8 ms·

That is the beauty of it. It is only eight pages long, but fundamentally changes the concept of money. The only thing that people should recognize is that it

That is the beauty of it. It is only eight pages long, but fundamentally changes the concept of money. The only thing that people should recognize is that it doesn't really try to explain the game theory behind it. It is a technical paper. When it all sinks in, it becomes clear that it is pure genius, but that certainly took me a while to grasp.

deleted 9y ago
[deleted]
betterunix2 9y ago
"That is the beauty of it. It is only eight pages long, but fundamentally changes the concept of money." Not really; it only serves to validate the beliefs of people who already agreed with the basic premise that money is something that can exist without central authority. That view was already common long before the Bitcoin paper. Plenty of libertarians believe that money is an emergent phenomenon of free markets, something which arises on its own as the market converges on a common currency as its medium of exchange. On the other hand, if you are aligned with the mainstream of economics, the entire premise of the paper is easily dismissed. In that view, money can never be separated from banks, the paper is basically nonsense.
- Frogolocalypse 9y ago
  What it did, was it made it possible to create a decentralized store of value without the need of a central authority. And that has definitely made people question their understanding of what money even is.
  - betterunix2 9y ago
    Not really. Anyone who is confident in the mainstream view of money, which requires the existence of a bank or government of some kind, would quickly dismiss Bitcoin. If I cannot pay my taxes or mortgage with it, why should I accept it? (And of course, if I can pay my taxes and mortgage, how can anyone claim to have removed the central authority from money? Just like the gold standard, nothing would prevent a government from changing its mind about whether or not to accept Bitcoin for tax payments.) Like I said, if you already believe that money can exist without a central authority, Bitcoin simply serves as validation. Otherwise it does not really change anything, because if you accept mainstream views of money, then the premise of Bitcoin makes no sense at all. You think Bitcoin is a decentralized store of value? Tell that to all those people whining about the Mtgox bankruptcy proceeding, which is being resolved by paying for the lost BTC according to the price in Yen at the time Mtgox declared bankruptcy which is a tiny fraction of the current prices. When push comes to shove the "value" being stored is measured in fiat currency, with all its associated central authorities.
    - Frogolocalypse 9y ago
      > Anyone who is confident in the mainstream view of money That belief structure is being challenged as we speak. > Tell that to all those people whining about the Mtgox bankruptcy proceeding The only thing that proved, is that you can't trust a bank.
    - sumedh 9y ago
      > Tell that to all those people whining about the Mtgox bankruptcy proceeding Not sure what your point is, dollars(cash) can be stolen as well.
      - betterunix2 9y ago
        The context: MtGox is currently going through a bankruptcy proceeding in Japan. The complaint right now is that the creditors i.e. people who had accounts with positive BTC balances when MtGox declared bankruptcy will be repaid in JPY, according to the price of their BTC balance when MtGox declared bankruptcy in 2014. Since then, the value of BTC has obviously increased quite a lot, so much so that MtGox can actually use its remaining BTC assets to repay those creditors, leaving plenty of BTC to pay the shareholders. In other words, even if you think Bitcoin acts as a "store of value," that still does not make it "money" according to the law. You can have 1BTC or 100BTC, but the law is only concerned with the monetary (i.e. fiat currency) value at some particular time (not necessarily right now).
        Frogolocalypse 9y ago
        Ergo : Don't trust banks.
        betterunix2 9y ago
        ...the same would apply if I had promised to pay you in BTC and then failed to make that payment. This is not really about trusting banks.
        9y ago
  - Udik 9y ago
    > it made it possible to create a decentralized store of value without the need of a central authority In itself, that always existed: it's called gold and gems. It's the most primitive store of value ever- modern economies were born when we went past it.
    - zik 9y ago
      Gold and gems can't be instantaneously and safely transacted over the internet. Name-calling cryptocurrencies "primitive" when they're clearly not doesn't lend a lot of weight to your argument.
      - Udik 9y ago
        Yes, bitcoin is better than gold in that it's virtual and can be transferred over the internet. But that doesn't change the fact that it's a store of value like gold is, and not a currency. > Name-calling cryptocurrencies "primitive" I called gold primitive as a currency. And made an argument for bitcoin (specifically) being similar to gold. Edit: btw, gold 500 years ago had the same exact property of bitcoin today: it was immediately transferable to anybody you were in contact with and could buy goods from. That didn't make it better.
      - usrusr 9y ago
        BTC cannot be instantaneously transacted at all, over the internet or otherwise.
    - imglorp 9y ago
      It's closer to a commodity than a currency: fixed supply. In fact, the IRS is treating BTC as a commodity, to be valued, for tax purposes.
      - Frogolocalypse 9y ago
        You should probably at some point recognize that everyone doesn't live in America
  - njarboe 9y ago
    Gold and silver were a decentralized store of value from about 600BC till 1935AD, so ~2500 years. FDR and Congress made owning gold illegal in 1934 and then the dollar went off the gold standard in 1971. Previous fiat currencies have usually not lasted more that a few generations before they blow up. Now is about the right time for that to happen. Reading history is fun and can help one understand the present. I'd highly recommend it. "Debt: The first 5000 years" is a great book and a good start at trying to understand what money is/has been.
