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Topic: Gold collapsing. Bitcoin UP. - page 645. (Read 2032266 times)

hero member
Activity: 644
Merit: 504
Bitcoin replaces central, not commercial, banks
December 02, 2014, 03:42:26 PM
Yes but there are still advantages to decentralizing the transaction even if redemption must be centralized, because redemption happens rarely.  Also,  if stocks, bonds or mortgages are directly offered on the blockchain (as opposed to representing certificates stored in a vault) they simultaneously represent something but also are themselves property.

I agree that decentralizing the transactions of stocks, bonds and mortgages may have advantages.   I guess I'm just slightly annoyed by the meme that "currency is only the first app of blockchain technology."  What needs to eventually be understood by the media is that:

(1) Currency is the foundational application of blockchain technology; without a valuable currency, no other apps are possible.
(2) The native blockchain units (bitcoins) are the only asset with no counterparty risk.


Many people have a problem conceptually separating the need to trust a counterparty to fulfill a contract, and the need to trust a ledger system to accurately record ownership information.

It's possible to make the latter arbitrarily small, but there's no technological solution to the former as it's inherent to the problem space.

Yes, well said.  We need to stress the distinction between trust of the ledger system and trust of the counterparty (and then point out that bitcoin is fundamentally different as it has no counterparty [or perhaps the counterparty is the ledger system itself]).  

Justus, I see you're giving a talk via telepresence in Vancouver on Thursday.  What will you be speaking about?



Other uses of blockchain technology (and not the bitcoin blockchain, it is easy to construct blockchains with less security) is where the good is only information, for example the right to access a theater (a ticket). You can show up at the entrance with a ticket "coin" (a better word needs to be invented) and send the ticket to the ticket office for admission. It could be done with an association of theaters where each theater runs a miner, and no block reward is necessary.

I fail to see why you would need a blockchain for that though... Any centralized server model could do.
legendary
Activity: 1512
Merit: 1005
December 02, 2014, 03:39:54 PM
Yes but there are still advantages to decentralizing the transaction even if redemption must be centralized, because redemption happens rarely.  Also,  if stocks, bonds or mortgages are directly offered on the blockchain (as opposed to representing certificates stored in a vault) they simultaneously represent something but also are themselves property.

I agree that decentralizing the transactions of stocks, bonds and mortgages may have advantages.   I guess I'm just slightly annoyed by the meme that "currency is only the first app of blockchain technology."  What needs to eventually be understood by the media is that:

(1) Currency is the foundational application of blockchain technology; without a valuable currency, no other apps are possible.
(2) The native blockchain units (bitcoins) are the only asset with no counterparty risk.


Many people have a problem conceptually separating the need to trust a counterparty to fulfill a contract, and the need to trust a ledger system to accurately record ownership information.

It's possible to make the latter arbitrarily small, but there's no technological solution to the former as it's inherent to the problem space.

Yes, well said.  We need to stress the distinction between trust of the ledger system and trust of the counterparty (and then point out that bitcoin is fundamentally different as it has no counterparty [or perhaps the counterparty is the ledger system itself]).  

Justus, I see you're giving a talk via telepresence in Vancouver on Thursday.  What will you be speaking about?



Other uses of blockchain technology (and not the bitcoin blockchain, it is easy to construct blockchains with less security) is where the good is only information, for example the right to access a theater (a ticket). You can show up at the entrance with a ticket "coin" (a better word needs to be invented) and send the ticket to the ticket office for admission. It could be done with an association of theaters where each theater runs a miner, and no block reward is necessary.

legendary
Activity: 1414
Merit: 1000
December 02, 2014, 03:32:20 PM

:-)  PokerStars can be built as SC(managed by bitcoin protocol) so we can audit it and enforce btc payments.

Edit:
PokerStars will be SC. And it can be SC managed by bitcoin protocol.
legendary
Activity: 1764
Merit: 1002
December 02, 2014, 03:10:06 PM
well, with this last ramp 30 min ago, we now have a Dow Theory non-confirmation in place already.  the next few days will be crucial for the $DJT to demonstrate whether or not it can also set a new high in the short term.  somehow, i doubt it:

legendary
Activity: 1764
Merit: 1002
December 02, 2014, 02:38:09 PM
once again, we have a really good opportunity to form a Dow Theory non-confirmation.

given the huge, straight up nature of both indices over the last 2 mo, and the depth of the drop in the $DJT yesterday, i'd say it's almost certain we'll get the beginnings of one if the $DJI can go up to a new high in the next day or so.  then the question will be whether or not it can confirm itself.  high alert in equities:



legendary
Activity: 1153
Merit: 1000
December 02, 2014, 02:36:20 PM
What most people fail to realize when they see what appears to be the insanely fast price appreciation of XBT over the last few years, is how many years went into this before 2009, and how slow the revolutionary change has been... and still is.

