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BitCoin Seen Through The Eyes Of A Central Banker
To us, the ECB's superficial, amusing take on BitCoin was merely a source of (Friday) humor. To others, such as Tuur Demeester, the ECB's report on "Virtual Currency Schemes" which was merely a confused attempt to validate the Euro by bashing a prototype electronic currency that others have written far more informed articles on, has far more profound insights into central banker mentality. We are skeptical: the ECB has far more existential issues to worry about than whether people will be paying for that house in Calabria with BitCoin (they won't; at least not any time soon), such as how fast until Spain and Greece run out of rehypothecatable and repoable assets, that allow the ECB to continue creating its own version of electronic money (in this case named Euro) out of thin air. But for those seeking more than what meets the central-planner's eye (because what better ploy than to divert attention from where it truly needs to be focused: such as Spanish bonds for example getting a 0% haircut instead of 5%), here are some answers to the question whether "the CB’s toolbox have what it takes to contain a private, decentralised cryptocurrency? Or: Bitcoin seen through the eyes of a central banker."
From Tuur Demeester: "The Gloom Of Central Banking"
On october 29th 2012, the European Central Bank published a 55-?page report titled “Virtual Currency Schemes”. With 183 references in the text, it seems obvious that specifically the fast growing peer to peer currency Bitcoin is under scrutiny.
Why in the world, one wonders, would an increadibly powerful financial institution bother to investigate what seems to be nothing more than a complex mathematical puzzle with which a bunch of whippersnappers send packages of bits and bytes back and forth to each other?
In what follows, I sketch an evolution of how central banks—the monopolists of the current fiat money paradigm—have dealt with the existence of online free market competition since 1996, and how they are now reacting to the sudden appearance of an enigmatic rival.
It turns out not only the ECB but also its more powerful and sophisticated Swiss godfather, the Bank for International Settlements, finds that it has genuine reasons to be on high alert.
Be warned that this is a subjective take on the issue. People from central bank and government circles will no doubt accuse me of being unbalanced and unfair in my interpretations and conclusions. So be it. My goal here is to scrape off the veneer of these reports and thus catch a glimpse of what may actually be happening behind the closed doors of Basel and Brussels.
Full report (pdf)
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A whiff of freedom in the air!
Private and digital...
Where have I heard that before?
Want it in my hand away from the maw of the Leviathan
(shit's worse than some forms of paper gold... sure, nobody's ever gonna mess with the code... my ass... nothing on systems is secure anymore...)
Don't be brain-locked; any tech that advances liberty is of value, and Bitcoin is definitely among them.
It's a common trait of humans: anything one doesn't understand is frightening and evil.
Neophiles (~5% of the species) vs. neophobes (~95%).
We created religion because tomorrow is *always* threatening.
I don't think there's anything wrong with folks being skeptical. I was very skeptical of BTC when I first found out about it. I still have some skepticisms/concerns, but none of them have been discussed here yet. Anyway, people who deserve to know will find out the truth for themselves. Everyone else can sling poo until they are forced to know.
No bother to me.
I stopped stacking barbarous relics for a while when I finally understood how (paranoid-level) secure bitcoin is:
i) it starts with public-key cryptography, so it works like this: you have both a private key and a public key. It's like latitute & longitude, you tell everyone the longitude you are, but nobody knows the latitude (and the space of possibilities is as vast as the number of atoms on Earth, forget about finding it). You receive bitcoins when someone tells the network that "I'm at longitude x, sending 1btc to whomever is at longitude y".
BUT it doesn't stop there! It still has another layer of security on top of that.
ii) You don't even tell anyone the longitude you are! They use a "hash function", which is basically a huge unique barcode, to hide the "public" longitude (public key). So basically messages are like this: "I'm at longitude x, sending 1btc to whomever has this crazy unique barcode for some longitude".
This is why, for example, if you have 1000 btc and send 1btc to Benny Bernanke, it actually creates two transactions:
Transaction #1: "I'm at longitude x, sending 1btc to whomever has this crazy unique barcode for some longitude".
Transaction #2: "Oh, by the way, now that you know my longitude x, I'm sending all the other 999btc to this crazy unique barcode for some longitude where I'm hiding my btc. By the way fuck you moneyprinters, and fuck you too-big-to-fail, and fuck your totalitarian financial oppression".
I wish I could send some bitcoin to William Banzai.
I'm just going to air my suspicions that some of the TDs themselves are probably looking closely at and contemplating picking up BTC. I'll bet that within six months you'll be able to donate in BTC here.
I would donate 10 BTC to 0H right now if they'd set this up.
Why don't we just have the number of dollars in circulation be set with a ratio to population, and have that set ratio never be changed under penalty of death? It seems pretty simple to me.
I mean if the general population is too stupid to do what I've just said above, what makes you think they are capable of choosing a alternate, legitimate source of exchange?
& I don't care how much you encrypt a code, those with the power to change the code- those who wrote it, have all the power, and it corrupts absolutely. Moreover, being as none of you are high level hackers or programmers, its a little bit odd that you are commenting on the tech. & my assumption is that if you did, you would have a vested interest in seeing it go into place, especially if it were hackable, b/c this would lead to a new ruling hacker class.
Lastly, nothing is uncrackable. Everything that you can imagine, can be accomplished. We just haven't figured it out yet.
"Why don't we just have the number of dollars in circulation be set with a ratio to population, and have that set ratio never be changed under penalty of death? It seems pretty simple to me."
Feel free to get started with that. Until then, I'll stick with what I know works.
"I mean if the general population is too stupid to do what I've just said above, what makes you think they are capable of choosing a alternate, legitimate source of exchange?"
The general population follows. They do not lead.
"I don't care how much you encrypt a code, those with the power to change the code- those who wrote it, have all the power, and it corrupts absolutely."
You should try to learn how open source software works. It will help you understand this better.
"Moreover, being as none of you are high level hackers or programmers, its a little bit odd that you are commenting on the tech."
As an admin/developer/many other hats kind of guy for many years, I can see clearly that you're talking out of your ass. Stop. It's not working.
"Lastly, nothing is uncrackable. Everything that you can imagine, can be accomplished. We just haven't figured it out yet."
I look forward to seeing you figure it out, owning the world, and getting all the chicks. Keep me in mind when you do.
Could someone tell me how many BitCoins a gallon of gas was worth in NY this weekend?
Hahahaha.....now that was funny.
I'll let a bitcoiner zealot chime in with the proper metrics.......hahahaha
Is this the "it is useless in a disaster" argument again?
Yawn.
1 BTC is around $10. The rest I leave up to you.
I was a bit mad last time I wrote here, since too many ZHs doubted the usefulness of real science (ie not social science but physics and chemistry). You are now forgiven for your silly ploys.
I assume you only trust your mom (and still, that's pushing it). When you get a bar of gold in your hand, you do not have to trust the buyer, and this is a very good thing. But what if you want to buy something on the net? How do you send gold to somebody who do not wish to reveal a physical address? Bitcoin solves the problem of trust on the internet.
Bitcoin is not controlled by a central point. It is controlled, much like the internet itself, like a network of servers. Anybody can set up a server an participate in the bitcoin network. These persons are called "miners".
I understand that many of you know next to nothing about science, and I strongly suspect most of you do not know much about programming either, but fear not: many other people do, and they (we) will lead the way when it comes crypto currencies. We will use BTC among ourselves, while most other people will not. BTC will be a sideshow for many years to come, until the mainstream catches on.
Physics and mathematics are my career fields. I do know programming. I also know enough about bitcoins to know that they are impractical.
You may think you know a lot, but you know nothing about money, why it exists and what function it performs.
Good luck to you and your people.
You may have overlooked the machinery you used to deliver that message to the rest of us and how it has reshaped our world as of late. You may have also overlooked the utility provided by this impractical bitcoin in the context of our current world and monetary system.
Thank you. And good luck to you and your people.
I don't think you know how cryptography works. Can the algorithms be changed? Sure, but what happens to all the BTC generated thus far? Talk about cutting off yer nose...
http://www.libertariannews.org/2011/12/01/why-do-people-want-a-gold-standard-when-history-shows-us-it-does-not-last/
You and the other Tylers have posted Bitcoin info many times during the last two years. If you are trying to determine if ZH is going the Bitcoin route by reading these stupid comments (mine included) then I just lost a little respect for the Durden's knowledge of all things financial. If ZH starts accepting Bitcoins that will be Durden-like, althought a bit late, but it changes nothing in regards to the fact that Bitcoins are no more secure than any online transaction.
If ZH goes with Bitcoin I will purchase a t-shirt and make another donation....not in bitcoin though.
Money Squid, Bitcoin is substantially different than any other online transactions, especially in the security context. As the first cryptocurrency that solves the electronic cash double-spend problem by way of a distributed p2p architecture, it is different than PayPal because it does not rely on a State-issued monetary unit and it is different than e-Gold because it does not have a single centralized point of failure and/or confiscation.
You can lead a horse to water...
I'm one of the most skeptical people I know. Skepticism is saying, "I don't believe X without very good reason."
Neophobia is saying, "I don't understand something new, therefore it's BAD."
There's no discernible relationship between those two perspectives. One is about epistemology, the other is about value judgments.
Eh?
How do you do ecommerce with PMs (without some derivative involved)? Or other transactions over long distances?
Bitcoin could be useful to the liberty movement.
Trade knowledge instead of money. See my other comment for more reasons not to use money:
http://www.zerohedge.com/news/2012-11-04/bitcoin-seen-through-eyes-central-banker#comment-2947340
The supply of knowledge is not limited, unlike all forms of hard money which means they retard knowledge production because they reward idleness and limited supply must eventually be subverted by the fractional reserve demand created by inexorable demand for debt from the low knowledge producers. Because fiat money retards knowledge production by misallocating capital to the low knowledge producers. I explained this in more detail at the link above and the sub-link to my thesis paper (draft).
A captivating video on the site
Vote For Silver 2012
silver shield is a stubborn fanatic, the fanatic-est of the fanatics.
when he gets an idea in his head, nothing will change his mind.
while i give him props for his work on the advocacy of silver, his attitude on bitcoin is just plain wrong.
he refuses to see that bitcoin is very useful as a payment GATEWAY, a decentralized form of payment that is not beholden to any government, not taxed, and no one can arbitrarily print more bitcoins.
you don't save wealth in bitcoins, you save your wealth in real assets like silver, gold, real estate; just buy bitcoins when you want to spend them.
his speculation that bicoin value will go to zero some day, is totally irrelevant - it's not zero today, and it's a useful form of transaction TODAY - why not use it?
Thanks for these comments! These are the kinds of fundamentals I seek in understanding this "currency" and it's uses.
