The economy would eventually transform into a landscape of owner-less providers of economic value, perfectly "efficient" in the capitalistic sense. That might even happen sooner than fully decentralized governments.

In this, it does very well.

My favourite comes from Fischer Black:

However, we might define an efficient market as one in which price is within a factor of 2 of value, i.e., the price is more than half of value and less than twice value. The factor of 2 is arbitrary, of course. Intuitively, though, it seems reasonable to me, in the light of sources of uncertainty about value and the strength of the forces tending to cause price to return to value. By this definition,I think almost all markets are efficient almost all of the time. ‘Almost all’ means at least 90%.

Gotta love that optimism.

They have no such thing. Grab a decent dictionary and start looking up random words. Many have at least 2 or 3 different definitions, often unrelated and sometimes even contradictory.

Are mathematicians dishonest as well when they use phrases like "almost everywhere" or computer scientist when they describe a problem as "Hard" or ballet dancers talk about an "adagio"? All those words have very specific generally understood meanings in the field which might confuse someone with no background in the field.

What alternative to you propose? That they make up new words each time they want a short hand to describe a specific concept, or that they use always a long descriptive phrase each time they want to talk about these concepts?

2) Jargon. Don't tell me that software development doesn't have weird uses and definitions of words. Meanings of words changes over time, languages aren't static. The term efficiency in the context of economics is rather well established and part of the English language, despite what you may personally think about it.

This is what current economists use when they talk about markets being efficient, so it makes sense for the paper to use it as well.

There are alternative definitions (strong, semi-strong), both of which have been shown to be mathematically false already (long before economists stopped believing them, sadly)

Basically, you can't do much that is interesting unless a computer system ultimately resolves, or is imputed by law to resolve, to a specific natural person.

(EDIT: People are missing the point. What you call it is immaterial. All the handwaving aside, these "autonomous systems" including the ones described by the author are legally not autonomous. It is not possible under the law to construct such a thing. You may claim that it is "autonomous" but no government will recognize that claim as suggesting legal independence from a natural person. True AI would make this weird but we do not have AI today and the underlying fact still remains.)

It's trivially easy to set up a USA corporation that is: managed by a laywer, that is is owned by a trust in the Caymans, or a similar secrecy jurisdiction, where the beneficiaries of that trust, a.k.a. the owners, are unknown - protected by client-attorney privilege. For an added layer of security, this trust's beneficiaries could be another trust that is governed by bearer bonds. That is, whoever owns the bond, an actual piece of paper, is entitled to the benefits of that trust. They are only legal in some countries.

Make this harder to follow, and you have a series of shell companies in many countries, all with secrecy jurisdictions, and I've just described how organized crime can own lots of very legal and real looking USA companies, with almost 100% chance that you'll never find out who is controlling them. Ones that make large political donations to lobby groups and politicians - not bribes you understand.

EDIT: I think you're all missing the point that this can be done today with the right lawyers and enough USD, but bitcoin just makes it easier. Though the fact that bitcoins can be traced MUCH easier than the flow of USD, is somewhat of a downside.

I want to add one important point. Bitcoin not only makes it much easier to setup this kind of autonomous corporation, it also makes it transparent and verifiable by outside. It does so through being open source. And since no one actually owns it, it is completely transparent.

What you are saying is literal and descriptive. Currently corporations are always resolvable to a natural person. I think the author's point is that new technology (including bitcoin) can effectively cut out the middle-man.

Therefore, future legal (or quasi-legal) entities will be able to be structured in novel ways. Maybe it won't be a corporation by the standards we're used to. But bitcoin itself is an example of this structure - de-centralised and not "owned" or "managed" by any particular individuals.

There are all sorts of agency/etc laws that would have to be built to support such a system.

Corporation is literally the wrong word for what this describes.

Language evolved, often creating interesting contradictory terms. "Autonomous corporation" is not the same word as "corporation."

Just like an important property of cars is that they are always driven by a natural person?

> The "autonomy" would be illusory.

Until we have strong AI, any autonomy will be illusory (i.e. humans will out compete agents at writing agents). I still find the word meaningful to distinguish such types of mostly autonomous corporations from traditional corporations.

You are probably right for now regarding how the legal system would currently handle such corporations.

To play up the SF angle a bit, this might change when lobbyists start accepting Bitcoin.

Perhaps, but the law can certainly stunt the growth of such currencies, to the point of keeping them small, niche, and irrelevant for the majority of transactions. I suspect that this is already the case, without any modifications to the law.

Of Bitcoin in particular it says

    this corporation has revenues, expenditures and profits.
    However... no one owns this entity, it owns itself
    ...it provides a payment protocol and employs miners to maintain that protocol. 
    The employs are rewarded with ‘stock’ that is split at most into 21 million units

I think Bitcoin is able to be distributed and autonomous by its nature, and that any future autonomous corporations will similarly need to be autonomous by nature. Thus, while allowing for the kinds of payments and receipts an autonomous corporation will require, I don't think Bitcoin is the only thing such a corporation will need, nor the most important.