We're like the folks in the 1860's marveling at the wonders of the first production quality internal combustion engines.  We are saying things like "think of how this will change the railroads" the societal impacts are vastly more complicated and far reaching.

The changes to come over the next couple hundred years from these innovations are outside the imagination of most anyone.  It is easy to be judgmental.

Yes, this.

There are numerous examples of what you describe, where foundations are formed over many decades and then come together in a manner that both appears sudden but also has continuous expanding impact. Take the internet & mobile computing for example, there were numerous advancements in many fields, network theory, computing, radio communications, displays, etc over many decades prior to the mid-late 90s. Then all of a sudden they came together to form global internet connectivity with mobile devices. The change appeared fast, but only to someone not involved with the foundational advancements. I don't even know how I'll describe to my kids what life was like before the internet and smartphones.

There was a semi-famous Russian scientist (forgot who) who complained several years ago that Apple/Steve Jobs didn't really create or invent anything and that the iPhone/iPad were nothing. What he was really saying is Apple simply packaged together a bunch of existing technologies, and was receiving out-sized credit & reward compared to the foundational work that came prior.

Satoshi similarly brought together a large mix of existing technologies to form Bitcoin (in a very elegant fashion). For example, could bitcoin work without mobile internet connected devices? Probably not since I'm not sure how cash style transaction could easily be performed. The list of things that need to be in place is quite long.
hero member
Activity: 924
Merit: 1000
December 02, 2014, 02:32:42 PM
Swiss just decided to not hoard gold and to decline the proposal "Save Our Swiss Gold" that would have seen banks increase their gold position from 7% to 20% of their total reserves. It may be not a good sign for gold.
legendary
Activity: 1764
Merit: 1002
December 02, 2014, 01:42:58 PM
moving up nicely. 

this is it, boys.  stay on it.

legendary
Activity: 1764
Merit: 1002
December 02, 2014, 01:25:31 PM
for those assets, what are the advantages of decentralization?
Lots of advantages in reliability and assurances.  More fundamentally it obsoletes some functions of auditing and government along with the associated costs to society.
It automates many of the administrivia of corporation management.

If you have ever run a public company, the advantages are more immediately apparent.

the pt that i was getting at is that until Bitcoin fulfills Satoshi's visions as a generally accepted and large enough form of currency or money, there will be no such trust or confidenc given by the masses or larger financial institutions to embed asset derivatives into the blockchain as the "legal" ledger.

what will drive Bitcoins growth is a maintenance of its Sound Money function along with transactional growth which we are fortunately beginning to see w/o a doubt.  once it becomes a generally accepted global and apolitical public good as money, then it might be used to embed more riskier assets within the blockchain as with CP.

otoh, the blockchain may only ever be applicable to Bitcoin as Money.  in which case, all those speculative assets may just be bought and sold with BTC as they will become denominated as such with the records continuing to be maintained by those organizations responsible for enforcing those contracts.

if we use Bitcoin to win the Money Game, we win Everything.  that is where the problem lies.
legendary
Activity: 1722
Merit: 1004
December 02, 2014, 01:19:13 PM
for those assets, what are the advantages of decentralization?  other than the one-offs we hear from Patrick Byrnes enabled by unsound money, when have you had stocks, bonds, or insurance contracts reneged upon?
If you want to turn those kinds of contracts into bearer instruments, representing them as tokens on a blockchain improves the ability to transact in those bearer instruments.

Many people have a problem conceptually separating the need to trust a counterparty to fulfill a contract, and the need to trust a ledger system to accurately record ownership information.

It's possible to make the latter arbitrarily small, but there's no technological solution to the former as it's inherent to the problem space.


+1
legendary
Activity: 1204
Merit: 1002
Gresham's Lawyer
December 02, 2014, 01:01:26 PM
for those assets, what are the advantages of decentralization?
Lots of advantages in reliability and assurances.  More fundamentally it obsoletes some functions of auditing and government along with the associated costs to society.
It automates many of the administrivia of corporation management.

If you have ever run a public company, the advantages are more immediately apparent.
legendary
Activity: 1400
Merit: 1013
December 02, 2014, 12:39:44 PM
Yes, well said.  We need to stress the distinction between trust of the ledger system and trust of the counterparty (and then point out that bitcoin is fundamentally different as it has no counterparty [or perhaps the counterparty is the ledger system itself]).
I agree.

Justus, I see you're giving a talk via telepresence in Vancouver on Thursday.  What will you be speaking about?
I'm not sure the format has been decided yet.
legendary
Activity: 1162
Merit: 1007
December 02, 2014, 12:17:48 PM
Yes but there are still advantages to decentralizing the transaction even if redemption must be centralized, because redemption happens rarely.  Also,  if stocks, bonds or mortgages are directly offered on the blockchain (as opposed to representing certificates stored in a vault) they simultaneously represent something but also are themselves property.

