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The Guns of Bitcoin (2017)

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Re: The Guns of Bitcoin (2017)

#101

Post by notahacker »

keymone wrote: post #98
WorldMaker wrote: post #88

Earlier quoted context omitted.

I don't think I am confused. I told you I have a different viewpoint on this. You are claiming different branches of the same tree are magically distinct from each other because they have different names and magic runes sketched into them with a pencil, and all I see is a single tree in a huge forest full of trees. I don't think I'm going to convince you of my viewpoint, but my viewpoint is not confused. You aren't l…

Yes, forks are magically distinct by the fact that YOU CANT SPEND FORKED COINS ON ORIGINAL NETWORK. How much more distinction do you need? And no, PoW is not wasteful. It’s in fact the most efficient system for pricing money security.

> It’s in fact the most efficient system for pricing money security.

Other currencies achieve security through means which don't involve the power generation resources of a small country.

Re: The Guns of Bitcoin (2017)

#102

Post by imtringued »

seibelj wrote: post #3

> What makes dollars valuable is that the government wants them back. Very common misconception. Dollars have value because there is demand for them (governments, other governments, other people and institutions). Bitcoin also has value because there is demand for it. As does your house, expensive art, etc. Why does anything have value? Because someone else will pay your for it. I can say my pencil is worth $1 billio…

I'm not sure how you disproved what you quoted. You only strengthened it. Governments create artificial demand for the national currency.

Re: The Guns of Bitcoin (2017)

#103

Post by notahacker »

Sschellbach wrote: post #96
notahacker wrote: post #94

Earlier quoted context omitted.

It's a cute quote, but there's a reason modern economists don't conflate labour inputs and value or monetary expansion and price inflation. It's actually much more useful not to use the same words for phenomena when you're studying the degree to which they're related. And more useful to play semantic games when the data unambiguously refutes the argument that fixing one value necessarily holds the other constant, of…

Calling early price discovery leg down for Bitcoin hyperinflation is dishonest at best. Even ironic as hyperinflation occurs when there is a continuing rapid increase in money supply. If that was hyperinflation, what would you call Bitcoin's 150% leg up between December 2018 and today?

What is dishonest is to argue you have solved the problem of people being impoverished by the unpredictable [actually usually very predictable] downward price movement of the dollar by dismissing all Bitcoin's much larger and much less predictable downward price swings as 'early price discovery'.

Re: The Guns of Bitcoin (2017)

#104

Post by htfu »

Sschellbach wrote: post #97
htfu wrote: post #95

Earlier quoted context omitted.

"In theoretical investigation there is only one meaning that can rationally be attached to the expression Inflation: an increase in the quantity of money (in the broader sense of the term, so as to include fiduciary media as well), that is not offset by a corresponding increase in the need for money (again in the broader sense of the term), so that a fall in the objective exchange-value of money must occur." - Also y…

This isn't opposite, its closer to a root cause than an opposite term. Anyway, supply and demand govern all prices, I wasn't arguing against such basic economic tenants. I'm just pointing to what inflation is and that is an expansion of money supply.

Not opposite term, opposite usage.

  char* inflation = austrian? monetary: price

Re: The Guns of Bitcoin (2017)

#105

Post by clarkmoody »

cameldrv wrote: post #51
clarkmoody wrote: post #37

Earlier quoted context omitted.

Specifically, "reserve demand." People and institutions demand to hold a positive balance of the monetary good, and the aggregate sum of these reserve demands set the purchasing power. The notion that fiat money has value because governments demand it in taxes, might set a non-zero value for the money, but it does not set a specific price level. For instance, I could make a trade for dollars at the exact moment that…

There is a reserve demand created because taxes are not due until some time after the transaction that created the tax liability. If you don't want to have exchange rate risk, you need to hold the dollars until the tax is due.

It's a good point, but:

If you don't want to hold the fiat, you can always send taxes on a continual basis to the collection agency (most people do this with each paycheck, via the automatic withholding).

In the case of a rapidly inflating fiat currency, you would make the trade, since you are probably going to lose value holding the dying fiat.

Re: The Guns of Bitcoin (2017)

#106

Post by keymone »

notahacker wrote: post #101
keymone wrote: post #98

Earlier quoted context omitted.

Yes, forks are magically distinct by the fact that YOU CANT SPEND FORKED COINS ON ORIGINAL NETWORK. How much more distinction do you need? And no, PoW is not wasteful. It’s in fact the most efficient system for pricing money security.

> It’s in fact the most efficient system for pricing money security. Other currencies achieve security through means which don't involve the power generation resources of a small country.

And they don’t have the same security properties as bitcoin does.

Re: The Guns of Bitcoin (2017)

#107

Post by WorldMaker »

monokh wrote: post #89
WorldMaker wrote: post #88

Earlier quoted context omitted.

