Ye I started checking out that mail-list. It's great.
Do you know anywhere where I can find credible information on him/them?
(Not that the Wiki-entries and top google results are bad but if you know some personally that would be cool).
Topic: Why are bitcoins still being made? (Pyramid-Ponzi) - page 3. (Read 2262 times)
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In reply to your new post: My feeling based on my own limited understanding of basic economics is that the opposite is true. It was a service for very long while minting was stabile as I am advocate it should be (infinite) but that it will turn into a ponzi-scheme by default at the end of the minting/as minting decreases in profitability. Statistics related to December 2012 seem to support my notion.
PS: Finite release of 21^ at once would create the same problems and sooner but it would be more moral and it would test the theory sooner.
The mining difficulty increased, due to too much people mining and making to much money solving blocks to fast. (not a 10min average) Also the ASICs with are mining a factor 100 faster then GPUs make it look really strange... weird... suspicious... without having the full background story.PS: Finite release of 21^ at once would create the same problems and sooner but it would be more moral and it would test the theory sooner.
Mining will keep going forever, just because it actually validates and encrypts the entire blockchain. Eventually mining will be profitable from transaction fees only. Hence it kinda going into infinite loop. If mining becomes too profitable, to much people will do it. To much people mining difficulty will change and mining becomes less profitable. On the other hand if too few people mining, and blocks are not getting solved fast enough, the difficulty decreases and mining becomes more profitable. And more people will start mining. This will keep going infinite, always stabilizing itself. (this is the solution for the Dilemma known as Byzantine Generals as long as more than 50% of the nodes is honest, and was needed here in order to make bitcoin a success.)
Enjoy reading the paper over the weekend, and if you get some extra time, start reading up on more of the details from Satoshi, escpecially on the crypto mailing list.
But John.
Your FAQ does not answer why one would want to sell a finite resources increasing in value(once minting grinds to a halt) when one can form a new service which does not. Again and again.
And so when you reach this point (and we saw a spike of value right after 2012 decrease in production that is still going) the currency does in reality become a commodity, an investment and loses its function thus because it has not intrinsic value it must become a ponzi scheme.
My notion that it is a pyramid scheme builds only upon what I find to be a pyramid-scheme like way of supplying additional coins that perhaps could have been differently. I can not see any moral justification for rewarding the production of things that have no intrinsic value but I am not here to argue morals. Only the pyramid model itself.
Infinite supply could have been kept by spiral waves of new block-difficulties relieving old still keeping anonimity and algorithm safety but protecting the service and removing the pyramid-scheme aspect.
The morality of things would also be better as the minters would now be in a better position to argue that they are protecting a service, not using it.
@Milon
Thanks.
I'll read the paper over the weekend then!
Not really started any research, just throwing out some ideas.
Coming back later then.
In reply to your new post: My feeling based on my own limited understanding of basic economics is that the opposite is true. It was a service for very long while minting was stabile as I am advocate it should be (infinite) but that it will turn into a ponzi-scheme by default at the end of the minting/as minting decreases in profitability. Statistics related to December 2012 seem to support my notion.
PS: Finite release of 21^ at once would create the same problems and sooner but it would be more moral and it would test the theory sooner.
Your FAQ does not answer why one would want to sell a finite resources increasing in value(once minting grinds to a halt) when one can form a new service which does not. Again and again.
And so when you reach this point (and we saw a spike of value right after 2012 decrease in production that is still going) the currency does in reality become a commodity, an investment and loses its function thus because it has not intrinsic value it must become a ponzi scheme.
My notion that it is a pyramid scheme builds only upon what I find to be a pyramid-scheme like way of supplying additional coins that perhaps could have been differently. I can not see any moral justification for rewarding the production of things that have no intrinsic value but I am not here to argue morals. Only the pyramid model itself.
Infinite supply could have been kept by spiral waves of new block-difficulties relieving old still keeping anonimity and algorithm safety but protecting the service and removing the pyramid-scheme aspect.
The morality of things would also be better as the minters would now be in a better position to argue that they are protecting a service, not using it.
