 BTC via a hack. after all, i have the private key from the donation address proving it came from me to you.
how can anyone prove who's right? should those coins be tainted forever? and should your suppliers be able to ask you to repay with non tainted coins as a result?
May 22, 2013, 10:22:08 AM
This was from Reddit, and my response
That's a really good point about mixing the coins before they're tainted, and given the speed at which that could be possible (fast enough to the point of being considered automated) it seems difficult to deal with.
Perhaps the solution is for legitimate mixer-services to not accept coins that have been transferred within the last say 2-7 days. Shorter would work, but the less buffer you have the more likely the freeze hits an innocent.
Quote
The taint problem exposes a coming political era for Bitcoin, where each miner must decide what to do with a stolen coin. It is a very dangerous transition for us, because we move from a pure consensus of clients based on packets and fees, to arguing about crime reports. Needless to say, crime report collection, verification, and final judging are currently geographically monopolized.
Accept that taint claims will be available, for your use, if you choose; but beware any miner that would block a transaction.
One critical factor in coin theft is information asymmetry. The thief can mix the coins well enough before anyone knows they're gone. Unwitting parties in transaction might bear most of the cost of any coin-blocking movements.
tl;dr: coin freezing bad
Accept that taint claims will be available, for your use, if you choose; but beware any miner that would block a transaction.
One critical factor in coin theft is information asymmetry. The thief can mix the coins well enough before anyone knows they're gone. Unwitting parties in transaction might bear most of the cost of any coin-blocking movements.
tl;dr: coin freezing bad
That's a really good point about mixing the coins before they're tainted, and given the speed at which that could be possible (fast enough to the point of being considered automated) it seems difficult to deal with.
Perhaps the solution is for legitimate mixer-services to not accept coins that have been transferred within the last say 2-7 days. Shorter would work, but the less buffer you have the more likely the freeze hits an innocent.
May 22, 2013, 10:08:15 AM
the main point of that talk which is what we all should really take on board. is to stop comparing bitcoin to FIAt price. but a direct Bitcoin to product price.
maybe setting up a bread, milk and veg valuation/commodity pricing index would help
EG work out the amount of miners online and divide that by 3600 to get a daily income value per person (much like minimum wage). then use that number to know that is the equivalent of 50 loaves of bread or milk.
much like how governments use the "cost of living" value to work out a minimum wage.. but in reverse
maybe setting up a bread, milk and veg valuation/commodity pricing index would help
EG work out the amount of miners online and divide that by 3600 to get a daily income value per person (much like minimum wage). then use that number to know that is the equivalent of 50 loaves of bread or milk.
much like how governments use the "cost of living" value to work out a minimum wage.. but in reverse
May 22, 2013, 08:57:57 AM
Another good show, lots of enthusiasm.
You are all very eloquent and interesting speakers, but I have to say again I am more and more impressed by how insightful and well thought out Andreas' comments are.
One thing really surprised me, even disturbed me - you gave a positive view of the idea of "tainting" coins. You barely mentioned the obvious problem - taintedness can only be defined by external authorities. Just arguing that it's a community decision is not enough - what kind of cash is it if the majority can vote that I don't "deserve" it for some reason? That's not so different to the problem we have with money now - if the majority doesn't like me using money for X then I'm just SOL. That's not OK.
I can't see it ever being accepted by the community, unless in some quasi- form with an overlay of extra technology (time locks? escrow?) which I don't understand yet. Even with any extra tech, suggestions of allowing tainted coins deserve considerable scepticism.
You are all very eloquent and interesting speakers, but I have to say again I am more and more impressed by how insightful and well thought out Andreas' comments are.
One thing really surprised me, even disturbed me - you gave a positive view of the idea of "tainting" coins. You barely mentioned the obvious problem - taintedness can only be defined by external authorities. Just arguing that it's a community decision is not enough - what kind of cash is it if the majority can vote that I don't "deserve" it for some reason? That's not so different to the problem we have with money now - if the majority doesn't like me using money for X then I'm just SOL. That's not OK.
I can't see it ever being accepted by the community, unless in some quasi- form with an overlay of extra technology (time locks? escrow?) which I don't understand yet. Even with any extra tech, suggestions of allowing tainted coins deserve considerable scepticism.
This is so true and so important to get right. So many newbies get trapped into this tainting argument.
Monetary units have to be fungible. The units themselves are non political. They can't help themselves from being used "inappropriately" by criminals who might use them for drugs or a young girl who might use them for an abortion.
If we allowed usd to be destroyed because of drug tainting we'd not have any cash left. Same goes for digital dollars.
May 22, 2013, 08:43:28 AM
Another good show, lots of enthusiasm.
You are all very eloquent and interesting speakers, but I have to say again I am more and more impressed by how insightful and well thought out Andreas' comments are.
One thing really surprised me, even disturbed me - you gave a positive view of the idea of "tainting" coins. You barely mentioned the obvious problem - taintedness can only be defined by external authorities. Just arguing that it's a community decision is not enough - what kind of cash is it if the majority can vote that I don't "deserve" it for some reason? That's not so different to the problem we have with money now - if the majority doesn't like me using money for X then I'm just SOL. That's not OK.
I can't see it ever being accepted by the community, unless in some quasi- form with an overlay of extra technology (time locks? escrow?) which I don't understand yet. Even with any extra tech, suggestions of allowing tainted coins deserve considerable scepticism.
You are all very eloquent and interesting speakers, but I have to say again I am more and more impressed by how insightful and well thought out Andreas' comments are.
