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Fundamentally, Bitcoin is software eating the Fed-Bank-Retail ecosystem. The Fed governance is replaced by code. The banking utility is replaced by miners. I t

by sonink 9y ago

Fundamentally, Bitcoin is software eating the Fed-Bank-Retail ecosystem. The Fed governance is replaced by code. The banking utility is replaced by miners. I think the march of bitcoin is actually a better example of how AI is taking over the world. People in AI are fascinated by AGI - but the bitcoin ecosystem is actually a real world example of how AI will take over the world. Specifically, the march of AI won't happen at 'edge' nodes, it won't be incremental, it won't happen by replacing humans with machines. The march of AI will start at the core, at a rethink of the fundamental infrastructure that powers an industry making it more amenable to machines and 'hostile' to most humans. People underestimate the amount of resources required to articulate monetary policy by a central bank. Bitcoin can already do that much better than maybe 70% of the worlds central banks. India, China and US can think about banning/regulating bitcoin. But there are countries in Africa who can already do better by simply leapfrogging to bitcoin and ditching their national currencies. Bitcoin is here to stay. And it cant be stopped.

kashkhan 9y ago
it's great that no government is doing the fiat. That by itself is reason enough.
- kodfodrasz 9y ago
  Let me rephrase this for you: It's great that some Chinese private entrepreneurs (connected with the intelligence services or not) are doing the fiat. That by itself is reason enough.
- 8973417983461 9y ago
  Let me rephrase this for you: It's great that some Chinese private entrepreneurs (connected with the intelligence services or not) are doing the fiat. That by itself is reason enough.
ryan_j_naughton 9y ago
>"People underestimate the amount of resources required to articulate monetary policy by a central bank. Bitcoin can already do that much better than maybe 70% of the worlds central banks." Bitcoin only has totally clear monetary policy because it's increase of the money supply is entirely predetermined: It is created at an ever decreasing rate approaching a limit. The result of this certainty in monetary policy is a currency that is naturally deflationary (literally by definition). This makes Bitcoin perfect as digital gold but shit as a functional unit of currency. You don't want to spend an asset that will naturally appreciate in value, discouraging using it. You could have a cryptocurrency that generally trends at the same inflation rate as regular currencies: 2-3% annual and use that to pay the miners (or just give everyone a wealth endowment through giving any current owners a 1% increase in their current wallets and use the other 1-3% for the miners) and you would have a currency that could stay price stable with out Fiat currencies instead of always increasing in price like BTC has (at least over a sufficient moving average to reduce the volatility from speculation).
- meric 9y ago
  That's like saying the decreasing price of hard disk space discourages people from purchasing it.
  - ryan_j_naughton 9y ago
    Knowing that there will be better hard drives in the future for less money has some effect on your willingness to purchase. Expectations of the future matter. The US Treasury is getting considerably less revenue right now from capital gains than usual because tons of financial entities are holding off on realizing returns from their investments now and are holding them until possible tax reform in the hopes of paying future taxes and thus getting greater returns. In your example, HDD space is purely a good to be consumed though and not a currency (or an investment beyond an actual capital investment because it does work for data storage). Thus, if you need to store data, you will buy storage simply because you need it then. But you can't sell that storage in the future for a positive return, so the incentive I'm talking about doesn't really exist in the example you used.
    - meric 9y ago
      You can make a positive return in terms of hard disk space. Refrain from swapping USD for hard disk space, and you can get more hard disk space in the future. This applies to all sorts of goods, like TV's, music players, etc. The value of USD is increasing against these goods, yet people still make the trade of USD for goods. I suppose if we increase the inflation of USD such that the price of hard disk space increases in USD terms, then people will be more inclined to swap USD for hard disk space sooner, and it will be a boon for the hard disk industry. But is that real economic growth? It smells more like malinvestment to me. One could even make the argument deflation is good for the environment, people are only inclined to consume that which is necessary, and the structure of the economy's physical capital will be realigned to support that pattern of consumption instead.
      - smallnamespace 9y ago
        If you believe that we should have UBI (and it seems like many here do), deflation is the exact opposite of it -- it slowly concentrates wealth with those who already have it, and all they have to do is hold the currency. Whereas inflation at least basically forces the wealthy to invest in real assets or else slowly transfer the value of the cash towards debtors.
nordsieck 9y ago
> But there are countries in Africa who can already do better by simply leapfrogging to bitcoin and ditching their national currencies. This may be technically true, but probably won't happen anyhow. There's a reason that those currencies are terrible, and that reason is that a person or people in power benefit from the seigniorage that is the cause of the currency inflation.
kodfodrasz 9y ago
> But there are countries in Africa who can already do better by simply leapfrogging to bitcoin and ditching their national currencies. I doubt this would do any good for them. * Their currency would be totally exposed to 3rd parties. * They would loose the control over the rates, which are an important tool to attract investments, if are stable and controlled well. * AFAIK some chineese private companies control large part of the mining network. Basically the central bank would be in private, and foreign hands. * The slow transactions would make it totally infeasable for use in everyday life, aspecially as people there have limited access to necessary technologies (stable network connections all round the contries, stable elecric power everywhere), so daily transactions of the ordinary people would either fall back to barters, or use some fiat paper money, eg. USDs. I totally don't get how could you reach tis conclusion, your whole post is a SV bubble wishful thinking with some trendy bullshit, eg. software eating the FED, fed is replaced by code. Bitcoin does better than centralbanks. If some currency looses 30% of its value a single day, that is not a sign of health, and this happended the very week with bitcoin. Actually Bitcoin does its job worse than an african dictatorship's currency, if its job is being a fiat currency, which is useful for the people in daily life. I doubt its job is that, so it may do its job well, but for this task it is unsuitable.