Instead, it will be innovative solutions that by their nature require decentralisation and autonomy that eventuate in this 'next generation of corporations'. Bitcoin will be an important model going forward; I'm really looking forward to solutions to other problems that surely will be inspired by it in the coming years.

In good times people want more money - a discussion on what they should want is irrelevant, lets stick to the facts - and in bad times people want to protect what they have (aggressively so). Now consider that what makes times good vs bad is not determined by money - it's determined and prolonged by some other shock like an asset misvaluation, the destruction of a massive crop, or some combination of external factors underlying the real or nominal non-money thing.

Let's say it's a rice crop. Those dependent on rice freak out, and push all their money into safe assets, those dependent on those dependent on rice do the same. The chain reaction continues until all the economy's money is tied up in safe assets, not being spent, and everyone is sat at home waiting for it to blow over. If policymakers do not intervene correctly at this point, this situation will become a depression, and much misery will ensue.

So what do we do? We make safe assets more expensive to lower the risk/reward ratio for commercial activities: we make bank holdings very unrewarding (lower interest rates), we devalue the money in circulation and provide liquidity in one move (print money), and government invests in big infrastructure (liquidity, jobs, momentum, signalling etc). All of this is designed to keep things moving and ward off a depression. And it works - this is why we abandoned the gold standard.

So given that Bitcoin means nothing to rice, or most other external factors, and not to the rigidities that exacerbate recessions - how exactly do we deal with this in the described autonomous utopia?

I very much agree that the regulators of currency leave a tremendous amount to be desired, but unfortunately this appears to be one of very few economic problems where decentralisation is not the answer.

There is a reason there are rice futures: those that depend on the price of rice, which is people that _sell_ rice, can hedge.

There is a reason India is constantly running out of onions: Online futures are illegal. http://en.wikipedia.org/wiki/Onion_Futures_Act

There is a reason we need to have a global economy for food production. Bad weather in one region? Import from elsewhere. (Same applies to all commodities and services.)

The economy works quite well naturally, but for massive government invervention, such as what you are proposing, which would have massive unforseen consequences (such as improverishing people, which punishes the poor the most).

By the way, were it not for abandoning the gold standard, the US would not be able to finance a perpetual state of war. (It would have to pick wars with terminal conditions and actually win them.) It would also be much harder to finance 1984.Net.

The typical response to this is for me to get screamed at about how I am obviously wrong because all economists disagree with me and because it's just obvious. I don't think that's a legitimate response.

> but for massive government invervention, such as what you are proposing

I am not proposing anything, I am merely describing. The issue at hand is not readily solved by the markets, which in this situation a) are in a state of risk aversion and b) possess very bad quality information that is difficult to reason about. This is classic market failure that is documented in places better than my mind - go forth and google.

If you are so used to receiving that response that you describe it as "typical" then I would suggest that you are either quite the revolutionary thinker, or that you are, in fact, typically wrong. Which do you think it is?

I am also using rice as a stand-in for the general case.

> I am not proposing anything, I am merely describing.

That's a meaningless distinction. Academic communists who supported Stalinism also claimed innocence when Stalinism resulted in the deaths of millions. I am not accusing you of anything on that scale, but I am saying that ideas have consequences. You are responsible for the consequences of the ideas you support and promulgate.

> This is classic market failure

Right, and I don't think markets are inherently failure-prone. If I drive my car into a light pole, is that a classic automobile failure? So I dispute the very terminology here.

Case in point: The 2008 mortgage crisis was caused by a massively distorted market for mortgages and easy credit. The first was created by Barney Frank with Freddie and Fannie, the second by the Fed. Future generations will remember this as a "market failure" and use it to justify the existence of future incarnations of Freddie, Fannie and the Fed.

> I would suggest that you are either quite the revolutionary thinker, or that you are, in fact, typically wrong.

There is a third possibility, which is that lots and lots of people think like me.

The existence of futures, commoditised goods, integrated markets and all the rest have clearly not eliminated shocks of the type I describe. What's your point?

> You are responsible for the consequences of the ideas you support and promulgate.

Again, you appear to be having issues with the concept of description. What I explained is how things actually work, why they need solved, and how they are currently solved by intervention. There is no argument here. I could very easily describe your arguments, and why they're flawed, and in no way would that amount to my supporting or promulgating them.

> I dispute the very terminology here

Dispute the terminology all you like, it's just a name for the what I described, it has no bearing on the concepts which you have failed to address cogently at all.

> There is a third possibility, which is that lots and lots of people think like me.

I think you mean that lots and lots of people think like me, and I would ordinarily dispute that too.

Except that the people who disagree with your "description" would point out that they are not solved by intervention, the underlying problems are simply exacerbated until they spiral out of control and experience a black swan event and the entire edifice collapses into an orgy of post hoc problem fixing that just messes things up more and more all the time.