  - pmorici 9y ago
    Pretty sure paper says it is a p2p cash system. The goal wasn't a store of value that was a natural side effect of the limited supply and the utility of the network effect from being a means of transacting.
- stale2002 9y ago
  And yet, reality has seemed to prove these economics wrong. You can use this "nonsense" money right now. And nothing that any economist says about it can stop you.
  - betterunix2 9y ago
    You cannot use it to pay your mortgage, nor to pay your taxes. You cannot even use it to pay Steam...
    - Frogolocalypse 9y ago
      I have a bitcoin debit card. I use it to pay all of these things. Your argument is akin to a person in the US saying that a person from Europe using their visa card, isn't using real money, because you don't control it.
      - leshow 9y ago
        Maybe I'm not clear on how a btc debit works but that seems foolish. Maybe a few years ago when it could actually function as a medium of exchange. Now the transaction fees are exorbitant.
        Frogolocalypse 9y ago
        > I'm not clear on how a btc debit works but that seems foolish. Not sure there's any response possible for that one. "I don't know how it works, but I think it's dumb." > Now the transaction fees are exorbitant. Every standard sized bitcoin transaction bar the past three days (and those will too), that people paid over 5c for has been committed to the blockchain.
        leshow 9y ago
        Either pay a ridiculous fee or wait a ridiculous amount of time for confirmation? Replace by fee is a thing, as long as the tx is unconfirmed it could be replaced. You're effectively saying the wait time is now 3 days unless you want to pay a fee of several dollars. So that rules out most transactions. How do you pay for anything given those restrictions?
- nerflad 9y ago
  Money is an emergent phenomenon of markets, and it has nothing to do with libertarians. https://en.wikipedia.org/wiki/Coincidence_of_wants https://en.wikipedia.org/wiki/Coincidence_of_wants
  - betterunix2 9y ago
    How does that prove money is an emergent phenomenon of markets? In fact, that article suggests exactly what the historical evidence suggests: markets cannot really exist without money. Societies without money tend to only engage in trade with strangers, rather than having markets: https://monoskop.org/images/3/36/Graeber_David_Toward_an_Anthropological_Theory_of_Value.pdf https://monoskop.org/images/3/36/Graeber_David_Toward_an_Ant...
    - nerflad 9y ago
      It can't prove it any better than than anything else can bridge the is-ought gap. I agree that markets can't exist without money, but I think historical evidence suggests that they will create money in order to exist. Almost every society in human history has developed a monetary system; either one based around a commodity as simple as camels, bullion or sea shells, or backed by fiat.
      - betterunix2 9y ago
        Well, the same author from the link I gave happens to have also written a book on that very topic that you might find interesting: https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years
        nerflad 9y ago
        I'll check it out. Thank you.
    - Retric 9y ago
      For an example of money showing up in Barter systems look at diablo 2's use of stone of Jordon's as a proxy for money.
- colordrops 9y ago
  No need to be so dismissive. The abstract term "decentralized" hides a lot of the complexity in Bitcoin. It is also programmable money, irreversible money, geographically unbound money, fast money, and transparent money.
- runeks 9y ago
  > On the other hand, if you are aligned with the mainstream of economics, the entire premise of the paper is easily dismissed. In that view, money can never be separated from banks, the paper is basically nonsense. So, did banks invent gold? Or did gold give rise to banks? How can banks even exist in the first place unless we already have a common medium of exchange (gold), which can deposited into said banks?
  - betterunix2 9y ago
    Actually, the first banks, along with the first money and the first markets, developed from the palace economies of early city states. Originally the proto-bank maintained records of what each person had deposited with the temple, what had been given to various people, and what was available to give. Those ledgers recorded each type of deposit (wheat, cloth, olives, etc.) with a different unit; the innovation that gave rise to money was the transition to a single unit of account.
    - runeks 9y ago
      That’s really interesting! Were these banks private enterprises? I assume people voluntarily deposited commodities in exchange for a common medium of exchange. The problem arises when depositors can’t redeem their medium of exchange for the commodities they originally deposited, or something of equivalent value. By the way, I’m convinced Bitcoin will not function without credit instruments, just like was the case with gold. I’d argue there’s a huge difference between redeemable and irredeemable credit instruments, though. The latter being an artifact of government regulation.
      - betterunix2 9y ago
        "Were these banks private enterprises?" Sort of; at that time it the boundaries were less clearly defined between what was governmental and what was private. The basic economic structure was for a large temple to store the various goods people produced, and to give the goods out to people as necessary. For example, a farmer would deposit grain, and the grain would be redistributed throughout the city-state; the farmer would receive other things from the temple, like clothes and tools. The record-keeping served two purposes: to keep track of what was available for distribution, and to keep track of who was contributing what. This was the "palace economy:" https://en.wikipedia.org/wiki/Palace_economy https://en.wikipedia.org/wiki/Palace_economy The bible makes reference to such a system in the story of Joseph (which is ancient enough that palace economies still existed when the story was first written), who was the administrator of such a system in Egypt: http://www.mechon-mamre.org/p/pt/pt0141.htm#47 http://www.mechon-mamre.org/p/pt/pt0141.htm#47 "I assume people voluntarily deposited commodities in exchange for a common medium of exchange." Not originally and not universally. It was more like a system of 100% taxation in some of the early palace economies, where everyone deposited everything they produced with the temple, and then received things as they were needed. You were basically not allowed to live in the city without contributing something (he who does not work shall not eat), though a person could always work for the temple itself e.g. as a sacred prostitute. Of course the specific laws and economic organization varied from city to city, and plenty of people lived far outside the cities and had their own ways to manage goods; the specific details varied with different places and periods of time. What you received for your deposit was often just an update to the temple's ledgers clearing a debt you owed the temple (i.e. indicating you paid your taxes; often referred to as "offerings" in the biblical legal code) and possibly offset future taxes. If you were unable to make good on that obligation, your land could be seized and you could become a slave until the king declared a general amnesty (not uncommon in the ancient world; the biblical legal code requires slaves to be given amnesty after 7 years of service, and a similar amnesty provision is in the code of Hammurabi). The story of Joseph also indicates that this exact scenario had played out under Joseph's administration in Egypt: the farmers were forced to turn their lands over to the government during a famine (I am not suggesting that the bible is historical; rather, in ancient Israel at the time that story was written, people were familiar with the situation). As the economies became better developed and the scale increased, money (i.e. a single unit of account that serves as a common medium of exchange) and markets (i.e. trade between inhabitants of the same city) began to replace the temple economy system, at which point private banking enterprises became more clearly defined. For example: https://en.wikipedia.org/wiki/House_of_Egibi https://en.wikipedia.org/wiki/House_of_Egibi https://en.wikipedia.org/wiki/Murashu_family https://en.wikipedia.org/wiki/Murashu_family
- deleted 9y ago
  [deleted]
Udik 9y ago
> fundamentally changes the concept of money. If there is something Satoshi Nakamoto didn't seem to understand, is money. He designed a system that, being capped to a max amount of units, is intrinsically deflationary, and thus cannot serve as money. You don't transact with something that was worth x last year and 2x this year (not to mention 10k last week and 17k this week), it's just dumb.
- Frogolocalypse 9y ago
  > intrinsically deflationary, and thus cannot serve as money. It is hard getting out of the inflationary currency mind-set, I recognize that. > it's just dumb. It's great. The money put on my debit card card a few months ago means that the beers I buy today are 1/3 of the price of what they were relative to the time the money was put on the card. And you know what's better than beer? Good beer on special.
  - Udik 9y ago
    I think you shouldn't buy those beers: in a few more months they'll be a 1/9th of the price. And maybe then you should wait again...
    - Frogolocalypse 9y ago
      But I like beer. So that's why I buy them.
      - Udik 9y ago
        Don't buy them now, and you'll eventually get more. Damn, you can buy a villa and fill the swimming pool with beer, if only you can wait long enough.
        Frogolocalypse 9y ago
        But.... beer is delicious. In fact, I kind of feel like one right now.
aws_ls 9y ago
Yes, that's why it highly irritates me when people repeat the Tulip bulb analogy. Bitcoin may be in a bubble, and it scares me. But it amazes me how little people think, before that kind of pattern matching. I read the paper about 2 years back, after reading Nathaniel Popper's book 'Digital Gold...' which presents the history of cypherpunks, leading upto Satoshi's white paper. The book was enjoyable to read. And the paper's brilliance was stunning. That said, when I think of it deeply, it does seem to me similar to pyramid schemes. The early adopters have a unfair advantage. Also, its better that an alternative to proof-of-work is found. Although the argument is support of that, is that, it perhaps takes more energy to sustain the present financial system, the base of which Bitcoin intends to replace. So I find myself in a curious position of being in the Blockchain camp, and unwillingly though. Which is because people who typically are in that camp, say the tech is good, but Bitcoin is not. But I believe Bitcoin by itself is a fantastic and disruptive thing. Without that app there is no platform (blockchain) evolution. But of course Bitcoin has flaws, and we could be in a big bubble. But no half baked Tulip bulbs analogy please+. Another flaw which I find with Bitcoin is the ownership is very fragile, compared to real world ownership. In these days of phone cameras, all it takes is an accidental photo of my secret 12 words, for my satoshis to get compromised. Or there is no alternative, if I lose my private key. Real world banks have ample ways of addressing the identity and tend to offer more robust possession safety. + - I have not seen that analogy on HN, thankfully, but its there every where. Yesterday, I saw a respected VC making it on LinkedIn. Edit: minor
- Frogolocalypse 9y ago
  These are all important considerations that any investor in bitcoin needs to consider.
- jacquesm 9y ago
  > The early adopters have a unfair advantage. That's absolutely true but consider this: early adopters always have an advantage, in fact just being born earlier than someone else gives you an advantage. Family wealth, real estate ownership, rent seeking, tenure and so on are all linked because of this.
  - 9y ago
not_a_terrorist 9y ago
please read. not necessarily related to this thread. for you own good. this is straight from satoshi. I know you hate him. I don't care. https://fr.scribd.com/document/359522859/Bitcoin-Network-Topology-ELI5 https://fr.scribd.com/document/359522859/Bitcoin-Network-Top...

