I have a hard time reconciling the social justice goals of some cryptocurrencies with this initial period where people are basically creating wealth out of thin air by doing useless computations at the cost of enormous electricity.
How are we any better for it? A select group gets rich, there is rampant speculation and fraud... but we're fighting "the man" so it's all good?
I can't see how society is better for this (or ever will be).
I've mined some BTC and ETH while thinking about these issues and I can't see a future where anything is different so I've stopped. It seems we'll replace bankers and oil millionaires with miners and early adopters... and the average Joe is where it was always.
Sorry for thinking out loud all these disconnected thoughts. I really want to believe but I'm having a hard time.
Meanwhile, it seems I'm doing better for society if I donate my spare resources to some distributed computing project to research cancer, AIDS, etc.
Where do you see the future in 50-100 years if cryptocurrencies take off for good?
>where people are basically creating wealth out of thin air by doing useless computations at the cost of enormous electricity
The only way this statement is different than how the Federal Reserve works is that Bitcoin is voluntary (You only join the economic model that you desire to participate in) / non privileged (you don't have to be born into certain groups to participate in how the system works), the system parameters (inflation, etc) are not coercible (The US President can't nominate a Federal Reserve Chairperson to bitcoin to favor policy that favors one special interest group).
>creating wealth out of thin air
The Federal Reserve literally creates money out of nothing for the Treasury Department. Due to seigniorage, Fed banks make money on the inflated currency before the last man on the street can.
>doing useless computations at the cost of enormous electricity
The thousands of servers that run FedWire, ACH, VISA, MasterCard Paypal, Venmo, ApplePay and the Cash-transport Trucks, Physical banks, all waste energy preventing people from trying to steal money too.
The thousands of servers that run FedWire, ACH, VISA, MasterCard Paypal, Venmo, ApplePay and the Cash-transport Trucks, Physical banks, all waste energy preventing people from trying to steal money too.
These thousands of servers manage millions of concurrent transactions per second in multiple currencies across multiple jurisdictions worldwide.
The largest cryptocurrency network (Bitcoin) spends more energy than that to handle...10 transactions per second?
Bitcoin has no preventative measures, and as designed most cryptocurrencies can't implement preventative measures or refunds. That's not a positive. That's a massive step backwards.
The energy consumption of proof-of-working mining is entirely unrelated to the transaction volume. 10x'ing the transaction volume of the network would not require 10x more energy for mining.
> Bitcoin has no preventative measures, and as designed most cryptocurrencies can't implement preventative measures or refunds. That's not a positive. That's a massive step backwards.
Actually that's one of the flaws Bitcoin was meant to fix. Charge back fraud is a very real problem for merchants and essentially makes all purchases more expensive as the credit card companies are forced to eat the expenses.
> The thousands of servers that run FedWire, ACH, VISA, MasterCard Paypal, Venmo, ApplePay and the Cash-transport Trucks, Physical banks, all waste energy preventing people from trying to steal money too.
All that addresses directly the problem of moving money around and theft prevention. The amount of upkeep you have to pay is bounded on both sides. Proof of Work, on the other hand, is just about wasting as much energy in the system as you can and ensuring that anyone trying to overtake it would have to waste even more energy. The energy use isn't related to any useful work, and is potentially unbounded.
Federal Reserve profits are returned to the federal government. While that's still a step or two removed from being returned directly to society, it's far closer than anything in the bitcoin ecosystem.
Inflation is pretty stable and thus predictable. The profits from seigniorage are made by the Fed itself (and thus the government), not the member banks. Member banks can make money from having privileged access to the discount window, but that's still not seigniorage.
Coinbase, Bitpay, et. al. incur all the same kinds of costs as VISA, MasterCard, Paypal, et. al. on top of the Miners' power consumption. Traditional systems might be inefficient because they're running on old hardware or something, but that's a problem that can be fixed. Bitcoin mining is already done on bleeding edge hardware, so its power consumption cannot be significantly reduced. I suspect it isn't enough to be a major concern, but Bitcoin clearly has a higher lower-bound than traditional systems.
It depends.
It seems that you see inflation as a kind of taxes and that you are against taxes.
If the government "print" new money to create more roads or to give healthcare and this cause inflation is that so unfair?