At best this is just delaying the inevitable, and at worst drastically increasing the magnitude of how bad it's going to be when it becomes impossible to delay it further.

In theological terms, your claims are equivalent to appeals for plenary indulgences as effective as an effective long term strategy for the mitigation of sin. ;)

> I think you mean that lots and lots of people think like me, and I would ordinarily dispute that too.

Lots and lots of people think like both of you. Bitcoin takes the question out of the political realm and into the technical realm. If you don't buy keynesian economics and want no part of it, then for the first time in modern history it is largely possible for you to circumvent systems based around those assumptions and management strategies.

There might be arguments that the very fact this is now possible eliminates the ability of keynesian systems to act in what they describe as a benevolent fashion, but it's largely irrelevant now. The cat is out of the bag and nothing is going to put it back in.

If the problem is warding off a depression, then the solution I described is indeed a true solution. It may not be optimal, but starting to discuss optimality of the potential solutions was a little beyond the scope of the point I was making.

> At best this is just delaying the inevitable

Let me explain to you what a business cycle is. Here is an example long term growth trend: http://wolfr.am/17dwVbt and here is the same with business cycles http://wolfr.am/1iaDMSa - if there is an inevitability, it's the trend. I can't comment on your inevitability, because you didn't actually say what it was.

> at worst drastically increasing the magnitude of how bad it's going to be when it becomes impossible to delay it further

Money is nominal, it has no long run effects. Everything I've described has been the use of a nominal tool in the smoothing of short-run fluctuations. The long term trend is unaffected.

> If you don't buy keynesian economics and want no part of it, then for the first time in modern history it is largely possible for you to circumvent systems based around those assumptions and management strategies

This is not relevant to what I said. If sufficiently large your Bitcoin utopia will suffer these problems and you won't have a solution. God help you if all your eggs are in that basket when reality strikes.

If the problem is warding off an invocation of oomkiller at the kernel level, then just setting the jvm heap size lower is indeed a true solution. We'll just ignore the fact that it doesn't actually address the problem and the memory leak still exists and has actual consequences, because we stopped oomkiller from randomly killing innocent processes which is definitely a noble goal.

Keynesian solutions have consequences, they are not magic. And they are not really solutions at all if you're not deceived by the simple sophistry of them, they're band-aids. That

> The long term trend is unaffected.

Is terribly amusing, I guess that's why we don't have financial crisis anymore or hyperinflation or sovereign debt defaults or poorly managed national economies or anything of the kind.

> If sufficiently large your Bitcoin utopia will suffer these problems and you won't have a solution.

That's because setting a shitty raft on fire so you're forced to deploy life vests instead of drowning is simply not a solution, and pretending otherwise is just stupidity masquerading as tactics.

Whatever, as long as it works for you hope you're happy with it, I'm not buying.

Wow. Normally I wouldn't say something that appears this "snarky," but...

I think the wrongness of this speaks for itself. This is being used as an excuse for massive manipulation of people's lives and businesses. Apparently, that has "no long run effects."

Definitely reminiscent of "In the long run, we're all dead."

Your posts mostly consists of rambling that the established economics definitions of efficiency, market failure and so forth are wrong. You call an entire profession slippery and dishonest.

You are clearly pushing your agenda, in a fashion that IS intellectually dishonest. Try having a conversation where you actually use the jargon of the subject matter. Market failure means one thing when you are discussion economics, don't try to invent your own definition. That is dishonest and poor argumentation technique.

> But the guy I was talking to didn't seem to be interested in discussing the issues

I made a clear point with a clear example and well defined boundaries. Some of what's been said here - a lot by you - has been so wrong/irrelevant/flawed that I wasn't willing to entertain it, on this point you are correct. I'm 2 weeks in to a new keyboard layout you see, and the thought of the amount I'd have to type to address them all properly was too much to bear.

> astroturfing

For the record, I had to google that.

That's an ideological statement and an axiom of your belief system, it is not however reality nor something everyone agrees with. That's why people scream at you, you are being ideological but speaking as if it's a fact. Markets fail, they do not always work well naturally, and government is not always the problem.

> Markets fail, they do not always work well naturally, and government is not always the problem.

Markets always work well eventually, and physical force (which is typically weilded by governments) is the only thing that can arrest that process. In the short term, certainly, there can be market disruptions. There are all kinds of ways to deal with those so they don't have to be problematic.

That's a religious statement, not a factual one. Please open an economics textbooks and find the chapter on market failures. You are talking ideological nonsense, you are not describing reality.

Edit: I checked your profile; you're quoting Ayn Rand; your mind is already fucked. I'm done with this conversation as it's impossible to reason with anyone who thinks highly of that insanity. The only thing Ayn Rand is a good starting point for is how to brainwash young minds with terrible writing and an idiotic philosophy. She's a joke.

