Dogecoin's inventor looks to the past for insight into the future • Hacker News Board

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

#181

Post by [deleted] » Fri, Jan 12, 2018, 9:15 PM UTC

openasocket wrote: post #167

peterjlee wrote: post #113

Earlier quoted context omitted.

It wasn't "The sort of activity which led to the financial crisis" that inspired bitcoin. After the crisis happened the US government funded the massive bailout by printing more money. It turned out to be a "good" decision since it prevented a catastrophic economic failure but it did cause more inflation and some people weren't happy that a government can just print more money on a whim. So that's how the bitcoin cam…

The government didn't actually print any money, the central banks just acted as a "lender of last resort," which works just as well in Bitcoin as it does in cash.

[deleted]

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

#182

Post by andrewla » Fri, Jan 12, 2018, 9:21 PM UTC

paulmd wrote: post #142

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

> 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. Sure you can. It's code, why wouldn't you be able to change it? There is no reason that cryptocurrency has to be inherently deflationary, rewards can easily be issued at a constant rate or any other rate. You are mixing up…

> Sure you can. It's code, why wouldn't you be able to change it?

Fair enough. I'd expand that to say "code + consensus", which is what the rest of your post expands on. If the Bitcoin (for example) community really buys into the idea that we need to bail out some set of organizations, it's possible to execute a fork to do that. And the number of validating bitcoin clients out there is pretty large, so it would require a lot of buy-in.

It would have to be a hard fork (it would be possible as a soft fork, segwith-style, but the new coins issued would not be able to mix with pre-bailout coins unless clients updated).

To be honest, though, you're probably right. In my mind, depressingly so. The biggest takeaway from "too big to fail", even amongst progressives, seems to be that we have to shrink or break up the organizations that are too big to fail, rather than letting them fail -- only diehard libertarians and outcast Austrian economists believe that. The next time we hit this, we'll give the money to AIG to give to Goldman and buy Chris Dodd another house and move on with our lives while we get busy creating the next bubble (I think retail this time; that seems to be where the easy credit has relocated).

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

#183

Post by cornyNetHandle » Fri, Jan 12, 2018, 9:27 PM UTC

temp-dude-87844 wrote: post #61

lumberjack wrote: post #7

Earlier quoted context omitted.

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.

As others are saying, Satoshi made some political-sounding statements about financial systems around the time of release, but the paper only refers to facets of traditional financial institutions in measured, objective terms. Then again, given that Satoshi's true identity is unknown, a lot of this is necessarily speculation by interpreting a small set of clues.

Satoshi worked online with a group of developers for more than a year while keeping perfect operational security. Developed a solution to the byzantine generals problem, but has no published maths papers, otherwise something would have come up through text analysis. Designed bitcoin as a financial instrument, indicating inside knowledge of the banking industry. Has mined enough bitcoin to be on the list of the world's 100 richest people, but hasn't shifted them.

Satoshi is a team employed by something very rich, probably a government.

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

#184

Post by asciimo » Fri, Jan 12, 2018, 9:31 PM UTC

CPLX wrote: post #169

derimagia wrote: post #103

Earlier quoted context omitted.

Honestly though, doesn't this also apply to a lot of people's choice of stocks?

Stocks are an investment in productive assets. Somewhere down the chain stocks invest in actual production value, which creates goods or services that people use, and increases the sum total of wealth in the world. Buying the stock is buying the rights to a stream of income based on that productivity. These "investments" in cryptocurrency don't have that aspect whatsoever. There is no claim on productive enterprise i…

> There is no claim on productive enterprise involved

That's not true. Many coins offer practical solutions to real world problems. Whether they are adopted at scale is the gamble. Very similar to betting on companies with stock.

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

#185

Post by trevelyan » Fri, Jan 12, 2018, 9:32 PM UTC

Certhas wrote: post #114

trevelyan wrote: post #81

Earlier quoted context omitted.

> The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. It actually would deal with the issue that led to the GFC. Remember --- the problem wasn't that there were fraudulent mortgages -- it is that these mortgages were packaged and repackaged in ways that deliberately obscured the risk involved so that people were buying stuff that had no under…

This seems to me to be naive at best. Risks were obscured due to the mathematical structure of CDOs, not by hiding money transactions. You could spend all day real time looking at the fact that few of the mortgages in your CDO are failing, and then when they fail systemically, you could watch in real time that a lot of assets that were thought to be pretty robust are not. Your argument seems to be simply that radical…

> Your argument seems to be simply that radically more data would enable better predictors.

The point is that transparency enables markets to accurately price risk and prevents the sort of market paralysis that caused the liquidity crunch.

Yes, it's true that people COULD have spent weeks figuring out the status of at least some of the CDOs on the market. But in reality no-one was reading 200 page long prospects that listed the exact mortgage originators and housing complexes of their CDOs. Buyers and sellers did not necessarily even have this data in peer-to-peer marketplaces. Financial institutions and their brokers bought securities based on their ratings, and dumped them ASAP once it became clear the entire sector was poisoned and they were doubtless overvalued.

> unless you force every contract to be public, blockchain technology will not help you that much

Smart contracts are public BECAUSE blockchains are open access. All parties can see the transfer of tokens on the network for the contracts that matter to them. No-one in the public necessarily knows what any contract represents, but if I am sold one I can monitor it in real-time. That was not possible with mortgage backed securities in 2007.