I agree that decentralizing the transactions of stocks, bonds and mortgages may have advantages.   I guess I'm just slightly annoyed by the meme that "currency is only the first app of blockchain technology."  What needs to eventually be understood by the media is that:

(1) Currency is the foundational application of blockchain technology; without a valuable currency, no other apps are possible.
(2) The native blockchain units (bitcoins) are the only asset with no counterparty risk.


Many people have a problem conceptually separating the need to trust a counterparty to fulfill a contract, and the need to trust a ledger system to accurately record ownership information.

It's possible to make the latter arbitrarily small, but there's no technological solution to the former as it's inherent to the problem space.

Yes, well said.  We need to stress the distinction between trust of the ledger system and trust of the counterparty (and then point out that bitcoin is fundamentally different as it has no counterparty [or perhaps the counterparty is the ledger system itself]).  

Justus, I see you're giving a talk via telepresence in Vancouver on Thursday.  What will you be speaking about?

legendary
Activity: 1204
Merit: 1002
Gresham's Lawyer
December 02, 2014, 12:03:38 PM
Now I almost miss talking about Side Chains.
Cheesy

Side Chains are how people like this will engage in Bitcoin, in his evolution of understanding John Mauldin is conditioned and primed to accept a Bitcoin derivative on a SC. The risk is people like him flowed by the Keynesians will form the economic majority during the next growth stage, and there are more of them than there are of us, so there is a lot of change that can happen if we dont keep a tight rein on the Bitcoin incentives.

QFT

What most people fail to realize when they see what appears to be the insanely fast price appreciation of XBT over the last few years, is how many years went into this before 2009, and how slow the revolutionary change has been... and still is.

We're like the folks in the 1860's marveling at the wonders of the first production quality internal combustion engines.  We are saying things like "think of how this will change the railroads" the societal impacts are vastly more complicated and far reaching.

The changes to come over the next couple hundred years from these innovations are outside the imagination of most anyone.  It is easy to be judgmental.
legendary
Activity: 1204
Merit: 1002
Gresham's Lawyer
December 02, 2014, 11:38:47 AM
this is interesting.

to get a domino effect going to the downside in equities, we need bond defaults of some kind.  could energy be it?:

Energy companies, the fastest-growing segment of the high-yield bond market in recent years, account for nearly 18% of all outstanding high-yield bonds, up from 9% in 2009, according to J.P. Morgan.


http://blogs.wsj.com/moneybeat/2014/12/01/falling-oil-prices-could-lead-to-massive-junk-bond-defaults/

More likely we'll see a consolidation in energy companies with M&A activity to absorb any defaults.  The big players will use this advantageously.
Energy is too large of a cost input on other industrial production to be a downside default catalyst from price depression, even though there are a lot of bonds floating, there is also a lot of money floating.
legendary
Activity: 1400
Merit: 1013
December 02, 2014, 10:15:21 AM
for those assets, what are the advantages of decentralization?  other than the one-offs we hear from Patrick Byrnes enabled by unsound money, when have you had stocks, bonds, or insurance contracts reneged upon?
If you want to turn those kinds of contracts into bearer instruments, representing them as tokens on a blockchain improves the ability to transact in those bearer instruments.

Many people have a problem conceptually separating the need to trust a counterparty to fulfill a contract, and the need to trust a ledger system to accurately record ownership information.

It's possible to make the latter arbitrarily small, but there's no technological solution to the former as it's inherent to the problem space.
legendary
Activity: 1764
Merit: 1002
December 02, 2014, 10:02:46 AM
John Mauldin...

The Bitcoin blockchain technology allows for the most secure electronic transactions ever devised. Its adoption and acceptance seem inevitable to me.

Actually the 'security' of transactions is not derived solely from blockchain tech. More essential is asymetric crypthography. PoW is 'just' used to avoid double-spends (find consensus), which in case you're going to back bitcoin with gold anyway can be solved more easily using a centralized ledger (with asymetric crypto to sign transactions).

It will be used to validate everything we purchase: stocks, homes, investments, airplane tickets, etc. It will be a far cheaper and much more secure way to validate your ownership of anything, from your home to your stocks.

Bold claims! We have the same problem as with a gold-backing of tying tokens in the blockchain to the real world. If centralized institutions (courts, police) are necessary for enforcing property rights anyway, why not have the ownership ledger managed by those (or related) institutions, too. If you need mechanisms external to the blockchain to go from 'token control' to 'legal property', I don't see much added value of using a blockchain. (It changes a bit with smart property as envisioned by Mike Hearn (leased car functions only on blockchain ownership proof), but that's a long way to go still and I doubt Mauldin is thinking of this. Also a derivative products can be built on top of blockchain-based tokens more securely than on central-ledger-based ones. Also: paying dividends and holding votes based on stock ownership can be integrated into a blockchain if it is linked to a liquid value-carrying monetary ledger)

So, Mauldin 'getting' those potential applications and 'not getting' the fact that bitcoin is the best (better than gold) sound money we've ever had (w/o backing) seems strange to me. It can probably be explained easily by looking at his portfolio... very similar really to Peter Schiff in that regard.


