Why Bitcoin is a significant breakthrough, but perhaps not as a currency • Hacker News Board

Re: Why Bitcoin is a significant breakthrough, but perhaps not as a currency

#61

Post by wmf » Thu, Dec 19, 2013, 11:47 PM UTC

aaron-lebo wrote: post #7

I think this article is on to something really important. It is way too easy currently to get caught up in the frenzy over the specuation surrounding Bitcoin. This idea of the Bitcoin protocol as a decentralized, secure, and transparent storage system has all kinds of applications, whether Namecoin, smart property or something else. I played around with using Namecoin as a more consumer-friendly form of drm. https://…

Check out this article on software licenses as securities: http://jordanpollack.com/softwaremarket/

Ultimately I think this level of efficiency would probably destroy most developers who used it (especially games).

Re: Why Bitcoin is a significant breakthrough, but perhaps not as a currency

#62

Post by dragonwriter » Thu, Dec 19, 2013, 11:47 PM UTC

XorNot wrote: post #58

rthomas6 wrote: post #49

Earlier quoted context omitted.

I did toss out a less thought-out version of the idea on bitcointalk and /r/bitcoin a while back, and you're right, they were not interested. Those communities seemed to think that a non-predetermined amount of coins meant the same thing as a fiat currency. But maybe if something like this is actually built, people that believe in more mainstream economic ideas would get attracted to it and start to use it?

Once you acknowledge mainstream economic thought (or at least mainstream academic economic thought) might actually be a useful field of study, you've pretty much defeated the point of running Bitcoin with a non-central bank model. Bitcoin appeals to people who have decided it's outrageous they have to invest their money in productive enterprise to get more of it, and it specifically appeals to greed which says "get i…

> Once you acknowledge mainstream economic thought (or at least mainstream academic economic thought) might actually be a useful field of study, you've pretty much defeated the point of running Bitcoin with a non-central bank model.

Perhaps the specific non-central bank model used by Bitcoin, but there could be alternatives to a traditional central bank that might be used in an alternative currency that wouldn't have the same problem, so I wouldn't rush to say that that acknowledgement rules out non-central bank models generally.

Re: Why Bitcoin is a significant breakthrough, but perhaps not as a currency

#63

Post by rthomas6 » Thu, Dec 19, 2013, 11:49 PM UTC

yxhuvud wrote: post #52

rthomas6 wrote: post #19

I am convinced that many problems with Bitcoin would be solved if we could come up with a way to tie mining difficulty to the currency's demand instead of only to the mining computing power. Instead of ensuring a predictable generation rate, this could ensure a predictable value . When demand wanes, the currency is harder to mine and becomes more scarce, and when demand surges, the currency becomes easier to mine and…

If you bind the amount of xcoins to demand, what is the difference to normal currency? The vast majority of the money that exist right now is created on demand by banks, when there exist people that want to loan and have the ability to pay back the loan. I wouldn't mind a distributed currency with this property, but you really should be aware that this is the basic operation of the banking system.

A slight but significant difference would be that the currency would not create credit or debt when it was created. People will either mine the currency, which is trading a service for the currency, or buy it on an exchange, which is trading one store of value for another. So the economy would be value-based instead of debt-based.

With a commodity like gold, when its value increases, people mine more of it because people want more. This increased supply reduces its value.

To me, the ideal currency is one in which you can get paid for performing a service, and 20 years later, the payment is still worth exactly the cost of that service. A long-term store of value, a way of remembering the value of everything.

Re: Why Bitcoin is a significant breakthrough, but perhaps not as a currency

#64

Post by rthomas6 » Thu, Dec 19, 2013, 11:53 PM UTC

wmf wrote: post #57

rthomas6 wrote: post #19

I am convinced that many problems with Bitcoin would be solved if we could come up with a way to tie mining difficulty to the currency's demand instead of only to the mining computing power. Instead of ensuring a predictable generation rate, this could ensure a predictable value . When demand wanes, the currency is harder to mine and becomes more scarce, and when demand surges, the currency becomes easier to mine and…

I have also thought about this topic because I'm not a fan of pyramid schemes or open-loop money supply. Difficulty is already a proxy for demand (or perhaps the demand/supply ratio) because increasing demand increases the exchange rate which increases mining profitability which increases mining. If the block reward was set equal to difficulty then you'd close the loop. I am concerned that such a system would never b…

If large deflation was planned in the beginning, it would very much benefit the early adopters. Also you're misunderstanding me a bit: I didn't mean the difficulty would only be tied to demand, but to have it factored in in addition to the current hash rate. Of course difficulty would still increase in proportion to the hash rate. I mentioned elsewhere that it might make more sense to vary the mining reward based on the demand, instead of the difficulty, such that blocks are still verified at a predictable rate, but the reward for each block can change.

Re: Why Bitcoin is a significant breakthrough, but perhaps not as a currency

#65

Post by Joona » Thu, Dec 19, 2013, 11:54 PM UTC

coderzach wrote: post #37

lifeformed wrote: post #18

Sorry to be a bit off-topic, but is anyone else's browser having difficulty rendering the text on this page? http://i.snag.gy/SK7NX.jpg I've noticed this on a few sites, and I'm wondering if the problem is on my end, or if it's a problem with the website.

You're probably on chrome for windows, which does a really poor job of rendering webfonts. https://code.google.com/p/chromium/issues/detail?id=137692

Do people not test their sites on the most popular browsers?

(I have the same problem with Opera 12.16.)