I don't think I am confused. I told you I have a different viewpoint on this. You are claiming different branches of the same tree are magically distinct from each other because they have different names and magic runes sketched into them with a pencil, and all I see is a single tree in a huge forest full of trees. I don't think I'm going to convince you of my viewpoint, but my viewpoint is not confused. You aren't l…

Your viewpoint on forks doesn't really check out. It's based on a misunderstanding of how related these forks are to Bitcoin. Anything that forks off of bitcoin is an entirely separate network, asset and market. You can in fact fork Bitcoin today and attempt to create a market, will your new coin be valued as a Bitcoin and derive its current ~9000 USD price? So the value of a fork coin is not in its approximation to…

> Based on which signs or hypothetical scenario are you imagining that this whole systems turns back on itself and breaks?

This is an easy one to answer. Proof of work as implemented in bitcoin is the largest, weirdest incentivized, most highly distributed preimage attack [1] ever run against any hash algorithm that we know of in human history. The history of hash algorithms suggests that humanity has yet to invent a perfect hash algorithm (whether or not you agree that perfect hash algorithms are even mathematically theoretically possible), which makes it very clearly a matter of "when" the distributed preimage attack succeeds in breaking the hash algorithm altogether rather than "if".

> the market overwhelmingly disagrees

The "market" isn't by definition a rational actor and may just be a mob swept up into fervor. Ponzi schemes in general prey on weaknesses in a market's mentality or emotionality to follow bad long term advice for short term gains. (That example should work whether or not you also agree that bitcoin-style mining difficulty is also directly a unique modern variant of a Ponzi scheme.)

[1] https://en.wikipedia.org/wiki/Preimage_attack

Re: The Guns of Bitcoin (2017)

#108

Post by hansvm »

conanbatt wrote: post #86
hansvm wrote: post #22

Earlier quoted context omitted.

It's not "plain wrong." When minting a new currency you need a way to bootstrap it into being an accepted medium of exchange, and taxes help serve that purpose. They aren't the only method (and I'm not sure historically whether that was the case for the USD), but it isn't baseless.

Currencies existed well before governments minted them. Plus the dollar was once backed by gold: you can transition from a convertible system to a fiat system, which has nothing to do with fiscal policy.

This reads like an argument, but it doesn't seem to contradict anything I said. Am I misinterpreting you?

> Currencies existed well before governments minted them.

Sure. Nevertheless, to accept a currency as a medium of exchange when it has no value to you personally (bank notes, gold, etc) you need to have confidence that you can exchange it to somebody else for something you do care about, regardless of who mints it.

> Plus the dollar was once backed by gold: you can transition from a convertible system to a fiat system, which has nothing to do with fiscal policy.

Yep. As stated, "[taxes] aren't the only method" to bootstrap a currency, and in practice transitioning from a gold backing to fiat seems to work smoothly (somehow...it's not hard to imagine an alternate reality where the public heard their dollars wouldn't be exchangeable for gold, the public lost faith in the dollar, and the dollar tanked as a result).

Re: The Guns of Bitcoin (2017)

#109

Post by monokh »

WorldMaker wrote: post #107
monokh wrote: post #89

Earlier quoted context omitted.

Your viewpoint on forks doesn't really check out. It's based on a misunderstanding of how related these forks are to Bitcoin. Anything that forks off of bitcoin is an entirely separate network, asset and market. You can in fact fork Bitcoin today and attempt to create a market, will your new coin be valued as a Bitcoin and derive its current ~9000 USD price? So the value of a fork coin is not in its approximation to…

> Based on which signs or hypothetical scenario are you imagining that this whole systems turns back on itself and breaks? This is an easy one to answer. Proof of work as implemented in bitcoin is the largest, weirdest incentivized, most highly distributed preimage attack [1] ever run against any hash algorithm that we know of in human history. The history of hash algorithms suggests that humanity has yet to invent a…

Don't you think we have other problems too if Sha-2 is broken? I'm going to assume that you aren't worried about the numerous other applications where this scenario would be catastrophic?

In any case, this scenario has very well been accounted for. The Bitcoin network can fork its consensus rules when such drastic requirements require it. Such as to a different hashing algorithm, and snapshotting of its previous state.

> Ponzi scheme This goes back to square one, which is that in the absence of understanding the value of bitcoin, a scheme is the only logical explanation.

We are now sitting at 10 years and $XXB ponzi scheme. Perhaps one of greatest schemes in history? Maybe it will unravel in the next 10? Time will tell.

Re: The Guns of Bitcoin (2017)

#110

Post by Sschellbach »

notahacker wrote: post #103
Sschellbach wrote: post #96

Earlier quoted context omitted.

Calling early price discovery leg down for Bitcoin hyperinflation is dishonest at best. Even ironic as hyperinflation occurs when there is a continuing rapid increase in money supply. If that was hyperinflation, what would you call Bitcoin's 150% leg up between December 2018 and today?

What is dishonest is to argue you have solved the problem of people being impoverished by the unpredictable [actually usually very predictable] downward price movement of the dollar by dismissing all Bitcoin's much larger and much less predictable downward price swings as 'early price discovery'.

I don't think I ever claimed to have solved any problem, just provided context for Bitcoin as a solution to the Cantillon Effect which is objectively a driving force for wealth inequality.
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