Also, I share your thoughts on Chris Duane and his work enlightening people on silver but when I first heard him profess that people should sell everything they own and buy physical silver I thought it was extremely irresponsible on his part.
Eating too much Ag will turn yer skin blue; therefore, it's not a good substitute for food.
Scientifically false. Consuming too much ionic silver solution (Ag+) or silver hydroxide (AgOH) solution, will form silver chloride (AgCl) in the body which gets lodged in the skin. But consuming true colloidal silver (the deep yellow amber color) which contains Ag nano-particles (not Ag+ nor AgOH), will not make your skin blue:
http://www.cgcsforum.com/index.php/topic,1144.0.html
http://shop.silverlungs.com/SearchResults.asp?Cat=1820
I am not affiliated with Silver Lungs, just sharing that link so you can see the differences in color. The correct yellow stuff can be made at home:
http://www.cgcsforum.com/index.php/board,40.0.html
Do not use a nebulizer for this! We have mucus to prevent introducing (potentiously infectious) foreign matter into our lungs! Notwithstanding, one can't get the necessary 1/4 liter or more into the blood stream (want to spray that much up your nose)!
The problem with bitcoin is the same problem as with gold (money is always socialism):
http://www.coolpage.com/commentary/economic/shelby/Demise%20of%20Finance,%20Rise%20of%20Knowledge.html#StoringIdleSavings
That is the supply can not grow as fast as people want to expand production, thus its value will increase just by idly holding it (for as long as the real interest rates are negative on any competing fiat). Thus people will hoard it (if there is ever any serious mass movement into it), thus destroying its viability for commerce (Dark Ages is an example).
The fundamental problem is that money can not represent a store of knowledge, and all value (and increase in production) created comes from knowledge. Read my article above if you want to understand deeply.
Money can't exist without credit (read the link above about the problem with gold), thus there can not exist a utopic advantage to any form of money that will avoid socialism:
http://www.cgcsforum.com/index.php/topic,1152.msg8867.html#msg8867
Money in every form is failure (socialism, suboptimal knowledge production) and thus not competitive (not even for the passive "investor" over the long-run):
http://www.cgcsforum.com/index.php/topic,1152.msg8882.html#msg8882
Read my other comment linked below to understand that only knowledge (not money) is unlimited (fiat is limited, as debt is limited due to misallocating away from knowledge production, and hard money is limited in supply causing hoarding due to increasing "value" rewarding being idle from knowledge production and because the marginal utility of saving money is not infinite, because again debt and interest rates are not...an circular illusion that society has rightfully destroyed throughout recorded history in boom and bust oscillations between the two manifestations of the same problem):
http://www.zerohedge.com/news/2012-11-04/bitcoin-seen-through-eyes-central-banker#comment-2947505
Evidence all the commentators here who expend their energy trying to maintain the value of their idle savings, instead of producing productive knowledge outside the scope of maintaining idle savings (that dog chases his tail forever into the poverty abyss... it is no different than the supranational passive capitalists who spend all their energy trying to sustain or increase their idle savings rather than producing knowledge).
Don't expect that you will ever understand what I just wrote. It is far beyond "one-in-a-million" level of mathematical insight.
people still need to buy food and repair their homes. if bitcoin is the money du jour then thats what they'll use to accomplish their required economic activity. and frankly food, clothing and home repair is the only really necessary economic activity in my opinion (help me thknk of other really important stuff, would you?). savers should not be punished (and bitcoins are near infinteily divisible making ever smaller transactions within the realm of possibility)
Thanks for sharing your concern.
As I said, not even "one in a million" people have sufficient intellect, background knowledge, and reading comprehension to digest what I wrote. I don't mean to be condescending if I note factually that you entirely missed the point-- it flew right over your head.
You can start by noting that most everything you have today (including the internet and computer you using, and including the food, antibiotics, etc) all came from knowledge production. Manual labor and hard resources without knowledge would give you the quality of life that existed before the stone age and the discovery of fire. Then after noting that, then observe that if knowledge were static, then we can already produce all that we need with robotics, so we could just eliminate the humans and churn out zillions of material goods which no one would be able to pay for with money (because no one would earn an income). And then you could proceed to note that since knowledge is the only thing of value being added in the economy, then ... you can follow the rest of the conclusions in my thesis... (or do I need to repeat my linked paper "Demise of Finance, Rise of Knowledge" again in baby steps?)
But I still don't expect you to grok it.
P.S. the title could have been "Demise of Money, Rise of Knowledge".
P.S.S. Beside underestimating how much you depend on knowledge production to survive (and thus underestimate why you will be poor if idle yourself on money and savings), you also highly underestimated how inefficient it is to try to be self-sufficient and disconnect from nature's inexorable trend of maximum division-of-labor (more accurately division-of-knowledge) and maximum economies-of-scale.
you're right I don't grok it. I'll have to set aside some time to read your papers to properly understand where you're coming from. I'll say this though about knowledge. It appears that once it is discovered it merely needs to be written down and shared to live on forever and spread like a virus to anyone who cares to read and learn about it. We have the tools now for unlimited knowledge sharing. Also new knowledge is discovered all the time in ways that are not motivated by money but by personal interest. Money is just a word for what your trading partner wants from you in exchange for the thing of his that you want. Anything can be money and I dont think the concept will ever go away as there needs to be some mechanism by which to allocate scarce resources. Again I'm probably totally missing your point so I'll try to read your papers and address things better in time. Thanks for responding and engaging.
Again you admirably demonstrate an interest and ability to seek knowledge, so I will in return share.
Can you grok nuclear physics even though it is written down? (also nuclear physics is always advancing and changing). Differentiate between data streams and usable information (which requires the knowledge producers to decipher):
http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=sixth+rule+of+ignorance
Noise becomes signal or vice-verse depending of the frame-of-reference, i.e. the mutual coherence of the transmitter and receiver, a.k.a. mutual resonance or Q (tuning), and I explained it with an example:
http://esr.ibiblio.org/?p=3744&cpage=1#comment-324949
http://esr.ibiblio.org/?p=3744&cpage=1#comment-324926
(it is quite satisfying to go back and read my comments linked above, as I have much more confidence and validation in the theory I was developing in my mind at that time)
I mentioned this in the "Financeability of Knowledge" section of in my paper:
http://www.coolpage.com/commentary/economic/shelby/Demise%20of%20Finance,%20Rise%20of%20Knowledge.html#FinanceabilityofKnowledge
You are getting closer to grokking my thesis:
Realize those who share knowledge do so for selfish but noble reason that their own knowledge can only be maximized by doing so.
For example, for computer software, I recently articulated the selfish economic decision about when to share or not share the programming source code:
http://goldwetrust.up-with.com/t112p240-computers#4753
In addition to the Inverse Commons link from further above, I also explained the math of why our individual knowledge can not be optimized without networking:
http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18789
I elaborated on that math, and made the analogy of using two-way radios to find the deepest valley in a 3D (3 variables only) mountaineous range:
http://goldwetrust.up-with.com/t182-technology-that-changes-everything#4754
So once you grasp that math, then you understand the environment is always changing (at least 7 billion times per second, given 7 billion autonomous actors in our global economy), as well as macro-scale changes such as accumulating economic imbalances (e.g. China's Yuan peg and its effects, etc). Thus the multivariate (100s or billions of variables) landscape is dynamic and thus we need dynamic knowledge to keep it annealed (optimized). If we let knowledge go static, the system and our species is not resilient and will decay.
So thus you understand that if knowledge becomes static, we are no longer necessary. We are no longer alive. We are no longer optimizing our environment. We go extinct. This is what in theory a 666 system would attempt to do, as I mentioned in my other comment below. Think of the "Ministry of Plenty" which allocates rationing and starvation in the book 1984:
http://en.wikipedia.org/wiki/Nineteen_Eighty-Four#Background
You see how sharing knowledge works? You stated some ideas, I responded, and in the process I understand my thesis better, while explaining it to you. Einstein said roughly if you can't explain it to layman, you don't fully understand it.
But money can't buy (guarantee) new knowledge production and knowledge is the only thing we produce of value. Money can't be sure that new knowledge will be produced. Without knowledge production, everything decays and ceases to exist. I further elaborated (from the "Financeability of Knowledge" section) in the "Knowledge Investing" section why money can't buy new knowledge:
http://www.coolpage.com/commentary/economic/shelby/Demise%20of%20Finance,%20Rise%20of%20Knowledge.html#KnowledgeInvesting
So therefor money is only a tool of socialism. It is a tool to misdirect resources away from knowledge producers towards those don't produce knowledge. In the mathematical aggregate (macro-economic scale over the long-run, i.e. over epochs), it serves no other purpose whatsoever. I covered this in more detail in my paper, and addressed for example the Buffett claim that money capital (finance) allocates resources most efficiently.
Yes anything can be money and it won't make any difference w.r.t. to the booms and busts over the long-run (because money in any form is always a tool of socialism due to the detailed reasoning I explained in prior comments), which is essentially (generative essense in my reductionist brain) because the only scarce resource are the knowledge producers and they can't be bought. I covered the scarcity of resources in the "Wheres the Beef?" section and also elsewhere linked as follows:
http://www.coolpage.com/commentary/economic/shelby/Demise%20of%20Finance,%20Rise%20of%20Knowledge.html#WherestheBeef?
http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18699
http://www.cgcsforum.com/index.php/topic,1152.msg8871.html#msg8871
http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=sixth+rule+of+ignorance
Thank you for the dialogue. Hope I have clarified a bit, or at least peaked your curiosity.
Note I am not criticizing the secure, anonymous, distributed trading capability of BitCoin. That could be reused in a knowledge trading system, where the supply of knowledge is allowed to increase by the market. In theory such a system (possibly coming soon) could destroy or attenuate the incidence of money, socialism, and governments. If ubiquitous, those vested interests (in money, e.g. central banks, governments, socialized welfare recipients, savers, passive investors, speculators, etc) might resort to 666 physical tagging in order to regain the ability (top-down control) to tax, redistribute, and destroy knowledge production (as they do now).
P.S. For those that like spooky correlations, a 666 system trends to knowledge becomes static (since any rise in knowledge becomes a threat to such a system), and thus axiomatically humans are effectively lobotomized (which is consistent with being harvested for their blood and flesh only since their brain wouldn't matter). Note that 666 is roughly the wavelength of blood red. So there is a potential solution to the biblical puzzle of the "number of a man". It is his blood. Think of the "Ministry of Plenty" which allocates rationing and starvation in the book 1984:
http://en.wikipedia.org/wiki/Nineteen_Eighty-Four#Background
I guess due to being blinded in my right eye in 1999, I remember the rats eating the eyeballs when victim was placed in the face cage, as a way of destroying all will for free thought and knowledge production:
http://www.youtube.com/watch?v=O-3HaOvUIzw#t=125s
Hi Shelby M. III, my 2 cents,
I don't buy Your argument about idle hard money worst than industrious funny money. I believe in ratios. Here in South Europe, even after the real estate correction, in a small touristic spot (nothing special) You can find a small house priced something like 46 yr of J6P average income. What we need is what we fear: a complete bust in RE and other sectors. Banks will not survive? Fu** them all... This is another problem. This is Glass Steagall repeal (and it's european equivalent) chickens coming home to roost.