@Milon
Thanks.
I'll read the paper over the weekend then!
Not really started any research, just throwing out some ideas.
Coming back later then.
In reply to your new post: My feeling based on my own limited understanding of basic economics is that the opposite is true. It was a service for very long while minting was stabile as I am advocate it should be (infinite) but that it will turn into a ponzi-scheme by default at the end of the minting/as minting decreases in profitability. Statistics related to December 2012 seem to support my notion.
PS: Finite release of 21^ at once would create the same problems and sooner but it would be more moral and it would test the theory sooner.
Quote
PS: Thanks for the well-wishes. I hope that I am wrong because I am fascinate by the idea! I especally hope that I am wrong about the correlation between the minting and ponzi-scheme because let's face it. The long-term survival of bitcoins as a currency is based on those who want to use it as a service; not the minters and not the (bubble) investors.
You keep answering your own questions: Quote
The long-term survival of bitcoins as a currency is based on those who want to use it as a service;
Yes as long people keep using it as a currency it will get where it should be, and looking how things are going, it need another couple of years, but its up and coming. Please review my post again fellas.
The reason for the 2012 date is because I read somewhere that it was in December 2012 that mining became quite alot more difficult per hash.
Please explain to me what bitcoins has in common with gold?
Ahh well, yea that was to be expected. (not the time/date, but that it would happen)The reason for the 2012 date is because I read somewhere that it was in December 2012 that mining became quite alot more difficult per hash.
Please explain to me what bitcoins has in common with gold?
Once again read the paper, at some point mining will only be done by specialized companies due to the hardware requirements.
First hit was from CPU to GPU, second hit (currently going on) is from GPU to ASIC. Third hit will be towards even more specialized ASICs. Hence at some point only specialized companies are going to mine, as only for them it will be profitable.
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Either it is a ponzi-scheme or an added inflationary cost to the whole worlds currency supply created out of thinner air than the so called fiat currency that is supposed to be build upon economic growth and thus stay at 0 inflation. Please note that I am not suggesting that they should do a ponzi-scheme, I am suggesting that it is a variation of the ponzi-scheme.
Part of the criticism against gold and its many bubbles have also always been that its value is exaggerated by its investors and that it is not related to its output value and while gold has a value in both industry and jewelry bitcoins have none beyond their function as a service - one that could be argued gold has in addition to its actual value.
Read Paper, the mining process, looks a lot like gold finding. (a lot of luck involved) As said before has some characteristics of a ponzi scheme, and some characteristics that point against a ponzi scheme. Part of the criticism against gold and its many bubbles have also always been that its value is exaggerated by its investors and that it is not related to its output value and while gold has a value in both industry and jewelry bitcoins have none beyond their function as a service - one that could be argued gold has in addition to its actual value.
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Inflation with bitcoins (one way or an other) starts at the second coin minted.
There's no reason to stop at 21^ if there is a feeling that the full sum can't be sold right away by its creators.
This is fixed inflation to distribute the currrency, this is also short-term inflation. (when in 2140 the last coin is mined, there will be no more inflation, ever)There's no reason to stop at 21^ if there is a feeling that the full sum can't be sold right away by its creators.
Well, my old Gulden, went to a Euro, and while they said a Euro was 2.20 Gulden, within a year I paid the same euro for the same coffee I paid in a gulden the year before. School thought me thats inflation. Inflation happens because more money gets printed / loaned. While a bank can loan me an Euro they don't have, I can't loan somebody a bitcoin I don't have. (he wouldn't be able to send this) Nor will a bank be able too
All of a sudden you don't have to trust anybody (your computer can calculate everything to see if all the mathematical proof is there) and all transactions are out there for everyone to see. (perfect for accountants, no more book juggling, just give us all your bitcoin addresses from last year.) The fact that you hit a max amount, just means no inflation, nobody can print / create more bitcoins, making the bitcoins every has worth less. What basically happened with my Gulden to Euro, and later on with the euro. A bread won't become more expensive overnight just because the government prints more money.