Only if you consider that you are entitle to a part of the economy, only because you have savings, nevertheless the needs of the society where you live.
that makes no sense. both borrowers and savers have to live, they both get hit by the cost of living. savers don't get to avoid eating and paying for healthcare just because they don't borrow.
> The Federal Reserve literally creates money out of nothing
I hear this often, but while it's a literal fact, maybe it's not that simple. Central banks create money out of the Trust that people put on them, and the trust has been built by the state for years or centuries.
The main problem I see in these discussions is that you can either conceptualize currency as a Thing (and therefore creating it out of nothing is "weird"), or as an Illusion/Social Contract (and therefore you're now beholden to the will of society).
Though the Thing conceptualization doesn't hold up too much when you realize that the practical value of BTC beyond the social value is zero. they're just numbers!
The primary mechanism that "creates" money is ordinary banks loaning money in the fractional reserve system. The Federal Reserve does not have as much control as people think.
You are right. Central banks can only influence the process, but what really decide the creation or "extinction" of money is the demand of credit in commercial private banks.
In a way, the system is self-regulated.
In fact, all the "fractional-reserve" thing is a myth. Banks loan when they see the opportunity of profit, and then they search for reserves. Not the other way around.
Regarding trust, have you heard of the Rai stones [0] from the island of Yap in Micronesia?
From the wiki article:
The extrinsic (perceived) value of a specific stone is based not only on its size and craftsmanship, but also on its history. If many people—or no one at all—died when the specific stone was transported, or a famous sailor brought it in, the value of the rai stone increases by reason of its anecdotal heft.
There is money and there is real resources. Money is just a real resources distribution technology.
What is important is the real resources of a society. We (as a country, whatever is your country, if it has its own money) will never be short of money.
It can, however, get short of real resource if it leave infrastructure and knowledge diminish.
The available capital far outstrips realizable capital. In other words money isn't a direct product of productivity but rather of trust in the ability to be able to realize the capital. There aren't enough things to buy from the available capital we are literally betting on not everyone realizing their capital at once if that was the case we would be failing completely.
So borrowing from the future is the best way to think about it we are betting on the ability to keep the system of realized capital much much lower than available. Money is not a thing it's a concept of trust.
All that would happen is prices would go up dramatically basically repeating germany in the 30's if not worse.
The key is the trust that this special power that the Federal Reserve and Banks in general have to create the medium of exchange. If that power is used in such a way that all participants are not treated fairly, the system is ultimately unsustainable.
> The only way this statement is different than how the Federal Reserve works is that Bitcoin is voluntary
Not at all.
Until 1971, a dollar bill was just a piece of paper. However, the US government would redeem it for gold. The US had thousands of tons of gold at Fort Knox. It held tons of gold elsewhere as well.
It also has and had the ability to tax, and collect taxes, the world's largest military and so forth.
In 1971, the gold window was shut. Dollar/commodity ratios did not immediately change much. Why? Because an announcement that the gold window was opening up again would end any problem.
The US still holds thousands of tons of gold at Fort Knox. Germany is repatriating its gold back to Germany. Why? Why spend so much guarding gold?
The answer is the gold implicitly backs the dollar. Any currency panic can be immediately stemmed by an announcement that the gold window is open.
I mean since 2008 there's been plenty of discussion of how the US financial sector grows not only by FDIC assurances, but the implicit assurance that when banks are in trouble, like the 1980s S&Ls, or the 2008 banks, that the taxpayer will bail out the banks. There has been a lot of literature on this, and you can read it if you want.
If banks are implicitly backed by the US government, as they obviously are, then dollar convertibility is even more backed by the US government, even if it is not official policy.
Otherwise, why does the taxpayer pay to guard tons of gold in Fort Knox?
I never said the US had gold reserves to pay off every dollar in circulation. What I said was "Any currency panic can be immediately stemmed by an announcement that the gold window is open".
I also said the US government had "the ability to tax, and collect taxes, the world's largest military and so forth".
Executive Order 6102, the Gold Reserve Act and measures such as this show how the US government has dealt with such things in the past.
Also I don't think gold has a magical quality - silver will do just as well, or platinum, or any commodity. Although obviously some commodities have the qualities that make a good currency, such as durability, uniformity, portability, divisibility and so forth.