deleted 9y ago

[deleted]

betterunix2 9y ago

"That is the beauty of it. It is only eight pages long, but fundamentally changes the concept of money." Not really; it only serves to validate the beliefs of people who already agreed with the basic premise that money is something that can exist without central authority. That view was already common long before the Bitcoin paper. Plenty of libertarians believe that money is an emergent phenomenon of free markets, something which arises on its own as the market converges on a common currency as its medium of exchange. On the other hand, if you are aligned with the mainstream of economics, the entire premise of the paper is easily dismissed. In that view, money can never be separated from banks, the paper is basically nonsense.

Frogolocalypse 9y ago
What it did, was it made it possible to create a decentralized store of value without the need of a central authority. And that has definitely made people question their understanding of what money even is.
- betterunix2 9y ago
  Not really. Anyone who is confident in the mainstream view of money, which requires the existence of a bank or government of some kind, would quickly dismiss Bitcoin. If I cannot pay my taxes or mortgage with it, why should I accept it? (And of course, if I can pay my taxes and mortgage, how can anyone claim to have removed the central authority from money? Just like the gold standard, nothing would prevent a government from changing its mind about whether or not to accept Bitcoin for tax payments.) Like I said, if you already believe that money can exist without a central authority, Bitcoin simply serves as validation. Otherwise it does not really change anything, because if you accept mainstream views of money, then the premise of Bitcoin makes no sense at all. You think Bitcoin is a decentralized store of value? Tell that to all those people whining about the Mtgox bankruptcy proceeding, which is being resolved by paying for the lost BTC according to the price in Yen at the time Mtgox declared bankruptcy which is a tiny fraction of the current prices. When push comes to shove the "value" being stored is measured in fiat currency, with all its associated central authorities.
  - Frogolocalypse 9y ago
    > Anyone who is confident in the mainstream view of money That belief structure is being challenged as we speak. > Tell that to all those people whining about the Mtgox bankruptcy proceeding The only thing that proved, is that you can't trust a bank.
  - sumedh 9y ago
    > Tell that to all those people whining about the Mtgox bankruptcy proceeding Not sure what your point is, dollars(cash) can be stolen as well.
    - betterunix2 9y ago
      The context: MtGox is currently going through a bankruptcy proceeding in Japan. The complaint right now is that the creditors i.e. people who had accounts with positive BTC balances when MtGox declared bankruptcy will be repaid in JPY, according to the price of their BTC balance when MtGox declared bankruptcy in 2014. Since then, the value of BTC has obviously increased quite a lot, so much so that MtGox can actually use its remaining BTC assets to repay those creditors, leaving plenty of BTC to pay the shareholders. In other words, even if you think Bitcoin acts as a "store of value," that still does not make it "money" according to the law. You can have 1BTC or 100BTC, but the law is only concerned with the monetary (i.e. fiat currency) value at some particular time (not necessarily right now).
      - Frogolocalypse 9y ago
        Ergo : Don't trust banks.
        betterunix2 9y ago
        ...the same would apply if I had promised to pay you in BTC and then failed to make that payment. This is not really about trusting banks.
        9y ago
- Udik 9y ago
  > it made it possible to create a decentralized store of value without the need of a central authority In itself, that always existed: it's called gold and gems. It's the most primitive store of value ever- modern economies were born when we went past it.
  - zik 9y ago
    Gold and gems can't be instantaneously and safely transacted over the internet. Name-calling cryptocurrencies "primitive" when they're clearly not doesn't lend a lot of weight to your argument.
    - Udik 9y ago
      Yes, bitcoin is better than gold in that it's virtual and can be transferred over the internet. But that doesn't change the fact that it's a store of value like gold is, and not a currency. > Name-calling cryptocurrencies "primitive" I called gold primitive as a currency. And made an argument for bitcoin (specifically) being similar to gold. Edit: btw, gold 500 years ago had the same exact property of bitcoin today: it was immediately transferable to anybody you were in contact with and could buy goods from. That didn't make it better.
