Topic: The current Bitcoin economic model doesn't work - page 3. (Read 96539 times)

Actually, what you implicitly agreed to is that you do these things:
"suggest" changes to BTC that would make it more like regular physical centralized currencies.  Their suggestions hardly if ever add any value to our beloved crypto-currency, and when refuted and politely told why exactly they don't, these people just continue to plug their original argument.  Even when it is suggested to the suggester to just start his/her own damn currency, they often pass right over that possibility.

Regular people don't spend their free time to act this way on forums.  You're either compensated or insane.

That's a world that can never be, no matter how hard you wish it to be so.

It's only unstable in terms of other currencies, not goods / services.

People like me aren't really interested in economics.  People like me want to build a world free from economics altogether.


I will tell you right now I do not, but you yourself have already implicitly agreed that you do work for the Manipulator in an earlier post you made.  Do you want me to recite it to you?

I shot down this idea back in Feb.  What has changed, Suggester?  Have the laws of economics been repealed since I last posted?  Do you have a new plan to peg the value of the bitcoin to a commodity service/product that doesn't break anonimity? 

What's wrong with you folks? I thought I was a conspiracy nut job till I saw people on this forum. Does a crypto-currency need to be stupidly volatile to be a good crypto-currency? Does anchoring its price to the average global electricity price means we're selling our souls to OPEC or something? Do you see Bitcoin ever going mainstream when one cannot even ensure it'll keep half of its worth by next week?

The premise of bitcoin is:
1- Anonymity
2- Control

My proposed model doesn't even touch these concepts. It's a purely economic suggestion. An unstable medium of exchange is a bad medium of exchange.

And you know what? By insisting on making Bitcoin fail it's probably you who's working for The Manipulator!

HE ADMITTED IT!


Just because you mine BTC doesn't mean you spend anything to do it, or care where the electricity comes from / who's paying it.  SETI and Folding@Home people do what they do for the same reason I mine BTC -- two things coupled together:  1) I believe in the concept more strongly than I believe in most things, and 2) I have an opportunity to support that belief tangibly.

For miners like me, it's not really about the value of the currency (BTC, USD, whatever) -- it's about the core principles and the concept.

Your valuation of BTC against USD shows that you do not think the same way about crypto-currencies as people like myself do.

Your definition of "a limited subset of goods and services" seems to mean just about every consumer good and service out there, while your definition of "very, very short periods" seem to mean around 5+ years. And that's all nice and dandy till we find that you've got no problem with bitcoins' price shooting up and down several folds within weeks. You're weird, you know?

Drama aside, I pointed out in the initial post that the proposed model will tie the coin's price to the average worldwide electricity costs. That's certainly not 100% stable on the long term, but I can promise you it won't double over a month nor lose half its value over 10 days. Let's just say it's significantly more stable than the current design. Got a better idea? Be my guest.

Crypt_Current, you've just made The Manipulator very, very angry. By exposing His agents you have sealed your fate. Let that be a lesson to all of you. Background music followed by a cut scene

Red, Encoin sounds like a very promising idea. While by no means Etlase2 was the first member to point at the dreaded problems of limited supply as many people have cried out loud against it over the last year and a half, it's the first practical implementation of the concept I've seen. I'll look into it right away (then report back to The Manipulator, of course).

I spend an unhealthy amount of time lurking around this forum, and I noticed a trend -- that people like Suggester pop up every now and then to ... "suggest" changes to BTC that would make it more like regular physical centralized currencies.  Their suggestions hardly if ever add any value to our beloved crypto-currency, and when refuted and politely told why exactly they don't, these people just continue to plug their original argument.  Even when it is suggested to the suggester to just start his/her own damn currency, they often pass right over that possibility.

I think it would be easier to put effort into creating an alt-chain than to defend political stances.  I don't think this sort of "defense" is any kind of thing any normal person does in his/her spare time, or as a kind of "labor of love".

It's probably not a novel idea, and it definitely and admittedly borders on paranoia, but:

I think these people are paid agents of organizations that have averse intent toward Bitcoin, and possibly the concept of crypto-currency in general.

One such organization could be whichever shadowy one is led by The Manipulator.

This seems very similar to what Etlase2 is trying to design for EnCoin.

I'm absolutely sure the coin price (equals) and absolute quantity of electricity argument is impossible to implement. (Feel free to see that and the previous EnCoin thread for details of why.)