You built the strawman of the bad effects of fiat money, then concluded that the effects of hard money are somehow different (even superior) without thinking it through and substantiating it. This is the myopia I am trying to correct.
I did not say hard money is worse. I said (if on a global basis, and not a localized gold standard receiving influx of gold) it will lead right back to fiat money again (see "Storing Idle Savings" section my paper), because people will demand usury and you can never stop that. And hard money can not be sustainably loaned because its supply is limited and usury grows at an unlimited compound rate. Thus fractional reserves come naturally (even illegally as they did by the private banks in 1800s), because of the law of supply and demand (if people demand it, supply will come). Read this:
http://www.zerohedge.com/news/2012-11-04/bitcoin-seen-through-eyes-centr...
Also hard money rewards people who sit on money instead of produce knowledge (as many of you do now, exspending muchtime thinking about your stacks of gold and silver). Note I have stacks (of unspecified quantity) too but I stopped thinking about them, because the measily annual increase in value of 21% (before taxes! what if they raise them to 100% as FDR effectively did? And block money laundering into a new digital fiat), can't come close to what I can generate in returns with my mind creating new software.
Hard money is not a solution to anything long-term. It allows the passive capitalists to enslave the world, then the masses try to fight back by borrowing more, and the cycle repeats over and over.
The only solution is individual knowledge production. It is up to you, if you want to end up with nothing or not. At the End Game, all the gold "investors" are destroyed any way. It must be that way. Do you really think nature is going to reward you for stacking money?
http://www.marketoracle.co.uk/Article20327.html
There is no system that will protect you. Nature wants you to be constantly producing knowledge in order to survive. Nature does not want to get you a comfy soft bed. Nature wants to keep the threats dynamic, so that you don't become complacent. Read the Parable of the Talents in the bible (even if you are an atheist, there is some economic wisdom).
====================================================
Let me explain it to you in different way. When gold skyrockets in value, it means the debt system collapses, which means the value of what the passive capitalists owns has imploded. They end up owning all the failure. By buying gold, you will own a large share of what is left, but what is left is failure. You end up with all this overcapacity in everything, even factories.
This enables interest rates to go sky high again, because real capital is scarce, as everything has imploded.
This is the 666 or slavery directed system because it seeks increasing failure as long as control is maintained (see the Ministry of Plenty in 1984), that oscillates between fiat and hard money.
Fortunately it doesn't own knowledge producers, and thus the progress of technology continues more or less orthogonally (although the capital adoption it is not linear, e.g. China is subdizing -800% profit margin losses in order to slow down the onslaught of automation and robotics that will come after China collapses).
So by holding gold you end up owning a larger share of failure. Of course, politics of the majority will never let you be a slave owner, unless you want to kiss up the king slave owners. So it doesn't work out the freedom-directed way you are expecting it will for you. Technology will probably bail you out, assuming you don't go live in a bunker and shut yourself off from it.
Freedom comes from knowledge production only, not from money.
The supranational passive capitalists (a.k.a. the banksters, elite, TPTB, Bilderbergs, etc) are enslaved by their passive capital. They could not for a moment have the freedom to walk away from the grind of managing slavery. Try being a manager at a fast-food restaurant or labor intensive business and you will quickly see how slavery is mutual. They are slaves to you and you are slaves to them, because they must each grab slices of your time to get approvals for each thing that they are not free to decide themselves (e.g. overriding a duplicate order at the cash register, etc).
Co-dependencing is a jail because it can consume all your time and you don't get to do any thing productive with your mind! If your dependents are doing low-knowledge things, then you end up doing so too, in order to manage them.
Lets take Bill Gates as an example (or even Steve Jobs). Although Gates was reputed to be a good coder, my understanding of Gates and Job's ignificant role were to be micro-managers of process in their key technology (and for Jobs also marketing) departments, i.e. the Cathedral model. This is why they never got around to understanding (or at least not fully adopting in Jobs' case) the benefits of a chaotic Bazaar model.
http://en.wikipedia.org/wiki/The_Cathedral_and_the_Bazaar
http://www.catb.org/~esr/writings/cathedral-bazaar/
Thus these guys built magnificient cathedrals, based on maintaining a firm top-down control on process. They were enslaved to it. When they left their companies, the cathedrals began to decay. These cathedrals has less value when left alone to run on autonomously. Have you not heard of the tirades and personal lashings dished out to employees by these two mega-managers?
http://www.dailymail.co.uk/news/article-1384932/Behind-screens-look-Apple-shows-Steve-Jobs-corporate-dictator-accepts-excuses-failure.html
http://www.pcmag.com/article2/0,2817,2385078,00.asp
http://en.wikipedia.org/wiki/Bill_Gates#Management_stylehttp://en.wikipedia.org/wiki/Bill_Gates#Management_style
http://ubuntuforums.org/archive/index.php/t-435346.html
It doesn't mean this men were not smart, rather that they applied their intellect to building co-dependent cathedrals, which bogged them down. The Bazaar model is in its infancy, and we are only just starting to see the early effects of it, e.g. the internet and Android (Linux) are generated from the bazaar model predominantly.
Dear friend, I agree with You, but You should please note that funny money is capable to produce even worst nightmares. In the place where I live people can't use trains becouse the local railway company embarked 10 years ago in a program to build galleries (under volcanic soil) in order to eliminate rail crossings. They used European Union funds.. now they are busted and don't have funds even to buy trains spare parts...
In a fiat funny money system someone pays you to dig holes in the ground and fill them again and sends the bill to future generations. You can't understand how in Europe this flawed logic has gone far.. Bureaucrates crucifixed becouse not able to spend EU funds.. Simple Question: If EU give me funds to dig a hole in the ground but I Do not need a hole in the ground, why digging a f...ing hole in the ground?
Europe has morphed in a movie set. The movie is Brewster's Millions
http://www.imdb.com/title/tt0088850/
but this is not a commedy and this is not going to end well.
Finally, I think we are doomed by the thinking of dead crappy economists like Davide Ricardo (comparative advantage crap theorem), Keynes (digging holes crap theorem).
They all sucks, Von Mises rules
PS I agree with Your "knoledge is our only salvation" argument, but at this moment I'm sorrounded by people doing silly, unproductive things with their ipads and tech doodads, so if knowledge will not give us mass occupation I fear we will experiment mass estinction.
That fooling around will turn into a goldmine of knowledge activity soon. Facebook and Google won't stand as the center of attraction for too much longer. The basic problem is the cloudstorage economies-of-scale. Once we work out the distributed P2P model then we get the cloudstore scale for free, Facebook, Google and their passive capitalists are toast.
TOR and Mute file sharing are two technologies with different goals and speeds. Both are much slower than client-server, and this is because the multifurcating network is much more efficient than the fully connected mesh. I am not sure yet how to overcome this issue, but I think it will come from a paradigm shift in some measure of semantic locality, i.e. my friends are most likely to need data about their friends, i.e. all people are connected by 7 degrees-of-friendship.
Yeah I know how bad it is in this recent occurrence underway, as well as the historic examples.. I even read the EU crats enacted legislation that Portugese fisherman aren't allowed to fish with their boats, they pay them not to work, etc.
The way we take away the power from the socialism, is not by using the money of the kings of passive capital-- which is gold. (they give us the fiat, they know gold is their fulcrum)
We do it by trading in knowledge capital. I will be posting an answer to PieEconomics futher below, explaining in more detail what I envision that to be.
Try to get involved in knowledge production. Get your mind off those fools who stay mired in that morass of passive money.
==============
Tangentially, Bill Gates was probably a control freak because of this mother:
http://online.wsj.com/article/SB124061372413054653.html
I have found that bright men who have controlling mothers, tend to end up having control issues. Some of them protect this outward as Gates did, and others project inwardly (you can guess who that man is in my family).
Gates was smart enough to be a hacker and adopt the Bazaar model, but his apparently parents (mainly the mother) ran a cathedral system.
I had a read through your links, and your essay 'Demise of Finance, Rise of Knowledge' and while it was interesting, and had many valid observations, there are some core conclusions that I do not agree with.
Your initial statement in the above post is "money is socialism". From my understanding of your essay, you arrive at this conclusion because of your assumptions, which are not necessarily so.
I'll break this down into logical statements so we can analyze the source of our difference in opinion - from your thesis I distilled the following logical block.
"Money is socialism" ** Inflationary scenario
Money cannot exist without credit
Credit is debt, on which interest is paid
Holding debt is non productive
Production (including creation of knowledge) is the source of all wealth
Gaining from non production infers transfers from production to debt holders
Holders of debt steal wealth from producers
This is socialism for the holders of debt
I think this logic block represents your thesis with regard to your first statement. Your statement, under current conditions is perfectly accurate, and I have no argument against it. My position is however that charging interest on debt is plunder (as is clearly revealed above).
In nations with Muslim rule, interest cannot be charged on debt, and I believe that if people generally understood the above logical block they would also see that such a system is ultimately flawed. In a system where usury is illegal (as it should be then things change). The problem therefore is not money, nor is it credit, it is usury.
From following your logical progression, I can then see you would have a further challenge - that under deflationary conditions which might exist without usury, as there is little incentive to extend credit, then we have the following.
"Money is socialism" ** Deflationary scenario
No usury means no credit
Without credit the economy contracts
Hard money increases in value
Holding hard money is not productive
Gaining from non production infers transfers from production to capital
Holders of capital steal wealth from producers
This is socialism for the holders of hard money
In this logic block it is the first statement that I consider false. Without interest on debt, there is less incentive for private lenders to extend credit, this does not mean that there will be no credit. Many retailers will still extend credit on the basis of payment plans that do not include interest, under a system that prevents usury this will include capital goods. Retailers want sales, and payment options increase the number of potential customers.
Secondly, under a system which identifies the reason why usury is illegal, that system would see immediately the utility of public institutions extending credit, and charging interest. These institutions could be run at a profit at times to increase their capital base, or entirely non profit. They could be capitalized through taxation, after a period of time they would no longer require taxation, but would be self sufficient.
In my conclusions then, my main disagreement with your conclusions is in the identification of money as the problem. The problem lies rather with private usury. If the common people became educated as to the mechanism of the transfer of their wealth, then such a system could be implemented. The barrier to implementing such systems are the current holders of wealth who wish to continue to plunder through the use of private usury.