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In effect you are creating money out of thin air but as I said it does provide a service in itself.
So the ponzi aspect of increased value based on increased investment and not profit (and thus return) I can accept to a degree.
What I have a hard time accepting or understanding are the pyramid-scheme aspects of it all.
The whole trust, is based on mathematical proof, that a computer on average should've done so long on bruteforcing it. Once again read the paper and come back and let us know what you think. (really want to hear your opinion, you even send PM if you want too So the ponzi aspect of increased value based on increased investment and not profit (and thus return) I can accept to a degree.
What I have a hard time accepting or understanding are the pyramid-scheme aspects of it all.
) 
Start here: https://bitcointalksearch.org/topic/new-to-bitcoin-start-here-7269
And this for the ponzi issue: https://bitcointalksearch.org/topic/faq-is-bitcoin-a-ponzi-or-pyramid-scheme-newbie-friendly-7815
And this for the ponzi issue: https://bitcointalksearch.org/topic/faq-is-bitcoin-a-ponzi-or-pyramid-scheme-newbie-friendly-7815
Greetings! 
Why are bit coins being made (minted)?
Why are bit coins being made (minted)?
I think it's a brilliant solution to a chicken and egg problem. Problem: you want a wide adoption of a virtual currency that has zero supporters, will have a finite supply, and will be supported by transaction fees.
How do you do this?
Answer: Slowly build support by initially rewarding miners with large block rewards and then ween them off block rewards and onto transaction fees by predictably decreasing the block reward.
Heya!
I'll try to watch the video at a late time but it is precisely the concept of controlled supply that worries me.
Since this money will not be issued in accordance to good and services available for that money it will in the end stop being a currency (even one created out of thin air) and simply a ponzi-scheme which people buy in hopes of increased value. There will be no point in purchasing anything since any purchase would thin out your finite investment and in the same way you couldn't possibly sell anything.
For those wishing to enter into new anonymous transactions a new digitical currency would be preferable.
I think in the best case scenario all bitcoin users are screwing over the rest of the world through their personal little federal reserve creating world currency that deflates the value of current currency. Butwhat happens as this minting stops and the pyramid-scheme part of things ends ?(frankly there is as someone mentioned no risk to this pyramid-scheme (the minting itself), it just is one). The risk is always in the ponzi-aspect (of the pyramid-scheme) and this is one of those rare, most interesting cases when joining the pyramid game is split from the ponzi-scheme.
Let's recoup a bit since I easily overstretch myself:
Pyramid-Scheme: People who mint early gain more over people who mint late.
Question: Who do they gain (Pyramid-players) from?
Answer: The Ponzi-Scheme investors who do not mint but hope to either gain from the bubble or the service by buying bitcoins from the minters.
PS: Thanks for the well-wishes. I hope that I am wrong because I am fascinate by the idea! I especally hope that I am wrong about the correlation between the minting and ponzi-scheme because let's face it. The long-term survival of bitcoins as a currency is based on those who want to use it as a service; not the minters and not the (bubble) investors.
I'll try to watch the video at a late time but it is precisely the concept of controlled supply that worries me.
Since this money will not be issued in accordance to good and services available for that money it will in the end stop being a currency (even one created out of thin air) and simply a ponzi-scheme which people buy in hopes of increased value. There will be no point in purchasing anything since any purchase would thin out your finite investment and in the same way you couldn't possibly sell anything.
For those wishing to enter into new anonymous transactions a new digitical currency would be preferable.
I think in the best case scenario all bitcoin users are screwing over the rest of the world through their personal little federal reserve creating world currency that deflates the value of current currency. Butwhat happens as this minting stops and the pyramid-scheme part of things ends ?(frankly there is as someone mentioned no risk to this pyramid-scheme (the minting itself), it just is one). The risk is always in the ponzi-aspect (of the pyramid-scheme) and this is one of those rare, most interesting cases when joining the pyramid game is split from the ponzi-scheme.
Let's recoup a bit since I easily overstretch myself:
Pyramid-Scheme: People who mint early gain more over people who mint late.
