Topic: (Un)Quick post from Japan. No politics please..... - page 2. (Read 4760 times)

I don't disagree with your general point, but the above statement is no longer true.  Silver in a mined, refined and elemental state (above ground stock, or basicly bullion, coins and jewlry) is much less abundant in our modern world than gold in the same state.  The reason for this is, although gold has been used primarily as a store of value even in the absence of a gold standard anywhere in the world, silver has largely lost it's monetary and investment value as a precious metal (up until last year, anyway) and it's value for the past 50 years or so has been dependent upon it's many industrial uses.  Many of those industrial uses consume the elemental stocks by using silver in chemical compounds that are difficult to reverse, (i.e. photography development) or by using the metal for it's electrical properties in devices that require it and are thus difficult to retrieve (i.e. satellites, aircraft/spacecraft avionics, military equipment and undersea cables).  So over the past 50 years or so, more silver was consumed in industry than is mined each year; although this may change with the recent rise in silver prices.  While pretty much all of the gold that has ever been mined can still be accounted for, as gold has very little industrial uses that cannot be replaced by cheaper materials.

As a heavy metal, it is indeed poisonous.

Napoleon gave his guests a thin golden leaf for his dinner guests to eat as an appetizer.

The aristocracy of Europe has more problems than just inbreeding.  :-)

Another anecdote on aluminum vs. gold in history…

Napoleon give his VIP guests aluminum flatware for dinner.  Everybody else got gold flatware. 

You don't have to go far back in history to see metals considered more valuable than gold.  Silver basically financed the entire Spanish expeditions to the new world.  Silver was lacking in Europe but, to this day, the western hemisphere is well endowed with this shiny metal.

A currency based on silver for the whole world is possible. Do I want that?  Hell no.  The more virtual, the better.  Fiat is already 97% virtual.  It's very convenient.  It's the smoke and mirrors and power plays (see paypal, Et Al) that ticks off any one not sleeping under a rock.

I'll tell you what cryptocurrency means to me: ability.

I grew up with the science fiction stories with credits as a plot device.  These electronic units were apparently independent of whatever evil empire was wrecking things.

Unfortunately, severe disability precludes using physical cash and coins.  As a consolation prize for disabilities beyond my control, I got to use credit and debit cards.

I get a degree of freedom if I trade for it with my privacy.  Is it necessary to know that I bought a book or went to a restaurant? As a merchant, why does anybody care if a customer buys from me?  Will I get an audit for selling a few hundred units while GM and The Federal Reserve get no audit whatsoever ever.

Nobody's business.

I hope it's not an elaborate (REALLY elaborate) pyramid scheme because that would be so disappointing.

SHA 256 is a good an encryption method at this level.  I'd like to see worst case scenario of what we're going to do in the event of a hack.  I'm like to see the system moved to SHA3 before any catastrophe as it will not have any possible hidden weakness of SHA1 as SHA2 might have.

Unfortunately, I think gold is poisonous.  :-/

+1 for the rest of the post!

There once was a crown jewel called aluminum -or however the British misspell it ;-).

Any rock put into the crown sent the message that it was not only more valuable than anything you will never own, it is more valuable than your existence.

Today, I wrap peanut butter and jelly sandwiches in aluminum foil.

Things change.

In my lifetime, I want to wrap my sandwiches in gold foil.

Look up the relationship between lead and gold.

Silver is inflationary for reasons similar to aluminum.  Silver is a byproduct of zinc and copper mining.

Industrial requirements will win the day with shiny "precious" metals.  There's a lot of money to be made shorting this nonsense.

Another situation relates to the death of De Beers.  Diamond foil.

Quantum computing will require heat resistance that silicon can't handle.  Diamonds can handle it.  Diamond wafers are an absolute necessity to the future and if necessary, the future will crush Debeers.

The point of all of that, which I could've just stated in one line, is that artificial scarcity (example, 21,000,000 bitcoins) backed up by strong mathematics IS the future. I know it's optimistic but post scarcity will come.

And regarding apple coin…

1. The overwhelming majority of artists cannot afford apples.  If anything is post scarcity, it's the music business.

2. "No greater treason than the right deed for the wrong reason."- TS Elliott

I hope to the flying spaghetti monster that Apple does their own variation of bitcoin and then shed their containers before the first bust arrives.

C4L FTW!


This is unlikely to work IMO.

Has Canadian Tire become a central target for government(s) due to their issuing of Canadian Tire money?

If not, is it maybe due to some security blanket effect produced on the government(s) by some kind of record keeping of which serial numbers of Canadian Tire money notes were issued to which customers? (I think I recall cashiers handing out used notes though without any apparent attempt to make sure they gave out precisely the serial numbers the cash register thouht they were giving?)