Some of the other conclusions of your post I also thought worthy of discussion, as I understand the mechanisms and interactions between knowledge and capital to be different to those expressed in your essay.
One of the principles of your thesis is that 'knowledge' is increasingly not included in labor, nor capital costs. That an increasing portion of knowledge is not accessible to capitalists, and represents an increase of freedom of the individuals who generate knowledge. While I agree with many of your observations, I find this particular conclusion to be unsupported.
When any business is formed, the plant and equipment will always contain technology - for any venture to be successful it must contain plant and equipment that are close to the mean standard of technology, and a process that is close to best practice. Innovation, which is an expansion of knowledge capital may occur anywhere within that industry, and will then be available to that venture either for 'free' (best practice, which is often shared) or through capital upgrades (which include patent costs). Regardless of where the knowledge comes from, and whether it arose for 'free' - in the end there is a cost associated with implementation, and this is paid by the capitalist.
In summary, there is a stock of knowledge that represents the baseline for a society, whenever a capital venture is undertaken the current stock of technology is included in the capital cost. However, that fraction of the cost is not increasing as you theorize, it is simply included as the cost of labor - which is no more or less skilled than labor at any other time, as the skills is reflected by the time taken to become proficient - and they draw from the current stock of information (the baseline).
Your suggestion that any industry can be based on manual labor and a non technological base of capital is flawed, there basically no industries which would conform to that description. Even the primary production processes include very significant expenditures on technology, and ongoing high salaries for knowledgeable people.
You also conclude that money cannot buy innovation, this is correct to some degree, but not as a general rule. Innovation mainly comes from skilled labor who are in the production process, engineers and scientists working in a certain industry. Often these guys invent stuff and make improvements and these are automatically owned by their employers.
Money as capital represents any economic good and any labor, that means that money can buy knowledge in the form of information and skilled labor. Money doesn't necessarily buy innovation, but innovation is rarely present without capital. Some innovation comes from R&D labs, however this is kind of like buying lottery tickets, its not guaranteed.
In the area of information technology, software development and so on, the cost of capital is very low - anyone with a PC may make an innovation. This may occur outside of any regular business, and opportunities are still available - however this rate of innovation will decrease over time as this relatively new technology is fully exploited.
I think some of your main conclusions are incorrect due to a failure of definitions, and assumptions of causation. While I agree that 'knowledge' is increasing, and some of this is arising in the area of computers and software, I think it is erroneous to draw the conclusion that this new field is not subject to finance and that it will somehow cause hard assets to be diminished in value.
If anything, hard assets continue to grow in value as they become more scarce - innovation and an increase of knowledge may increase efficiencies, but essentially all our basic needs are derived from energy, mining and agriculture - regardless of efficiencies and knowledge, these assets will retain their value.
I upvoted your comment, because you elucidated your argument and distilled much of my thesis very coherently. I am going to argue against your logic though.
(this is hastily written at 3pm and I haven't even eaten breakfast yet due to being overloaded with tasks on the computer, so please excuse the poor writing coherence and try to deduce this writer's intention)
You distilled the essence of my argument into two logical scenarios.
Inflation scenario:
Deflation scenario:
Excellent! I was understood! It is refreshing to have a dialogue with someone who has such strong logical reductionist skills.
Why Banning Usury is 666
Your thesis is that usury can somehow be eliminated or controlled through centralized law or by widespread education. And thus you see the vested supranational passive capitalists (a.ka. banksters) as the impediment to this goal.
However, you missed the very important fact of nature, which is that hard money will then perpetually gain value in this utopia, thus no one needs to work after they have saved enough to meet their current living expenses for perhaps a decade. You see without an opportunity cost on money, the incentive to produce disappears.
The borrowers are those who decided they don't want to produce any way, and will accept centralized control and slavery in place of the freedom of producing before consuming. So the middle of the politics (bell curve) is already demonstrating that human nature.
Also I can scientifically prove this is natural, because if the bell curve was flat (everyone was equal in education, production motivation, etc), then knowledge would not exist:
http://goldwetrust.up-with.com/t124p30-theory-of-everthing#4752
Because knowledge is not ever what we know now, but what we continue to adapt to. This can be explained both in terms of the potential energy of degrees-of-freedom as I did in my paper, and also as I have explained in comments here about if new knowledge production ceases, then no one has any income value to buy anything.
Nature can't be a uniform system, because then it becomes static. It is dead, e.g. everyone is a saver, no one is a producer. Imagine if everything in the universe was the same shade of color, there would be no shading, and you wouldn't see any shapes. The objects would not exist in your visual senses. Apply this uniformity to every possible sensory perception, then nothing exists. It is all static and dead.
Actually this was well known already in 1856, the Second Law of Thermodynamics states that the universe forever trends to maximum diversity (i.e. maximum independent possibilities, entropy, and degrees-of-freedom).
You simply can not outlaw usury, unless you want to outlaw free will. Then you will have the 666 system that I described in my other comments here. To eliminate usury, you must eliminate the free market of autonomous actors.
I have a very strong math, physics, and computer science mind, and I have thought about this for 6+ years.
Jason Hommel explained his perspective of why banning usury won't work:
http://www.silverstockreport.com/2008/fekete.html (skip the email exchange with PhD Antal Fekete and scroll down the page)
Knowledge Can't Be Owned by Money Nor Finance
Correct due to the nearly binary nature of the least cost marginal producer.
Wrong. The lowest cost producer is not the lowest cost marginal producer and it can have proprietary technology that is far advanced (and more profitable). In fact, we often see this, e.g. Apple is much more profitable than Samsung or HTC in smartphones. Remember that knowledge is not spread uniformly (nor should nor could ever be):
http://www.amosweb.com/cgi-bin/awb_nav.pl?s=wpd&c=dsp&k=sixth+rule+of+ig...
You are clearly falling into the socialist logic trap. I don't know why most people fall in into it. Only a very few people can resist the urge to have a uniform distribution in society, perhaps because they don't have the anarchist's (me and very few others') deep mathematical understanding as I explained early in this post.
Ludicrously far from reality, but I don't blame you for not understanding the theory well (Eric Raymond only presented the Inverse Commons in 1998 so it is still not well understood what is radically changing the world as we speak). Please re-read my paper again (and click the links in it to gain deeper exposition) and realize that new knowledge production can never be guaranteed by any amount of money. Refer for example to the Mythical Man Month in software production.
Also realize that if new knowledge production stops, then there is nothing in the economy of value, because no one is generating any incremental improvements in production, thus the owners of the production can run their systems with robots and the economy implodes on itself.
You are confusing past knowledge with new knowledge. You are failing to incorporate the Second Law of Thermodynamics. Industry could run on with past knowledge technology (i.e. the "base" you refer to) and robots (i.e. the cheapest manual labor), and yet society would collapse. It is the inexorable creation of new knowledge that both anneals society to changing environment (resilency) and more importantly that creates value other than the static knowledge so that society doesn't collapse into a few capitalists and their robotic production capital (albeit with very high base technology available before new knowledge activity ceased). And your notion that capitalists fund knowledge creation is becoming more and more ludicrously far from reality.
No it is owned by the person who created it, because more and more so (inexorable trend of maximum division-of-knowledge) knowledge is becoming so specialized that if you lose the creator, you've lost the ability to generate new knowledge from the past knowledge. This is why key software programmers are getting $millions per year in stock options and compensation. If you lose them, in many cases you've lost the ability to maintain the code. Software is becoming nearly the entire economy. And software is dynamic and has to be maintained, otherwise it must be discarded.
The 3D printer has arrived. Hard capital costs are declining to 0. All the capital is in the mind going forward. This is an epochal shift and we are warning the world:
http://goldwetrust.up-with.com/t182-technology-that-changes-everything#4754
Correct. Money can not buy new knowledge production. It can provide capital resources to incubate them, but this is becoming increasing unnecessary. Heck I had to bypass the medical system and create my own home laboratory with four 9V batteries to cure myself of a terminal condition:
http://www.cgcsforum.com/index.php/topic,1130.0.html
False it will accelerate, not slow. You missed the elephant in the room, because you don't understand that software is alive. Software always has to be expanded with new features, to meet the increasing knowledge of the users. Knowledge trends to maximum forever, due to the Second Law of Thermodynamics. Again review the "Energy of Knowledge" section of my paper. And everything is becoming software. Every process can be encoded in software, from business logic, to finance, to accounting, to engineering, to even sex (yes actual sex with electrodes to your brain or a physical robot or even a live mate who is also hooked to electrodes coming from the program).
You transposed cause and effect. All increases in extraction and production come from increases in knowledge. Thus resources are unlimited, because new ongoing increases in knowledge potential is.
As I explained in the "Where's the Beef?" section of my paper, any temporary apparency of limits is due to suppression or misallocation away from knowledge production (and we have massive doses of those debt bubbles right now in the inflation scenario, coincident with massive doses of the deflation scenario as we reduce the cost of manual labor to near 0, as China tries to compete against the coming onslaught of automation by pegging its Yuan to keep its manual labor the cheapest in the world by running industry at negative -800% profit margins!)
I do understand there are gradations between the extremes I have argued, and it won't all happen overnight. But do keep in mind that epochal shifts are often so sudden that they topple empires (old regimes), cause wars, etc.. as the masses scramble to adapt and survive. Today I wrote down some math on such adjustments:
http://www.mpettis.com/2012/10/27/when-the-growth-model-changes-abandon-the-correlations/#comment-18913
Note in that math, I forgot to include the potential for the technological frontier to leap ahead suddenly.
==========================================
See also the comment I wrote immediately after this one as some of my thoughts carried over to it:
http://www.zerohedge.com/news/2012-11-04/bitcoin-seen-through-eyes-central-banker#comment-2951115
It should be obvious from my explanation that my understanding of the subject wasn't coincident with my reading of your essay - I have developed this understanding over a period of time.
Now I have a serious question after reading your following comment;
"However, you missed the very important fact of nature, which is that hard money will then perpetually gain value in this utopia, thus no one needs to work after they have saved enough to meet their current living expenses for perhaps a decade. You see without an opportunity cost on money, the incentive to produce disappears."
Did you brain just broked?
What you are saying is that we should abandon the principles that saw the rise of civilization - that people who aren't busy producing 'things' are obviously under utilized, and we should make work. This philosophy is everything that is wrong with our current civilization, leading to such detestable practices as 'planned obsolescence'. I make a counter postulate, that those who are no longer burdened with the daily necessities are free to add value following a pursuit of their choice - and that those who pursue objectives out of free choice will always create greater value than those who do it to merely subsist.
I should also add the following, which was omitted from my prior post - I also consider the rental of real estate, or information to be the same process of plunder as usury. It is unproductive, and therefore steals value from production. The implementation of such a system (of making plunder illegal) has a profound impact on society - there is simply no way to get wealth except by supplying productive capital (which can only come from labor), or by providing labor - or of course by theft.
