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I'm glad you responded. My goal is exactly to dispel some of these myths: - It's not a pyramid scheme. It is designed to work just like other currencies do. Th

I'm glad you responded. My goal is exactly to dispel some of these myths: - It's not a pyramid scheme. It is designed to work just like other currencies do. The idea that Bitcoin is some kind of scam comes from ignorance on the topic of mediums of exchange. This talk was my attempt at showing how all currencies work, so that you can compare Bitcoin to all other currencies, and see that similarity. - You are correct that it is not designed to be a stable store of value. Gold shares a similar problem. Price stability is probably not going to be one of Bitcoin's strong suits, for sure. It's primary role might be simply as a highly liquid store of value that cannot easily be controlled by a central authority, which is still incredibly profound. - A lot of things caused the fall of the Roman empire. I don't see devaluation of Roman currency as -the- reason, but I do see it was major component. It's pretty hard to run a stable empire when economic exchange breaks down. - Regarding Rothbard: I am not an Austrian (school of economics). I like a lot of their older macroeconomic works, but I think that the school has (in the last 30ish years) been hijacked by hard-core libertarians to justify things that I would never agree with. There are some things that markets seem to do a worse job at than governments, and as a citizen with access to clean drinking water, I am perfectly comfortable with that compromise. - I think the "jury is still out" as to whether it will be a better store of value to the US Dollar. But the store of value of the USD is simply that our government exists, and is stable. And I don't know if you've paid attention to the recent ineptitude (like the fiscal cliff), but it's not a strong vote of confidence. That's the question: Do you believe more in your government, or in a predictable, documented software algorithm? Either could fail. We'll find out which fails first.

bitcartel 14y ago
Devil's advocate: "Any counter-proof that Satoshi Nakamoto did not design a ponzi scheme on purpose?" Cached copy (original was deleted): http://webcache.googleusercontent.com/search?q=cache:XJ8SqHgjQl8J:bitcoin.stackexchange.com/questions/8671/any-counter-proof-that-satoshi-nakamoto-did-not-design-a-ponzi-scheme-on-purpose+&cd=1&hl=en&ct=clnk&gl=us http://webcache.googleusercontent.com/search?q=cache:XJ8SqHg... More discussion here: https://bitcointalk.org/index.php?topic=158111.msg1673645#msg1673645 https://bitcointalk.org/index.php?topic=158111.msg1673645#ms...
deleted 14y ago
[deleted]
baddox 14y ago
> There are some things that markets seem to do a worse job at than governments, and as a citizen with access to clean drinking water, I am perfectly comfortable with that compromise. You seem to be implying that clean drinking water is something that governments can do a better job at than markets. Was that your intention, and if so, do you have evidence to support the claim?
- camus 14y ago
  halliburton/kbr in Irak ? i would not drink the water they gave to soldiers.
  - baddox 14y ago
    You mean the government contractors?
    - camus 14y ago
      that are private businesses.
      - baddox 14y ago
        Yes, but the discussion was about markets versus governments. Government contract work is not being done on the market.
Retric 14y ago
a highly liquid store of value that cannot easily be controlled by a central authority gold already does that, but governments or markets pick one. It's pretty hard to run a stable empire when economic exchange breaks down. Currency's break down as society breaks down not the other way around because currency's value is propped up by the need to pay taxes or loans in that currency. Country's that try to spend more than they take in in taxes or loans devalue there currency other than that there surprisingly stable. Do you believe more in your government The US government is increadably well run when compared to just about every government throughout history. While it's politically useful to suggest otherwise there is a reason per capita GDP is so high and our well run government is a large part of that. Now that's not to knock bitcoins but your comparing it to something with a 99.99+% chance of being around next year and that's a tough act to follow when a single bug could kill bitcoin in a few seconds. Granted the odds are much worse 20 years out, but you get time to move currency around in most failure modes, were again bitcoins can hit zero with Zero warning or just lose 90% of it's value with a mid sized sell off.