I also would add tangential to this, that cryptocoin advocates seem desperate to find things which have a cost but no inherent utility or usability. They cast about, with almost nothing in the world to point to, until they come upon the dollar and euro. They point to it and say they are mystified as to why these things have a cost but no utility, and then say Bitcoins should have a price as well, because they're "just like" the dollar but "better". Of course, this all is a silly argument.
Bitcoins don't even have the value the dot bomb stocks like Pets.com and Webvan had. Bitcoins are completely worthless. Which means the cryptocoin market will inevitably crash, no matter the lofty rhetoric of Silicon Valley VCs. I mean, they spouted the same rhetoric about the dot bomb stocks as well, those VCs which were around way back then. The publication of the book "Dow 36000" back at the height of the dot bomb bubble, October 1999, by two American Enterprise Institute "scholars", saying that the Dow was undervalued, should have been a sign of such things. It's 17 years on and the Dow still has yet to hit that mark.
The midst of a currency panic will be the exact point when the government is least interested in parting with its gold. Assuming it's even really still there.
what use is the gold if the US economy collapses? Whose gold would it be if the gov't falls over?
It kind of works if you have a place to run off too, but nobody in the federal government can just go take the gold and hide for a bit. The incentives are aligned so that the gov't does "the right thing" (stem the fall)
This is wrong in every possible important way. Not least is the idea of confusing the Gold Window it’s the Gold Standard (gold backing currency in any way).
The worldwide gold standards (in any form, or even silver backed) were dead by WW1.
There’s no implicit backing of the dollar since then, at all, and convertibility was a (really terrible) relic of that period.
> Not least is the idea of confusing the Gold Window it’s the Gold Standard (gold backing currency in any way).
There's not a confusion between the Gold Window and the Gold Standard. It's just the Gold Window is the only real bottom line. There can be different types of gold standards, and some of them are abstractions of the Gold Window. The Gold Window is not abstract, it is an exchange of paper for gold.
> The worldwide gold standards (in any form, or even silver backed) were dead by WW1.
They were dead and what happened to Germany's currency? The Papiermark fell into complete worthlessness.
> There’s no implicit backing of the dollar since then, at all, and convertibility was a (really terrible) relic of that period.
If it was a "relic" it was something that existed because it needed to exist.
As I said in another post, I don't think gold has a magical commodity. It is a commodity which has good qualities for a currency, or backing a currency - it is uniform, divisible, durable, portable etc. An announcement that the gold window was open again would quickly stem any currency panic and would give government officials time to deal with it. There is no magic in a gold commodity, silver would work as well, as would platinum, as would any commodity (although the more currency properties the commodity had the better).
If there's no implicit backing of the dollar, then why does the US government, at great expense, store thousands of tons of gold at Fort Knox and elsewhere?
Why did Germany start repatriating hundreds of tons of gold from overseas five years ago if these gold reserves mean nothing? What are they for other than as an implicit backing of currency?
I know the US government would like to have a magic printing press that printed out hundred dollar bills and had them be worth something without any connection to anything. But things don't work like that.
Why did the price exchange of a Papiermark collapse after World War I if convertibility has no relevance to paper currencies?
I've been into Bitcoin since 2010 and it is very obvious to me crypto currencies are making the world better. Fundamentally, because they are censorship-resistant and permissionless financial networks, they allow people to have access to economic opportunities they wouldn't otherwise have. Concrete examples: escaping hyperinflation in Venezuela, donating to charities censored by authorities, escaping unethical laws (eg. civil forfeiture in the US), removing financial transaction friction (no more "sorry the bank is closed on weekends!"), finally being able to TRULY send money internationally near instantly (absolutely no other system does this!). And so on.
It's like the invention of the internal combustion engine. In the early days (late 19th century) someone might look at it and wonder how noisy polluting engines can make the world better. A hundred years later, it's very obvious that making transportation easier and faster enormously contributed to improving the world's economy.
Give bitcoin another 5 - 10 years, and it will be centralize into the hands of a very very few powerful players (crypto equivalence of Facebook, Google, Amazon etc) making it easier for government to track/monitor/censor etc.
On escaping hyperinflation, while this is possible and also a good thing, you can still loose a huge part of your savings by running to a currently speculative currency/commodity. In Nigeria, a lot of people did that and Bitcoin crashed in value and the local currency appreciated about 30% in the black market where a lot of common folks source their foreign currencies.