    - usrusr 9y ago
      BTC cannot be instantaneously transacted at all, over the internet or otherwise.
  - imglorp 9y ago
    It's closer to a commodity than a currency: fixed supply. In fact, the IRS is treating BTC as a commodity, to be valued, for tax purposes.
    - Frogolocalypse 9y ago
      You should probably at some point recognize that everyone doesn't live in America
- njarboe 9y ago
  Gold and silver were a decentralized store of value from about 600BC till 1935AD, so ~2500 years. FDR and Congress made owning gold illegal in 1934 and then the dollar went off the gold standard in 1971. Previous fiat currencies have usually not lasted more that a few generations before they blow up. Now is about the right time for that to happen. Reading history is fun and can help one understand the present. I'd highly recommend it. "Debt: The first 5000 years" is a great book and a good start at trying to understand what money is/has been.
- pmorici 9y ago
  Pretty sure paper says it is a p2p cash system. The goal wasn't a store of value that was a natural side effect of the limited supply and the utility of the network effect from being a means of transacting.
stale2002 9y ago
And yet, reality has seemed to prove these economics wrong. You can use this "nonsense" money right now. And nothing that any economist says about it can stop you.
- betterunix2 9y ago
  You cannot use it to pay your mortgage, nor to pay your taxes. You cannot even use it to pay Steam...
  - Frogolocalypse 9y ago
    I have a bitcoin debit card. I use it to pay all of these things. Your argument is akin to a person in the US saying that a person from Europe using their visa card, isn't using real money, because you don't control it.
    - leshow 9y ago
      Maybe I'm not clear on how a btc debit works but that seems foolish. Maybe a few years ago when it could actually function as a medium of exchange. Now the transaction fees are exorbitant.
      - Frogolocalypse 9y ago
        > I'm not clear on how a btc debit works but that seems foolish. Not sure there's any response possible for that one. "I don't know how it works, but I think it's dumb." > Now the transaction fees are exorbitant. Every standard sized bitcoin transaction bar the past three days (and those will too), that people paid over 5c for has been committed to the blockchain.
        leshow 9y ago
        Either pay a ridiculous fee or wait a ridiculous amount of time for confirmation? Replace by fee is a thing, as long as the tx is unconfirmed it could be replaced. You're effectively saying the wait time is now 3 days unless you want to pay a fee of several dollars. So that rules out most transactions. How do you pay for anything given those restrictions?
nerflad 9y ago
Money is an emergent phenomenon of markets, and it has nothing to do with libertarians. https://en.wikipedia.org/wiki/Coincidence_of_wants https://en.wikipedia.org/wiki/Coincidence_of_wants
- betterunix2 9y ago
  How does that prove money is an emergent phenomenon of markets? In fact, that article suggests exactly what the historical evidence suggests: markets cannot really exist without money. Societies without money tend to only engage in trade with strangers, rather than having markets: https://monoskop.org/images/3/36/Graeber_David_Toward_an_Anthropological_Theory_of_Value.pdf https://monoskop.org/images/3/36/Graeber_David_Toward_an_Ant...
  - nerflad 9y ago
    It can't prove it any better than than anything else can bridge the is-ought gap. I agree that markets can't exist without money, but I think historical evidence suggests that they will create money in order to exist. Almost every society in human history has developed a monetary system; either one based around a commodity as simple as camels, bullion or sea shells, or backed by fiat.
    - betterunix2 9y ago
      Well, the same author from the link I gave happens to have also written a book on that very topic that you might find interesting: https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years https://en.wikipedia.org/wiki/Debt:_The_First_5000_Years
      - nerflad 9y ago
        I'll check it out. Thank you.
  - Retric 9y ago
    For an example of money showing up in Barter systems look at diablo 2's use of stone of Jordon's as a proxy for money.
colordrops 9y ago
No need to be so dismissive. The abstract term "decentralized" hides a lot of the complexity in Bitcoin. It is also programmable money, irreversible money, geographically unbound money, fast money, and transparent money.
runeks 9y ago
