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Dogecoin's inventor looks to the past for insight into the future

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Re: Dogecoin's inventor looks to the past for insight into the future

#171

Post by mrb »

AlexandrB wrote: post #143
mrb wrote: post #76

« Once the cryptocurrency price bubble pops and takes all the hype with it, will the community be able to recover the energy it needs to build real, innovative technology once again? » Of course it will recover. Blockchain technologies are so transformational that you need a lot more than a simple price crash to kill cryptocurrencies. Of all persons, the creator of a cryptocurrency (even a joke one) should understand…

> Of course it will recover. Blockchain technologies are so transformational that you need a lot more than a simple price crash to kill cryptocurrencies. Are they transformation? I have yet to see a blockchain application that's not done more cheaply with a traditional database. Most of the practical uses of blockchain are as effectively centralized "distributed" databases (e.g. corporate blockchains), while the rest…

A blockchain-based cryptocurrency has 3 central qualities: decentralized, permissionless, irreversible transfers. That's what makes it transformational. No other currency or system can provide these 3 properties (except physically exchanging a commodity, eg. exchanging gold in the real world.)

You claim most cryptocurrencies are "effectively centralized", but that is false. For example if I make a Bitcoin transfer by broadcasting it to the P2P network (ie. assuming it reaches most miners), no single entity can block the transaction, thanks do decentralization (ie. many disparate miners around the world attempting to include the txn in their block.)

Re: Dogecoin's inventor looks to the past for insight into the future

#172

Post by Cyberdog »

lmm wrote: post #40
sremani wrote: post #31

Earlier quoted context omitted.

Minting new coin is not difficult, there is CrptoNote project on Github you can fork and in matter of minutes you can have your own "Coin" and start mining on couple of old Linux boxes. I understand the network and traction, but this is not very different from each bank having its own currency notes back in the day (1800s?). The biggest problem is they are not stable enough to be currencies their volatility makes the…

I'd trust Doge more than most cryptocurrencies, honestly. It's relatively established, the community doesn't or at least didn't take itself too seriously (sounds like that may now have changed), and it took the (admittedly mostly symbolic) decision to allow "mining" to continue indefinitely, ensuring there will always be a Doge supply rather than passing all gains to the early adopters. In a sense it's a lot more fun…

> It's relatively established, the community doesn't or at least didn't take itself too seriously (sounds like that may now have changed)

It changed a bit, but not entirely. Check out the subreddit and you'll still see lots of Comic Sans and image macros.

I have Dogecoin to thank (blame?) for getting me initially interested in cryptocurrency precisely because the community was so welcoming and didn't take itself so damned seriously, and even though Dogecoin is more "valuable" now, I'd still recommend it for those looking for a low-risk and relatively simple introduction to the concept.

Re: Dogecoin's inventor looks to the past for insight into the future

#173

Post by andrewla »

openasocket wrote: post #164
andrewla wrote: post #48

Earlier quoted context omitted.

Sure, if the government in question has the funds on hand or can borrow them. But they can't just literally increase the number of Bitcoin by a factor of 5 [1] in order to give trillions of dollars to people who have demonstrated their incompetence at handling that money. [1] https://fred.stlouisfed.org/series/BASE

I don't think you understand how that works. The government didn't literally print more money, they bought securities from the banks in exchange for credit in the central bank's account. No actual money was printed. The increase in the BASE is because the Fed was reducing its reserves. This is entirely possible to do in Bitcoin, you can still have a "lender of last resort".

Not "credit" in the sense of a "line of credit", but "credit" in the sense of "increased the amount held in their account" -- the banks, if they so desired, could ask the Fed to deliver, as cash, the money held in reserves, so long as they upheld their reserve requirements at the same time, and the Fed would have, by law, been forced to instruct the Treasury to deliver the specie.

Of course, the plan was that the troubled assets would be purchased by the Fed, an sold in a non-firesale fashion, and cancelled against the increase in the money used to cancel that out, to return the held reserves back to the trendline that predated 2008.