Question: Who do they gain (Pyramid-players) from?
Answer: The Ponzi-Scheme investors who do not mint but hope to either gain from the bubble or the service by buying bitcoins from the minters.
PS: Thanks for the well-wishes. I hope that I am wrong because I am fascinate by the idea! I especally hope that I am wrong about the correlation between the minting and ponzi-scheme because let's face it. The long-term survival of bitcoins as a currency is based on those who want to use it as a service; not the minters and not the (bubble) investors.
Greetings!
Me and some buddies will soon be making an University presentation based on digital economies and we are considering using bitcoins as our main subject. We haven't really had the chance to formulate any serious questions and if we do pick bitcoins the questions in the future will probably be a bit more advanced. But here's something I personally have wondered instead and I'll just throw it out there.
Ok hold stop! Have you read and understood http://bitcoin.org/bitcoin.pdf ? This should be your first read before any questions.Me and some buddies will soon be making an University presentation based on digital economies and we are considering using bitcoins as our main subject. We haven't really had the chance to formulate any serious questions and if we do pick bitcoins the questions in the future will probably be a bit more advanced. But here's something I personally have wondered instead and I'll just throw it out there.
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Why are bit coins being made (minted)?
To me it would be more reasonable to release the full amount from the start or in a worst case scenario organise a trust which releases bit coins at a set rate. From a cynical point of view this could be argued to be some advanced fom of a ponzi-scheme hidden in a pyramid-scheme.
Refering to above, read and understand it, your answer is in the question:To me it would be more reasonable to release the full amount from the start or in a worst case scenario organise a trust which releases bit coins at a set rate. From a cynical point of view this could be argued to be some advanced fom of a ponzi-scheme hidden in a pyramid-scheme.
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or in a worst case scenario organise a trust which releases bit coins at a set rate.
This is the mining community, open source like Linux. The coins are being mined for this very reason, release a steady amount over time.Quote
The ponzi-scheme from my perspective seems to be the very nature of the digitcal coin.
It is rooted in no production increase for a specific authority/group and so each minting in in theory one of maximum inflation.
If there is 1 coin to begin and 1 coin is minted the value of the previous coin should be cut in half.
This part can be forgiven because it also serves a purposes, while it can be consideed a ponzi-scheme it can also be considered a service for which you pay to have access to. You get the anonymity and the global access. Ponzi-scheme may not even be the right word but in one way it is because its value is increasing from increased investment not from increased profit.
While it has some of the typical characteristics of a ponzi-scheme, it has also some characteristics that point against the fact it is a ponzi-scheme.It is rooted in no production increase for a specific authority/group and so each minting in in theory one of maximum inflation.
If there is 1 coin to begin and 1 coin is minted the value of the previous coin should be cut in half.
This part can be forgiven because it also serves a purposes, while it can be consideed a ponzi-scheme it can also be considered a service for which you pay to have access to. You get the anonymity and the global access. Ponzi-scheme may not even be the right word but in one way it is because its value is increasing from increased investment not from increased profit.
You have no "Trust" origination, due to this transactions are being broadcasted globally. And everybody gets to see everything. While the mining provides the initial distribution from coins, it also serves to safe keep all of bitcoins transactions data/history. For this purpose, eventually mining will be completely paid out of transaction fees, when all coins are mined.
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But the pyramid-scheme part is to me the most serious part.
It seems to be that those who got in the earliest (pre - 2012) will get out the most from this whole thing in the end. Partly because of reasons above but partly also because clearly the early minter has an early advantage. In the end minting will become almost impossibe.
Well, in '11 they had this podcast with one of the main developers, who explained it pretty well. In the early days he had done a lot of mining, and collected over 10.000 BTC however he put this all into a website giving away 0.1 BTC for someones email address, just to create more awareness for bitcoin. (this was during the peak back then) Then the interviewer asked, what if you kept all your bitcoins, you would have had close to half a million US dollars now. On which the developer said, well if you look at it from the other way, if I would have kept all my coins, Bitcoin might have never become this popular and rise this far in price. It seems to be that those who got in the earliest (pre - 2012) will get out the most from this whole thing in the end. Partly because of reasons above but partly also because clearly the early minter has an early advantage. In the end minting will become almost impossibe.