> On the other hand, if you are aligned with the mainstream of economics, the entire premise of the paper is easily dismissed. In that view, money can never be separated from banks, the paper is basically nonsense. So, did banks invent gold? Or did gold give rise to banks? How can banks even exist in the first place unless we already have a common medium of exchange (gold), which can deposited into said banks?
- betterunix2 9y ago
  Actually, the first banks, along with the first money and the first markets, developed from the palace economies of early city states. Originally the proto-bank maintained records of what each person had deposited with the temple, what had been given to various people, and what was available to give. Those ledgers recorded each type of deposit (wheat, cloth, olives, etc.) with a different unit; the innovation that gave rise to money was the transition to a single unit of account.
  - runeks 9y ago
    That’s really interesting! Were these banks private enterprises? I assume people voluntarily deposited commodities in exchange for a common medium of exchange. The problem arises when depositors can’t redeem their medium of exchange for the commodities they originally deposited, or something of equivalent value. By the way, I’m convinced Bitcoin will not function without credit instruments, just like was the case with gold. I’d argue there’s a huge difference between redeemable and irredeemable credit instruments, though. The latter being an artifact of government regulation.
    - betterunix2 9y ago
      "Were these banks private enterprises?" Sort of; at that time it the boundaries were less clearly defined between what was governmental and what was private. The basic economic structure was for a large temple to store the various goods people produced, and to give the goods out to people as necessary. For example, a farmer would deposit grain, and the grain would be redistributed throughout the city-state; the farmer would receive other things from the temple, like clothes and tools. The record-keeping served two purposes: to keep track of what was available for distribution, and to keep track of who was contributing what. This was the "palace economy:" https://en.wikipedia.org/wiki/Palace_economy https://en.wikipedia.org/wiki/Palace_economy The bible makes reference to such a system in the story of Joseph (which is ancient enough that palace economies still existed when the story was first written), who was the administrator of such a system in Egypt: http://www.mechon-mamre.org/p/pt/pt0141.htm#47 http://www.mechon-mamre.org/p/pt/pt0141.htm#47 "I assume people voluntarily deposited commodities in exchange for a common medium of exchange." Not originally and not universally. It was more like a system of 100% taxation in some of the early palace economies, where everyone deposited everything they produced with the temple, and then received things as they were needed. You were basically not allowed to live in the city without contributing something (he who does not work shall not eat), though a person could always work for the temple itself e.g. as a sacred prostitute. Of course the specific laws and economic organization varied from city to city, and plenty of people lived far outside the cities and had their own ways to manage goods; the specific details varied with different places and periods of time. What you received for your deposit was often just an update to the temple's ledgers clearing a debt you owed the temple (i.e. indicating you paid your taxes; often referred to as "offerings" in the biblical legal code) and possibly offset future taxes. If you were unable to make good on that obligation, your land could be seized and you could become a slave until the king declared a general amnesty (not uncommon in the ancient world; the biblical legal code requires slaves to be given amnesty after 7 years of service, and a similar amnesty provision is in the code of Hammurabi). The story of Joseph also indicates that this exact scenario had played out under Joseph's administration in Egypt: the farmers were forced to turn their lands over to the government during a famine (I am not suggesting that the bible is historical; rather, in ancient Israel at the time that story was written, people were familiar with the situation). As the economies became better developed and the scale increased, money (i.e. a single unit of account that serves as a common medium of exchange) and markets (i.e. trade between inhabitants of the same city) began to replace the temple economy system, at which point private banking enterprises became more clearly defined. For example: https://en.wikipedia.org/wiki/House_of_Egibi https://en.wikipedia.org/wiki/House_of_Egibi https://en.wikipedia.org/wiki/Murashu_family https://en.wikipedia.org/wiki/Murashu_family
deleted 9y ago
[deleted]