Congress had instructed, through TARP, the Fed to purchase "troubled assets" and had authorized amounts, but the Fed ignored those instructions and restrictions entirely and purchased none of the troubled assets, instead bolstering the reserves through the standard open market operations, and later, through quantitative easing, which is just an acceleration of the standard open market operations, with the purpose of creating enough inflation to allow the economy to recover. But that inflation didn't happen (still hasn't happened) for reasons that literally no person on earth can explain. Then the Fed did some balance sheet gymnastics (mark-to-market is a glorious thing) to show that all the TARP funds had been repaid (with interest!).

Re: Dogecoin's inventor looks to the past for insight into the future

#174

Post by igorgue »

lumberjack wrote: post #7
ummjackson wrote: post #4

Earlier quoted context omitted.

(author here) I agree! I was calling out Bitcoin's initial goals in the article but don't 100% align with them myself. Financial institutions came to exist for a reason and I'm really not on board with everyone "being their own bank" as I feel it'd be a step backwards from what we have today. What I do agree with is the need for more audit-able, accountable systems so the institutions we trust are less susceptible to…

Are you sure that was Bitcoin's initial goal? Or just speculation from early adopters? In the actual white paper, Satoshi does not mention any of this, although like you, I do remember these motivations being used very early on. I don't know their origin, but Satoshi simply talks about non reversible transactions, in the context of payments over the Internet.

It's in the intro of the white paper.

Re: Dogecoin's inventor looks to the past for insight into the future

#175

Post by openasocket »

andrewla wrote: post #173
openasocket wrote: post #164

Earlier quoted context omitted.

I don't think you understand how that works. The government didn't literally print more money, they bought securities from the banks in exchange for credit in the central bank's account. No actual money was printed. The increase in the BASE is because the Fed was reducing its reserves. This is entirely possible to do in Bitcoin, you can still have a "lender of last resort".

Not "credit" in the sense of a "line of credit", but "credit" in the sense of "increased the amount held in their account" -- the banks, if they so desired, could ask the Fed to deliver, as cash, the money held in reserves, so long as they upheld their reserve requirements at the same time, and the Fed would have, by law, been forced to instruct the Treasury to deliver the specie. Of course, the plan was that the tro…

Sure, but all of this is still entirely possible to do with Bitcoin instead of dollars is my point.

Re: Dogecoin's inventor looks to the past for insight into the future

#176

Post by meesterdude »

HuggableSquare wrote: post #153
wyldfire wrote: post #75

Dogecoin is kinda like a control/placebo for real cryptocoins. And the fact that it exploded without providing real distinct utility apart from existing coins is an indication that something is indeed wrong.

Originally it was pretty much just a fork of Litecoin, but since then Dogecoin has considered the economic viability of it as a real currency. It's one of the few inflationary cryptocurrencies, it has a block every minute which is good for confirmation times, the transaction fees are very low, AuxPoW has given it a huge network of miners keeping the network alive, and the core devs have kept the stability of the netw…

> which includes not adding every new feature that all the other altcoins love.

Or indeed making any changes at all! The github repo hasn't been touched in over 2 years

Re: Dogecoin's inventor looks to the past for insight into the future

#177

Post by andrewla »

sethev wrote: post #159
andrewla wrote: post #126

Earlier quoted context omitted.

Well, first of all, yes, 100% certainly -- if you try to buy insurance for uninsurable things, then you are taking a risk, and risks can have downsides. And as for bearing the consequences, we simply do not have the capacity within the rule of law to make them bear the consequences. The people who made the decisions were extremely well compensated even outside of equity up until the moment when the house of cards cam…

The vast majority of people who did business with AIG had nothing to do with subprime. Your whole answer seems to assume that the consequences of AIG going bankrupt could have been neatly contained the subset of their business that caused the problem.

