Topic: would you buy a marked quantum scifi bitcoin for above par? (Read 6239 times)

The property of "energy went into bitcoinium having no other use" is compatible with neutrality of money system and, I believe, is essential for its universality: https://bitcointalksearch.org/topic/an-answer-to-perceived-uselessness-of-pow-hashing-neutrality-855520

However, it being "cryptographically verifiable in a decentralised way" is where many questions arise. The measure of decentralization is a tricky one. If an entity creates an alt-coin and runs a single node mining it - is it decentralized? If there are two or five nodes? How many nodes is decentralized enough? In the end it boils down to adoption curves and network effects, which contribute a great portion of the value: https://bitcointalksearch.org/topic/m.9656213

But I agree, that the universal cryptographic AI with non-local communication would be able to erase the boundaries between different alt-coins and their network effects, essentially melting them all into the same one bitcoinium. The question remains - what boundaries will still be left? Can brain activity be thought of as cryptographic and therefore be transfused to bitcoinium as well? Can matter be turned into energy and then bitcoinium? Following that path we might all end up in the same one room where it all started, where differences didn't exist.

Maybe we should seek sameness-in-difference instead, maybe that's what bitcoinium is for.

I think this is giving altcoins too much credit, because it implies that one should actually pay "par" for an altcoin if given the choice. If I knew for certain that 10 units of energy went into creating a stash of bitcoins and 12 units of energy went into creating a stash of litecoins, I wouldn't necessarily trade my bitcoin stash for the litecoin stash. It may be theoretically possible to come up with a measurement of value based on the amount of work put into a coin, but that's far from how people value coins today. Note that in the AI world, bitcoins aren't fungible because ones created at different times have different amounts of energy put into them.

This reminds me of Marx's labor theory of value. Sure, we can calculate how many hours of labor it took various people to produce various goods, and call this their "value", but that bears little resemblance to how real people value things based on supply and demand.

When I decide on my demand for a coin, it has less to do with how much work was put into creating it in the past, and more to do with if I think it'll be more useful than alternatives in the future, and how confident I am that the future supply will be appropriately limited.

I like this metaphor and the idea that the value of a bitcoin can be defined by the energy "put inside" in order to secure the network.

It raises an interesting question about the economic consequences of merged mining as a way to secure sidechains.
Merged-mining allows to claim the rewards of several chains with the same level of consumed energy. But as stated in a previous post: "the electricity that went into [bitcoinium] must have no other use" which means that the value injected by a miner into the whole system (bitcoin + MM sidechains) stays the same if it finds a solution for a single chain or for several chains.

Therefore, it raises the interesting point about how sidechains reward the miners:
- they create new sidecoins => there is less bitcoinium in each coin (bitcoin or sidecoins)
- they use fees or demurrage (but don't create new coins) => we have the same quantity of bitcoinium in each coin, whatever the number of MM sidechains.

In the former, there's an inflation controlled by the miners which decide to merge-mine (or not) new sidechains. In a sense, it doesn't seem different from current situation with bitcoin & altchains. In the latter, we keep the deflationary model of bitcoin.

Did I miss something ?

The money system is currently centralized which will make it impossible for 'the people' to run the system in their best interest.
Bitcoin is a decentralized money system which finally makes it possible for people to choose with their money without an authority can change the rules (like printing and stuff).
So we have something better to continue, we only have to chose.

I also say "money system" because money and currencies are two different things.

In my perspective, money equals (stored)energy.

Emphasis mine.

It's unlikely that Bitcoin gets that much traction before the distribution of coins is mostly complete, at which point the expenses on mining will be reflecting the amount of disagreeing on how to manage the universal global money system. UN/gov are made of people and their biases, mining provides neutral rules for dispute resolution.

No because USD and EUR are fiat and cost a fraction of face value to produce.


That is perhaps not impossible, but the chances of it happening are far higher if people ignore cost fundamentals in their pricing.   I'd say its a definitionally bad thing if an alt overtook bitcoin because then what assurance do people have that it wont happen again: that seems like a recipe for cryptocurrency to lose store of value potential.  As it already doesnt have unit of account property that may make cryptocurrencies fail.


It depends on what you think came first gold or network effect.  Do you think gold should be valued significantly differently if its stamped with F instead of B?  The fact that it can be melted down and recast puts a clear limitation on how far that to happen.

The universal AI in they hypothetical bitcoinium makes it behave like gold for recasting purposes between all altcoins, as they are made of bitcoinium.  While todays bitcoin does not know about work costs in other chains, the humans speculating on them do and can do this calculation.

Adam

There's another feature missing from current day bitcoin that the universal AI provides: PoW convertibility and non-local communication: ie the ability to recast F coin bitcoinium into bitcoin.  Without that unlike gold you cant do the analog of melting down a Spanish Doubloon coin and recast it as an American Gold Eagle coin.

While we can estimate it as I described its still a bit subjective.  Also and partly because of that, there is lower network effect, less liquidity, plus the risk that it would end as a floating exchange rate due to human factors (alt-coins are not currently valued in this way, and even if that became de rigueur it might slip in event of a system shock eg like people getting out of F coin).

So in the meantime the reason to bother with sidechains is they give a way to opt-in to the recastability without needing universal AI, and thereby avoid getting trapped in an alt that is losing favor.