Udik 9y ago

> fundamentally changes the concept of money. If there is something Satoshi Nakamoto didn't seem to understand, is money. He designed a system that, being capped to a max amount of units, is intrinsically deflationary, and thus cannot serve as money. You don't transact with something that was worth x last year and 2x this year (not to mention 10k last week and 17k this week), it's just dumb.

Frogolocalypse 9y ago
> intrinsically deflationary, and thus cannot serve as money. It is hard getting out of the inflationary currency mind-set, I recognize that. > it's just dumb. It's great. The money put on my debit card card a few months ago means that the beers I buy today are 1/3 of the price of what they were relative to the time the money was put on the card. And you know what's better than beer? Good beer on special.
- Udik 9y ago
  I think you shouldn't buy those beers: in a few more months they'll be a 1/9th of the price. And maybe then you should wait again...
  - Frogolocalypse 9y ago
    But I like beer. So that's why I buy them.
    - Udik 9y ago
      Don't buy them now, and you'll eventually get more. Damn, you can buy a villa and fill the swimming pool with beer, if only you can wait long enough.
      - Frogolocalypse 9y ago
        But.... beer is delicious. In fact, I kind of feel like one right now.

aws_ls 9y ago

Yes, that's why it highly irritates me when people repeat the Tulip bulb analogy. Bitcoin may be in a bubble, and it scares me. But it amazes me how little people think, before that kind of pattern matching. I read the paper about 2 years back, after reading Nathaniel Popper's book 'Digital Gold...' which presents the history of cypherpunks, leading upto Satoshi's white paper. The book was enjoyable to read. And the paper's brilliance was stunning. That said, when I think of it deeply, it does seem to me similar to pyramid schemes. The early adopters have a unfair advantage. Also, its better that an alternative to proof-of-work is found. Although the argument is support of that, is that, it perhaps takes more energy to sustain the present financial system, the base of which Bitcoin intends to replace. So I find myself in a curious position of being in the Blockchain camp, and unwillingly though. Which is because people who typically are in that camp, say the tech is good, but Bitcoin is not. But I believe Bitcoin by itself is a fantastic and disruptive thing. Without that app there is no platform (blockchain) evolution. But of course Bitcoin has flaws, and we could be in a big bubble. But no half baked Tulip bulbs analogy please+. Another flaw which I find with Bitcoin is the ownership is very fragile, compared to real world ownership. In these days of phone cameras, all it takes is an accidental photo of my secret 12 words, for my satoshis to get compromised. Or there is no alternative, if I lose my private key. Real world banks have ample ways of addressing the identity and tend to offer more robust possession safety. + - I have not seen that analogy on HN, thankfully, but its there every where. Yesterday, I saw a respected VC making it on LinkedIn. Edit: minor

Frogolocalypse 9y ago
These are all important considerations that any investor in bitcoin needs to consider.
jacquesm 9y ago
> The early adopters have a unfair advantage. That's absolutely true but consider this: early adopters always have an advantage, in fact just being born earlier than someone else gives you an advantage. Family wealth, real estate ownership, rent seeking, tenure and so on are all linked because of this.
- 9y ago

not_a_terrorist 9y ago

please read. not necessarily related to this thread. for you own good. this is straight from satoshi. I know you hate him. I don't care. https://fr.scribd.com/document/359522859/Bitcoin-Network-Topology-ELI5 https://fr.scribd.com/document/359522859/Bitcoin-Network-Top...