-MarkM-

Probably not.  But I contest that what you assume would happen once competing currencies exist would actually happen.  Bitcoin has a strong first to market advantage, so any other competing currency based upon it would have to have some dramatic advantages over Bitcoin.  If a large Western government (i.e. the United States) started such a bitcoin copy with legal tender advantages, that chain would probably become more widely used, and thus more valuable.  That's assuming that no other aspects of Bitcoin are changed, most importantly the cash-like ability to trade anonymously.  I would doubt that if the feds ever do a bitcoin clone that they won't put something in there to identify users, which will inevitablely be used against users either by the government itself or by hacker-thieves.  Just the possibility of such a thing would inhibit adoption.  If nothing else, foreign users would be reluctant to use such a thing.  A corporation might not do the same, but such a corporation would become a central target of governments, and thus a victim of their own successes.

I am not convinced that having many variant blockchain based currencies would devalue bitcoin.

For one thing if it constantly pointed out that it is in fact using the bitcoin software or modifications of the bitcoin software, all of its marketing would also to at least some extent also be marketing for bitcoin.

Ideally it would even be able to serve the demographic that feels left out of bitcoin by the escalated cost of entry into the bitcoin-minting business.

Maybe an alternate route from hobbyist earnings up toward full buying power new currency could be games. It has long been a problem that it is hard to set up gaming as something people can legitimately make a living at, such as by their character's actions in a game serving to make the game sufficiently more interesting to play for other players that the value of the game as a whole is increased.

We can see already from games such as World of Warcraft, Second Life and Eve Online that currencies used in games can become tradeable directly with "real" currencies, maybe either setting up more and more games that use bitcoins and also variants of bitcoins, or some existing large games introducting such currencies into their games or rationalising their games' economies by restricting the total supply of various things in the game by means of such blockchains, could be at least as practical a way to start up new blockchain based currencies as would iTunes issuing AppleCoins or Canadian Tire issuing Canadian Tire Coins.

A lot of the value in many private currencies seems to be the sheer number of people they get to spam with whatever they want to spam them with. Whether it is air miles or the customer loyalty points of some particular chain of shops, just having lots of people own some seems to almost have value in itself though more likely much of that value rides upon actually having some means of and excuse for spamming them with some form of promotional material promoting possibly even more things than just one's own products.

So to some extent especially during boot-up it might be more important to get coins out to vast numbers of people than to have those coins initially seem to have any actual value. The more people that have some the more value just the sheer number of people will maybe tend to lend to the things.

-MarkM-

@bearbones
'I also think that it would be very hard to make a privately operated bitcoin-clone profitable'
'No, it is far easier and less risky to bootstrap bitcoin.'

Are you serious? That is exactly what Bitcoin (through first access to capital) have done. No-one with any serious economic or political weight behind them would bootstrap Bitcoin.
For two reasons:
1: A huge overhang of unsold Bitcoin the developers are sitting on.
2:By starting a new algorithm they would get the benefits that the first people who got into Bitcoin did. Namely a huge pile of the new digital currency.

@amincd

I'm a Ron Paul supporter too. Fingers x-ed.
Apple could easily do so, they would just pay artists in Applecoin.

Apple couldn't do so. If others are mining its coins, then Apple will lose money every time it gives out an iTunes download (since it must pay the artist 70 cents per download).

You answered your own question.  No government currently accepts bitcoins for tax payments, therefore the threat is meaningless.  I also think that it would be very hard to make a privately operated bitcoin-clone profitable.  If you controlled the majority of the network, you'd be paying a huge amount to sustain it and also accepting the other 49% on parity.  No, it is far easier and less risky to bootstrap bitcoin.

@amincd
'As far as bitcoin's speculative nature: of course! It's a fun experiment'
I think that sums it up best. Its awesome. But Apple COULD give people Itunes downloads or movies or whatever for Applecoins, even if it let people mine them themselves. Why not? All they would have to do is start a new algorithm (Applecoins) and accept that plus USD. And not Bitcoins. Anyone accepting digital currency would also start accepting Applecoins (plus Bitcoins). Yet the consumer would rather hold Applecoins because they are backed by Apple. See what I mean? As more newbies got into digital currency, Bitcoin would slowly die as Applecoin becomes ubiquitous.

@bearbones
You misunderstand me. No-one will outlaw Bitcoins. I'm using that analogy to show how it would die.Thats HOW Governments change currencies. Everyone is allowed to keep using the old one as much as they want. It still has all the properties of money. Divisibility, portability, cultural acceptance etc. Its just that the Government will no longer let you pay your taxes with it.  The old currency is exactly the same as the new one, but with one advantage. You have to pay your taxes in the new one.