> your mind is already fucked. I'm done with this conversation as it's impossible to reason with anyone who thinks highly of that insanity. The only thing Ayn Rand is a good starting point for is how to brainwash young minds with terrible writing and an idiotic philosophy. She's a joke.

That's completely untrue. I'm a very intelligent and very well-educated person, and I agree with Ayn Rand. And there are a lot of people like me.

Ayn Rand's views are actually quite intuitively reasonable---and there is a lot of techincal philosophical work that has been done to show that they are true.

(a) there is an objective reality

(b) we can gain knowledge about it

(c) we should act self-interestedly in the pursuit of happiness

(d) we need freedom (in the classic liberal sense) to do that

Which of these views causes you to automatically dismiss me out of hand?

If you want to make a cogent criticism of Ayn Rand, I will tell you why I think it fails.

> That's a religious statement, not a factual one

It's not a religious statement. I realize that you are accusing me of believing certain things on faith, and I completely reject that. I am a scientist.

I definitely suspect we probably disagree on what "always work well eventually" means, though, which I left undefined.

you're correct, but a few things:

1) the gold standard never fully went away; while we implemented Keynesian fiat money, we then pegged it to Oil production, hence the term "Petrodollar". It was a little amusing that we went to war in Iraq (under the WAR ON TERROR banner) immediately after Hussein switched to the Euro as the default currency. [1] Even in it's weakened state, the Petrodollar is still the main currency of choice.

2) The Gold Standard switch is the tip of the iceberg. We should be talking about the US Bankruptcy. Check out the Trading with the Enemy Act of 1917 (specifically, the 1933 amendment) [2], and House Joint Resolution 192 of June 5th, 1933 [3]. Those two acts set up the perpetual state of war in the US, though some would say it happened when congress went sine die during the civil war.

3) Fiat money is _awesome_ in a world in bankruptcy. Since 1933, people/citizens are the source of all money. we live in a world of abundance now since the industrial revolution, and in the next 20 years, as machines take over all the old grunt-labor jobs, we're going to have a glut of people unable to do the jobs they were trained to do. under any resource-backed economy (gold, oil), this would be catastrophic. However, this is why we have institutions like the Bank of International Settlements in place, to post bonds and discharge debt for insolvent countries/corporations. Money is debt, as the Youtube video tells us. We're now in a world where a Promise to Pay (an IOU) is in fact the money itself [4]. In this world, everyone that has a "Sophisticated Investor" level of understanding of the game can act as their own BIS, effectively becoming another Carnegie, Rockefeller, Warburg, or Oppenheimer.

I suspect you're a lewrockwell.com reader, or at least one who follows a more libertarian leaning (correct me if wrong). Back when I was championing the gold standard, I used to say a lot of the same things. Much of what they said was right, but was missing the massive caveat that it was only correct within the confines of HJR-192. Gold/Silver is only payable for private commerce outside the jurisdiction of Wickard v. Filburn [5] nowadays. Michael Badnarik, former Libertarian Presidential Candidate, teaches a common law class that explains many of these concepts, so that you can preserve and exercise those pre-1933 rights [6].

[1] http://content.time.com/time/magazine/article/0,9171,998512,...

[2] http://www.law.cornell.edu/uscode/text/12/95a

[3] http://www.focusoncommerce.net/index_htm_files/LAW%20-%20Hou...

[4] http://en.wikipedia.org/wiki/Negotiable_instrument

[5] http://www.lawnix.com/cases/wickard-filburn.html

[6] https://www.youtube.com/watch?v=a-a_yR1jzHY

This isn't a response to any of your points, but I'm deeply amused to see someone still calling Bitcoin a 'toy currency' at a market cap of $2b. Many people were calling Bitcoin a toy currency when the market cap was more like millions. Truly, people can differ in opinions a great deal.

This is a big problem that does make it a toy currency. The slow exchange probably brings up the price. I expect, without much proof, that the USD:BTC ratio would be lower, at least short term, if you could exchange them easier.

$2b in circulation is pretty decent of course, but if you cannot convert those BTC to USD with ease then the valuation is flawed.

3 days is still a very long time compared to the 'real' currency exchanges.

Edit: or it's not evenly distributed. A few thousand people holding all of their wealth in Bitcoin would be enough to study this.

Wouldn't this force people already worried about the future to buy into less abstract stores of value like houses? Wouldn't that just end up monetizing houses eventually leading to a bubble? Isn't the risk/reward ratio an indicator for the health of an economy and isn't skewing it treating the symptom not the cause?

> we devalue the money in circulation and provide liquidity in one move (print money)

But we use this newly created money to buy assets which the market had no interest in buying inflating their price and funding contractors at the expense of everyone else.

> and government invests in big infrastructure (liquidity, jobs, momentum, signalling etc)

But unlike market investors, there's no worry about ROI. Building these large infrastructure projects may pay off but theres no downside and they could just end up making a few people very rich.

> And it works - this is why we abandoned the gold standard.