"You simply can not outlaw usury, unless you want to outlaw free will."
This statement reveals an ethical issue - stealing should be illegal - it is an exercise of free will, but it infringes on others. It is not just the person who is paying the interest that is losing value, it is everyone - and they did not consent. As a reminder I presented the logical argument regarding interest payments, and that the value is stolen from all producers.
From your reply;
"You are clearly falling into the socialist logic trap. I don't know why most people fall in into it. Only a very few people can resist the urge to have a uniform distribution in society, perhaps because they don't have the anarchist's (me and very few others') deep mathematical understanding as I explained early in this post."
You are referring to my assertion that an enterprise has access to industry knowledge. I make no claim that information is evenly distributed, rather that it is either useful at the source (maybe vanishing later), or it enters the base of knowledge accessible to an industry - available for a cost. I am also an anarchist, and have no problem with a mathematical treatment of any subject. You simply accuse me of inability to understand, but I can only respond to your arguments, not some theoretical model that you do not present.
Imperial Rome is a great example of uneven distribution of knowledge and the impact it can have. Due to an understanding of political and military organization, military hardware and some information on engineering, Rome conquered the known world.
As for the rest of your response, I want to refocus on your thesis. You really need to restate it clearly, because I am getting a very nebulous sense of what you are talking about.
In your thesis, money cannot be exchanged for knowledge - you are yet to provide a compelling argument as to why this should be considered a valid assertion. From my observations, I see that knowledge is a facet of human labor - that it requires time and effort to acquire this knowledge, and that it is traded as an economic good.
The question arises immediately -if everything is becoming software, then where will food come from? A further question, if knowledge cannot be traded for money, what then will those who produce knowledge trade it for, and if everyone only produces knowledge - who will they trade it with?
I was never arguing that the knowledge producers live at a subsistence level. You are conflating orthogonal issues. Knowledge producers don't need to save in gold, they are producing so much value, they have abundance in either the inflation or deflation scenarios.
As I said at the beginning of my prior comment, that I hadn't taken a meal the entire day, and I was rushed to write that (so that I could go drive 30 min to find a meal) and I was so very hungry while writing that, so perhaps I didn't express myself as clearly as I intended.
My point is that if society rewards the idling of capital, then society stagnates. The Dark Ages was an example of this, where gold was hoarded and capital was thus scarce. The point that I was making is that those who don't produce much knowledge then take a larger share of the capital of the world, by hoarding some gold, ditto as in the inflation scenario by hoarding bonds (lenders) and debt (the borrowers).
Again you fall into the equality trap. You want to think that by allowing more people to live lazily, this somehow encourages more knowledge production. But this is not true. It demotivates them to cross the chasm of knowledge production, because laziness is the antithesis of knowledge production. Where Eric Raymond wrote about the Gift Culture:
http://www.catb.org/esr/writings/cathedral-bazaar/homesteading/ar01s06.html
He was referring to the abundance that comes for competitive knowledge production, not one that derives from a laziness motivation of passive capital:
http://www.catb.org/esr/writings/cathedral-bazaar/homesteading/ar01s08.html
You see when the dumb/lazy people get abundance, what do they do? Do they compete to produce the best knowledge? No they compete by who can give the most outlandish wedding, who can waste the most money on houses, cars, etc..
Competition solves that. I think that is socialistic-fear-mongering nonsense any way. My 1999 GMC Yukon with the 5.7L Vortex engine is stilling running strong with 200,000 miles on it. Heck it isn't even a diesel. Again letting people get richer for sitting on money, is the antithesis of encouraging competition.
So you are a socialist and not a free market advocate! I could detect that by the logical errors you were making. How is renting something you produce and maintain unproductive! Competition sets the price. Rentals and espcially software require a lot of maintenance. In fact, I read in Eric's Magic Cauldron that software is 75% maintenance.
Correct on productive capital, incorrect that labor is productive capital. Knowledge production is productive capital, and labor is not knowledge production. Proof is the government can create a million jobs by giving a million men a million spoons, instead of using hydralic backhoes-- that is the antithesis of production.
Sorry I can not agree with your self-assessment, when you decry free will, because you claim it inpinges on the society.
And I could explain this deeper, but I am not going to, because getting into a debate with a socialist is unproductive.
If you haven't got it by now, I doubt there is anything I can say to convince you.
Farms can be (already are) automated.
It is an asymmetric issue as I pointed out in my paper. The hard goods producers need existing knowledge and will trade for it, but new knowledge can not be forcefully created by any amount of money.
It is really key that when you study things, you pay attention to key details.
Thank you for your post. I did not bother to read the post you responded to, I just assumed it was crap, written by som airhead.
Just wanted to disagree with you about one thing. You CAN use BTC as a store of wealth. I also suggest you do, if you know enough about the technology to understand it's fundamental properties, that is. It is a good complement to gold.
You are missing my point. I am saying that because the supply of BitCoin can not be increased, then if it ever becomes a popular storage of wealth, then its price will be in a bubble. Boom and bust again, just like we will see with gold.
I pointed out that hard limits to money supply are not sustainable for at least 2 reasons:
Shelby wrote: "because the supply of BitCoin can not be increased, then if it ever becomes a popular storage of wealth, then its price will be in a bubble. Boom and bust again, just like we will see with gold."
This is why the existing bitcoin system, like gold, will never become a substitute for a national (or world) currency.
A modified form of bitcoin that would make it slightly less anonymous, would allow its use as a national (or world) currency, This would allow taxation to be integrated into the bitcoin system, increasing recirculation (while still not increasing the overall supply). I discuss such a system on my PieEconomics blog.
A national bitcoin model would be only a stopgap measure, before transitioning to something entirely new, such as you describe with your knowledge based currency. Clearly, we don't want high unemployment together with the best technology money can't buy.
Questions: (1) If someone gets "credit" for sharing knowledge, is that different from "employment"? (2) Can you describe specifically how knowledge currency would work, for example, when someone goes to a store to buy an apple? (3) What happens when most of the new knowledge comes from computers rather than from people?
Hi David, I see our private Hommel forum is down for good. I called Hommel on Halloween, but I guess he isn't going to bring it back up.
As you may know from my past comments in the private forum and in my goldwetrust.up-with.com forum, I am contemplating a unit of knowledge which is the Line-Of-Code of software (where most dynamic knowledge production can now be encoded in dynamic software, i.e. the process is inexorable and ongoing). Perhaps each uniform unit is a lambda in the lambda-calculus translation of the program code. In any case, the LOC will be fungible based on relative market value of different modules.
Thus the money supply will expand by a market function of the production of new knowledge and the value the market assigns to that knowledge.
Then add BitCoin's anonymous commerce engine, and you've perhaps got a viable currency for the knowledge age.
(1) Employment is not knowledge production. The Mythical Man Month showed that adding programmers to a project (in the top-down cathedral style of coding) reduces the knowledge produced per programmer.
(2) Knowledge currency would only apply to buying and selling software licenses. Others might offer exchanges from this to other goods in the economy.
(3) Ray Kuzweil and Bill Joy are wrong. There is no singularity. All knowledge will come from people, the computers are merely the tools:
http://goldwetrust.up-with.com/t112p135-computers#4264
http://relativisticobserver.blogspot.com/2012/01/future-part-1.html?showComment=1328790025910#c5356131269908069148
==========
Cathedral vs. the Bazaar near the end of the following linked comment:
http://www.zerohedge.com/news/2012-11-04/bitcoin-seen-through-eyes-central-banker#comment-2951115
Whatever it is, they will pry it from your cold dead fingers.
A nice occasion of sun spots or an EMP attack will make Bitcoin toast.
Ah, the "If the global internet goes out" response. I assume you'll be fine in your shielded bunker, as everything else that carries electrons will be 'toast' too.
Corollary - if an extreme scenario is what it takes to produce failure, perhaps the real flaw is in your assessment of it as a system?
Straw man. I was speaking of Bitcoin, not the ultimate fate of the universe.
Then, RockyRacoon, I counter with this:
Damage to the internet, which was designed to function in case of nuclear attack, will survive all but the most major extinction-level event, which means Bitcoin, whose protocol rides over the internet all over the globe, will survive also.
I recommend doing some research on offline methods to store keys, as these pertain to 'cold wallets' and methods to have your wealth protected in case of network interruption or just a need to bury something physical in the ground.
Okay, you win. Feel better now?
Thumb drives are pretty much immune to EMP when they're disconnected from a PC.
Really? Those millions of tiny transistors with tiny metal connects are pretty imune to EMP? Throw yous in the microwave and see how it goes.
if you want to play stupid games and believe the end of the world is imminent and still keep your bitcoins in case the world un-ends itself sometime later ... etch a copy of the blockchain and your privates keys in stone (or archival-grade optical disks).
anyway the EMP/solar-flare bla bla crap is pretty far fetched and life will go on regardless. worry about that shit when it happens and as others have said in such mad-max scenarios of power grid going and staying down its bullets and food you'll want not useless bits of metal or bitcoins.
mmmmmm.....I think you need to take a break from the bong. I am no prepper, end of world, doomsday type. Not sure where you get that crap from my posts, or are you just trying a lame redirection? If you are sold on Bitcoin put your money where you McCool mouth is and by that shit all out. If you think you are going to anonomously buy weed, crack, heroin with Bitcoins because the "encryption" is so great you will be spending a lot more time in "bubb's ass pounding prison." In fact, that would be a true test, no not bubba's prison, buying illegal drugs with Bitcoin. Or, if you so sure why not donate some Bitcoins to some Al-Qaeda terrorist group? No way the NSA will know? You will have a laugh knowing you pulled a fast one, just for shits and grins, not enough money to help them with any attacks. Its just a few BTCs right and with that secure encryption who would know? Only you!
Day 5 break from the bong and things couldnt be more lucid. Your EMP worries and kneejerkism is where I get that from. I may or may not control keys that can forward up to 13 bitcoins. I may or may not have more than that stashed away in silver/gold somewhere too. People are buying products on the silk road all the time and suffering zero consequence. Seems that reality conflicts with your views. I may or may not donate bitcoins to the base (alCIAda) on a frequent basis. Not that anyone could know or stop me ;) You'd be surprised what a few BTC will buy in terms of IED supplies.
Phony lameness....
Money Squid linked the article from Wired Magazine....and it was a year old.
If you Bitcoiner Zealots had a problem with their printed "facts".....you've had plenty of time to address and take it up with them
The event that makes bitcoin toast also makes >430 nuclear power stations worldwide toast.
You won't be worrying about your BTC losses.
Ain't got no BTCs. No losses.