It is still interesting to see where all these developments lead.
Isn't this already an issue due to the massive Chinese influence on the BC market?
I remember reading an article a while ago detailing how the network could work transactions faster if some value was changed, but Chinese farmers refused to change the value for whatever reason and because they represent such a large share of the network the whole network is stuck with those sub-optimal values.
It's already possible to fully "track/monitor" (without centralization) because all transactions are recorded permanently in the blockchain.
As to "censor" it would not be possible even if Bitcoin was mostly centralized (I assume you are talking about miners centralization). As long as some miners are honest, even if it's a small fraction, your transactions that others attempt to censor will still eventually be confirmed, whenever these honest miners find a block, because given the P2P nature of the Bitcoin protocol, all transactions can reach all nodes.
So does physical fiat currency, and physical fiat currency is virtually untraceable, unlike bitcoin, which has a public ledger for every transaction (although it is pseudo-anonymous).
You want to ban that so drug dealers have to find a more creative way to make money? (And they'll find a way. I'm still surprised they managed to find a way to use Tide detergent as currency to sell drugs).
What point are you trying to make? Sounds an awful lot like the "Let's ban peer-to-peer filesharing, because it's used for copyright infringement" argument.
There was a point made that 4 groups of mining pools can perform a 51% attack if they were orchestrated. That's not really decentralization is it if such a thing is possible already?
Nodes control consensus in bitcoin. If miners attempt to circumvent the will of the users, the Proof-of-work algorithm can be changed, making useless all of the miner hardware. They know this, which is why they can't force the issue.
Decentralization of mining is an issue, but decentralization of nodes is a far more important thing to maintain.
People often make observations like this, about lots of things. "It's not 100% perfect so what's the point?".
The point is it's closer to 100% perfect than any other system we have. Incremental improvements are still improvements even if they aren't all things to all men.
Decentralisation isn't black and white, it's all relative. Bitcoin is more decentralised than fiat currencies and traditional banking. Isn't that obvious?
The arguments for Bitcoin are the same arguments for cash with respect to censorship resistance. The gist of it being that sometimes the law and what is legitimate diverges to a point where there are legitimate value transfers that are outlawed. It is only by having a way to do these legitimate value transfers that these things will ever be revealed. So in a sense, it keeps the law "in check".
See the comment here https://news.ycombinator.com/item?id=14572940 for a more eloquent explanation. From the link: "The individual ability to buy anything, much like the individual ability to read anything, is both an important personal freedom and an engine for social progress specifically in the areas where society's mores are wrong."
> ... wealth out of thin air by doing useless computations at the cost of enormous electricity.
This is not a new observation or a universal property of crypto projects. Alternatives to POW, are an active subject of research, and are very important to several active crypto projects. You don't even have to look too far down the market-cap listings to find them.
What are some of them? I'm not too up on the latest research in this area so it would be interesting to know how you can do a cryptocurrency that doesn't depend on proof-of-work calculations.
The issue with PoS is that it introduces trust into the element. There doesn't seem to be a way (yet?) where you can introduce PoS without lowering the security of new adopters.
PoS works on the premise that rewards will be given to holders. Unlike PoW, PoS has a single incentive structure where the management of the networks is aligned with the holders of the tokens. If you are not a large holder, the existing holders can re-write the rules to their advantage. You have to trust that large holders won't do this, even though the incentives align with that outcome.
BTC is great, you can't say there is no social value. Not only are people getting rich like you say but its also useful for stuff like buying drugs online and to get around pesky government money laundering regulations.
Or donating to organizations to which your government has severed other payment channels because they find them inconvenient. Or escaping bail-ins and bank holidays. Or skipping out on central bank attempts to force consumption and punish savings with negative interest rates and cash bans.
Wealth isn't being created. For every person getting rich there's someone else buying in at the current price which is.... euphoric for a "digital commodity" with no inherent value.
"The greater fool theory is the theory that states it is possible to make money by buying securities, whether overvalued or not, and later selling them at a profit because there will always be someone (a bigger or greater fool) who is willing to pay the higher price"
> the social justice goals of some cryptocurrencies
Which cryptocurrencies have social justice goals?