I thought the gold standard was abandoned because Nixon refused to convert France's dollar holdings back to gold in 1971.

It forces people to spend/invest money primarily, which keeps the economy growing, prevents job losses etc. Houses are one form of investment, but they're no less tangible than many others from the point of view of your average investor.

> But we use this newly created money to buy assets which the market had no interest in buying inflating their price and funding contractors at the expense of everyone else.

This is not about magicking up new demand, it's about restoring the previous demand before the fear set in. Inflation is a reality, yes, but it's not inherently a bad thing - in these situations there's an acceptable level where the benefits outweigh the costs.

> But unlike market investors, there's no worry about ROI. Building these large infrastructure projects may pay off but theres no downside and they could just end up making a few people very rich.

It barely matters if they pay off at all, the end product in this kind of capital expenditure is much less important than the process of doing it. Making a few people rich is the usual outcome of high-value expenditure, why would that be any less true in a recession? It's a nothingness on the scale of rescuing a flailing economy.

> I thought the gold standard was abandoned because Nixon refused to convert France's dollar holdings back to gold in 1971.

I'm not a historian. It's certainly why we don't go back to it, and why not a single country on the planet uses a fixed monetary system anymore.

Lowering the difficulty of exams so that previous scores are reached again sounds like curing the symptom to me. How are the benefits outweighing the costs?

> Making a few people rich is the usual outcome of high-value expenditure

Its high value expenditure with newly created wealth taken from the savings of everybody else. It matters a great deal if it doesn't pay off.

> Its high value expenditure with newly created wealth taken from the savings of everybody else.

It's either savings or new wealth, it can't be both.

> It matters a great deal if it doesn't pay off.

I'm not sure you'd be of that opinion in a depression.

I'm all for saving people, lets call it charity though and not investment.

> It's either savings or new wealth, it can't be both.

True, I meant currency, its new currency taken from the savings of everybody else

> I'm not sure you'd be of that opinion in a depression.

Hypothetically if we used a global hard money system, like bitcoin, and the government was so sure that spending now would boost the economy in the future. I see no problem in them taking a loan and building some highways.

They would have to pay it back though...

> True, I meant currency, its new currency taken from the savings of everybody else

New currency is new currency. It comes from nowhere. It devalues all existing currency, not just savings.

> I see no problem in them taking a loan and building some highways.

These projects are typically undertaken with debt. New currency is generally introduced in the bond market.

If people put their money in savings, isn't the bank still spending it? Investing in things like new businesses? Couldn't the same thing happen regardless of the currency?

Edit: sorry, incomplete response. Yes it happens in every currency, the difference is they have mechanisms for handling these issues.

An alternative is to allow anyone to issue currency. Worgl, Austria got itself out of the Great Depression by doing just that, creating a currency with built-in devaluation (until Austria's central bank shut it down).

We already have multiple bitcoin-style currencies, and it's easy to create more. Some even devalue, much like Worgl's currency. So I don't think this is likely to be a problem, unless somebody is silly enough to make bitcoin the only legal tender.

Whether new money is issued by a central bank or other agents, it seems to me the effect is pretty much the same.

Edit: And back to the point - Bitcoin has no controlling party, it cannot be manipulated in this way at all. It cannot respond to business cycles.

I clearly see how 3. is not possible with Bitcoins, but how are the others not possible?

Other crypto-currencies such as http://freico.in/ have seemed to at least tried to address this issue.

> the privileged position held by money compared with capital goods, which is the underlying cause of the boom/bust business cycle

This is far from accepted wisdom.

Bitcoin is the opposite of an elastic money supply, and eventually it becomes a completely static money supply. This is a feature as far as a store of value goes, but a liability when it comes to medium of exchange.

http://bitcoinmagazine.com/7050/bootstrapping-a-decentralize...

* Person comes up with a business model. * Person automates it as much as possible, eventually automating all of it. * Person ends up being in a car accident.

There's no reason why the AI he wrote shouldn't be able to keep "living" (aka paying its bills) for a while, if the idea was of the right sort.

If the payment -> key sent part was automated then money would just build up in the bitcoin account over time.

Of course, without the creativity to come up with new C&C mechanisms, the pattern of migration and purchases might eventually become predictable enough to stop the botnet.

Make something that scrapes content and SEO-izes it. Add affiliate links. Run on AWS. Make payout to affiliate commissions to the same account that pays AWS. Make the system capable of growing/shrinking its AWS capacity on its own. bam. self-perpetuating and potentially self-optimizing/growing income with zero outside intervention (except for when google corrects around it).

Does anyone have an example other than the BTC blockchain that provides a valuable service guaranteeing consensus is required for changes to the system's behavior?

When they ask how the humans went extinct, the answer will be; gradually and then suddenly.