If Kenya introduced KenyaCoins and accepted payment for taxes in KenyaCoins only, then there would be a backstopped demand and some people somewhere that would ALWAYS need them. That would cause all digital currency enthusiasts to migrate towards KenyaCoin. They wouldn't have to do anything to Bitcoin at all. It would just die on its own.

If (fxxking) Goldman Sachs offered deposit insurance on accounts in GoldmanCoins ONLY then the public would want to hold those instead of Bitcoin etc etc. No-one would have to do anything specifically to try and halt Bitcoin. People would just naturally stop using it in preference for something else.

This would not work against bitcoin, as there is no method of enforcement.  If bitcoins were centralized (say, only Americans used them), then it would be possible.  If we can get past the infancy stage, though, no one will be able to enforce a boycott.

A/B: Bitcoin does have some resistant to going to zero, in that it's scarce. This will make it always potentially valuable.
 
C: As far as new currencies using a similar concept, Bitcoin has a first mover advantage in brand-recognition, supporting software, people with the client installed, accepting merchants, and the security of its block chain, which will make it the safest cryptocurrency for a long time.

It's well designed, so I don't see room for a variation to make gains against it.


Apple couldn't give people Apple products in exchange for AppleCoins, since would not be generating all the coins itself. If it generated the coins itself, then it wouldn't be able to match the computing power currently contributing to the Bitcoin block-chain.

As far as bitcoin's speculative nature: of course! It's a fun experiment, that has potential to change the world. Its rapid growth is what's most phenomenal.

Hey guys! Sorry, I shouldn't have mentioned gold at all. Its has sidetracked my argument. I only had it in my original post because one of the Bitcoin developers I was in e.mail contact with bought up gold as a comparison to Bitcoin. Gold seems to cause instant freakout in every thread it pops up in, especially in the financial forums I am usually in (actually its more like butthurt over there...) )

Anyway, I'll try and pare it down to the basics. Sorry, shouldn't have produced an essay, but I'm trying to get a one-stop shop I can cut and paste onto financial blogs.

Creighto thinks I haven't read around here before posting, therefore I am asking noob questions and being rude. With all due respect, I think he hasn't read my posts carefully and is misunderstanding me, willfully or not. As I see it........
----------------

Each Bitcoin is unique. However there are many algorithms that will give similar results.

As a deflationary currency, those with first access to Bitcoin (ie the first miners and developers) will see the value of their coin increase. This causes hoarding behavior.

Bitcoin must necessarily have a centralized registry (whether in the cloud or encrypted and streamed) to prove ownership, because Bitcoins (being a piece of data and all) can be copied.

As Bitcoin is a piece of data with no physical properties of value  (ie oil, silver, copper, bottles of wine etc), cultural properties of value (gold, diamonds etc), way of producing income (land, housing) or legally defined value (Governmental or local fiat....ie taxes and transactions must be paid by law using it) or other value ascribed to it by corporations (beer coupons, gift certificates, airmiles etc)  and all Bitcoin transactions can be currently enacted in some other way (I can buy Alpaca socks with Yen or Euros), Bitcoin has no value beyond that ascribed to it by the Bitcoin community. (Please note, this is NOT a diss, all I am saying is that there is no-one outside the Bitcoin community that would see Bitcoin as having an intrinsic value beyond the USD they could sell it for to someone inside the community).

In other words, while each Bitcoin itself is unique, and the inspiration for Bitcoin is unique as hell (VERY unique  ), there would be nothing to stop someone else starting a competing algorithm. 

And this is my point. If Bitcoin gets to a level of sophistication and ease of use such that any non-computer literate person can use it easily, then eventually some small government or large corporation or whatever, will want to use something like it. This SYSTEM (not Bitcoin itself) could be the money of the future (as many of you point out in many different places on these boards).

In this case however, since it is a DEFLATIONARY currency, and since Bitcoin itself has no intrinsic value beyond this community, and since the SYSTEM can be duplicated (unlike gold for example), Bitcoin will be a victim of it's own success. The new adopter will go "Great idea! Lets get our own algorithm...Bytecoins!". Because, as we see, the first people with access to the algorithm get a whole pile of these new Bytecoins which increase in value from day one. The leaders will want a pile of them naturally. The new adopter would have no interest in using Bitcoins as first access has already been acquired by Bitcoins developers and 'old salts'. The first thing they will do will be to backstop their currency by law, and Bitcoin will be dealt a fatal blow.

We see it in finance all the time. Government X destroys the currency by mismanagement. New Government Y introduces a new currency, that people must use by law to pay their taxes. Everyone wakes up the next day and their old currency is worthless. Or a new technology comes along with similar but slightly better properties than an old one (how much is whale oil worth nowadays?). A Bytecoin that could be used exactly the same as a Bitcoin, except that if you wanted to gamble in Macao or trade in orange juice futures or pay taxes in Kenya or whatever you had to use Bytecoins and Bytecoins alone, would instantly cause people to start favoring them as there would be an backer of last resort.