You can mess with the code all you like. Here it is: https://github.com/bitcoin/bitcoin/tree/master/src
Good luck getting your changed algorithms to generate something acceptable to those using officially released code. 'Tis death to counterfeit.
gRANTED tYHTHE
BLYTHE.
1Mz31ha5NJDfzcoJ2ajeAfrEWNnt1Eb4UQ
Any alternative currency used on even a relatively minor scale represents a dire & imminent threat to every power of fractional reserve banking entities and those allegedly "sovereign" nation-states that they effectively co-opt. Each & every incremental % increase in the acceptance & use of currencies other than that which these fractional reserve banks create (directly or indirectly) accelerates the rate of of collapse of the fiat that these institutions issue.
Once people identify & understand the fundamental illusion that is the foundation used by Modern Money Mechanics (that the "money" they are told exists in the form of fiat has illusory value, and is merely a mirage of any inherent wealth, based on a psychologically induced system of "faith"-- just like plastic casino chips with numerals on them), they are then able to connect the dots and spot the deception that's present in the rest of the system, which is an elaborate hoax, in reality.
Monopoly fiat, backed by the force of law that sovereign states attempt to project, is the only way to perpetuate economic systems whereby the real rate of productivity can be in decline, yet the decline, which will translate into a lower standard of living for the overwhelming majority of the population, can be delayed long enough so as to allow the kleptocracy class to concentrate their ownership of assets that represent real wealth. It's "simmer, not boil, the frogs," in political-economic terms.
There's no real 'debt' from the perspective of a fractional reserve central bank; it's hard for those steeped in conventional economics to rip out the notion from their brain that the fractional reserve central bank can't lose anything (they didn't lend anything of value or that cost them anything - they have ZERO skin in the game), and that their favored entities that are TBTF have only slightly less risk (because they will always be able to socialize their losses via taxpayer bailouts in the wake of busts, while they retain their ill-gotten gains during the booms), and that what most refer to as debt in this system is only a liability for the debtor. If the debtor doesn't repay what was they borrowed (a monopoly currency that cost the lender nothing to produce), they can lose their farm, construction equipment, home, machinery, infrastructure, vehicle, etc. that was used to securitize or collateralize the loan, or even if the loan was unsecuritized, they can at least see their revenue or wages garnished, be sent into involuntary bankruptcy (where their general pool of assets will be seized upon by creditors, including lenders), and squeezed in other ways.
The only way to avoid this is to not play the game. During crack up booms, you miss out on fiat-based gains, if you don't play the game, and the incentive for playing that game is that if your timing is correct, you can get rid of all debt and convert the excess fiat gains into hard assets having inherent value or other things of inherent value, before the fractional reserve alchemists induce another inflationary-deflationary (or vice-versa) harvest.
If one were fortuitous enough to play the game, and have the skill and/or luck to convert fiat gains into real wealth before the boom turns to bust, they'd probably be idiotic to repledge their real wealth assets as collateral for loans ever again (I say probably, because there are exceptions to every general rule, but these people would have to be either extremely lucky in their timing in terms of cashing their "chips" of fiat in for real wealth, or connected to the alchemists in such a way that they'd be assured a bailout in the event of another bust whereby their real assets are pledged as collateral for fiat loans).
The Harvest is the end game for the fractional reserve bankers and their minions. As just one example of the rape that is harvest, even generations of families that were land rich (let's say a family that has owned four square miles of prime farmland yielding high value crops for three generations, carrying no debt) can find that an economic downturn (brought about via manipulation of the monopoly fiat monetary supply in many cases) suddenly forces them to take the step of obtaining a loan, pledging their farm and equipment as collateral, in the belief that the loan will allow them to survive the downturn and become more profitable at some future point - they're now 'harvestable.'
Alternate currency, that fractional reserve institutions have no ability to manipulate the supply/volume of, readily accessible and readily accepted, is the kryptonite of the literal fraud that is fractional reserve banking & Modern Money Mechanics.
The thing that sets bitcoin apart from FIAT is that bitcoin has a known quantity in circulation,thus transactions of a short term nature can be theoretically conducted with only minimal loss to both participants.
FIAT being completely arbitary these days carries real risk of loss every time it is held for any time period.
I have not used bitcoin yey but the "idea" of it is growing on me for online commerce.
Just another nail in the coffin of centrally manipulated, government sanctioned theft.
Bring it on..
"Fiat" is not an acronym, so when you capitalize it you look ignorant. Like people who say I can't find the right mouse button on my MAC.
"Fiat" a latin word which means "let it be". And this is literally where the definition of fiat money comes from. Fiat is money which derives its value from a *legal decree*.
The thing that sets bitcoin apart from fiat money is... that it's not, by definition, fiat money. Bitcoin is commodity money, like gold or silver. There is no authority who declares it to be money or regulates its value. It is traded in the marketplace and its value is agreed to only through voluntary trade.
What part of the capitalised word FUCK-OFF dont you understand.
Edit
And BTW as you are the self appointed free ZH spell checker.
FIAT is an acronym for Fails-In-All-Tests
So bite me...
Poor Grogman 1, aphlaque_duck 0! :>D
"The thing that sets bitcoin apart from FIAT is that bitcoin has a known quantity in circulation,..."
Seriously? How would you know how many bitcoins, euros, us dollars there are in circulation? You personally keeping track? If the entity making the currency, digital and/or paper, tells you there are only $20 billion in existence, but there really is $21 billion how would you know? If Bitcoin transactions are so super secret then an infinate number of bitcoins canbe created and sold in secret to those late to the party (oh, hurry before the rush is on, there is only xxx left you do not want to be left out so buy now)and you would have no idea?
Buy it. Buy it all now before word gets out the price of this limited supply super secret, untracable, uncrackable bitcoin skyrockets out of your price range. Hurry.
No basic understanding of how the system works could conceivably lead a newcomer to this conclusion, but I dont think you are really interested in the "How or Why" are you?
Why dont you tell Me, why it wont work?
Go on be specific I'm all ears...
Now that's how you do it.
Bravo, TruthInSunshine !
goddamnit this is why i read zerohedge
+1000 for you
Excellent summary.
Thanks.
" Links or references appreciated." -Ultraticum
TiSunshine, -BitCoin is merely what the gold standard would be without the restirctions forced into law by the money lenders (i.e. credit 20x leveraged, short fingered barbarians).
It's just that bitcoin is around central bank control....at the moment. Clearing houses, etc for major transactions cannot tale place over bitcoin. It's a currency for Craigslist really.
We'll have to wait for at least 2 years in a Romney Admin before we get the gold standard argument going again. It has a 50 % chance of passing in some form by 2014 IMHO.
If OBIwanSpendomi gets reelcted...bitcoin, gold, silver, shiny buttons, feckin' clam shells....all will be currency.
I've got a business model for you entrepreneurs out there. You set up a website that provides advice in your area of expertise. One example is the wise-ass that runs the appliance samurai website. He takes donations which is where bitcoins work best, since in the rare instance the deal doesn't go properly it is not a big deal. Once you get your website loaded with information you can just sit back and let the bitcoin roll in. So what if it comes in small chunks?
I've had people on the web give me hundreds of dollars worth of advise on how to fix my car, computer, appliances, etc, and would have gladly donated, but there wasn't an easy way until bitcoin.
By the way, if you make any coin off of this idea I would appreciate a donation!!!!
1BQZYfTdRktJzzmPh44hq8DTurVWSLFBVj
Also send me a note so I can write back and say "You didn't build that! You think you are smart? There are plenty of smart people out there..."
Bitcoin was growing in strenght and popularity, but the NSA cracked the code and comprimised the software to ensure it would never rival the petrodollar. Can I get a holla for the ol'mighty dolla?
When did the NSA crack the code? Links or references appreciated.
For you computer-smart types that can not use google -
http://www.wired.com/magazine/2011/11/mf_bitcoin/all/
http://www.nbcnews.com/technology/technolog/bitcoin-virtual-money-gets-h...
http://en.wikipedia.org/wiki/Electronic_money
"Bitcoin -a peer-to-peer electronic monetary system based on cryptography."
So if an electronic monetary system like Bitcoin is based on cryptography....uh....yeah I see no connection with the viability of an electronic monetary system to the NSA. Nope, no connection with cryptography.
Interesting. After reading through all those old links, I found nothing which said that the cryptosystem of BTC had been compromised in any way.
What I did find was a bunch of MSM sensationalism slinging poo.
Furthermore, after the gox hack last year, BTC price stabilized at around $2, then began its rise again. It is now about $10/btc. Yes, just like the wired article says: it's long dead. Heh.
That's because your reading comprehension sucks.
Gox hack = compromised. There were multiple incidents that alluded to the flaws we are describing to you bit coin zealots.
And as far as your inability to read the title of the article....well, that pretty much explains the zealotry here.
Rise.....and Fall.
Up....then down.....$30 to $2 bucks is quite a drop. The price has stabilized at $10......so, how many percent are they down from their high 18 months ago?
The bit coin system was compromised at various chains along the way.
Perhaps the code is intact....that's really what you techies are "stuck" on. Maybe I need to retread the article, but I just don't remember them saying bit coin was "Dead"
So if you can point me to where it says "long dead"......I'd appreciate that as well.
So much stupidity in this I'm not even going to respond. I'll just stick this here so you can't edit it away.
Yes, it's pretty obvious you are troubled by the facts.
My guess is you never really read the article in the first place.
Carry on......Zealot
AgShaman's List of Misunderstandings:
1) Service provider (trade platform/transfer/etc) is compromised, therefore bitcoin is compromised
No, actually. No more than a bank robbery invalidates the us dollar. If you steal every dollar in a bank, does the entire financial system collapse? No, obviously.
2) Price volatility means that something is wrong with bitcoin
No, actually a maturing market goes through phases that involves large price swings when the market is illiquid, to more stable movement when market depth improves. Bitcoin has been improving in daily trade volume and transactions on a constant basis.
3) "The bit coin system was compromised at various chains" - too vague to determine if you mean the blockchain, or you are alluding to the first point of service providers being a link in a 'chain'.
If you meant service providers are set up by human beings and can have security problems, yes, we've already covered that - in that respect they are like banks that get robbed or have their passwords leaked online.
If you meant that the underlying protocol that forms the blockchain is compromised, you're wrong. The first symptom of such a failure would be bitcoins created outside of the algorithmic determined rate. Many people pay attention to those metrics, and it would be easy to see if this was the case - I just looked, and it is right on target.
What a surprise...the most passionate of the bitcoiner zealots chimes in.
You zealots are all obtuse beyond measure.