kk58 9y ago
I wonder if bitcoin with AI will give embed AI with survival function?
8973417983461 9y ago
> But there are countries in Africa who can already do better by simply leapfrogging to bitcoin and ditching their national currencies. I doubt this would do any good for them. * Their currency would be totally exposed to 3rd parties. * They would loose the control over the rates, which are an important tool to attract investments, if are stable and controlled well. * AFAIK some Chinese private companies control large part of the mining network. Basically the central bank would be in private, and foreign hands. * The slow transactions would make it totally infeasable for use in everyday life, especially as people there have limited access to necessary technologies (stable network connections all round the countries, stable electric power everywhere), so daily transactions of the ordinary people would either fall back to barters, or use some fiat paper money, eg. USDs. I totally don't get how could you reach tis conclusion, your whole post is a SV bubble wishful thinking with some trendy bullshit, eg. software eating the FED, fed is replaced by code. Bitcoin does better than centralbanks. If some currency looses 30% of its value a single day, that is not a sign of health, and this happended the very week with bitcoin. Actually Bitcoin does its job worse than an african dictatorship's currency, if its job is being a fiat currency, which is useful for the people in daily life. I doubt its job is that, so it may do its job well, but for this task it is unsuitable.
- sonink 9y ago
  Everything that you mentioned is most likely a shortcoming of the current version of Bitcoin. That being said, it is not a big leap of faith that each of these will be rectified in due course. If not with updates to Bitcoin, then with another coin. My post wasnt just about Bitcoin specifically, but around the entire blockchain ecosystem.
  - ketzu 9y ago
    You specifically talked about "already" and "bitcoin": > But there are countries in Africa who can already do better by simply leapfrogging to bitcoin and ditching their national currencies. Also: The concern about infeasability in everyday life is network based and not a shortcoming of bitcoin. So it's not dependent on the coin you are using. All other points seem to be inherent to public blockchains, so it is quite the leap of faith to believe they are fixed in any public blockchain cryptocurrency.
glasz 9y ago
please don't focus only on technical details. digital currencies, btc in particular, are breaking the bank's monopoly of creating money. that's the real revolution. states and banks get into the topic of such technologies not because its better but because they see what may happen and they want to control the outcome. there's high potential for people gaining freedom from the west's monetary system. but i'm very pessimistic about us getting this right and not loose "control" to state and corporate powers exactly like we did with the internet.
girishso 9y ago
> making it more amenable to machines and 'hostile' to most humans. Why AI takeover is always considered against humans? Why can't it co-exist with humans?
- chillydawg 9y ago
  It's just that it's unlikely an AI will have the same goals as you or me. Their goals might be to make, say, paperclips: https://wiki.lesswrong.com/wiki/Paperclip_maximizer https://wiki.lesswrong.com/wiki/Paperclip_maximizer
- akvadrako 9y ago
  I think it can, just like how we "co-exist" with wild cats. If they don't bother us too much we let them live, but humans always have priority.
ozim 9y ago
Yes comrade we want to bring equality and low fees to poor nations which are oppresed by capitalistic banks! March of new era will bring better future for everyone. They want to stop our revolution, China with JP Morgan as they stand for old order. We have to get rid of those monopolistic pigs. /s I hope those bitcoin guys won't get guns to actually execute people who are not buying.
dzhiurgis 9y ago
> But there are countries in Africa who can already do better by simply leapfrogging to bitcoin and ditching their national currencies. They already leapfrogged them a decade ago with m-pesa.
b1daly 9y ago
Bitcoin can easily be stopped by governments, at least in countries that are not failed states. All they have to do is declare it illegal, and enforce the law. It would be trivial for them to shut down exchanges. Without that, it would hard, and expensive, to convert to fiat. Legit businesses would not accept Bitcoin. The only uses would be black market, and I doubt they would continue using bitcoin on the darknet markets. Without the ability to easily convert to the currency of the country you live in, Bitcoin would have little to no value.
- johndevor 9y ago
  The black and grey markets represent nearly 1/3 of the world's economy. They cannot be shut down. The war on drugs is an excellent example of this.
danmaz74 9y ago
AI? Bitcoin has nothing even remotely to do with AI - on the contrary, most support for Bitcoin is based on the idea that a totally pre-determined algorithmic management of currencies would be beneficial to the economy. So, what AI are you talking about?
beefield 9y ago
> People underestimate the amount of resources required to articulate monetary policy by a central bank. Bitcoin can already do that much better than maybe 70% of the worlds central banks. India, China and US can think about banning/regulating bitcoin. But there are countries in Africa who can already do better by simply leapfrogging to bitcoin and ditching their national currencies. Could you elaborate how you think bitcoin monetary policy is better than 70% of world's central banks? To me, one of the most important tasks of monetary policy is to have a stable value of a currency (not against other currencies but against stuff people actually buy). And with that measure, I have difficulties identifying one single central banks that is worse than bitcoin within the last few years. (Maybe Zimbabwe or Venezuela?) But 70%? No way. (Note that bitcoin also fundamentally lacks a mechanism for price stability, not that anyone actually owning bitcoin would that want.) And Africa ditching national currencies for bitcoin? How do you propose that an illiterate farmer in rural nambia is going to use bitcoin? Even if you figure that out, do you think that the african governments - crappy as they may be - are that stupid that they don't figure out that instead of paying the seignorage to bunch of bitcoin nerds who currently own the currency, they can make their own fork and pocket the seignorage themselves? Bitcoin has no future as an usable, official currency anywhere. That should be obvious.
vkou 9y ago
Nobody in Africa is seriously using bitcoin to do business. None of the BTC startups, even the remittance ones, want to touch that market with a ten foot pole (Despite their slide decks shouting from the rooftops about banking the unbanked.) Maybe it's because BTC doesn't actually solve any of their problems.

