Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Thoughts on Bitcoin

blog.samaltman.com

Post reply on HN
Print view View original

181–190 of 213 posts

Re: Thoughts on Bitcoin

#181

Post by sprice »

foxhedgehog wrote: post #168
notdrunkatall wrote: post #13

I've been watching bitcoin since $30, bought at $80, and sold last night. I think that Stefan Molyneux (or however you spell it) is right on when he says that bitcoin is "a revolutionary protocol for information synchronization." However, it is by no means unique, and as we've seen, anyone can start their own bitcoin-type cryptocurrency. Apparently, the Canadian government is working on their own, and I don't think i…

"the Canadian government is working on their own" is there a citation for this?

Maybe http://en.wikipedia.org/wiki/MintChip which isn't really going anywhere

Re: Thoughts on Bitcoin

#182

Post by parasubvert »

VintageCool wrote: post #77

Question: why isn't gold the international reserve currency?

Chapters 1 and 2 of Karl Polanyi's The Great Transformation provide one popular theory as to why it collapsed around World War 1, from a cultural anthropology perspective.

http://uncharted.org/frownland/books/Polanyi/POLANYI%20KARL%...

Liaquat Ahamed's _Lords of Finance: The Bankers Who Broke The World_ provides another congruent account, from a more detailed historical/economic perspective, as to why gold was abandoned.

http://www.amazon.com/Lords-Finance-Bankers-Broke-World/dp/0...

Re: Thoughts on Bitcoin

#183

Post by chj »

sliverstorm wrote: post #131
ljd wrote: post #49

Earlier quoted context omitted.

I actually think the decentralized nature of bitcoin is what gives it all it's value. The fact that no bank can control it, inherently holds value. Currency manipulation is a really big problem right now, and knowing that you can buy a currency that won't be artificially controlled by it's issuer is an asset in itself. Having the currency centrally controlled again isn't special and it doesn't deviate enough from a c…

Honestly, bitcoin is less and less decentralized every day. Nobody runs bitcoin-qt anymore (it's all online wallets and lightweight clients), and mining power is steadily consolidating as the capital-intensive ASICs take over. The more widespread BTC adoption becomes, the more the network will be owned by those with the capital to purchase large quantities of GH/s

Exactly. Computational power of a few dominates the rest.

Re: Thoughts on Bitcoin

#184

Post by wmf »

gregr401 wrote: post #142
wmf wrote: post #89

Earlier quoted context omitted.

Decentralization is very expensive because it requires mining, so if you don't think that's important you should probably back a more efficient system like Ripple or Open-Transactions.

Expensive for whom, how exactly do you quantify that? Today we pay fee's to institutions which have massive infrastructure costs (along with their necessary profits). If anything, decentralization offers an incentive for the technically inclined to reap some potential rewards which is far more feasible than today's systems.

If you don't think decentralization is needed then Ripple is just as good as Bitcoin but it requires no mining. So the expense is the wordwide cost of all Bitcoin mining which is estimated at over $100M/year.

Re: Thoughts on Bitcoin

#185

Post by polarix »

waps wrote: post #152
CamperBob2 wrote: post #65

Earlier quoted context omitted.

The fact that no bank can control it, inherently holds value. But the fact that anyone can roll their own competing currency inherently kills value, doesn't it?

It does not have value. Nobody is denominating services or goods in BTC. They denominate them in USD and BTC is simply a convenient way to spend USD, maybe even make some profit for the short time you're holding it. That's the value of BTC. Hard-to-trace, global (and local), decent-rate, unregulated money transmission. Decentralized and cheaper Western Union. Makes you wonder if Satoshi isn't simply the NSA. The more…

"Hard-to-trace" -- hardly: this is the easiest money to trace in the history of money! (Well, ACH transactions are easier if you are backed by an army.)

Re: Thoughts on Bitcoin

#186

Post by splintercell »

seanmcdirmid wrote: post #126
stretchwithme wrote: post #95

Earlier quoted context omitted.

Inflation is not essential. If people hide their money under mattresses, all that means is that they aren't competing to buy the available goods. Inputs for other ventures are cheaper. If the government weren't trying to re-inflate the asset bubble with cheap money, ventures that make more sense would be flourishing instead. Resources are not infinite. When someone accepts a piece of paper and just holds on to it ins…

> If people hide their money under mattresses, all that means is that they aren't competing to buy the available goods. That is called "deflation." They tried it in Japan, it didn't work. > If the government weren't trying to re-inflate the asset bubble with cheap money, ventures that make more sense would be flourishing instead. Inflation and cheap money/asset bubbles are completely orthogonal. If anything, inflatio…

> They tried it in Japan, it didn't work.

There's a big difference between "trying to make it happen" and "happened despite of them trying to not happen".

