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Online Cash Bitcoin could Challenge Governments, Banks

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Re: Online Cash Bitcoin could Challenge Governments, Banks

#201

Post by vrotaru »

nerfhammer wrote: post #198
vrotaru wrote: post #188

Earlier quoted context omitted.

No, the 1920-21 was.

If you're counting peak annual rate rather than total deflation then part of 1920-1921 was worse than 1929-1933, but if we're talking about momentary deflation then neither was the worst deflation in US history. see http://en.wikipedia.org/wiki/File:US_Historical_Inflation_An...

Thanks. I was speaking about annual rate. BTW, a very instructional chart.

Can I rant a bit? Thanks again. It'll be about deflationary blips and deflationary spirals.

Have you ever noticed that the definition of a deflationary spiral self-contradictory? You know how it goes, people hoard money in order to spend them later, but when that later comes they do not spend them but continue to hoard even more in order to spend them later-later. Then later-later-later. Then... Well, the endgame is that everybody dies and zombies take over the earth. (Zombies are immune to hoarding, it seems)

Do people really act like this? Because if at any step of such an iteration the people will start spending (and the low prices and increases money balances will provide for an excellent temptation) then the vicious circle is broken, the spiral is no more, and we are contemplating here a deflationary blip. Or event if blip doesn't sound reputable enough.

Looks to me like a totally legit process. Exactly what the Walras Auctioneer will do in his search for a price equilibrium.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#202

Post by Groxx »

euccastro wrote: post #193
Groxx wrote: post #145

Earlier quoted context omitted.

> Wouldn't it be smarter for me to just give you $1 directly via PayPal? Which you would get by... selling some amount of bitcoins to an exchanger. And the person you give $1 to would turn around and buy the same amount from another exchanger, less overall fees both ways. It amounts to the same thing, unless you view bitcoins as a dead-end worthless location to put money in, because you never use them. Which is irrat…

No, I would get USD/EUR by the same means I was getting them before Bitcoin existed.

But we're speaking hypothetically as if they were actually buying bitcoins, but not withdrawing them, because it's cheaper in the long run to pay with other currencies.

But if you never withdraw them, they have no value at all. Therefore some are withdrawn, and at least some of that $1 came from bitcoins. If you even withdraw one penny worth, you have added one penny to your net bank account, which has influence on your account forever.

The simpler hypothesis is that they intended to show the uselessness of a deflationary currency by infinitely hoarding. But that's completely irrational, so an alternate, simple hypothesis is that they are using bitcoin, so any money they have is influenced by bitcoins they exchange.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#203

Post by mattfawcett »

tocomment wrote: post #157
sgornick wrote: post #59

Earlier quoted context omitted.

Baby steps. Try starting out using an eWallet, such as MyBitcoin: http://www.mybitcoin.com Then buy your Bitcoins with PayPal here: http://coinpal.ndrix.com use the bitcoin address generated at MyBitcoin. You'll get your bitcoins in less than an hour at MyBitcoin. Then those bitcoins can be spent using your example, at StrongGames.

I just installed the bitcoin software and bought some bitcoins at your link and I got this email: "...If the block count in your client matches the one shown at bitcoinwatch.com, your client should already show the transaction. Otherwise, wait for the two block counts to match..." My block count says 51,486 but the one at bitcoinwatch.com is over 100,000. Why aren't they the same? Will they be?

Yes, because you have only recently installed it will take time for your client to download all the current blocks.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#204

Post by joe_the_user »

narcissus wrote: post #191
joe_the_user wrote: post #173

Earlier quoted context omitted.

Actually, Bitcoin transactions are public - it's inherent in the scheme that verifies the transactions. Thus determining a person's net worth should be extremely easy. This fact might make bit coin less appealing than cash for many things where anonymity is important. (Also, Whether having public transactions would be enough to make the transaction "work" would be a different question - what happens when you don't de…

I think a lot of that problem disappears when you start using separate receive addresses with each transaction. Yes, that can become a bit of a pain, but it's more than doable. From what I remember, the default of the GUI, at least, is to generate you a new receive address as soon as you receive something on your current address. That should remove a lot of the problems of tracking net worth.

No, you don't understand... a look at the article will show that publicness is inherent in the protocol...

Without a public "audit trail", the problem of re-using bitcoins (which are just numbers) you hypothetically "spent" would clearly unsolvable (though I'm doubtful if you could truly free of this problem even with the public audit trail).

Re: Online Cash Bitcoin could Challenge Governments, Banks

#205

Post by danenania »

nerfhammer wrote: post #199
danenania wrote: post #184

Earlier quoted context omitted.

Wikipedia (emphasis mine): "The Great Deflation or the Great Sag refers to the period from 1870 until 1890 in which world prices of goods, materials and labor decreased.This had a negative effect on established industrial economies such as Great Britain while simultaneously allowing incredible growth in the United States which was just beginning to industrialize. Deflation has historically been more associated with r…

Your contention is that "one of the few" refutes "almost invariably" but is compatible with "not that rare"

"One of the few" in the US alone, which has a relatively short and central-bank dominated history.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#206

Post by SkyMarshal »

lutorm wrote: post #106
sgornick wrote: post #59

Earlier quoted context omitted.