by sonink 9y ago

kashkhan 9y ago

it's great that no government is doing the fiat. That by itself is reason enough.

kodfodrasz 9y ago
Let me rephrase this for you: It's great that some Chinese private entrepreneurs (connected with the intelligence services or not) are doing the fiat. That by itself is reason enough.
8973417983461 9y ago
Let me rephrase this for you: It's great that some Chinese private entrepreneurs (connected with the intelligence services or not) are doing the fiat. That by itself is reason enough.

ryan_j_naughton 9y ago

>"People underestimate the amount of resources required to articulate monetary policy by a central bank. Bitcoin can already do that much better than maybe 70% of the worlds central banks." Bitcoin only has totally clear monetary policy because it's increase of the money supply is entirely predetermined: It is created at an ever decreasing rate approaching a limit. The result of this certainty in monetary policy is a currency that is naturally deflationary (literally by definition). This makes Bitcoin perfect as digital gold but shit as a functional unit of currency. You don't want to spend an asset that will naturally appreciate in value, discouraging using it. You could have a cryptocurrency that generally trends at the same inflation rate as regular currencies: 2-3% annual and use that to pay the miners (or just give everyone a wealth endowment through giving any current owners a 1% increase in their current wallets and use the other 1-3% for the miners) and you would have a currency that could stay price stable with out Fiat currencies instead of always increasing in price like BTC has (at least over a sufficient moving average to reduce the volatility from speculation).