One thing really surprised me, even disturbed me - you gave a positive view of the idea of "tainting" coins. You barely mentioned the obvious problem - taintedness can only be defined by external authorities. Just arguing that it's a community decision is not enough - what kind of cash is it if the majority can vote that I don't "deserve" it for some reason? That's not so different to the problem we have with money now - if the majority doesn't like me using money for X then I'm just SOL. That's not OK.
I can't see it ever being accepted by the community, unless in some quasi- form with an overlay of extra technology (time locks? escrow?) which I don't understand yet. Even with any extra tech, suggestions of allowing tainted coins deserve considerable scepticism.
May 22, 2013, 02:18:45 AM
Maybe you can set up a fundraiser to get funds to advertise on bitcointalk about your show! Would be a very wise investment!
Will listen to the show tomorrow in the morning
Best time to listen
Will listen to the show tomorrow in the morning
Best time to listen 
May 22, 2013, 12:36:20 AM
I love this project. It's slowly becoming the radio voice of bitcoin news.
Thank you for listening! We strive to bring great bitcoin related content to our listeners. We have a lot in store for upcoming interviews!
May 22, 2013, 12:33:32 AM
I love this project. It's slowly becoming the radio voice of bitcoin news.
May 22, 2013, 12:31:26 AM
Have a question you’d like answered On-Air? Call us at 1-855-WE-TALK-BITCOIN
Join Adam & Stephanie at the Inside Bitcoins Conference on July 30th in New York City! This all day event at the New Yorker building is the place to be for the latest commentary and networking opportunities in the Bitcoin space. For a 20% discount on registration, please fill out this one page listener feedback form - The code is presented at the conclusion.
Adam will speaking, Stephanie will be grabbing interviews and covering the event.
While you’re in town, stop by one of our conference meetups! At Bitcoin2013 in San Jose we had a FANTASTIC time and can’t wait to meet you in New York!
For previous episodes & our Listener Support widget, visit us at www.letstalkbitcoin.com
Send Listener Questions, Feedback, plus offers to help the cause and join
our team to [email protected]
Also, we're looking for members to join our Bitcoin Community Roundtable -
If you're doing something in the Bitcoin community and want to be made
available of interview opportunities as they arise, Check out the specific
thread for more details https://bitcointalksearch.org/topic/lets-talk-bitcoin-is-looking-for-community-reps-for-the-bitcoin-roundtable-186752
Each episode takes about 10 hours to produce, please support the show if
you like what we're doing.
Visit sponsor www.EasyCoin.com for a 13% discount on all bitcoin purchases!
We appreciate our sponsors testing the deflationary business model and encourage you to reward their early adoption with your business, should you have need for this type of service. Thanks!
Want to support the Show rather than this particular episode? 1LTBShowv5nZ2fgZ4hWU7ieeDRNKSAxtov
Listener Support Addresses for episode 19
Bitcoin: 1DaHiEUqtfx4icqZwWMPYnfu3rVeK5QTfy
Litecoin:LUxaof4avTxEGfmajZnSLVMDdYLVJYsFNT
Bitmessage: BM-BcWgZS3dqdrCz9x7cDi9QnMUc51xZbNv
Hosts:
Adam B. Levine
Stephanie Murphy,PhD
Andreas M.Antonopoulos
RSS Feed Here
For June 29, 2013
Show Notes for Episode 19 Making It Up As You Go
Join Adam & Stephanie at the Inside Bitcoins Conference on July 30th in New York City! This all day event at the New Yorker building is the place to be for the latest commentary and networking opportunities in the Bitcoin space. For a 20% discount on registration, please fill out this one page listener feedback form - The code is presented at the conclusion.
Adam will speaking, Stephanie will be grabbing interviews and covering the event.
While you’re in town, stop by one of our conference meetups! At Bitcoin2013 in San Jose we had a FANTASTIC time and can’t wait to meet you in New York!
For previous episodes & our Listener Support widget, visit us at www.letstalkbitcoin.com
Send Listener Questions, Feedback, plus offers to help the cause and join
our team to [email protected]
Also, we're looking for members to join our Bitcoin Community Roundtable -
If you're doing something in the Bitcoin community and want to be made
available of interview opportunities as they arise, Check out the specific
thread for more details https://bitcointalksearch.org/topic/lets-talk-bitcoin-is-looking-for-community-reps-for-the-bitcoin-roundtable-186752
Each episode takes about 10 hours to produce, please support the show if
you like what we're doing.
Visit sponsor www.EasyCoin.com for a 13% discount on all bitcoin purchases!
We appreciate our sponsors testing the deflationary business model and encourage you to reward their early adoption with your business, should you have need for this type of service. Thanks!
Want to support the Show rather than this particular episode? 1LTBShowv5nZ2fgZ4hWU7ieeDRNKSAxtov
Listener Support Addresses for episode 19
Bitcoin: 1DaHiEUqtfx4icqZwWMPYnfu3rVeK5QTfy
Litecoin:LUxaof4avTxEGfmajZnSLVMDdYLVJYsFNT
Bitmessage: BM-BcWgZS3dqdrCz9x7cDi9QnMUc51xZbNv
Hosts:
Adam B. Levine
Stephanie Murphy,PhD
Andreas M.Antonopoulos
RSS Feed Here
For June 29, 2013
Show Notes for Episode 19 Making It Up As You Go
- Stephanie’s Back from Porcfest! She tells us all about it, ever heard of Woven Bacon Sandwich? You will today
- Listener Mail: Open Garden availability, and the various options on the market for cold storage.
- Interview with Jeff Coleman from the Bitcoin Alliance of Canada for an interesting if tinny discussion of the Mbit, what it is, why it’s important, and why you might want to change your wallet right now to use it.
- Then we’ve got a tri-fecta of stories about various governmental organizations declaring things about technology they don’t seem to understand
- First Bitcoins Seized by DEA - Further Details
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