Baby steps. Try starting out using an eWallet, such as MyBitcoin: http://www.mybitcoin.com Then buy your Bitcoins with PayPal here: http://coinpal.ndrix.com use the bitcoin address generated at MyBitcoin. You'll get your bitcoins in less than an hour at MyBitcoin. Then those bitcoins can be spent using your example, at StrongGames.

So if I put my bitcons on MyBitcoin.com, I'm under the impression that they have complete control over my wallet. Just like if I gave my wallet to someone and asked them to please accept payments on my behalf. Correct? That's an awful lot of trust to put in a random website. If they decide to run the website until they are sitting on enough coins and then just transfer them to themselves, is any court going to believ…

My understanding is that every bitcoin contains the entire block chain which contains a record of every transaction made in the network.

A transaction is basically three pieces of data: private key signature of the sender/payer, public key of the receiver/payee, amount of bitcoins.

The blockchain is very difficult to counterfeit, so theoretically a site like MyBitcoin.com can't actually 'control' your wallet or transfer all the bitcoins to themselves, at least without all the private keys of their depositors.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#207

Post by danenania »

cabalamat wrote: post #192
danenania wrote: post #176

Earlier quoted context omitted.

America had steady deflation during a period of massive economic expansion in the late 1800s. Deflation is only a sign of distress historically when preceded by government-induced monetary expansion. A boom causes a bust. Wages are sticky so moderate deflation strongly benefits workers. Both wages and savings will gradually increase in purchasing power. Inflation punishes the lower classes disproportionately for the…

> Inflation punishes the lower classes disproportionately for the same reasons. It is the primary driver of income inequality in the world. If that was true, then economies that use gold and silver as currency, and where there isn't a large supply of new money, there wouldn't be much income inequality. But there was plenty of income inequality in ancient Rome, and in most ancient despotisms. So I suspect your hypothe…

Wikipedia:

"The problem of debasement in the Roman economy appears to be pervasive, although the severity of the debasement often paralleled the strength or weakness of the Empire."

http://en.wikipedia.org/wiki/Roman_currency

Political authoritarianism, corruption, direct taxation, seizure, and military plunder are also effective ways for a ruling class to steal from the rest, so you can certainly have terrible inequality in societies with sound currency, but inflation is the most efficient and covert method, and has been the most popular way for governments and their corporate allies to gain at the expense of the world's poor and middle class in the last 100 years.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#208

Post by cabalamat »

danenania wrote: post #207
cabalamat wrote: post #192

Earlier quoted context omitted.

> Inflation punishes the lower classes disproportionately for the same reasons. It is the primary driver of income inequality in the world. If that was true, then economies that use gold and silver as currency, and where there isn't a large supply of new money, there wouldn't be much income inequality. But there was plenty of income inequality in ancient Rome, and in most ancient despotisms. So I suspect your hypothe…

Wikipedia: "The problem of debasement in the Roman economy appears to be pervasive, although the severity of the debasement often paralleled the strength or weakness of the Empire." http://en.wikipedia.org/wiki/Roman_currency Political authoritarianism, corruption, direct taxation, seizure, and military plunder are also effective ways for a ruling class to steal from the rest, so you can certainly have terrible inequ…

Good point regarding debasement in the Roman Empire; something I had forgotten.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#209

Post by pyre »

originalgeek wrote: post #169
pyre wrote: post #76

Earlier quoted context omitted.

And that worked so well for copyright piracy! I'm glad we live in a world without pirated music and movies!

Hauling people away in handcuffs is a much more potent deterrent than randomly shaking people down for a few grand.

It depends on critical mass. If only 2 people are doing it the risk of being the one in handcuffs is a lot larger than when you are 1 of 100 million people doing it.

Re: Online Cash Bitcoin could Challenge Governments, Banks

#210

Post by waynerad »

getsat wrote: post #138
waynerad wrote: post #134

Earlier quoted context omitted.

So, every x days, every user of the currency in the country has to upgrade their software, because the government has blocked the protocol, so they need new software that in essence uses a different protocol??? If using this currency is that inconvenient, people will just go back to using credit cards and Paypal.

I don't have to download a new copy of uTorrent if I decide to use different ports. The client could probably just check periodically for a signed message from a central server (or a broadcast on the network itself) with instructions to currently operate on the network. This isn't really a big deal or usability issue that I can see.

I see I've been modded down. Why? What do you people know that I don't?

It seems to me like I'm asking a simple, obvious question: what is stopping governments from simply shutting down Bitcoin within their physical borders? You think they will not be smart enough to handle a simple port number change?

Regarding the comparison with Bittorrent, my ISP (Comcast) did in fact block and throttle Bittorrent, successfully, until someone sued them. It seem to me Bittorrent is an example of how ISP's can block an application, not an example of them being unable to do so.

"The client could probably just check periodically for a signed message from a central server (or a broadcast on the network itself) with instructions to currently operate on the network." -- why could the ISP not block this, also?

Especially if the software is open source, as Bitcoin is, all the knowledge of the inner workings of the protocol is public knowledge, which makes it impossible to stick in something like "just check periodically for a signed message from a central server (or a broadcast on the network itself) " secretly without governments wanting to block the system knowing about it.

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