meric 9y ago
That's like saying the decreasing price of hard disk space discourages people from purchasing it.
- ryan_j_naughton 9y ago
  Knowing that there will be better hard drives in the future for less money has some effect on your willingness to purchase. Expectations of the future matter. The US Treasury is getting considerably less revenue right now from capital gains than usual because tons of financial entities are holding off on realizing returns from their investments now and are holding them until possible tax reform in the hopes of paying future taxes and thus getting greater returns. In your example, HDD space is purely a good to be consumed though and not a currency (or an investment beyond an actual capital investment because it does work for data storage). Thus, if you need to store data, you will buy storage simply because you need it then. But you can't sell that storage in the future for a positive return, so the incentive I'm talking about doesn't really exist in the example you used.
  - meric 9y ago
    You can make a positive return in terms of hard disk space. Refrain from swapping USD for hard disk space, and you can get more hard disk space in the future. This applies to all sorts of goods, like TV's, music players, etc. The value of USD is increasing against these goods, yet people still make the trade of USD for goods. I suppose if we increase the inflation of USD such that the price of hard disk space increases in USD terms, then people will be more inclined to swap USD for hard disk space sooner, and it will be a boon for the hard disk industry. But is that real economic growth? It smells more like malinvestment to me. One could even make the argument deflation is good for the environment, people are only inclined to consume that which is necessary, and the structure of the economy's physical capital will be realigned to support that pattern of consumption instead.
    - smallnamespace 9y ago
      If you believe that we should have UBI (and it seems like many here do), deflation is the exact opposite of it -- it slowly concentrates wealth with those who already have it, and all they have to do is hold the currency. Whereas inflation at least basically forces the wealthy to invest in real assets or else slowly transfer the value of the cash towards debtors.

nordsieck 9y ago

> But there are countries in Africa who can already do better by simply leapfrogging to bitcoin and ditching their national currencies. This may be technically true, but probably won't happen anyhow. There's a reason that those currencies are terrible, and that reason is that a person or people in power benefit from the seigniorage that is the cause of the currency inflation.

kodfodrasz 9y ago

> But there are countries in Africa who can already do better by simply leapfrogging to bitcoin and ditching their national currencies. I doubt this would do any good for them. * Their currency would be totally exposed to 3rd parties. * They would loose the control over the rates, which are an important tool to attract investments, if are stable and controlled well. * AFAIK some chineese private companies control large part of the mining network. Basically the central bank would be in private, and foreign hands. * The slow transactions would make it totally infeasable for use in everyday life, aspecially as people there have limited access to necessary technologies (stable network connections all round the contries, stable elecric power everywhere), so daily transactions of the ordinary people would either fall back to barters, or use some fiat paper money, eg. USDs. I totally don't get how could you reach tis conclusion, your whole post is a SV bubble wishful thinking with some trendy bullshit, eg. software eating the FED, fed is replaced by code. Bitcoin does better than centralbanks. If some currency looses 30% of its value a single day, that is not a sign of health, and this happended the very week with bitcoin. Actually Bitcoin does its job worse than an african dictatorship's currency, if its job is being a fiat currency, which is useful for the people in daily life. I doubt its job is that, so it may do its job well, but for this task it is unsuitable.

kk58 9y ago

I wonder if bitcoin with AI will give embed AI with survival function?

8973417983461 9y ago

> But there are countries in Africa who can already do better by simply leapfrogging to bitcoin and ditching their national currencies. I doubt this would do any good for them. * Their currency would be totally exposed to 3rd parties. * They would loose the control over the rates, which are an important tool to attract investments, if are stable and controlled well. * AFAIK some Chinese private companies control large part of the mining network. Basically the central bank would be in private, and foreign hands. * The slow transactions would make it totally infeasable for use in everyday life, especially as people there have limited access to necessary technologies (stable network connections all round the countries, stable electric power everywhere), so daily transactions of the ordinary people would either fall back to barters, or use some fiat paper money, eg. USDs. I totally don't get how could you reach tis conclusion, your whole post is a SV bubble wishful thinking with some trendy bullshit, eg. software eating the FED, fed is replaced by code. Bitcoin does better than centralbanks. If some currency looses 30% of its value a single day, that is not a sign of health, and this happended the very week with bitcoin. Actually Bitcoin does its job worse than an african dictatorship's currency, if its job is being a fiat currency, which is useful for the people in daily life. I doubt its job is that, so it may do its job well, but for this task it is unsuitable.