However,


In the process, I identified (the beginnings of) a pretty trivial mechanism for keeping *coin prices stable. It uses the price of electricity as a constraint. It has varying minting based upon economic changes.

I don't want to deliberately sidetrack Etlase2 threads. But if there is interest, I don't mind starting a new thread to discuss the feasibility of the concept.

This post has a brief summary.
This post gives a few more details.

I'm not saying this exact idea is finished or perfect. I noticed few unintentional flaws in the details myself. But if anyone is willing to discuss the plausibility of creating stable *coins using a variant of this mechanism, then give me a ping in PM.

If you want me to understand that a fixed number of coins and depreciating prices are better... Trust me, I've already heard you! Nothing to see here. Move along...

I think it is way too early to say whether or not the system is going to produce a stable currency or not.  I suspect that it will produce enough stability, but for, I think, very nearly the exact same reasons that you think it won't.

I'm also not sure that total stability (or really even more than a little stability) is a necessary feature of a medium of exchange.  For example, I don't consider the dollar to be very stable at all, except in relation to a limited subset of goods and services over very, very short periods, but the dollar is still a very useful medium of exchange.

The value of everything floats.  Things that are more useful today than they were yesterday will become more valuable.  Things that are easier to produce today will become less valuable.  Hoping for real long term stability is childish.  Expecting it is madness.  History tells us that state sponsored violence isn't enough to create stability.  What makes you think you are clever enough to design an algorithm in advance that will achieve it no matter what tomorrow brings?

Sorry, but if i had 100 posts, not 1000, i would still say that your argumentation is a complete bullshit.

I really admire kjj and BitterTea for wasting time with you. You just don't get simplest things. Your whole point is illogical, false and based on wrong assumptions and facts.

But keep going, just let me grab some popcorn.

It's nothing personal, but from experience it seems that people with ridiculous number of post counts take it as their personal duty to respond to just about anyone saying anything on the board whether they've got something valuable to add or not. That's why their replies, generally speaking, don't tend to be very useful or well-thought. And I've seen three examples today already.

There's no way to ever verify otherwise but it doesn't really matter. We're discussing abstract ideas not personal motives.

Then you better remain speechless. Because if people are spending $12 billion/day on electricity to produce coins (wtf?) then they deserve $12 billion worth in stable coins per day. At the current price of about $5/coin and the daily 144 blocks*50 coins the daily new supply is worth about $36,000.

There's no point going through the technical details about whether the price will perpetually deflate since the last 20 pages pretty much cover all the for and against arguments on that and they're available for people to read if interested. Rather, it's more constructive if we focus on the main much simpler problem: the instability of the bitcoin's price. I don't think you have any doubts that the current model does not produce a stable currency, do you?

If we agree on that, then I hope we also agree that stability is an important if not an essential feature of a medium of exchange. It would then be established that we have a problem in the current design, and we'll start thinking about how to deal with it.

For the lulz: It's incredibly funny seeing Bittertea and SoH keep posting "This user is currently ignored." I bet they're still yelling about how pointless it is to keep posting in this pointless thread. It's like these retards literally can't stop typing.

I had a post count under 1,000 once, but I don't any more.  Feel free to check my details though, if you think that I'm some old money dude trying to defend his hoard.  I've earned about 125 BTC since I got started, and I've spent about half of that on goods and services, and I've lost a fair chunk more by gambling (both on actual gambling sites, and on the exchanges).  Oh, and I'll be spending another 30ish (depending on the exchange rate) in the next week or so, which will leave me nearly bitpennyless.


You are confusing the subsidy (creation) with the reward (income).  If this was a paragraph about coin creation, it would be right, in that every 4 years halves the number of coins created.  But the rest of the paragraph makes it very clear that you are really thinking of income, and income does not decrease linearly with time the way creation does.


Linear.  You are assuming that the cost of mining pushes the value, and that the value does not push the cost of mining.  This is not true.  If we ignore all other factors, we end up with something similar to the Lotka-Volterra equations where the cost of mining and the value of the coins have a complex non-linear effect on each other.

But in reality, we can't ignore all other factors, because bitcoin gets value from exchange, not creation.  So we need a third non-linear differential equation to show how mining relates to supply.  And then we need a fourth, to show how value and creation relate to demand.  And then we need a fifth, to show how value relates to saving.  And then a sixth, to show how...

See where I'm going with this?


A conclusion drawn from your previous linear mistake.  You are assuming a system with no feedback, and then shocked (shocked!) to find that it runs away to a singularity.