Deflation/Inflation works fine when governments aren't involved. Point being that if market can predict the inflation and deflation then every contract will account for that. No business will fail because of deflation, because they will purposefully account for the deflation in their economic calculation when they pay the workers and raw materials.

In simple words, when government isn't causing deflation, at the start of deflation the wages always falls faster than the prices of consumer goods which always clears the market(which is when the rate of fall of consumer goods prices equals the rate of fall of wages).

When government is trying to meddle with the money supply, it disrupts the economic calculation of the market which prevents the market from clearing in time and from real wages to rise up.

Re: Thoughts on Bitcoin

#187

Post by sliverstorm »

nilkn wrote: post #178
sliverstorm wrote: post #139

Earlier quoted context omitted.

there isn't anywhere to go for BTC but up Why? BTC is, for our purposes, infinitely divisible. BTC is just as useful when it is worth $1, as when it is worth $1B. I believe the bitcoin network has value, but 1BTC doesn't hold any more intrinsic value than 0.1BTC. They both leverage the same network.

The argument usually hinges on simple counting: there are only 21 million possible bitcoins, and 21 million is nothing compared to the money supply of other currencies. Therefore, in the end (supposing bitcoin succeeds hugely), the exchange rate must be enormous. So the difference between 1BTC and 0.1BTC is that there are significantly fewer of the former than the latter.

There are only 21 million possible bitcoins, but there are 2.1e15 possible satoshis, which are the only denomination that really matter.

Re: Thoughts on Bitcoin

#188

Post by bushido »

atmosx wrote: post #104
skwirl wrote: post #82

Earlier quoted context omitted.

By your definition of a "mistake", the biggest mistake you probably made in your life was not buying all the Medifast Inc stock you could get your hands on in 1999. It went up 16,210% in ten years. But wait, it gets worse. Even just going back a year, if you had bought and sold the right stocks at the right times, you'd be the richest person on earth by far, even if you only started with a few bucks. But don't worry,…

Really? Is there something a stock or anything accessible by mere mortals that goes up 20+ times it's value every year? :-) I bought and sold my bitcoins when prices where bellow 100$. Well, given the fact that I doubled the money I should be happy and brag about it, but I'm not. I could be holding 10k now and it hits in the stomach when I'm thinking about it. On the other hand, I would never invest more than I can a…

If someone wants an accessible instrument that regularly goes 20x+ times initial risk in a year or even a month! look into the options markets. Remember to always only buy to open your call and put positions and sell before the contract expires if it is in the money.

There are thousand, if not tens of thousands of trades that can get someone that RoR.

I can point towards other instruments that can have that much or more risk to reward ratio. I calculate speculative risk at 100% value + incidental costs of the trade. So if someone said they doubled their investment that would mean a ratio of 1:1 aka a coin flip.

Though if someone did not know that these regulated speculative opportunities are abundantly available, they most likely should stay away.

Re: Thoughts on Bitcoin

#189

Post by seanmcdirmid »

splintercell wrote: post #186
seanmcdirmid wrote: post #126

Earlier quoted context omitted.

> If people hide their money under mattresses, all that means is that they aren't competing to buy the available goods. That is called "deflation." They tried it in Japan, it didn't work. > If the government weren't trying to re-inflate the asset bubble with cheap money, ventures that make more sense would be flourishing instead. Inflation and cheap money/asset bubbles are completely orthogonal. If anything, inflatio…

> They tried it in Japan, it didn't work. There's a big difference between "trying to make it happen" and "happened despite of them trying to not happen". Deflation/Inflation works fine when governments aren't involved. Point being that if market can predict the inflation and deflation then every contract will account for that. No business will fail because of deflation, because they will purposefully account for the…

Deflation doesn't work period: in the face of falling prices, people will save rather than spend, leading to a vicious cycle. No serious economist would claim otherwise. Deflation wasn't created by the Japanese government; they just didn't do enough to fight it, thinking austerity with its personal sacrifice was the right way to a healthy economy. They were wrong in a big way.

Economies must be managed. Arguing whether Bitcoin is better than USD is vacuous: one is just a crypto currency, the other represents the entire US economy and all the movements that go along with that. Someone has to meddle to keep the system working, if its not the government, it would some rich guys in a smokey back room doing it.

Re: Thoughts on Bitcoin

#190

Post by calinet6 »

vijayboyapati wrote: post #149

Sam sees the flaw in his own argument - when he mentions gold and the possibility of its use a store of value. But he doesn't understand the full significance of his own comment. Moldbug has by far the most compelling (imo) theory on the origin of money and why bitcoin (and gold) float far above their use value. These two posts cover it very well: http://unqualified-reservations.blogspot.com/2011/04/on-mone... http:/…

Really fascinating articles, thank you.
Post reply on HN