Adam

I guess, a deeper meaning that OP is trying to convey, is that differences not only between alt-coins, but also between various life forms, is just an illusion as all are made of the same primordial source energy - the universal AI.

In other words, we are all God's sock puppets, congratulations!
On the other hand, one might argue that only differences actually exist.

Then why bother with Side Chains at all? If an altcoin has enough bitcoin timestamps, then its value is proportionate to Bitcoin's, adjusted for hashrate.

Well indeed.  Hence sidechains, if they are trying to improve bitcoin, they can do that: improve it (on a sidechain, or timelock, multisig etc).


Well I think its maybe like gold, the extrinsic properties grew out of the intrinsic properties and network effect of people using it as a commodity money.


(I assuming you're talking about knowing the historic difficulty so you can compare it to the right epoch of bitcoin as a benchmark).

I think maybe comparing the current difficulties and prices would be enough.  (Plus discounting for a steeper supply inflation and known premine % or other parameters that are worse).

Setting things up to detect that, it appears limited enforcebility and requires cooperation of the alt?
You could look at the blockchain of an alt and see how much work there was total, and look at its parameters, however that doesnt prove they didnt fake the whole thing to one side over the course of a month or something and give it years of fake history, some parts of which look good relative to bitcoin.  Of course unless its merge mined its total hashrate is going to typically be quite small, so that if someone had a good incentive they could've recreated it later. 

That tends to suggest that minimally you would need the blocks to be periodically timestamped in bitcoin otherwise if no one was paying attention the entire thing could've been forged more recently as hashrate is faster now than in the past.

(There's a graph somewhere I cant find right now that shows the number of days it would take to recreate bitcoin.  During the hashrate spike last year, it got as low as 50days, but in the bitcoin context its stilly really hard for that to be an attack, because bitcoin security is from there only existing one distributed supercomputer than can run at that pace, nothing else can catchup.)

Adam

I'm starting to see your analogy, but the human elements leave me questions. I believe some people are trying to improve Bitcoin rather than steal its thunder. But most are scams, indeed.

Humans put great value in the extrinsic properties of Bitcoin's design besides the intrinsic properties of its function. It's not just about how many zeros were solved for. Then, how sure can the universal AI be that historical difficulty isn't forged fraudulently by humans in altcoins? Bitcoin's history is well documented.

The sci-fi version tracks proof of work in alt-coins using any algorithm (via non-local communication and a cryptographic AI etc) but even the current bitcoin the only reason people are mining alts is because they hope to sell above par, humans can evaluate the factors, as I said "The universal AI is called common sense:"


I'm finding the analogy holding up surprisingly well, though it does depend on where you focus on the value lying, like gold: people discovered gold, it had useful properties, so then they invested in it and a network effect built up around it, and because of that they developed a keen interest in assaying gold, being 100% sure they have the real thing.

You could argue bitcoinium (aka bitcoin) is the real thing, and imitations composed of proof of work, that are being sold above par (far above proof of work production cost) are the equivalent of gold plated lead.

Adam

If its useful like sellable as a service, then that acts just like Adam Chirilluc cup of tea:


an oversupply of the service will cause its price to fall also, and we'll still have the exact same Joules spent on bitcoin mining (minus the revenue from providing the service).  Bitcoin price is set by people investing in it and utility demand.  Production cost follows that, not the reverse, otherwise we wouldnt have difficulty falls as we saw last month.

There's an economic principle that if a commodity is producible at below par, people will expend more effort (ie the difficulty will go up).  Paul Sztorc explains the economic theory better in this blog article: http://www.truthcoin.info/blog/pow-and-mining/

Adam

Adam's thought experiment depends on an omniscient AI. It's a common fallacy.

...which would be more amazing if bitcoinium was mined via useful PoW (like protein folding). And if it is then mining of bitcoinium may become more profitable than bitcoinium itself, which in turn will drive value of bitcoinium to zero (we don't value by-products much).

Well that those things are producible for a tiny fraction of par is the very problem bitcoin solves, in electronic form that gold solves in physical form.


Yes you are.  In small parts via inflation.


I dont think branding of digital artefacts that can be cheaply copied matters.  Bitcoin is FOSS software, if someone comes up with something useful, it can and will be copied.  That was what the pacman game analogy was about.



I argue it does exist, and bitcoinium is bitcoinium.  You're just missing a property of bitcoinium which is the electricity that went into it must have no other use, and that the use must be cryptographically verifiable in a decentralised way, and behave like a statistical poisson process (people around the world trying to do it and on average one mining a block of coins every 10mins).

Heating your cup of tea with a resistive heating element satisfies none of those properties.  (Yes you could heat your tea on top of a stack of ASICs, and maybe someday people will do that; but the extent to which you extract use from the waste heat causes the average cost of production to fall and hence difficulty to rise to compensate).


Its a bit more than a Joule though.  Its a time-adjusted Joule that you can cryptographically prove and that has no side-uses.  That really is bitcoinium and that has amazing implications.

Adam

The same is applicable to Bitcoin.

Don't forget GPU proof for the miners that bought expensive cpu systems.

Watch the price?

Who was scammed by Litecoin and how?