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Goldman Sachs Report Explores Use of Bitcoin as Currency

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Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#181

Post by bobwaycott »

imtringued wrote: post #135
bobwaycott wrote: post #104

Earlier quoted context omitted.

> Your definition of “intrinsic value” does not match that of standard economic terminology. I am well aware of that—because using standard economic terminology in this case, that of ascribing the property of intrinsic value to gold, is dead wrong . It’s both a misuse of language and a confusion of terms. Value is a thing agents ascribe to objects; in economic theory, it is a measured result of social relations. It i…

>If everyone decides gold has no value tomorrow, it has no value. There’s nothing intrinsic about it. And then I will buy the entire supply of gold and abuse my market power to force manufacturers to pay exorbitant prices and become a billionaire. Why? Because even if all the speculators have left people still want jewelry and corrosion resistant metals.

The economic value of a commodity is both use and exchange values. You’re talking of use values here. They are included when talking of the value of an object.

You’re also, like other commenters, unnecessarily stuck on the example of gold. See past that. Gold is no different from any other object—anything can lose its value, because that value is the product of human activity, ideas, and relations in a market. When I say If everyone decides gold has no value tomorrow, it has no value, I was talking all value. Your scheme won’t work when everyone decides gold has no value, because gold is nothing more than an object in the market whose value is constructed by human relations and activity.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#182

Post by bobwaycott »

FabHK wrote: post #178
bobwaycott wrote: post #110

Earlier quoted context omitted.

That it is consistent does not mean it is equivalent. Humans are pretty poor at avoiding conflating their terms and categories into messes of confusion. This fiction that gold (or any other thing) possesses intrinsic value is one of best examples of such confusion in economics. Things have value because people decide they do—and as soon as they decide otherwise, that value steadily declines to zero, despite how many…

Sure, you can argue that a house, a hamburger, and a car have no intrinsic value per se, but only in relation to humans and/or because we give them value. But again, with that you're departing from the modern economic notion of intrinsic value in discussions of money.

Do you mean the numismatic notion of intrinsic value? Because that is a very different thing from saying economic intrinsic value. I’m not departing at all on the economic part, I am directly talking to that notion.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#183

Post by aiCeivi9 »

tananaev wrote: post #81
0wing wrote: post #74

Earlier quoted context omitted.

Please explain how the Lightning Network developers solve an unsolved NP-Hard problem in computer science regarding routing? [1] The Lightning Network design is exactly what the first sentence of Satoshi's Bitcoin whitepaper seeks to avoid - payment processor middlemen. "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a f…

Personally I don't really mind having a few main hubs because Lightning Network allows trust-less payments. Your hub can never steal your money. It's guaranteed by math and Bitcoin network itself. Lightning Network might not be perfect solution, but it is a solution to scaling problem. Increasing block size is certainly not a long term solution.

> Your hub can never steal your money

But it can keep coins that remain in them until the channel expires and for usable channels it will be at least a month or two. So some amount of trust is required. Also, unless I don't know about something, wallet software needs to store additional data for LN to work that can't be just reconstructed from private key/paper wallet.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#184

Post by mrb »

wereHamster wrote: post #91
mrb wrote: post #72

Earlier quoted context omitted.

Actually there is a great way to scale on-chain: UTXO Set Commitment allows nodes to simply discard unnecessary blockchain data (in a way not too dissimilar to classic "pruning"). The data set maintained by nodes would basically grow linearly with the UTXO Set instead of the number of txns. Eg. right now it would cut 150GB down to 3GB. Sadly it seems under-researched.

utxo set is one issue with large number of transactions. The far bigger is the big block size you would need for visa-level transaction numbers (1GB / 10min was mentioned). And it's not only an issue for end-users (can't run a bitcoin client on your phone, you'd burn through your data within a couple days), but also for miners. They'd be far more likely to mine on top of an old block, leading to stale blocks. There w…

«issue for end-users»

It's not really an issue. End-users always have the possibility of running in SPV mode where they don't download full blocks.

«They'd be far more likely to mine on top of an old block»

Not really. First of all, a 1GB block today would be transmitted in typically only ~12-15MB thanks to Compact Blocks (6 bytes per txn ID). Graphene would cut this down to 3-5 MB (http://forensics.cs.umass.edu/graphene/). Secondly, with current software and current hardware, we can still bump the block size ~100× while keeping the block verification time low enough that it's still workable. Then with software optimizations and another few years of technical hardware and network bandwidth improvements, we can get another 10×.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#185

Post by mrb »

DINKDINK wrote: post #78
mrb wrote: post #65

Earlier quoted context omitted.