Re: Why Bitcoin is a significant breakthrough, but perhaps not as a currency

#66

Post by oscilloscope » Thu, Dec 19, 2013, 11:55 PM UTC

swalsh wrote: post #42

rthomas6 wrote: post #19

I am convinced that many problems with Bitcoin would be solved if we could come up with a way to tie mining difficulty to the currency's demand instead of only to the mining computing power. Instead of ensuring a predictable generation rate, this could ensure a predictable value . When demand wanes, the currency is harder to mine and becomes more scarce, and when demand surges, the currency becomes easier to mine and…

I proposed a way of tying the difficulty level to the quantity theory of money a while ago on economics and alt currency forums of bitcoin talk. I think if you're going to be successful, you'll have to find a different set of early adopters. Bitcoin is as much ideological as anything, and while some people don't want to see another alt currency because of their level of investment, others just generally don't believe…

Doesn't Peercoin behave this way to some degree?

http://en.wikipedia.org/wiki/PPCoin#Money_supply

Re: Why Bitcoin is a significant breakthrough, but perhaps not as a currency

#67

Post by ninguem2 » Fri, Dec 20, 2013, 12:30 AM UTC

bachback wrote: post #27

SwellJoe wrote: post #12

Earlier quoted context omitted.

It's not a theory I have ever heard, and I think there's sufficient reason to rule it out. Swartz never really professed an interest in currency or monetary policy, etc. that I am aware of. He was an extremely prolific individual who worked on many very public projects. Transparency was clearly one of his core values, and never exhibited more than passing general nerd interest in cryptography, anonymity, or the techn…

Who are on your list? Nick Szabo. Mike Hearn. Hal Finney. Wei Dai.

Nick Szabo and Wei Dai appear to be mythical creatures just as much as Satoshi Nakamoto and therefore saying that, say, Szabo is Nakamoto provides no information. The other two appear to be real people.

Re: Why Bitcoin is a significant breakthrough, but perhaps not as a currency

#68

Post by Aqueous » Fri, Dec 20, 2013, 12:35 AM UTC

rthomas6 wrote: post #19

I am convinced that many problems with Bitcoin would be solved if we could come up with a way to tie mining difficulty to the currency's demand instead of only to the mining computing power. Instead of ensuring a predictable generation rate, this could ensure a predictable value . When demand wanes, the currency is harder to mine and becomes more scarce, and when demand surges, the currency becomes easier to mine and…

I think the jury will be out on this until BitCoin achieves a saturation point where its deflation due to rapidly fluctuating demand stops and its deflation due to being limited in supply starts. Which means, not for a while. We won't really know how deflationary BitCoin is intrinsically until the noise in our graph goes down - i.e., it stops being so susceptible to speculative bubbles. Maybe this never happens, but I think as there is more regulatory uncertainty it will.

Any coin that tries to adddress the problem of deflation right now will also have to go through a cycle of gaining widespread adoption before we know whethre or not the monetary policy built into the coin works. PeerCoin if it ever gains wide adoption will almost certainly seem just as volatile as BitCoin as it becomes more widespread. And we wont know until it becomes widespread if it successfully combats deflation.

Re: Why Bitcoin is a significant breakthrough, but perhaps not as a currency

#69

Post by praxeologist » Fri, Dec 20, 2013, 12:42 AM UTC

XorNot wrote: post #59

praxeologist wrote: post #22

Earlier quoted context omitted.

Bitcoin is inherently libertarian: http://rudd-o.com/archives/bitcoin-without-the-politics If all the libertarians who are into bitcoin suddenly cut down the rhetoric, you think that this will "make bitcoin legitimate technology"? What does that even mean? You mean that governments are going to suddenly be more friendly to bitcoin users? That seems like an incredibly naive belief, sorry. In general, it is disappointi…

Yeah people having a say in their government - how silly. We should simply let the free market determine policy. See the richest and strongest will decide what our social, economic and foreign policies are and it will be a golden age of serfdom!

I don't want to play a role in an ongoing crime... but I think that is naive to believe you even have a say in your government. You have a greater chance of dying in a car wreck on the way to the polling station than your single vote swinging an election. Democracy really doesn't work unless you have the option to opt out and it is at a very small scale where you are actually able to judge the character of the people to choose from.

What you are advocating is what you then go on and complain about; it's total akrasia. You are suffering from Stockhom syndrome in believing freedom from your serfdom would be serfdom. Democracy is a very persuasive idea because it seems like you have choice, but then in reality the political elite rule. 2/3rds of Americans oppose the Iraq war; would you say this is an example of having a say in policy?

Governments are, across the board, a failure and a drain on society. Every service, including things like providing a "social safety net" can be better provided through market processes.

Re: Why Bitcoin is a significant breakthrough, but perhaps not as a currency

#70

Post by jokoon » Fri, Dec 20, 2013, 12:42 AM UTC

rthomas6 wrote: post #19

I am convinced that many problems with Bitcoin would be solved if we could come up with a way to tie mining difficulty to the currency's demand instead of only to the mining computing power. Instead of ensuring a predictable generation rate, this could ensure a predictable value . When demand wanes, the currency is harder to mine and becomes more scarce, and when demand surges, the currency becomes easier to mine and…

> You could plan the rough change in value over time, and build it into the algorithm

Are you sure of what you're saying ? Because bitcoin doesn't seem to work in a very simple fashion already, it's decentralized and it's already a miracle if it's working as the programmer intended.