Great points, Molecular.  Crypto 2.0 applications like stock certificates and property-title transfers are often discussed in the abstract where they may appear like the natural evolution of blockchain technology.  However, upon delving into the details, the concept is not as enticing as it may first appear due to the "messiness" of the link between the blockchain token and the property that exists in the outside world. 

Like you pointed out, there's a fundamental difference between the transfer of a bitcoin, and the transfer of a token that represents a claim on some external-to-the-blockchain property.  In the later case (asset-backed tokens), all that is transferred is ownership (and ownership is really a social construct, valuable only to the extent that one's society is willing to enforce property rights [as control of the property in question remains a physical problem]).  In the former case (bitcoin), what's transferred is control itself.

Yes but there are still advantages to decentralizing the transaction even if redemption must be centralized, because redemption happens rarely.  Also,  if stocks, bonds or mortgages are directly offered on the blockchain (as opposed to representing certificates stored in a vault) they simultaneously represent something but also are themselves property.



for those assets, what are the advantages of decentralization?  other than the one-offs we hear from Patrick Byrnes enabled by unsound money, when have you had stocks, bonds, or insurance contracts reneged upon?
legendary
Activity: 1246
Merit: 1010
December 02, 2014, 09:47:27 AM
John Mauldin...

The Bitcoin blockchain technology allows for the most secure electronic transactions ever devised. Its adoption and acceptance seem inevitable to me.

Actually the 'security' of transactions is not derived solely from blockchain tech. More essential is asymetric crypthography. PoW is 'just' used to avoid double-spends (find consensus), which in case you're going to back bitcoin with gold anyway can be solved more easily using a centralized ledger (with asymetric crypto to sign transactions).

It will be used to validate everything we purchase: stocks, homes, investments, airplane tickets, etc. It will be a far cheaper and much more secure way to validate your ownership of anything, from your home to your stocks.

Bold claims! We have the same problem as with a gold-backing of tying tokens in the blockchain to the real world. If centralized institutions (courts, police) are necessary for enforcing property rights anyway, why not have the ownership ledger managed by those (or related) institutions, too. If you need mechanisms external to the blockchain to go from 'token control' to 'legal property', I don't see much added value of using a blockchain. (It changes a bit with smart property as envisioned by Mike Hearn (leased car functions only on blockchain ownership proof), but that's a long way to go still and I doubt Mauldin is thinking of this. Also a derivative products can be built on top of blockchain-based tokens more securely than on central-ledger-based ones. Also: paying dividends and holding votes based on stock ownership can be integrated into a blockchain if it is linked to a liquid value-carrying monetary ledger)

So, Mauldin 'getting' those potential applications and 'not getting' the fact that bitcoin is the best (better than gold) sound money we've ever had (w/o backing) seems strange to me. It can probably be explained easily by looking at his portfolio... very similar really to Peter Schiff in that regard.


Great points, Molecular.  Crypto 2.0 applications like stock certificates and property-title transfers are often discussed in the abstract where they may appear like the natural evolution of blockchain technology.  However, upon delving into the details, the concept is not as enticing as it may first appear due to the "messiness" of the link between the blockchain token and the property that exists in the outside world. 

Like you pointed out, there's a fundamental difference between the transfer of a bitcoin, and the transfer of a token that represents a claim on some external-to-the-blockchain property.  In the later case (asset-backed tokens), all that is transferred is ownership (and ownership is really a social construct, valuable only to the extent that one's society is willing to enforce property rights [as control of the property in question remains a physical problem]).  In the former case (bitcoin), what's transferred is control itself.

Yes but there are still advantages to decentralizing the transaction even if redemption must be centralized, because redemption happens rarely.  Also,  if stocks, bonds or mortgages are directly offered on the blockchain (as opposed to representing certificates stored in a vault) they simultaneously represent something but also are themselves property.

newbie
Activity: 22
Merit: 0
December 02, 2014, 04:00:21 AM
Like you pointed out, there's a fundamental difference between the transfer of a bitcoin, and the transfer of a token that represents a claim on some external-to-the-blockchain property.  In the later case (asset-backed tokens), all that is transferred is ownership (and ownership is really a social construct, valuable only to the extent that one's society is willing to enforce property rights [as control of the property in question remains a physical problem]).  In the former case (bitcoin), what's transferred is control itself.



Thank you. This is brilliant stuff.
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