IMHO the cryptocurrency movement's politics are mainly libertarian -- get government out of the way (by establishing a means of payment outside government control), so people are more free to transact with each other as they please.
Social justice is almost the opposite platform -- give government more control over how resources are spent, so resources can be targeted toward disadvantaged populations.
> I have a hard time reconciling the social justice goals of some cryptocurrencies with this initial period where people are basically creating wealth out of thin air by doing useless computations at the cost of enormous electricity.
> How are we any better for it? A select group gets rich, there is rampant speculation and fraud... but we're fighting "the man" so it's all good?
Any "social justice" goals are misconceived or a lie. Bitcoin was literally created to implement a gold standard based on goldbug conspiracy theories about the Federal Reserve.
It's based on considerably more. Literally everything about the design of Bitcoin only makes sense in the context of the anarchocapitalism of the Cypherpunks list and its successors. They largely accepted goldbug crank economics as completely normal.
This is why Bitcoin economics is so weird and doesn't work in the real world. The process is:
1. If you buy into this weird ideology, you'll get rich for free!
2. Don't worry if you don't understand it or it doesn't make sense - just keep doing the things and you'll get rich for free!
This is why the worst Bitcoin advocates come across as fanatical cultists, and why they got the social reputation they have.
Not all good things come in beautiful packages. This is the economic consequence of creating a system that no one entity can fully control. Without a central backing, it's value cannot be manipulated and, therefore, the supply cannot increase equally with demand. This has the harsh consequence of facilitating excess reward mechanisms amongst early adopters.
I agree. It does sort of suck when you realize that the rich are again getting richer, but the point of Bitcoin, and crypto as a whole (minus the scams), is not to redistribute wealth, but rather, make finance open and permissionless. The question is, are the economic consequences of adoption worth the benefits of it's mainstream use? I, and many others, believe so.
I don't understand why we aren't moving toward useful computation as a proof of work..
As an example, while it might take complex rounds to turn desired SETI analysis into verified SETI analysis work, with more payout/work going to winning verification rounds than the analysis rounds, I would presume 1-5% of all future SETI coinage would be the actual past computations cost for that public good, that is going to be a lot of computations for the public good.
If many future coins are really backed by different useful work, we could then have a decentralized way to achieve global computation projects, and the currency market becomes a means to vote on the large scale human endeavours with ones liquidity.
What I find destructive in Bitcoin is that the removal of the central banks should not just prevent the abuse and printing benefits governments get when their currency is used by throwing all of it in energy value down the toilet. The value should be going to public good computations in each coinage so we can vote on global projects with our wallets.
The short answer is, it's really hard to make that work with the maths.
The way that bitcoin, and most block chains, work is that almost all of the work has to be wasted, because you want someone to find "the best" answer for a very hard problem. Also, some part of the answer to that problem has to involve the transactions.
You could do something like: Find the best match to (say) a polynomial of the SETI data of today, if I randomly corrupt it with the hash of some bitcoin transactions, except that isn't useful if the corruption destroys the problem you really care about, and it isn't useful (for bitcoin) if the transactions don't significantly effect the problem.
Decoupling doesn't seem like the hard problem to me.. I.e. if you somehow have a separate SETI chain of verified claims about the hashes of sectors then it is easy to change the satisfiability problem to one where you need to buy your solution to the transaction chain hash as an inclusion a reference to a portion of a cycle in the other chain (which determines the payout of new coins, leaving you transaction fees.)
The problem is you need it to be expensive to change a block, so the seti work needs to depend on the transactions it signs, else it is too cheap to produce modified block chains.
Using the transactions to make a block hard to change is the best option for a self contained chain with no other work, but a chain of work/work verification seems like it can be decoupled from monetary transaction chains or anything other than the transactions in parties proving and taking credit for pieces in the real work.
The difficulties should be pretty normal. Past blocks need to influence new cycles such that the current chain doesn't speed up work for building a new alternate, etc.
If a chain needed to pull a satisfactory reference from the Bitcoin chain and reward the transaction parties its new coin that wouldn't change Bitcoin's status which is either backed by it's own Bitcoin transactions or not.
Therefore, I see no need for tight coupling between real work chains and coin chains to start making rewarding real work a social requirement/pressure for any new coinage.