Your points do nothing but support my position....and back up the article written by Wired Magazine a year ago. If you are so passionate and sure they were not being fair and laying down facts about the various flaws....then you've had a year to take it up with them and force them to retract or rewrite their article. Since you haven't....I'm going to assume your inaction supports the claims put forth in the article. If not for the poor performance....and the incredible price drop, you might have had a case to support your position....instead, you've been waiting for the exchange rate to recover so you could come out from under your rock. If it was not at a third of it's high...and even lower, I'm guessing your mouth would not be running amuck as it is now.
Bitcoin has flaws and problems:
Credibility being the biggest...since it's been in existence only a few years, I guess that's to be expected. The people involved seem to be feeding the doubts of the skeptics. The east coast faced a 100 year storm....and the stock market shut down for 2 days. Bitcoin got gamed by a hacker....and their exchange shut down for a week. Yes, ridiculous volatility qualifies as a flaw.
But, but, but.....the code...it's so pure. Yeah yeah yeah....we're all so happy you techies are in love with your code.
It doesn't discount that it is fundamentally flawed...and has problems it needs to deal with. The early birds smell like MLM snake oil salesman...gaining advantage on newcomers.
Bitcoiners have lotsa work to do....and a ways to go, before the people living in the real world will start to divy out some respect. I can get much better deals using cash....and stay completely anonymous currently. When I can make purchases of what interests me with bitcoin...and not get a 20%+ raping vs. using cash....then bitcoin will get my vote in being a competitive alternative.
I understand your bitcoin system just fine....it's worshipped by nerds with fragile personas
Fix your problems....then get back to us.
The one with the credibility problem is you. But that's ok. Once again, I'll just put this here so that you can't change it later.
Ahhh.....your feelings are still hurt?
Upset still about being caught spinning your web of fiction?
Yeah keep chiming in......as if I would change something in my posts...your cluelessness is confirmed
Shameless Zealot
I hope you stick around here longer. By the way, if there's one thing I've learned about name-callers such as yourself, it is that it is fun to watch your kind squirm. And you squirm so well. Keep up the good work.
hahahaha.....squirm?
yeah....it really shows I'm sure.
I know you didn't read the article....but they refer to you bitcoiners as Zealots....so I guess I can't really take credit for it, though I'd like to.
cry foul....when you've been exposed as a fraud? That's not very 'fight clubesque'
Super sensitive types should not be here
You should work on your sermon writing....it's not very believable
the NSA cracked the code
Bullshit. This is merely FUD.
And how exactly does one "crack" open source code?
The NSA has the power to alter the laws of mathematics. It's spooky.
So, how many fiatscos did you make on your silver medallion so far? 200-300K?
If silver was going to the moon like you say it is, you would not be selling it. You always tell everyone to sell everything you have and buy physical silver... that is extraordinarily bad advice.
It's a very creative YouTube marketing scheme you have going. Now you have another coin in the works. Why not... there seems to be an endless stream of suckers out there who will gladly pay you $4 over spot per coin.
You can delete my YT comments, but you will never silence me.
I think he already has built his personal stack.
Not saying I know all the answers, but I think the general idea is to encourage as many people as possible to steer their own ships in a path of self reliance....outside the constructs built by the bankers.
The more people that can generate an existence of independence.....the less bullets required when the zombie collectivism erupts...or should it appear.
Primary and Private Dealers exact a premium to produce bullion offerings that have artistic qualities. The size of the premium often has a relationship to the size of mintage. I have not purchased any of these myself, but I do understand the dynamics involved. A bullion round, with art and design, that tells a story....could be productive in getting people to snap outta their slumber.
Lotsa haters here at ZH.
Lotsa whiners that are doing nothing to make the landscape better
Not a hater, just a critical thinker.
Interesting question. Seems the Bitcoin is doing just fine meanwhile the central banks are actively killing their currencies, including the Fed and ECB. Lets revisit this issue again in 1 years time and see how things have further progressed. Can you believe the bitcoin system has really been functioning properly for almost 4 years now? Its kind of amazing given the secondary markeplace incidents with folks who did not properly secure their wallet files. And yet the system marches on unhindered. Theres 10.3 million bitcoins in existence at this time, almost a full half of the eventual total issuance. Now I wonder how many dollars there will exist in another 4 years as compared to today? twice as many? ten times as many? It will be interesting to see exactly how the world transitions to bitcoin and other crypto-currencies as a reserve currency along side their hopefully-not-tungsten filled gold bars ;)
why would someone want to rival something that is dead?
even the Armageddon dollar recycling scheme isn't enough to keep interest rates where the Fed needs them to be, hence the $90B or so per month of Fed-initiated demand...
"I'm not quite dead yet!" -- the US dollar
Ah, the "cryptography is useless because <reason>" response.
That also would invalidate any SSL sessions for your bank, their proprietary payment systems, and any systems used by credit card processors.
Is there a reason you don't understand this, beyond spreading your unique take on 'reality'?
Why yes, of course. Your bank accounts are backed by....banks that deal in dollars. Bitcoin was created as a virtual currency to be outside national and supranational control. The value of a Bitcoin was to be based on the market, what people were willing pay for Bitcoins, Bitcoins acceptance a vaious merchants, and the fact that Bitcoins were to be produced a specific rate based on computing power, not the whim of some banking turd. What part of that are you not able to comprehend? As the value of Bitcoins began to increase and gain some market acceptance it was attacked and Bitcoins stollen from accounts and the Bitcoin exchanges came under attack. if virtual currency is not secure, who is going to buy it, who is going to accept it? The Western banking system is based on its SWIFT interbanking software and FedWire for secure online banking. They will attack and defeat any alternative electronic currency which they do not own or control and thretens the public's "confidence" in the current system. If you are so confident in your SSL sessions back up the truck and buy Bitcoin now for cheap. You'll make a killing cause you so smart.
In the NBC story you linked to, it wasn't a problem with the security of BitCoin itself - it was a problem with the way the file that holds the bit coins (hence why it's called a wallet) was stored (seems to be rather insecurely). It's similar to having a wallet full of cash stolen from your pocket. The theory behind the creation and use of BitCoins is sound, but of course keeping the currency itself safe is a matter for the keeper of the currency. For individuals, you could store your wallet file in an encrypted format on a USB key, and the only time anyone can access it is when your USB key is plugged into a machine and you've decrypted the file.
To me, that sounds a lot safer than lending a bank your money for them to do what they want with, and charging you for the privilege.
There is a back door in every computer, phone, ipad, tablet. Period. Every major computer and software company is required, and they willingly obey, to install a back door in their products to ensure the NSA, CIA, FBI and any other government agency with any "need" has full access to your information. If you do not know this, or are unwilling to accept it as fact, there is nothing that is going to convince you that electronic currencies have been compriminsed and will always be comprimised. There are many books and news articles, some from major media, that document that every single email, fax, telephone call, tweet, text or other electronic communication is intercepted and the meta data for each is stored, if not immediately processed, for future processing, and that the electronic back door exists. You can have no secure password or encruption with it being hacked, broken, stolen, manipulated by the government if it is so desired.
If you think Bitcoin is secure and is a viable vurtual currency back up the truck and buy with both hands. If you want to dabble and buy a little here and there great. If you want buy/sell for fun, or just to gamble great. But Bitcoin will never be allowed to rival a real fiat currency supported by the western banking system. You might as well invest in other forms of virtual currency/credits from Farmville, Facebook and video games. If they work for you that is great.
In about 2007 I read an intereting article about how a few people from America paid Chinese kids in China to play video games all day long then transfer their game points to them, which they then sold to other players here in the US. If the scheme works for you do it.
"There is a back door in every computer, phone, ipad, tablet. Period. Every major computer and software company is required, and they willingly obey, to install a back door in their products to ensure the NSA, CIA, FBI and any other government agency with any "need" has full access to your information."
Really? Please show some evidence of this. I'd love to see it. I also think the thousands of highly skilled researchers who'se job it is specifically to find this sort of thing (and could make the star discovery of their career by finding it) might view your statement as being a bit simple.
Money Squid, I think you're throwing too many punches, honestly. If you hate it, don't participate. Quite simple.
1) If bitcoin isn't secure (via service providers, not the underlying protocol) who is going to accept it?
I've covered this before, but if you'd like some repetition I can oblige.
A service provider that doesn't have a proven track record will indeed be shunned. It is as simple as that. There have been service providers in the bitcoin network that have proven themselves, and others that have had problems establishing their businesses. As the more successful operations persist, they attract the major share of people seeking their services. Sounds suspiciously like something called "The Free Market", doesn't it.
Currently there are millions upon millions of bitcoin in the system, being transacted by users at increasing volumes. That doesn't happen in a network where there is no trust in the underlying principles and algorithms.
2) If bitcoin isn't secure (via magical backdoors in every crypto scheme that exists) who is going to accept it?
I'd say you have a larger problem. It would mean any cryptographic usage that is currently in the technology you utilize every day is leaking information out about you this very second. I'd think if you were really convinced that this was the case, you'd unplug your computer and start wiping every file you had.
As for bitcoin being compromised, the first thing that would happen (either all at once or slowly) is bitcoins would be created above the algorithmically controlled rate they are now - and this would be an extreme red flag that many people would see. I'd go into the mechanics with you, but honestly you have access to Google, and you can look at the metrics yourself.
Even if we digress down the highly-paranoid-road you alluded to, there would be other incidents that would suggest that other services were compromised, unless you're going all-out-conspiracy-crazy and think a secret like that would stay one forever.
Occam's razor disagrees with you, I'm afraid.
3) They will attack and defeat anything we create as an alternative, etc..
You must be an absolute pleasure to work with in a team. I disagree with your rather polarized world-view.
If you can't physically touch "it", you don't own "it", and whatever "it" is will soon be rehypothicated.
Bloody sheep.
I am most surprised how this idea can be "sold" Who in their right mind, other than early adopters and stake holders, would be interested in this?
OB, the other day I'd made some comments along those very lines and the push-back was tremendous.
Methinks some folks have no idea of the depth to which any system may be corrupted....
We KNOW how the system can be corupted, and we're trying to prevent that from happening... and you are cheering for its demise.
What fucking side are you on?
On the side of Hard Money
In One's Possession.
Physical Gold
I am not against BitCoin.
It is a child of electronic digits, ones and zeros, system based.
And therefore corruptible.
As says one of my acquaintances, a mathematician, who works for the NSA, in breaking codes, compromising systems and the like.
He states firmly (with a sly smile and a twinkle in his eye) that if it's electronically based it is compromisable
Period
Says he, not me.
I will take his knowledge and real time experience as non-theoretical and practical.
I am neither for nor against BitCoin.
I merely point out that a fellow who seems in the know says it is not infallible, can be gamed.
And the more folks think not, the better it is to game and break.
Your friend works for the NSA (that is, the government), and therefore you must believe everything he says as being fact.
Certainly the government (and its dark agencies) have nothing to lose...
Nope...
