Is personal funding viable? • Hacker News Board

Re: Is personal funding viable?

#61

Post by sgornick » Thu, Jul 05, 2012, 5:38 PM UTC

nhaehnle wrote: post #22

whit537 wrote: post #5

Earlier quoted context omitted.

Mind saying more or linking? I keep hearing strong opinions against bitcoin but haven't heard details.

The most clear-cut argument against Bitcoin is that it is a ridiculous waste of energy. The nature of mining in the protocol implies that if Bitcoin takes off on any significant scale, there is a dichotomy going on: either there are so few miners that single large actors can dominate the total hashing power of the network, making it vulnerable; or, a significant fraction of the total world computing power goes toward…

Quite a bit of the money that mining operators receive is now going mostly going towards investment in R&D (and soon, manufacture) of ultra-efficient ASIC based mining hardware.

This things solve the computational work at a couple orders of magnitude greater than GPUs (the currently prevalent mining hardware) does.

So instead of 70% of the cost of mining going to pay for the electricity, it will be 10%, and the cost of the technology consuming the remaining 90%. I.e., in terms of total kWhs consumed for Bitcoin mining, we probably are already past the peak.

One single bank building in Manhattan consumes way more power than Bitcoin ever has.

Re: Is personal funding viable?

#62

Post by sgornick » Thu, Jul 05, 2012, 5:56 PM UTC

kingkilr wrote: post #4

kiba wrote: post #2

I see that it supports credit cards, but it doesn't support bitcoin.

Yes, that could be related to the fact that bitcoin isn't something anyone with any familiarity with economics should take seriously. (For the purposes of this comment "familiarity with economics" should be understood to mean: has so much as shopped in a grocery store).

Will PayPal allow GitTip to escrow the funds?

If not (and likely not, considering PayPal does not allow for their payment network to be used for "pre-sales"), then GitTip can only charge for the actual amounts tipped (and claimed by the donation target).

Right now, let's say I'm willing to tip $150 per year. I can then donating $0.25 to ten people. Since I carry no balance myself (from received tips), that means every Friday I get a charge for the amount I tip. So I would see a charge of $2.50 (10 X $0.25) plus $0.30 plus ($2.50 X 3.9%) = $2.90. So that is a 16% payment network fee.

Certainly this can be optimized, but Bitcoin doesn't have such high fees. The sender pays the fee, and even then it is a fraction of a penny. And the conversion from Bitcoin to USDs is generally under one percent.

Cash (USDs) can be received once each week by GitTip as an ACH direct deposit (using BitFloor) or through Dwolla (using Mt. Gox, Intersango or Camp BX) so easy cash-out methods are covered.

And there are no chargebacks.

So regardless of your politics or what you want to use as a store of value, Bitcoin solves problems very well. Especially for micropayments problems like this.

Re: Is personal funding viable?

#63

Post by r2DEYdly » Thu, Jul 05, 2012, 6:11 PM UTC

natrius wrote: post #28

kiba wrote: post #14

Earlier quoted context omitted.

If you know that the bitcoins you have in your account today will be worth more in the future, you have a powerful disincentive to spend. That's only if you're a scrooge and don't like spending anything. Since bitcoin started, I spent bitcoin on hosting and domain, t-shirt, musics, development bounties, writers, and other things that I forgot to mention. I never spent a bitcent on mining hardware, though. You have to…

"We don't exists to horde money, but to spend it doing things that we like." Deflation increases the incentive to hoard cash. People respond to incentives. Economies based on deflationary currencies end up suffering from problems caused by this. You may not agree, but pretty much every economist does.

How do you respond to incentive to not buy a new smart phone, because it will probably be cheaper a year from now?

Re: Is personal funding viable?

#64

Post by natrius » Thu, Jul 05, 2012, 6:30 PM UTC

mindcrime wrote: post #58

natrius wrote: post #52

Earlier quoted context omitted.

So you're saying that people won't respond to the incentive to hoard cash? An economy based on a currency with low, predictable inflation will have less hoarding than a deflationary currency. Hoarding in itself causes deflation, so deflationary currencies risk causing a deflationary spiral. Do you have an example of a vibrant economy based on a deflationary currency? I have several historical counterexamples.

So you're saying that people won't respond to the incentive to hoard cash? I'm hungry... really f%!#ng hungry, right now. I have $10.00, which - today - buys me 2 hotdogs and a soda. But, if I wait a year, that same $10.00 will buy me a nice steak, some corn chowder, a side of sweet potato fries and a margarita. What do I do? Hmmm....

That's not how economics works. Sure, some decisions won't be affected by the increased incentive to hoard. However, there are some decisions where the marginal incentive to hoard pushes people over the edge to decide to hoard. Instead of focusing on the sentence of my argument you chose, try disproving the one that followed: "An economy based on a currency with low, predictable inflation will have less hoarding than a deflationary currency."

Re: Is personal funding viable?

#65

Post by natrius » Thu, Jul 05, 2012, 6:33 PM UTC

r2DEYdly wrote: post #63

natrius wrote: post #28

Earlier quoted context omitted.

"We don't exists to horde money, but to spend it doing things that we like." Deflation increases the incentive to hoard cash. People respond to incentives. Economies based on deflationary currencies end up suffering from problems caused by this. You may not agree, but pretty much every economist does.

How do you respond to incentive to not buy a new smart phone, because it will probably be cheaper a year from now?

Some people do respond to that incentive. Perhaps a clearer way for me to have made that point was to say, "Incentives affect the decisions that people make."

Re: Is personal funding viable?

#66

Post by mindcrime » Thu, Jul 05, 2012, 6:35 PM UTC

natrius wrote: post #64

mindcrime wrote: post #58

Earlier quoted context omitted.

So you're saying that people won't respond to the incentive to hoard cash? I'm hungry... really f%!#ng hungry, right now. I have $10.00, which - today - buys me 2 hotdogs and a soda. But, if I wait a year, that same $10.00 will buy me a nice steak, some corn chowder, a side of sweet potato fries and a margarita. What do I do? Hmmm....

That's not how economics works. Sure, some decisions won't be affected by the increased incentive to hoard. However, there are some decisions where the marginal incentive to hoard pushes people over the edge to decide to hoard. Instead of focusing on the sentence of my argument you chose, try disproving the one that followed: "An economy based on a currency with low, predictable inflation will have less hoarding than…

Sure, some decisions won't be affected by the increased incentive to hoard. However, there are some decisions where the marginal incentive to hoard pushes people over the edge to decide to hoard. Instead of focusing on the sentence of my argument you chose, try disproving the one that followed: "An economy based on a currency with low, predictable inflation will have less hoarding than a deflationary currency."

No doubt... just emphasizing the point that we aren't dealing with absolutes here. People do spend money, even with deflationary currency. I'm not saying deflationary currencies are a good thing, or that there aren't some ramifications. But I think some bitcoin critics overstate the importance of the deflationary aspect, that's all.

Re: Is personal funding viable?

#67

Post by joeyespo » Sat, Jul 14, 2012, 6:48 PM UTC

Draiken wrote: post #43

Unfortunately I think only the internet stars have even a chance of living like this... The irony is that these superstars normally already have huge paychecks :/

On the other hand, this could be an incredible opportunity to pay it forward. If they're accepting the tips, they're participating, which is then just a few clicks away from funding others by providing bigger tips to promising projects.