We aren't moving towards useful proof-of-work because the goal of Bitcoin is to agree on one, single chain of events. By making the calculations useful, there would be greater incentive to have competing chains, which is avoided by choosing something otherwise useless, such that an adversary has to waste work in order to promote a different main chain.
The burning of electricity is neither useless or wasteful. It is the conversion of value from a registered form (Your electric bill) to an anonymous form (bitcoin). If you balk at the CO2 output, petition your government to stop placing a premium on anonymous value. ie, let users buy drugs and gamble using their credit cards.
Bitcoin isn't intended to be an egalitarian redistribution of wealth; it's supposed to be a way for digital cash to exist that doesn't involve depending on trusted authorities like banks, and proof-of-work mining happens to be the only solid solution to that that anyone has come up with so far.
> creating wealth out of thin air by doing useless computations at the cost of enormous electricity.
Yeah, I'd personally feel better about cryptocurrencies if they were computing something huge and actually arguably useful like SETI or the Human Genome or something.
The article is specifically about "early adopters in tech" do we really need to change the topic to are cryptocurrencies good or bad and rehash old tired arguments?
Bitcoin has come a long way... 7 years ago I was writing perl scripts to cobble together a depth-of-market program that operated on the mtgox API. I would get excited scalping coins from $17-19 USD back then. No SEC/CFTC, no regulation, no anything, just good old fashioned auction market theory - combined with a sucker being born every moment and winding up on the other end of a mtgox trade. The sky was the limit, it was an exciting time if you were an oddball breed of programmer crossed with day trader.
Fast forward.... WTF is going on now? Regulated exchanges for bitcoin, dozens of btc clones, new exchanges being birthed/destroyed each month, and the dinosaurs of finance adopting it 10 years too late. It's a crazy mixed up world.
> the dinosaurs of finance adopting it 10 years too late
The monoliths of finance will set the legislation that will determine everything about crypto-currencies in all major economies. And if their extreme political power isn't enough, they already by far own the most patents relating to blockchain tech.
Bitcoin + Ethereum = $58 billion.
JP Morgan = $330 billion. That's one "dinosaur" with $25 billion per year in net income.
The notion that they're dinosaurs and they're ten years late, is laughable. Along with all the other banks and central banks, they'll dictate the terms by which crypto-currencies will exist (the only alternative to being controlled by the banksters that control everything related to finance, is to remain a niche that never goes big / mainstream).
Give it enough time and crypto-currencies will develop its own rapacious elite. It has already happened to some extent with Bitcoin, since the early adopters are kings and the peasants must fight for the scraps.
> The monoliths of finance will set the legislation that will determine everything about crypto-currencies in all major economies.
As it turns, they won't. Or, more to the point, can't. Bitcoin didn't 'ask' for permission for anything, because permission isn't required to do math.
There seems to be this unshakeable belief in some people that things that things that aren't given permission by a government aren't legal, where it is, in fact, the other way around.
> There seems to be this unshakeable belief in some people that things that things that aren't given permission by a government aren't legal, where it is, in fact, the other way around.
It's got more to do with the knowledge that governments are the ones who decide what's legal and what's not. So if governments deem cryptocurrencies as "illegal", or something worth regulating, then there's literally nothing you can do against that.
No. Rights define what governments can and cannot do in democracies. It's amazing how many people from America of all places, that now fail to understand this.
And who defines those rights? Governments do.
That's something only very few people from US America seem to understand.
Even the mighty US constitution has had twenty seven amendments since it's original inception.
We are not talking about some unchangeable "god given natural law" here, we are talking about human made contractual frameworks which have been evolving just as much as the societies they are meant to govern.
No. The constitutions define the limitations of government, not the other way around. It is those limitations that people give governments to act on their behalf within those limitations. Again. It is amazing that this has to be explained to an American.
Guns are not 'legal'. The government doesn't have the power to take them away from you. Free speech isn't 'legal'. The government doesn't have the power to take it away from you. These amendments which you have brought up are about defining the limitations of government. QED.
> The constitutions define the limitations of government, not the other way around.
Not every nation does have a constitution, some even completely lack a comparable document. I'm also not a US American because as I said before: It's pretty much only US Americans who seem to have issues understanding this very simple dynamic.