Big risk, big payout... And then only if you didn't spend your 10.000 BTC on 2 pizzas... I think this is pretty fair and also, most of the early adopters gave a lot of bitcoins away just to create more awareness about it and get it more popular. So yea I do expect most of them to have a secret stash of a 100 or a 1000 BTC somewhere hidden far away, but looking at the thousands if not millions they gave away... Plus all of this is a reward for them as without the early adopters bitcoin would have never made it.
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In either case, even if you do not agree with this please do tell me why the amount of bit coins should be limited at 21^ and not unlimited?
If you do not have a fixed amount, it will result into inflation. (printing more money) I have no idea why and/or for what reason the number just under 21 million was chosen, but it will most likely have a mathematical purpose. (if they told me the max would have been 4 billion I would've been happy too)Quote
Thanks!
You're very welcome 
why haven't you done a prober research yet!
( tell me why the amount of bit coins should be limited at 21^ and not unlimited? )
here are some interesting links:
https://en.bitcoin.it/wiki/Controlled_supply
and
http://en.wikipedia.org/wiki/Fractional-reserve_banking
Not to mention the "future of Bitcoin"
http://youtu.be/mD4L7xDNCmA
Good luck with your presentation
( tell me why the amount of bit coins should be limited at 21^ and not unlimited? )
here are some interesting links:
https://en.bitcoin.it/wiki/Controlled_supply
and
http://en.wikipedia.org/wiki/Fractional-reserve_banking
Not to mention the "future of Bitcoin"
http://youtu.be/mD4L7xDNCmA
Good luck with your presentation
Please review my post again fellas.
The reason for the 2012 date is because I read somewhere that it was in December 2012 that mining became quite alot more difficult per hash.
Please explain to me what bitcoins has in common with gold?
Either it is a ponzi-scheme or an added inflationary cost to the whole worlds currency supply created out of thinner air than the so called fiat currency that is supposed to be build upon economic growth and thus stay at 0 inflation. Please note that I am not suggesting that they should do a ponzi-scheme, I am suggesting that it is a variation of the ponzi-scheme.
Part of the criticism against gold and its many bubbles have also always been that its value is exaggerated by its investors and that it is not related to its output value and while gold has a value in both industry and jewelry bitcoins have none beyond their function as a service - one that could be argued gold has in addition to its actual value.
Inflation with bitcoins (one way or an other) starts at the second coin minted.
There's no reason to stop at 21^ if there is a feeling that the full sum can't be sold right away by its creators.
In effect you are creating money out of thin air but as I said it does provide a service in itself.
So the ponzi aspect of increased value based on increased investment and not profit (and thus return) I can accept to a degree.
What I have a hard time accepting or understanding are the pyramid-scheme aspects of it all.
The reason for the 2012 date is because I read somewhere that it was in December 2012 that mining became quite alot more difficult per hash.
Please explain to me what bitcoins has in common with gold?
Either it is a ponzi-scheme or an added inflationary cost to the whole worlds currency supply created out of thinner air than the so called fiat currency that is supposed to be build upon economic growth and thus stay at 0 inflation. Please note that I am not suggesting that they should do a ponzi-scheme, I am suggesting that it is a variation of the ponzi-scheme.
Part of the criticism against gold and its many bubbles have also always been that its value is exaggerated by its investors and that it is not related to its output value and while gold has a value in both industry and jewelry bitcoins have none beyond their function as a service - one that could be argued gold has in addition to its actual value.
Inflation with bitcoins (one way or an other) starts at the second coin minted.
There's no reason to stop at 21^ if there is a feeling that the full sum can't be sold right away by its creators.
In effect you are creating money out of thin air but as I said it does provide a service in itself.
So the ponzi aspect of increased value based on increased investment and not profit (and thus return) I can accept to a degree.