Is there something I am stating incorrectly here?

Trying could be fun though.

Why couldn't the ancients have figured out the concept of confirnming previous things/values by somehow incorporating or coding them into later things?

Maybe part of the infamous "secrets" of stonehenge, the pyramids, and so on lies not merely in their stellar alignments but in some kind of chain, whereby each later such site includes some coded proof of knowledge of the previous sites in the "chain"?

Hmm...

-MarkM-

Just answering your question A, later I come for the rest of the "essay"

You must understand that nothing has intrinsic value. Value is a subjective opinion people have on stuff, not an intrinsic attribute of stuff themselves.

That said, please realize it's not impossible, although unlikely, that gold's value reach zero one day. All it takes is people to find better and cheaper substitutes for everything gold does. Personally, I think distributed cryptocurrencies can be such substitutes in what concerns gold utility as a store of value, but that only long years will tell.

Now, comparing bitcoin particular with gold, of course gold brings much more security as investment. We can rest assure that, no matter what, the value of this ancient precious metal won't go to zero from night to day. We can count on its historical value, which bitcoin, being such a young project, obviously doesn't have.
But then, what did you expect? You can't invent something 5.000 years retroactively.

shane, you should have a look into Namecoin.

Namecoin has almost the same properties as Bitcoin, on top of that, it solves the issue you are most concerned about: it has "intrinsic value".

No matter what happens to the exchange rate, Namecoins can always be used to purchase .bit domain names.

I foresee that Namecoin will evolve into a major currency in its own right. If your theory is correct, it might overtake Bitcoin.

Considering the vagueness of the questions, I'm not surprised that you were generally ignored.  The old salts here get very weary of answering the same questions, and if you want a real answer to an unanswered question you have to frame the question well.


Only if you assume that there is a backstop to the fiat currencies that you compare it to.  In practice, this may or may not be so.  Technically there is nothing backing up the US FRN beyond "the full faith and credit of the United States (government)", so in the end what backs a fiat currency is the faith the general public has in the long term future of said government.  If that is enough for you, then that's fine for you.  You should not assume that others share your religion.

I disagree with this statement.  A defined 'accepter of last resort' takes upon itself a huge liability by this action, potentially to their own destruction should the government decide to go after this institution.  If the public even believes that the government can destroy this institution, then the currency dies for lack of trust in a future trade value.  Bitcoin is valuable without any openly defined supporting institution.  If what you say is correct, this should have never happened.  The reality is that it did happen, so some significant economic support for the currency presently exists, which implies that it will continue to exist provided that said econimc support cannot be identified and subsequently undermined.

That's not an answer, it's a dodge of a serious rebuttal to your statements.  By what premise do you assume that such motivations actually exist?  It's rude to dismiss responders so, please don't do it again.

No.  That's the point.  You can choose to centralize for yourself by depositing into a "bank" or website, but no one has to.

You need ot read some more and return later.
They can have what they want by using a bitcoin bank or online wallet service, but monetary policy is politics.  Bitcoin just makes alternatives to the establishment possible.
If I were mad at you, you wouldn't be talking anymore.  But I do consider you a bit rude, coming into our house to crap on our table.  You are not the first to comeup with this theory.

I agree completely.


Sure.  That's why Facebook never took off, just being a novel version of a wiki after all.  It was doomed from the start.

Using the industrial or decorative value of gold as an argument to why it is safer is not reasonable. Gold is not intrinsically valuable. Nobody keeps it because he knows it won't go below 10 USD a kilo; almost the entire value would have vanished if that happened.

Gold is valuable because it is manifested in culture. It is a convention, belief, you name it. If just a small fraction of this happens to Bitcoin, the system has succeeded. The gold analog is thus valid.

I've been looking for flaws in Bitcoin for quite a while, and I found only two points that might pose a problem. The first would be not reaching a market size from where it begins to take a natural monopoly on being the independent international currency. The second would be protocol issues causing a non-healthy network state.

As to the other criticisms, especially those concerning how important the state, housing or whatever is... it's not important. Bitcoin just needs to take over any kind of market as long as it can gain further momentum from there. Not having inflation alone might get this into The Economist -- and then it's just over, the people reading that can sustain a price of USD 100 just because they're curious how buying BTC works. Rolex, Private jet? Nah, today I'm getting some BTC, they're better than CHF for inflation comparison, ain't that much cooler to have than a Rolex?

States attacking Bitcoin, mh, that might become a problem, too.