... people are willing to pay for terrible things, especially if they're provided by autonomous businesses. And people will do anything for money including working for an autonomous business doing terrible things. And who's to say that an autonomous business providing a nice service, such as electricity, won't keep trade secrets and also needs no human workers (thus robots could be doing, in secret, some terrible deed hated by humans to provide a resulting service liked by humans... and that secret business plan might have been concocted by an algorithm with no human intervention).

Given the fact that 98% of BTC belong to 2% of portfolios and there's a way stronger anonymity compared to fiat currency (you all know who Bernanke is and where his power comes from) and early adopters can drive easily the market up or down. Personally I believe that's the main reason BTC didn't fall after SR bust. Because, what most believe is not controlled is TOTALLY controlled (big players didn't opt out).

That said I can see how BTC is useful and has awesome qualities, especially for people who understand technicalities of a digital currency and how money works.

However, BTC is a hoarding system. Much like gold and nothing like fiat. BTC is not inflationary, by design. Inflation is the first quality a fiat currency must have, in order make people willing to spend.

If that were true, no-one would have bought an iPhone and Apple would be penniless (USD etc are deflationary relative to technology items).

The iPhones in Europe had for years the same price. So I don't really understand your example. Could you elaborate ?

Now, a currency that doesn't slightly inflated tends to be seen as an investment by consumers rather than an exchange medium. I would very much welcome bitcoins as a payment since I believe their value will go up in the future, but how many people are willing to end bit coins instead of dollars?

Sorry, what?

""" Gold can be thought of as the first real autonomous ‘corporation’ although you probably don’t see it that way. Think about it – it provides a payment protocol and employs traders to maintain that protocol.

The idea is the same – this corporation has revenues, expenditures and profits. However, once again, no one owns this entity, it owns itself. """

I am deeply interested in the subject and would love to discuss the topic and brainstorm some possible implementations with like minded people on Freenode (#bitcoin-agent).

If the whole premise of its autonomy rests solely on it's ability to engage in metered economic exchanges by way of some kind of bitcoin-style protocol, then an "autonomous corporation" MUST, by definition, persist on a distributed global network of continously available computers. So, if this entity has that dependency, then who's providing the hosting?

He who opts in on hosting the protocol, carries a say in the fate of the entity, thus this is no more "autonomous" than any other body of distributed human decision making. Whether it be voting, the purchase of publicly traded shares, or the organization of a bond to fund a bridge to nowhere.

It comes down to this: In order to mine bitcoins, or rather, add value to the system, you have to be constantly connected tothe internet. You can't mine a bitcoin in isolation. You can't power up a stand-alone, air-gapped machine, and mine bitcoins and expect them to have value when you connect it to the internet.

If you can't mine your own bitcoins in a vacuum, then very obviously, this requires you to interact with the world at large, over public networks. Those other systems must be available and complicit in such activities. That certainly doesn't fit my definition of "autonomous" in the sense of some massive force-of-nature style artificial intelligence boogey man. These systems need to be switched on, activated and tended to by someone. Someone will eventually want to extract value from these economic crypto-currencies.

So, here we are, coming back to the drone/remote control debate. Is a drone really "autonomous" when there's a pilot manning a set of remote controls from a bunker? Similarly, is this truly an "autonomous" corporation, when there are people deploying agents onto client hosts and services onto servers, all with the goal of gaining wealth? However you want to encapsulate the skill sets involved, that still requires expertise, and human intervention in my book, and certainly doesn't sound autonomous at all, to me.

Autonomy is a relative term. Whose autonomy are we talking about, here? And autonomy from "what" precisely?

* Messaging (https://bitmessage.org/wiki/Main_Page)

* Hash table (http://en.wikipedia.org/wiki/Kademlia)

* Name service (http://dot-bit.org/Main_Page)

The only other thing you really need to be able to program arbitrary services is a decentralized work queue.

And I'm not suggesting that those particular protocols are the final solutions for these tasks, but they are proofs of concept that are being iterated on by a lot of very smart computer scientists.

Let's say the computer scientists die, and leave these systems behind. If their legacy is ignored, it will not persist in humanity's absence. Unless people continue to employ these tools, the tools will not spring back to life and animate themselves for their own sake.

Just because you have an idea, and you throw up a wiki, and some client code on github, does not an A.I. make. This all sounds so much like it's just a Simple Matter of Programming (SMOP).

http://everything2.com/title/Smop

As humans, we generate the electricity, we manufacture the chips and lithium-ion batteries. We buy the remote controlled quad-copters, and send them flying through the air. We turn the radios on and off. We plug in the network switches and routers, and administer the servers and prevent them from overheating. These things don't produce and care for themselves. There's a person on the other end, no matter how much they attempt to obfuscate their identity, or piggyback on crowdsourcing. Even with distributed peer-to-peer crowdsourcing, you still need peers and you still need a crowd.

Are there self-replicating computers out there, building 3D printed copies of one another, fabricating their own solar cells, growing legs, walking themselves over to wall outlets, plugging in, and then executing block transactions for the sake of their own desire to be a bitcoin node?