> Guns are not 'legal'. The government doesn't have the power to take them away from you.
As confirmed by the supreme court: The government does have said power to enact regulations of said firearms because the second amendment leaves that interpretation room.
> Free speech isn't 'legal'. The government doesn't have the power to take it away from you.
How "free" is speech really when you can't even choose time, place and manner of said speech?
I ask you again: Who is in the ultimate position of power to interpret a nations constitution and actually enforce said interpretation? Idealists might claim "the people!", when in all actuality it's the acting government.
Case in point: Many of the people in Hamburg also demanded their constitutional given right to "freedom of assembly", the vast majority of them did so peacefully. Guess how that turned out? With a media campaign painting the whole movement as rioters and common Germans demanding that police should simply shoot them.
Hate to break it to you, you've just brought up a bunch of disjointed statements, with questions peppered throughout in order to deflect attention away from the reality of what I wrote. Not a single one of your points counters what I said. Not sure why you'd do that, but here we are.
> The notion that they're dinosaurs and they're ten years late, is laughable.
Maybe I wasn't clear. They are ten years late because they missed the 100,000% return on investment. I promise you, before they sell their board members on the idea of "getting involved" with BTC, they will present a figure called "opportunity cost", which represents the gains they have not realized by not participating. That figure is incredibly high, hence they are ten years late.
Also, I don't believe they can dictate terms with BTC's existance at all. They can depress or inflate the market, but since there is no central authority - all they can do to influence prices is determined by their market participation. An example of a real market that they can dictate terms with would be US debt(treasury bond futures). By participating in the bond auctions with the fed: they get to set the rate. There is no equivalent process by which they can influence BTC, much less dictate it's existence.
Why do you say they will dictate the terms? They will own the mining? The whole point of bitcoin is decentralization (unless some large entity owns mining majority).
> (unless some large entity owns mining majority).
Without control of the nodes, the mining hashpower is only a secondary concern. If the miners ever tried to enforce their will, the nodes would simply change the PoW algorithm, and the miners would effectively be out of work.
a good thought experiment. I think it's likely that the government forms a symbiotic relationship with Bitcoin if things get that far.
If the public does not want national currencies, then governments need to make them wanted. Physical force is an obvious approach, but probably impractical.
Blockchains only improve the efficiency of permissionless system. If you're going to create an in-house currency, it would be idiotic to use something as un-scalable as a blockchain.
Sure, it's not too impressive though...I think my net gains were in the 15k area. I was a really small fish back then, I ended up making more(in BTC) by selling the actual program for other people to use. At the time, there wasn't a depth-of-market setup available for mtgox, so the majority of trading was people looking at the last sale price and throwing their bid/ask based entirely on that. Nowadays I think every exchange has their own flavor of depth-of-market platform available, and there are plugins for major trading platforms(xtrader/ninjatrader/multicharts) that work with the BTC exchanges.
There is still money to be made scalping BTC, but since the price is higher the margin required is much, much, much greater. And with more margin comes more possibility of loss, etc.
It's easy to simplify though... imagine that all trades for anything, happened between $1 and $10. Now imagine a graph from bottom to top, starting at the bottom($1) and ending at the top($10). Horizontally, draw a bar next to each price, and the width of the bar should represent how many trades happened at each price. In my poorly drawn example below, you can see 2 trades happened at $1, while 4 trades happened at $3(more than any other price). Auction market theory says that the price is likely to return to $3, since that is where the majority of business was done. So to trade based on that, you are looking to sell at $5 and buy at $1, in anticipation of the market moving back towards that center of $3. It's a gross oversimplification, but that's the heart of auction theory.
Because the high number of these competitors make it look like the vast majority of them are just pump and dump speculation schemes.
In a way cryptocurrencies have become the new Wallstreet where few people, with very specialized knowledge and connections, can make money while they keep telling everybody else "It's so easy everybody can do it" so they have a steady supply of new suckers.
I'm struggling with the findings here. From the article: all late adopters ("NLAs") and non-delayed early adopters ("NEAs") had a cash out (or abandonment) rate of ~10%. (Ironically, higher for NEAs at 11%, but likely not statistically significant.) But delayed NEAs cashed out at 18%, and at even more significant rates where social ties were stronger (e.g., dorms). And these delayed NEAs can affect NLA adoption in the long term.