What I have a hard time accepting or understanding are the pyramid-scheme aspects of it all.
Why are bit coins being made (minted)?
if they did your idea of a trust or did a ponzi-scheme it would defeat the entire purpose of bitcoins as it would centralize the system to either one person slowly releasing bitcoins or someone having to be trusted to release bitcoins (currently they would earn millions upon millions) which would make alot of bitcoin user's see it like another currency like paypal which means its controlled taxed and vulnerable.
the apeal of bitcoin is you grow the network by mining you do what the hell you want and its your business legal illegal no ones to say you cant spend it on what you want, not to mention people like me who feel very very smug that the governments have no way to tell how much money i have in bitcoins so cant tax me on it
also people who got on the bitcoin early will make more money but have also invested more by mining and taking the risk of bitcoin not taking off and loosing all there money in the process (solidcoin comes to mind)
in the end i could spend weeks and weeks arguing about bitcoin both good and bad points but also note bitcoin must fill some gap in the market otherwise it wouldn't be so damn successful
if they did your idea of a trust or did a ponzi-scheme it would defeat the entire purpose of bitcoins as it would centralize the system to either one person slowly releasing bitcoins or someone having to be trusted to release bitcoins (currently they would earn millions upon millions) which would make alot of bitcoin user's see it like another currency like paypal which means its controlled taxed and vulnerable.
the apeal of bitcoin is you grow the network by mining you do what the hell you want and its your business legal illegal no ones to say you cant spend it on what you want, not to mention people like me who feel very very smug that the governments have no way to tell how much money i have in bitcoins so cant tax me on it
also people who got on the bitcoin early will make more money but have also invested more by mining and taking the risk of bitcoin not taking off and loosing all there money in the process (solidcoin comes to mind)
in the end i could spend weeks and weeks arguing about bitcoin both good and bad points but also note bitcoin must fill some gap in the market otherwise it wouldn't be so damn successful
And i didn't mine gold back in prehistory because i wasn't alive back then.
Same for bitcoin, since it share tons of properties with gold. I like to call bitcoin "digital gold"
The new bitcoins are there to bootstrap the currency, to reward the miners, to put the bitcoins in circulation in a "trust no one way" and have them secure the blockchain even if today the transaction fees are still looow (like 0.3 btc per block of fees) and not enough to pay for the security
Generating infinite bitcoins means inflation, wich is bad.
Same for bitcoin, since it share tons of properties with gold. I like to call bitcoin "digital gold"
The new bitcoins are there to bootstrap the currency, to reward the miners, to put the bitcoins in circulation in a "trust no one way" and have them secure the blockchain even if today the transaction fees are still looow (like 0.3 btc per block of fees) and not enough to pay for the security
Generating infinite bitcoins means inflation, wich is bad.
Meh, people in 2012 cried that people in 2011 had moar bitcoins than them. People in 2011 cried that people in 2010 had moar bitcoins than them. Same for people in 2009. For 2008 no because back then bitcoin didn't exist.
The point is, who invested in bitcoin back then, risked a lot. The second half of 2011 and the first half of 2012 was a period where the bitcoin price kept dropping and dropping, not increasing. People had tons of time to invest and buy cheap bitcoins but guess what? They did not want to RISK! They prefered to say that bitcoin was dying, that price would drop to 0 and blablabla instead of invest.
And today they cry because who risked, now is happily profiting. Why didn't they buy at 15$? Or at 10? Or at 5? It dropped to 2 and less!
Quote
release the full amount from the start
To who?Quote
organise a trust
Problem: bitcoin is based on the "trust no one" ruleQuote
the earliest (pre - 2012)
Meh, people in 2012 cried that people in 2011 had moar bitcoins than them. People in 2011 cried that people in 2010 had moar bitcoins than them. Same for people in 2009. For 2008 no because back then bitcoin didn't exist.The point is, who invested in bitcoin back then, risked a lot. The second half of 2011 and the first half of 2012 was a period where the bitcoin price kept dropping and dropping, not increasing. People had tons of time to invest and buy cheap bitcoins but guess what? They did not want to RISK! They prefered to say that bitcoin was dying, that price would drop to 0 and blablabla instead of invest.