How, then, is this autonomy?

Oceans are affected by those above as well, and by us. We have managed to affect the oceans quite a lot during our short time on earth, mainly by pollution it and the environment in general.

Nothing is really autonomous in that sense. Yes, the earth will probably be here after we perish and it will probably survive, more or less, intact so in that sense it is probably quite autonomous.

   1. It's IMPOSSIBLE to have a corporation without money
   2. So far it's been impossible to receive money online anonymously

   3. Corporations can't be anonymous

The fact that the NSA can track you down by various means is a whole different thing. And by that logic nothing in the Universe is anonymous, since it's deterministic and it doesn't lose information, so theoretically everything could be traced back to its origin.

That is kind of like saying, "StackOverflow is anonymous. You do not attach any form of ID to your questions!" Of course, that worked out pretty badly for a certain high-profile Bitcoin user recently (yes, he leaked his real name at one point; however, he had also used his pseudonym in many other places, which was part of the problem):

https://medium.com/p/d48995e8eb5a

"by that logic nothing in the Universe is anonymous, since it's deterministic"

Hardly, in fact, all the evidence points to a probabilistic universe; by extension, probabilistic approaches to anonymity might be possible. It just so happens that in the context of electronic payments, that is entirely possible, and for more than 25 years cryptographers have been studying such things (and there is a pile of published research). Yes, you can even have an electronic payments system that protects your privacy from the NSA.

https://en.wikipedia.org/wiki/Irreversible_process

If a process is irreversible it means information was lost. And from the article, "All complex natural processes are irreversible".

The Universe doesn't lose information. The one thing that made physicists believe for a moment that it did, was something about blackholes, but it was then proven to be wrong.

Use a tumbler. Done.

(1) You need to hope and pray that your mixing service does not just run off with your money

(2) You need to be careful not to withdraw your money from the mixing service "too quickly" or else you will de-anonymize yourself

Here is a paper that casts serious doubt on at least one mixing service, based on a simple (by the authors' own admission) approach to de-anonymizing Bitcoin:

https://www.wi.uni-muenster.de/sites/default/files/public/de...

All this ignores the fact that the security model of Bitcoin mixing services is even less well-developed than the security model of Bitcoin itself (incredibly, such things are possible).

In the Silk Road investigation, the investigators basically threw up their hands and said "don't bother trying to analyze the transaction graph." So there's some evidence that tumblers are effective in practice.

"In the Silk Road investigation, the investigators basically threw up their hands and said "don't bother trying to analyze the transaction graph." So apparently tumblers are effective in practice."

Do you have a citation about mixing services specifically thwarting investigators? Maybe the investigators felt that Bitcoin itself was too much to deal with. It would not be the first time a law enforcement agency has pointed to a system with little-to-no security and claimed that they cannot attack it.

Why does the money received need to be anonymous?

And to reasonable people, it sounds reasonable.

Well, since I was talking about an "anonymous corporation" in my comment, it would be kind of necessary for it to receive money anonymously.

I agree OP is talking about something slightly different.

Still, keeping a private key safe for a distributed corporation will be a challenge. One attack I can think of - set up a fake hosting company that claims to offer cheap hosting, wait for the corporation to move some of its agents there, then bam, you've got the private key. That kind of thing might be difficult to pull off, but if any of these corporations controlled significant assets, then the amount of resources an attacker would be prepared to expend would be very high.

I suppose it suggests a mechanism where spending resources requires the cooperation of a number of agents that must be contracted with different hosting companies, and perhaps a period of warm up, where for the first x months, an agent might do useful things but would not be given power to control money.

Let's say there is an agent A whose source is on Github and which makes X BTC/month. If the agent is programmed to pay out dividends to shareholders and auto-update its code, (large) shareholders have a shared interest in improving the agent.

Likewise, an ambitious developer could fork agent A and try to improve it. If he can convince a lot of people that his agent will beat out the other agent, he can get people to invest in it in order to bootstrap agent B (assuming the agent requires an initial investment).

If agent B is more profitable than agent A, people will start investing time and money on it and abandon the other agent.

PS: Agents would not necessarily need investors assuming they can bootstrap themselves to profitability. This is just a possible scenario. However, I think is likely that agents who rely on some form of human input are more likely to beat the competition.

It's more likely that such an autonomous corporation would provide a cloud service. The protocol could be designed like bitcoin to reject hosts that don't meet certain criteria (such as latency or security). With Homomorphic encryption techniques being advanced these types of clouds could even be somewhat secure.

  only way to deal with those corporations will be through 
  Bitcoin (that’s right, they won’t, or rather can’t, accept 
  fiat like US Dollar)

I think the intrinsic value argument is pointless. Gold for example, has some value outside of it being a medium of exchange, but the price of gold is very divorced from its usefulness in industry or its attractiveness so the fact that it has "intrinsic" value doesn't mean much.

i mean, mining in this case will be work.. and the amount of work would say how much payment that work diserve..

but how to calculate work in a generic manner without being too linear.. like hours/work.. i mean.. pay for creativity, ideas, less tangible things..

and about other investments. how they would be decided? this requires a good amount of algorithms..