There is deception in your comment too: - You are misreading your charts. The real-world median txn fee is far from $1.50... it's $13: https://bitinfocharts.com/comparison/bitcoin-median_transact... - A real-world txn is on average 500 bytes, not 250. - Although you can have multiple recipients/outputs in a single txn ("batch transactions"), it is not used very often. I computed not too long ago 2.6 outputs on averag…

>The real-world median txn fee is far from $1.50... it's $13: The site you quote is showing the median transaction fee of each block. That's not what I stated: "The median fee for a typical transaction in the past week" >- A real-world txn is on average 500 bytes, not 250. What's your source? https://bitcoinfees.earn.com/ indicates 225. It seems like you're using a source that assumes two UTXO inputs, which would res…

No, bitinfocharts shows the median tx fee of transactions through a day, not blocks. It's been over $13 for the last 7 days, hence over $13 for the last week.

Source for average (mean) txn size: https://charts.bitcoin.com/chart/transaction-size#b2k which is a bit above 500 bytes. Bitcoinfees.earn.com shows the median, not mean, txn size.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#186

Post by dsacco »

sethgecko wrote: post #175
dsacco wrote: post #89

Earlier quoted context omitted.

> Gold has not intrinsic value either. Nothing has to be honest. Unless you mean something very different from the established consensus of economics when you use the term, “intrinsic value”, both of those statements are false.

Gold's intrinsic value is perhaps 10% of it's current value. You are not holding gold because you want to make jewelry, you are holding because of it's perceived value and it's scarcity.

Absolutely, I agree with you. The speculation around gold pushes significantly higher extrinsic value onto it. I'm just making a point that it has a floor of intrinsic value as well, even if that's smaller than the speculative activity.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#187

Post by ThomPete »

dullgiulio wrote: post #173
ThomPete wrote: post #164

Earlier quoted context omitted.

Again. You can't open a bitcoin mine. You can mine bitcoin but any fork of the bitcoin is not bitcoin anymore.

I wrote cryptocurrency mine, not Bitcoin mine. Cryptocurrencies as a whole are not scarce, unlike gold. Thus, they are not a substitute for gold.

That doesn't change anything. The focus of this discussion is whether bitcoin is like gold (i.e. does it have properties like gold).

Bitcoins price is not based on how many cryptocurrency mines you can open. If that was the case bitcoins price would have gone down not up.

And no one is claiming that crypto coins are substituting gold. No need for strawmen.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#188

Post by keymone »

aiCeivi9 wrote: post #183
tananaev wrote: post #81

Earlier quoted context omitted.

Personally I don't really mind having a few main hubs because Lightning Network allows trust-less payments. Your hub can never steal your money. It's guaranteed by math and Bitcoin network itself. Lightning Network might not be perfect solution, but it is a solution to scaling problem. Increasing block size is certainly not a long term solution.

> Your hub can never steal your money But it can keep coins that remain in them until the channel expires and for usable channels it will be at least a month or two. So some amount of trust is required. Also, unless I don't know about something, wallet software needs to store additional data for LN to work that can't be just reconstructed from private key/paper wallet.

what incentive does a hub have to do that? it's easy to accuse a hub in doing that but it's trivial for a hub to prove they aren't. if it is ever proven that hub holds on to somebody's channel - the hub loses reputation and customers.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#189

Post by ThomPete »

FabHK wrote: post #177
ThomPete wrote: post #165

Earlier quoted context omitted.

What's not true?

This: > Either both bitcoin and gold has intrinsic value in economical terms or none of them have in philosophical terms The argument is precisely that gold has, and bitcoin hasn't, intrinsic value (in the economic sense). Gold can fulfil the functions of money, but also has other uses. Bitcoin can fulfil some functions of money (barely), but has no other uses.

Bitcoin can fulfill the function of money (but just like gold it's cumbersome, try and pay for a tshirt with gold in H&M).

Bitcoin also have other uses such as store of value (just like gold) and a unique footprint which makes it useful in the digital space.

So no it's not wrong at all.

There was a time when gold wasn't useful for much other than as a store of value and as jewelry. If we are to follow your own argument then Gold had no intrinsic value because of it's limited use before the industrial revolution.

Only the market determines whether something have value. The idea of intrinsic value in anything (also when used in economic terms) is simply misleading and not representing reality but rather the illusion of a reality that doesn't exist.

Gold can loose it's value completely.

Re: Goldman Sachs Report Explores Use of Bitcoin as Currency

#190

Post by ThomPete »

FabHK wrote: post #178
bobwaycott wrote: post #110

Earlier quoted context omitted.

That it is consistent does not mean it is equivalent. Humans are pretty poor at avoiding conflating their terms and categories into messes of confusion. This fiction that gold (or any other thing) possesses intrinsic value is one of best examples of such confusion in economics. Things have value because people decide they do—and as soon as they decide otherwise, that value steadily declines to zero, despite how many…

Sure, you can argue that a house, a hamburger, and a car have no intrinsic value per se, but only in relation to humans and/or because we give them value. But again, with that you're departing from the modern economic notion of intrinsic value in discussions of money.

What is the actual value of gold? (it's intrinsic value) How is that determined?
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