Separately, we could say that general exclusivity schemes (e.g., gmail, facebook) can accelerate broader market demand. But, of course, it's not causation: plenty of "exclusive" products never gain traction.
So this suggests there's a certain class of people who care deeply, potentially more about "status" of being an early adopter than the underlying tech, and will be toxic if they don't get what they want. So... identify these people carefully?
> But delayed NEAs cashed out at 18%, and at even more significant rates where social ties were stronger (e.g., dorms).
One possible explanation that immediately came to my mind was that these "delayed NEAs" were thinking something along the lines of "we were promised an instantaneous peer-to-peer payments system, but it was not instantaneous at all; screw this, it is obviously broken" and got out for this reason. There is no detail in the press release about what explanation for the delay was given. It's hard to judge people's motivation without that.
> exclusivity
The press release tries to make this about exclusivity, but I don't see how their far-reaching guesses follow from the data.
Paper from Science [1] (registration or scihub required). Not clear to me whether "cash out" means that they sent funds from a MIT-controlled wallet into any other wallet or if they took it to addresses known to be exchanges. If the former then another explanation is that they were just being prudent to truly control the money.
My first thought as well. These NEAs probably already had a mechanism for managing their coin, and so wanted to consolidate, rather than have a separate "MIT wallet"
If a prerequisite for getting the funds from MIT was establishing your own wallet somewhere and providing a deposit addr, then perhaps they could designate "cash out" to mean "move from that initial deposit address to anywhere else". Aside from some bias caused by sweeping, it's a more reasonable way to draw these conclusions.
I'm not a coder so my understanding of the technology is very limited, but couldn't we use the blockchain to P2P host something besides a crypto currency, something like a public discussion platform that's tamper/censorship proof?
The crypto currency feature could still be kept in place as a payment for people doing the actual hosting, but it would only be there to help facilitate the platform itself and not it's sole purpose.
Is that idea even viable or am I vastly misunderstanding the technology behind BC?
That totally works today. Its one of the many applications of blockchain tech due to its "immutable ledger" property.
Egs: ipfs.io
Besides this there are even many cool applications such as "golem.network- airbnb for computing", "filecoin.io - airbnb for storage" ,"ethereum dapps" etc.
After a quick glance ipfs.io looks exactly what I've been thinking about but in a much more dry way.
As I see it, right now there is an opportunity window for a P2P hosted social discussion platform.
That's because many big social media companies have been increasingly cracking down on user submitted content, leaving a lot of people to wonder where they could participate without having all their content at the whims of some commercial third party, which can be bullied to censor/delete by state actors at any point in the future.
One could argue Thor offers such a place, but imho in terms of usability Thor is far off from something everybody can use easily.
The challenge is getting the market to value the token that miners are paid in, such that the chain is sufficiently protected by their proof-of-work. Digital money may be the only thing valuable enough to absorb the capital loss associated with the energy spent on proof-of-work, whereas a messaging board -- or any other application that creates relatively little value -- will not generate enough profits to cover the miners' work.
The only reason the Bitcoin blockchain is mined so heavily is because of its tokens' high price -- and sufficient market depth, which can absorb miners cashing out their earnings -- which basically sets in motion something that can't be stopped until it reaches non-profitability, unless the entire world decides to forego profitable Bitcoin mining.
But that's pretty much the same challenge any cryptocurrency faces and even BC faced in it's beginning. BC got past that hurdle to a certain degree, why can't something with actual "usability for the masses", in the form of an open, transparent and uncensored discussion platform, do the same?
How are we any better for it? A select group gets rich, there is rampant speculation and fraud... but we're fighting "the man" so it's all good?
I can't see how society is better for this (or ever will be).
I've mined some BTC and ETH while thinking about these issues and I can't see a future where anything is different so I've stopped. It seems we'll replace bankers and oil millionaires with miners and early adopters... and the average Joe is where it was always.
Sorry for thinking out loud all these disconnected thoughts. I really want to believe but I'm having a hard time.
Meanwhile, it seems I'm doing better for society if I donate my spare resources to some distributed computing project to research cancer, AIDS, etc.
Where do you see the future in 50-100 years if cryptocurrencies take off for good?