You are totally correct that your fictional linear model can only be saved by adding feedback.  But your model isn't reality.  Reality already has feedback in place.


Yawn.  Do I even need to say it?  Linear extrapolation with no feedback once again races to the moon.  Also, bitcoin isn't atomic.  We are free to divide it.  Even if a single bitcoin will someday be worth eleventy billion dollars, it doesn't mean that we can't peel off a fraction to buy a loaf of bread today.

I'm going to stop here.  The later part where you want the equivalent of 12 billion new coins produced per day left me nearly speechless.

Maybe you can more succinctly present your proposal so I don't have to spend an hour refuting things like...


What would be the point of hoarding any kind of money forever? Are you going to eat it? Are you going to build a house out of it? You don't understand incentives. The only reason to hoard money is to later spend it.


They spent time and money building infrastructure. Who are you to say that their time and money is worthless? What have you contributed? Why don't you start your own currency if there's so little risk?

So, please summarize your proposal, say in a paragraph or less, and I will respond directly to it.

Your "argument" against my suggestion wasn't very informative to say the least. I'll try to explain why:

Your thinking, kjj, is hopelessly linear.

The real world is a messy, complicated place.  Many factors come together to interact in complex ways, non-linear ways.  Real understanding of the world is very difficult, often actually impossible.  So we simplify and approximate.  We make models where A causes B, and B causes C.  But these models are wrong, and we poison our thinking when we forget that.

Bitcoin is a system with dozens of variables, and hundreds of relationships.  We know a couple of these exactly.  We know a few more to a decent approximation.  Quite a few more are just vague assumptions.  The vast majority of them are so unknown that we don't even know what we are missing.

In summary, your entire conclusion is based on simple linear extrapolations.  Ponder this:



Did that convince you that you were wrong and I am right? No? Why not? Perhaps because it wasn't very convincing? Or perhaps even because I haven't actually said one single useful sentence?

I'd really like to start hearing arguments against (or for) my proposal just for a change. Preferably from members who aren't trying to increase their post count by replying even when they have nothing to say.

Is it pointless to come to a thread to explain why it is pointless to argue with you?  It probably is, but I'm going to give it a try anyway.

Your thinking is hopelessly linear.

The real world is a messy, complicated place.  Many factors come together to interact in complex ways, non-linear ways.  Real understanding of the world is very difficult, often actually impossible.  So we simplify and approximate.  We make models where A causes B, and B causes C.  But these models are wrong, and we poison our thinking when we forget that.

Bitcoin is a system with dozens of variables, and hundreds of relationships.  We know a couple of these exactly.  We know a few more to a decent approximation.  Quite a few more are just vague assumptions.  The vast majority of them are so unknown that we don't even know what we are missing.

In summary, your entire conclusion is based on simple linear extrapolations.  Ponder this:

Sorry, as much as you want it to be, "maintaining a stable exchange rate against X fiat currency" is not one of the design goals of Bitcoin. Again, feel free to start your own block chain rather than campaigning to change this one against the will of current users.


You mean, like dollars, which have lost 95% of their value since the inception of the federal reserve?


Maybe not. So what? That time will come. Bootstrapping a new system of money is an iterative one, not instantaneous.


Nor do you lose any of your Bitcoins. If the dollar fluctuates against the euro, OH NOES! Bitcoin is a much smaller market, as it grows it will stabilize. Do you understand this?


Oh no, I used a bad word. Sorry, I get angry when people campaign to change Bitcoin instead of just making their own fucking version. Seriously, you have all the tools available to you. Grow up.

Can be rigged both ways. That is the point.
But i would rather suspect it is rigged "your" way.



It's not because you are not getting it.



I am not in a hurry anywhere. I think i rather won't cross 2k posts in the next year, unless something special happens.

Also, 1k posts in over a year is really nothing extraordinary.

So why can't it be rigged against me then? If I was gonna rig something I'm gonna make sure it appears like I have the support of 2/3rds of the community (hint hint).

But it's not pointless to come to a thread only to say it's pointless to argue with its poster?
I'm really thankful to whomever added this fantastic ignore button. Keep barking boys, you gotta have at least 2k posts before Christmas.

Additionally the poll in the topic may very well be rigged, as SMF currently does not support blocking votes of people with less than X posts and registered longer than Y days.

Also, it is pointless to discuss with Suggester, as he just doesn't get it.