No, it would not have been neat. It would have been incredibly messy. Their life insurance in particular, was mostly shielded by statute, but the remainder of their business would have been fair game -- that would have had wide-reaching implications, both in and out of the financial sector. The collapse of major investment banks that would have inevitably followed would result in many companies not being able to make payroll. That would have exacerbated the already existing problems with the real estate market collapsing, as meeting payment obligations would be more difficult for people, further depressing the values of mortgage-backed securities, as financial companies would have sought to mitigate their losses and cover their reserve and capitalization requirements by selling things at firesale prices.

It would have been a disaster of epic proportions. Would it have been worse than what happened? I don't know -- and neither do the economists who insisted on action. As it was, innumerable businesses not at the scale of AIG were left in the cold to collapse without billions of dollars of free money, and, more significantly in my view, institutions and well-capitalized individuals who correctly predicted the collapse of the market would have been well-positioned to use their assets to buy up undervalued assets (including home mortgages, which, if purchased at fire sale prices, would have made decisions about de-valuing the loans easy, because the effective yields would have been so much higher).

Re: Dogecoin's inventor looks to the past for insight into the future

#178

Post by Sangermaine »

Mtinie wrote: post #90
tribune wrote: post #17

Earlier quoted context omitted.

The point of cryptocurrencies is to rediscover everything we already know about money, the hard way

On the surface that can be a beneficial exercise. 400+ years of financial dogma and cruft has accumulated in the world's financial system(s). If the sole eventuality of this period of cryptocurrency development is that some of the "sacred cows" stood up in the four centuries since are torn down, and outdated models are discovered and updated to better serve people of today, I consider it worthwhile progress.

Except that's not what's happening. What's happening is that some people are relearning the hard way why those "sacred cows" are so sacred. We've become so used to having them that some people take them for granted and forget why they exist, like the "raw water" people forgetting why municipal water systems exist.

e.g.

"Why do we need all these regulations anyway? It's just statist slavery!"

later

"Ah right, the fraud and the scams."

Re: Dogecoin's inventor looks to the past for insight into the future

#179

Post by mrisoli »

rthomas6 wrote: post #52
vec wrote: post #33

Earlier quoted context omitted.

This is the kind of dangerous thinking that fuels speculation bubbles. Bubbles go up and up and up until they plummet all at once. Everyone looks like they're winning all the way up until everyone suddenly loses together. Maybe Bitcoin isn't a speculation bubble; maybe it's something new. But if you ignore the underlying tech and just look at the price chart it sure looks like an old fashioned speculation bubble, and…

The internet was something new, and it fueled a speculation bubble. I think we are seeing something similar with cryptocurrencies. Are they something innovative and potentially useful? Yes. Do their valuations make sense? No.

Well, a handful of tech companies are some of the most valuable companies in the world right now, a few of them thanks to what was then the untapped power of the internet(Amazon, Google, Facebook), Google and Facebook not only are huge companies but they can also influence elections and public opinion.

There is no question that there was a bubble, but the value of the internet as a platform for building businesses now far exceeds what people expected it to accomplish in the dotcom bubble.

I'm not saying cryptocurrencies will have the same fate, but it's not impossible.

Re: Dogecoin's inventor looks to the past for insight into the future

#180

Post by nicky0 »

statoshi wrote: post #170
Tommah wrote: post #168

At this point, if you put Dogecoin and Bitcoin next to each other, Bitcoin looks like the joke. It's slow, the fees are too high, and its developers won't address these problems.

Sounds like you're looking at the wrong metrics. Dogecoin had 0 commits to its main repository in 2017. Compare that to 3,277 commits to Bitcoin Core alone. Bitcoin has scaling issues that developers are addressing with second layer networks because tons of people are using Bitcoin. Dogecoin doesn't because it has so few users that the demand for block space is well below the available supply.

The story those numbers tell me is that Dogecoin is already working well enough that it didn't need updating. Whereas Bitcoin developers are scrabbling hard to fix the sinking ship.
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