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

#186

Post by avs733 » Fri, Jan 12, 2018, 9:35 PM UTC

cornyNetHandle wrote: post #148

ummjackson wrote: post #140

Earlier quoted context omitted.

Absolutely, and that's what is happening right now. I honestly don't have a solution for this problem... other than trying to make it as least appealing to these institutions are possible.

The only 'solution' I can see to this problem, is to develop an alternative to the floating monetary unit, of solving the calculation of exchanging goods and labour. Money is useful, because it solves for the 'n' of a given trade by using all the pricing of transactions as a form of parallel computation, so the fact that it may often give sub-optimal results is outweighed by the fact that it has such a low overhead,…

>The only 'solution' I can see to this problem, is to develop an alternative to the floating monetary unit, of solving the calculation of exchanging goods and labour.

So...communism?

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

#187

Post by cornyNetHandle » Fri, Jan 12, 2018, 9:41 PM UTC

avs733 wrote: post #186

cornyNetHandle wrote: post #148

Earlier quoted context omitted.

The only 'solution' I can see to this problem, is to develop an alternative to the floating monetary unit, of solving the calculation of exchanging goods and labour. Money is useful, because it solves for the 'n' of a given trade by using all the pricing of transactions as a form of parallel computation, so the fact that it may often give sub-optimal results is outweighed by the fact that it has such a low overhead,…

>The only 'solution' I can see to this problem, is to develop an alternative to the floating monetary unit, of solving the calculation of exchanging goods and labour. So...communism?

That was an attempt at it, though one made in bad faith by many of the leading proponents. If you are genuinely making something obsolete, you don't usually need to go to the bother of banning it.

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

#188

Post by HuggableSquare » Fri, Jan 12, 2018, 9:43 PM UTC

meesterdude wrote: post #176

HuggableSquare wrote: post #153

Earlier quoted context omitted.

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

Here's a reply I posted elsewhere in the thread about this:

Although there hasn't been a release in two years they're currently working on releasing 1.14 this year. In case you're interested the core devs have been doing a pretty good job on keeping people informed on the status of the release on the subreddit. Latest post here: https://www.reddit.com/r/dogecoin/comments/7oxi53/developer_...

Also, there has been lots of updates to the github repo, just look at the 1.14-dev branch instead of master.

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

#189

Post by trevelyan » Fri, Jan 12, 2018, 9:44 PM UTC

ska wrote: post #128

trevelyan wrote: post #81

Earlier quoted context omitted.

> The sort of activity which led to the financial crisis would not be mitigated by the establishment of a decentralized currency. It actually would deal with the issue that led to the GFC. Remember --- the problem wasn't that there were fraudulent mortgages -- it is that these mortgages were packaged and repackaged in ways that deliberately obscured the risk involved so that people were buying stuff that had no under…

It actually would deal with the issue that led to the GFC. It really wouldn't. The decisions that led to this were made by people who had access to all the data they needed to achieve better understanding, but that didn't help. The idea that it would become trivial to distinguish between good and bad investments seems to me to be incredibly naive.

> The idea that it would become trivial to distinguish between good and bad investments seems to me to be incredibly naive.

It is not naive. It is exactly how smart contracts work.

If you purchase a CDO on a blockchain, you are purchasing a share of whatever revenue paid into another contract. You can monitor those contracts, and the ones that are programmed to pay into THEM, and the ones that are programmed to pay into THEM ad infinitum.

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

#190

Post by paulmd » Fri, Jan 12, 2018, 9:45 PM UTC

andrewla wrote: post #182

paulmd wrote: post #142

Earlier quoted context omitted.

> 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. Sure you can. It's code, why wouldn't you be able to change it? There is no reason that cryptocurrency has to be inherently deflationary, rewards can easily be issued at a constant rate or any other rate. You are mixing up…

> Sure you can. It's code, why wouldn't you be able to change it? Fair enough. I'd expand that to say "code + consensus", which is what the rest of your post expands on. If the Bitcoin (for example) community really buys into the idea that we need to bail out some set of organizations, it's possible to execute a fork to do that. And the number of validating bitcoin clients out there is pretty large, so it would requi…

I think if cryptocurrency were ever "officially" adopted it would be a centralized model anyway. Something like Ripple or that proposed Canadian cryptocurrency.

https://www.forbes.com/sites/laurashin/2016/06/16/canada-has...

With a centralized model, there's no need for miners or mining, because you trust the system that you run. And transactions could be extremely fast.

Basically, it would look a lot like a bank with an API and public/private key signatures, running on a regular old database. Governments would probably love this, in fact, since it would prevent the cash economy from stealing their tax revenue.

You may or may not consider this "cryptocurrency", but then again most "blockchain" companies these days are just using it as a fancy database. Why do IOT devices monitoring production of $PRODUCT need to sync a blockchain? Why not just have them hit a REST API that is controlled by the client? Again, you can presumably always trust yourself/your company, so the trustless part doesn't add much value, and for a lot of this stuff there is no real need for consensus-resolution type functionality that the Bitcoin part provides.

If all you need is Merkle trees... those have been around for what, 40 years now? Bitcoin didn't invent them, Ralph Merkle did.