The author answered: "I liked to shot of the tower … looks like it’s reaching out into space and time!"

http://btcgeek.com/dawn-of-autonomous-corporations/#comment-...

I love life's little coincidences.

Gold is not a solution since it needs to be stored and moved by someone. We tried that in growing ecenomy of 19th century and it lead to a banking cartel and legalized fractional reserve lending. I think gold will collapse with fiat currencies for the exact same reasons: counter-party risk. No one wants to trade in gold/silver coins because they can't be moved and protected like bitcoin.

No matter how many bitcoins do you have, you can lock them up with M-of-N transaction where N separately generated keys belong to your partners and friends. And the encrypted wallet can be backed up on any number of computers for a very low cost.

Unless people start using Bitcoin universally and won't need any fiat currency at all. Which I expect is going to happen over the next decade.

You may think that "regular wage earners" who have no savings are not affected at all, but that's a double mistake:

1. Folks without savings are highly depended on those who have (aka capital, aka infrastructure, aka ecosystem). They depend on their boss having enough money to sustain ups and downs and not go bankrupt. They depend on productivity of the producers around them who make food and goods - those have to save to invest in the future development to increase quality and lower prices. The less wealthy people you have around you, the less comfort and service you get (obviously). In the middle of Sahara any bum is much less safe or wealthy than on Manhattan.

2. Folks without savings can't even start having savings when they are heavily taxed by debasement. Thus existing class of powerless people stays powerless and those who have depreciating savings join that class over time. Which is understandable: continued debasement simply moves all the capital to the very few close to the printing press leaving everyone else in the powerless "workers" category.

Extra twist is that folks without savings are bribed to support the system by offering low-cost artificial credits (created from printed money, not from someone's savings) and it only adds insult to injury: at the cost of destroyed local productivity, risk of hyperinflation, 3rd world hate towards them, people not only cannot save money, but have to pay some interest rate to get at least some stuff to preserve whatever money they got right now.

If you look at the whole picture consisting of net receivers and net losers in this great wealth transfer, it's very-very sad.

However, owners of new money do not outbid savers on all markets in all products the same day. They go and invest in some particular market changing prices there. E.g. stock market, or housing market, or some foreign production facilities. The money slowly flows to more and more hands finally ending on high street and competing with all existing money there - prices grow, savings diminish, purchasing power of "regular" consumers goes down. But the investment was not accounting for that because it was not known how much and how quickly all this new money will come on the market. Especially if there are numerous capital controls and high friction: the money saturate some other markets for a while until on day X it flows to your market and destroys your business in one month.

Example: imagine you look at current price structure and expect that investment in iPhone factory will let you sell 1 billion iPhones and make some profit. You go and build your factory, pay your bills and finally after 1 year produce 1 billion iPhones. By that time all your investment money is being moved to hands of many private persons who drive up the prices on all goods in the markets they participate in. If they are on your market, bad news for you: food will be more expensive and people will spend less money on your iPhones; and you will go bankrupt (unless you borrow more of printed credit to stay in the game longer). In reality, it's more complex. Trillions of dollars are being held outside U.S. and do not cause enormous price increases inside (official stats say "1-2% inflation") because for foreign holders of dollars there are either no things to buy from U.S., or it's hard/expensive to do due to regulations, tariffs etc. So U.S. effectively outsourced destructive effects to other countries where people get poorer faster than in U.S.

The bad news: the longer you keep artificial barriers, the harder market will punch you back. The longer U.S. market does not see its own printed dollars, the more and faster these dollars will flood in on some random day when foreign economies will be so depressed, that they'd try hard to get rid of their greenbacks where they still have high value.

Then, of course, U.S. gov would disallow citizens selling stuff to "enemy" countries to prevent too many dollars increasing prices at home. This will effectively move country to a closed loop North Korea-style. No one outside U.S. would want to sell stuff for dollars, and americans won't be able to sell their goods to foreigners. Since most of the production is outside the U.S., country would need to build new factories inside. But to do that you need genuine savings. Since all savings are effectively destroyed, huge depression would be on the horizon. So the government would continue printing money, but this time it will go to the home market to build production inside. This will quicker lead to very noticeable inflation and even more bankrupcies and depression. The course of things can be changed by two means: either government intervention will be stopped (e.g. people make a bloody revolution or they switch to Bitcoin), all losses are accepted and people can start saving agin. Or government begins another war and forces other countries to accept dollars and produce stuff for U.S. But that can be done only to the extent on how many productive facilities other countries have and how much can they protect themselves. If the war path continues, it'll be just a misery everywhere until USG has nowhere to go and collapse after too much destruction.

You have high hopes.