sonink 9y ago
Everything that you mentioned is most likely a shortcoming of the current version of Bitcoin. That being said, it is not a big leap of faith that each of these will be rectified in due course. If not with updates to Bitcoin, then with another coin. My post wasnt just about Bitcoin specifically, but around the entire blockchain ecosystem.
- ketzu 9y ago
  You specifically talked about "already" and "bitcoin": > But there are countries in Africa who can already do better by simply leapfrogging to bitcoin and ditching their national currencies. Also: The concern about infeasability in everyday life is network based and not a shortcoming of bitcoin. So it's not dependent on the coin you are using. All other points seem to be inherent to public blockchains, so it is quite the leap of faith to believe they are fixed in any public blockchain cryptocurrency.

glasz 9y ago

please don't focus only on technical details. digital currencies, btc in particular, are breaking the bank's monopoly of creating money. that's the real revolution. states and banks get into the topic of such technologies not because its better but because they see what may happen and they want to control the outcome. there's high potential for people gaining freedom from the west's monetary system. but i'm very pessimistic about us getting this right and not loose "control" to state and corporate powers exactly like we did with the internet.

girishso 9y ago

> making it more amenable to machines and 'hostile' to most humans. Why AI takeover is always considered against humans? Why can't it co-exist with humans?

chillydawg 9y ago
It's just that it's unlikely an AI will have the same goals as you or me. Their goals might be to make, say, paperclips: https://wiki.lesswrong.com/wiki/Paperclip_maximizer https://wiki.lesswrong.com/wiki/Paperclip_maximizer
akvadrako 9y ago
I think it can, just like how we "co-exist" with wild cats. If they don't bother us too much we let them live, but humans always have priority.

ozim 9y ago

Yes comrade we want to bring equality and low fees to poor nations which are oppresed by capitalistic banks! March of new era will bring better future for everyone. They want to stop our revolution, China with JP Morgan as they stand for old order. We have to get rid of those monopolistic pigs. /s I hope those bitcoin guys won't get guns to actually execute people who are not buying.

dzhiurgis 9y ago

> But there are countries in Africa who can already do better by simply leapfrogging to bitcoin and ditching their national currencies. They already leapfrogged them a decade ago with m-pesa.

b1daly 9y ago

Bitcoin can easily be stopped by governments, at least in countries that are not failed states. All they have to do is declare it illegal, and enforce the law. It would be trivial for them to shut down exchanges. Without that, it would hard, and expensive, to convert to fiat. Legit businesses would not accept Bitcoin. The only uses would be black market, and I doubt they would continue using bitcoin on the darknet markets. Without the ability to easily convert to the currency of the country you live in, Bitcoin would have little to no value.

johndevor 9y ago
The black and grey markets represent nearly 1/3 of the world's economy. They cannot be shut down. The war on drugs is an excellent example of this.

danmaz74 9y ago

AI? Bitcoin has nothing even remotely to do with AI - on the contrary, most support for Bitcoin is based on the idea that a totally pre-determined algorithmic management of currencies would be beneficial to the economy. So, what AI are you talking about?

beefield 9y ago

> People underestimate the amount of resources required to articulate monetary policy by a central bank. Bitcoin can already do that much better than maybe 70% of the worlds central banks. India, China and US can think about banning/regulating bitcoin. But there are countries in Africa who can already do better by simply leapfrogging to bitcoin and ditching their national currencies. Could you elaborate how you think bitcoin monetary policy is better than 70% of world's central banks? To me, one of the most important tasks of monetary policy is to have a stable value of a currency (not against other currencies but against stuff people actually buy). And with that measure, I have difficulties identifying one single central banks that is worse than bitcoin within the last few years. (Maybe Zimbabwe or Venezuela?) But 70%? No way. (Note that bitcoin also fundamentally lacks a mechanism for price stability, not that anyone actually owning bitcoin would that want.) And Africa ditching national currencies for bitcoin? How do you propose that an illiterate farmer in rural nambia is going to use bitcoin? Even if you figure that out, do you think that the african governments - crappy as they may be - are that stupid that they don't figure out that instead of paying the seignorage to bunch of bitcoin nerds who currently own the currency, they can make their own fork and pocket the seignorage themselves? Bitcoin has no future as an usable, official currency anywhere. That should be obvious.

vkou 9y ago

Nobody in Africa is seriously using bitcoin to do business. None of the BTC startups, even the remittance ones, want to touch that market with a ten foot pole (Despite their slide decks shouting from the rooftops about banking the unbanked.) Maybe it's because BTC doesn't actually solve any of their problems.