And today they cry because who risked, now is happily profiting. Why didn't they buy at 15$? Or at 10? Or at 5? It dropped to 2 and less!
Quote
and not unlimited?
And have inflation? No thank you.
Greetings!
Me and some buddies will soon be making an University presentation based on digital economies and we are considering using bitcoins as our main subject. We haven't really had the chance to formulate any serious questions and if we do pick bitcoins the questions in the future will probably be a bit more advanced. But here's something I personally have wondered instead and I'll just throw it out there.
Why are bit coins being made (minted)?
To me it would be more reasonable to release the full amount from the start or in a worst case scenario organise a trust which releases bit coins at a set rate. From a cynical point of view this could be argued to be some advanced fom of a ponzi-scheme hidden in a pyramid-scheme.
The ponzi-scheme from my perspective seems to be the very nature of the digitcal coin.
It is rooted in no production increase for a specific authority/group and so each minting in in theory one of maximum inflation.
If there is 1 coin to begin and 1 coin is minted the value of the previous coin should be cut in half.
This part can be forgiven because it also serves a purposes, while it can be consideed a ponzi-scheme it can also be considered a service for which you pay to have access to. You get the anonymity and the global access. Ponzi-scheme may not even be the right word but in one way it is because its value is increasing from increased investment not from increased profit.
But the pyramid-scheme part is to me the most serious part.
It seems to be that those who got in the earliest (pre - 2012) will get out the most from this whole thing in the end. Partly because of reasons above but partly also because clearly the early minter has an early advantage. In the end minting will become almost impossibe.
In either case, even if you do not agree with this please do tell me why the amount of bit coins should be limited at 21^ and not unlimited?
Thanks!
Here comes a new question after some thoughts and discussion:
Me and some buddies will soon be making an University presentation based on digital economies and we are considering using bitcoins as our main subject. We haven't really had the chance to formulate any serious questions and if we do pick bitcoins the questions in the future will probably be a bit more advanced. But here's something I personally have wondered instead and I'll just throw it out there.
Why are bit coins being made (minted)?
To me it would be more reasonable to release the full amount from the start or in a worst case scenario organise a trust which releases bit coins at a set rate. From a cynical point of view this could be argued to be some advanced fom of a ponzi-scheme hidden in a pyramid-scheme.
The ponzi-scheme from my perspective seems to be the very nature of the digitcal coin.
It is rooted in no production increase for a specific authority/group and so each minting in in theory one of maximum inflation.
If there is 1 coin to begin and 1 coin is minted the value of the previous coin should be cut in half.
This part can be forgiven because it also serves a purposes, while it can be consideed a ponzi-scheme it can also be considered a service for which you pay to have access to. You get the anonymity and the global access. Ponzi-scheme may not even be the right word but in one way it is because its value is increasing from increased investment not from increased profit.
But the pyramid-scheme part is to me the most serious part.
It seems to be that those who got in the earliest (pre - 2012) will get out the most from this whole thing in the end. Partly because of reasons above but partly also because clearly the early minter has an early advantage. In the end minting will become almost impossibe.
In either case, even if you do not agree with this please do tell me why the amount of bit coins should be limited at 21^ and not unlimited?
Thanks!
Here comes a new question after some thoughts and discussion:
Quote
The more I think about it the more I do not know if it should even be called inflation or deflation when we discuss bitcoins.
Perhaps falling or rising value is more correct? Inflation is tied to a specific economy.
At least if we tie Bitcoins value to its value as a service it should then behave more as gold or any other commodity or stock?
What are your thoughts on this and would a stabile value then be the best for the commodity to act as a currency?
Perhaps falling or rising value is more correct? Inflation is tied to a specific economy.
At least if we tie Bitcoins value to its value as a service it should then behave more as gold or any other commodity or stock?
What are your thoughts on this and would a stabile value then be the best for the commodity to act as a currency?
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