I trust the professional opinion of a man of good character.
that really doesn't even matter, knuckles.
today, bitcoin is working.
today, you can transact anonymously, outside the purview of government, outside of central banks, online, using bitcoin.
if bitcoin crashes some day, it crashes, so what - just don't hold any substantial bitcoins for any substantial time, buy them as you need them.
for now it's a useful tool
PLEASE DO NOT BUY ANY BITCOIN! I LIKE TO STACK AT EL CHEAPO PRICES. THANK YOU.
BTW, 130%+ YTD, 1btc scarcity > 230 ounces of Au.
Let the govmnt try to break it. They tried to break PGP and failed miserably. And miners are spread across the world, good luck convincing or forcing them to stop.
Stacking and Half_A_Billion: Thanks for all your comments in the thread. Time for me to hit some bitcoin forums and learn something.
Perhaps this is one advantage of bitcoin, its limitations...
We already know that it will serve as a target for the Central Bankers wrath, but that will only draw more attention to it as has happened all ready.
New ideas and virtual currencies will hopefully spring up like weeds, and as the Central Bankers flail around writing discussion papers about last years currency the world of online commerce will quickly evolve and move on.
Bitcoin isnt a replacement for PMs and never could be.
Also having said that perhaps the FOFOANs would like to comment on how bitcoin fits into their neat little fantasys about freegold and the EURO?
Come on FOFOANs it will be fun...
So you have been a double agent all this time without telling us?
What else would you like to share...
Ah, the "digital versus analog" response, with a bit of the "digital is mutable therefore imperfect" strawman.
What you perceive as faults, are actually strengths.
I can send the entirety of my balance across the world in one hour.
If the authorities decided to confiscate, and used technologies to locate dense electrically-conducting metals, could you relocate your stash as easily?
"And therefore corruptable"
You're forgetting how the bitcoin network operates, how each node verifies the entire blockchain, how the cryptography embedded in each transaction negates tampering - and incidentally, how the current network is larger in processing power than anything on the planet.
Again, if the underlying cryptographic methods are compromised, then the entire global financial system is compromised - but bitcoin can switch methods, since it is software distributed in a free system.
Perhaps you need to take another look at it, knukles. All of you do.
One ant, by itself, can't do much, but corral millions of driver ants and watch them strip a forest of all edible lifeforms. The point being: the FRN is still in existence due to inertia -- should BTC reach a certain level of the same, the NSA will only be able to take a few bytes before they're overwhelmed in the data streams. Let's sit back and watch the play unfold...
"I merely point out that a fellow who seems in the know says it is not infallible, can be gamed."
You're on the side of hard money, in ones possession - physical Gold. How about those people who bought gold-plated tungsten bars, thinking they had hard money? Gold is just as corruptable and gameable as anything else, because owning it relies on a system where you are the last, and most likely smallest, part of that system, with no oversight at all.
Understanding bit coin strength means understanding cryptography, p2p network app,s and previous achievements of the open source movement ie the totally proven unstoppable bit torrent which big Corp have thrown everything and the kitchen sink at and totally failed.... to switch it off you need to switch off the Internet...if you don't understand this just listen to Tyler explain to you why cb,s are shitting bricks. I personally have a small amount of bit coin and a lot more pm,s some one could buy a load of them and then dump to give the appearance of volatility.. And as a fledling currency I think it will be wild till it settles but inflationary def not. Do not buy any until you have practiced encrypting your wallet using very long passwords etc. It is as safe as you make it but read up and learn ..it is big boy pants stuff. I would be very careful if you use windows. You can have it backed up in as many locations as you wish but is only ever as secure as you and you knowledge make it ie 90 million hours for a password cracker at current speeds or simply put on microsd and drop in bottom of lake or you can keep a paper copy of your wallet which you can regenerate later as a wallet again..and remember how much cash gets used by criminals bit coin is the same......
Many of the same arguments used against PMs are also being used against Bitcoin.
1. It isn't secure
2. I don't understand it.
And last but not least, my all time favorite
3. "You cant eat it".
What beautiful symmetry...
To their credit, In terms of efficiency, bitcoin is a great idea. Unfortunately fraud is the status quo in the world today and bitcoin is just as easy to manipulate (some might say easier to manipulate) and therefore things will only deteriorate until the greedy fuckers at all levels of society experience real consequences for bad behavior.
We have been here before folks. There is no political solution moving forward and nothing changes until the moral hazard is addressed. Dont' sewat it, be productive and prepare, there is simply nothing else you or your community can do since the crimminals are running the place anyway. Chance always favors the prepared mind. Always will and if you think that Nature and the laws of physics make any promises regarding anyone's survival, you are beyond stupid.
How on earth are you going to commit fraud in bitcoin? Sending a trillion bitcoin to your address won't do it, no miner in Russia or India or Finland is going to include the transaction.
You have to i) break the hash, then ii) break the private key, to steal bitcoin from an address. Both tasks are computationally implausible--way more probable for turbo tim to pay the debt through winning lotteries of other countries.
Newsflash: Things you touch, even have in your hand, can and will be taken from you when the state deems it so. Including life.
Also, arbitrarily calling people sheep just because you disagree with them about something you don't understand, just makes you look bad.
'Bloody sheep' is right. Although there are exceptions, usually "Big Fish" eat little fish. And unless very desperate, big fish will wait for little fish to become big enough to catch & eat. Else it's "poor recource allocation" -- whether at the basic animal level or at the devilish Central Banker level.
For these reasons and more (Rothschild Rule #1: "Let me control a nation's money supply, and I care not who makes its rules". Corrolary: He who controls the rule-makers also makes the rules regarding competition to Rule #1), I worry for competing Digital Currency (Bitcoin) to eventually fall prey to the Big Fish also.
In the case of the US, the IRS will undoubtedly shut that door also. E.g. In a recent RT Capital Account report with Lauren Lyster, some tax accountant claimed that even 'barter' has to be declared with a Form 1099. Bloody vampire squids!
BTC rule #1: gradually erode the control of the munny supply.
IRS principle they don't want people to realize: There are more of us than there are IRS agents! Lots of fish swim under the surface of the oceans.
What about knoweldge? I'd say that's the only thing that can't be taken from you, short of killing you. Gold can be taken with relative ease.
On that note, here's something that is going to blow your mind right out of your ass. You can store a billion dollars worth of bitcoin IN YOUR BRAIN. https://en.bitcoin.it/wiki/Brainwallet
This type of crypto-system will represent a major transfer of wealth BACK to the younger tech-savvy generation, who have been literally enslaved by the last few generations of brainwashed supporters of fiat and central banks. And I am not in the younger generation. I too believe in tangible PMs, but I know that discounting or disregarding this movement will be something you do at your own peril.
Well said, Ultra.
PMs are magnificent, but they are not an idol to be jealously worshiped.
Patience, it will, but only after the moral hazard has been brought in check. I do not consider knowing how to operate a smart phone "tech savy". more than half the population knows how to do that, along with use their EBT card. Please, wake the fuck up, are you seriously going to consider these folks as anything but useless eaters? Do so at your own peril. Patience, let the system reset/clear.
I suggest you read up on cryptography and RSA algorithms. Principles of physics are involved -- entropy, exponential functions, information theory, guage theory, etc.
This is wisdom. The digital generations understand the utility of Bitcoin. Just wait until capital controls get more severe, and sales taxes increase; the use of Bitcoin will become common sense for many transactions. Business will still be done via digital channels, and it's too hard to do everyday transactions with precious metals.
please elaborate how
transactions such as exchanging bitcoins for a bag of carrots at the farmers' market or a can of gasoline after a storm that takes out the power grid, iphones are not charged and there is no access to the internet. it may so happen that when the scheme of fiat collapses, your everyday transactions (food, energy, etc.) will be done via physical exchanges of some sorts for extended time. until then, the fiat regime will continue. the btc - like currency may be a way of future, after everything is stable, but will not protect you during the collapse. metals and physicals will.
The "collapse" for this decade is of fiat. The grid and the web will be on.
The grid and internet are up on in Africa, madmax boy. Find a doctor.
http://nazret.com/blog/index.php/2006/12/27/ethiopia_internet_cafes_star...
Internet cafes in Ethiopia. Since 2006!
a) provide link where trade for daily essentials is done via credit/debit cards among locals in africa when the electricity is out - since btc is an electronic, virtual currency.
b) see comment 2946860 bellow
c) ad hominen attack sure makes your case a lot stronger
A) What event do you think is going to take down all of the Internet for an extended period?
B) How can A occur without numerous spent fuel pond meltdowns occurring concurrently?
C) If B happens, being without your BTC transactions is going to be such an insignificant concern.
D) it is not an either-or situation; you can have silver dimes AND BTC.
btc is a virtual currency that cannot exist w/o the supporting structure. it suffers from the same limitations as credit/debit cards. the majority of day to day transactions necessary to sustain continuity occurs locally (i.e. purchases of food, energy, tools, etc.). The point is that in a fiat system, you can at least use cash when the supporting electronic structure fails. btc doesnt have this backup protection, i.e. some physical, btc cash equivalent. should btc replace fiat and the grid in your location fails, than you're no better off than having a debit/credit card when your local store is unable to accept or process it due to power failure. thus, you might need cash or pm coins or something physical that would be accepted in a trade. that was the whole point when this thread started and the techie generation will shoot itself in the foot if they dont come up with some backup protection to this virtual currency. i am not against btc, i am just saying that if btc becomes a de facto currency by private choice, the need for cash equivalents will be even more needed than it is now. cash is king. i dont see how btc is cash, so i cannot see how it can be king.
i've downloaded a tor software program but cant get on - i want to go to 'silk road'.
any advice?
The dark web is not a safe place. If you can't get tor working, it is for your own good. Best way to hook up with 'the goods' is through friends. Worst way to hook up with 'the goods' is by getting owned on the dark web.
One common sense example: For any transaction north of the current $10k federal reporting requirement in which one of the parties has an incentiveto be anonymous.
I didn't argue bitcoin was solely useful for protecting against the fiat collapse. But it is useful in that respect. I'm sure some in Greece and Iran have already protected themselves, at least in part, via bitcoin.
Also, here's a real world example. There are gasoline rations in NJ now. I wouldn't be suprised if someone is selling black market gas in bitcoins for a large markup.
Sounds like you're describing a Mad Max scenario. I don't think the fiat collapse will be like the one in depicted in "Revolution." There will still be electricity, and where there is electricity most transactions will be digital.
these
better make sure they have and maintain access to the web and that their iphones are and can be recharged in order to sell/buy using the btc. i cannot see how in crisis these techies will go to a farmers' market and exchange their stupid bit coins for a bag of potatoes.
And in this same lights-out crisis, you're going to buy potatoes using your credit card?