- kdsudac 14y ago
  " The US government is increadably well run when compared to just about every government throughout history" Do you have anything to back that claim up? I have quite a few friends who go on rants about government inefficiency and would be nice to have some hard data. I always just resort to asking: what's a more laissez faire country that you'd actually want to live in? is their approach scalable and sustainable?
  - Retric 14y ago
    The United States' State Department recognizes 195 independent countries around the world. People rant about how terrable the US education system is but the United States places 17th in the developed world for education, according to a global report by education firm Pearson. That's well into the 90th percentile. The US is often in the top 20 for metrics like CORRUPTION PERCEPTIONS INDEX 2012 http://cpi.transparency.org/cpi2012/results/ http://cpi.transparency.org/cpi2012/results/ and historically corruption was even more of an issue. Just think back to things like the Magna Carta http://en.wikipedia.org/wiki/Magna_Carta http://en.wikipedia.org/wiki/Magna_Carta. Rome, was considered the height of civilization in there day and yet corruption was rampant and rulers would have people killed on a whim etc. Not to mention extremes like the Inca civilization practiced mass ritual human sacrifice. Even our somewhat tarnished free speech is worlds better than most areas. Not to mention having the #1 most powerful military of all time. People look down on the space program as we have not landed on the moon in a while, but we still send more probes than anyone else. Ditto for infrastructure, there is little point to replacing infrastructure early so while Japan spends more on infrastructure that's not a good sign. PS: I think people really have the mindset that we should be #1 in all things forgetting that there are almost 200 other countries out there.
acslater00 14y ago
"You are correct that it is not designed to be a stable store of value. Gold shares a similar problem. Price stability is probably not going to be one of Bitcoin's strong suits, for sure. It's primary role might be simply as a highly liquid store of value that cannot easily be controlled by a central authority, which is still incredibly profound." This I think the fundamental problem with the Bitcoin movement in a nutshell. Once you get past the grandiose claims, the fact that Bitcoin is inadequate as a store of value reduces it to an instantaneous transfer means only. But think through the implications of that. Its volatility makes it inappropriate for any transactions which are not instantaneous. Your rent will not be denominated in Bitcoin. Neither will your salary. No loans will be denominated in Bitcoin. Equity arrangements for companies, purchasing contracts, your savings accounts, none will use Bitcoin due to the volatility. So the Bitcoin economy is still dependent on traditional currencies, which means all of these purported benefits of avoiding currency debasement and the like simply don't exist!
- smokeyj 14y ago
  The price of a 4 year old cryptocurrency is volatile?? Must be broken, let's throw it away. Bitcoin will be more more stable than fiat currency on a long enough time line. In 100 years the US dollar won't be around, but bitcoin will be. Even if it's just us from /r/bitcoin. Finally, fiat currency is a terrible store of value, unless you like loosing it. A quick glance at USD purchasing power will show what I mean.
  - srl 14y ago
    "In 100 years the US dollar won't be around, but bitcoin will be." Two claims, no justification. I'll leave the bitcoin issue to the side, since while I don't believe bitcoin itself will be around in a century, I have no trouble with the idea that /some/ crypto-currency will. Claiming the US dollar won't be around is kind of weak, though. It's too easy and too popular to predict doomsday, with little to no evidence, for these sorts of claims to be taken seriously.
    - smokeyj 14y ago
hazov 14y ago
It may not be a Ponzi scheme, but it really gives more power to early adopters (when difficult was much lower), I do not know about it, but is it known if any of the really early adopters cashed out of their bitcoins?
- MacsHeadroom 14y ago
  It really gives more power to early adopters? What, like IPv4 or the World Wide Web did? No shit. And no, most Bitcoins mined in 2009 and early 2010 haven't moved and probably never will.
  - hazov 14y ago
    Well, for money if it gives advantage for the issuer it's called seigniorage, it's not different than a central banking printing money and reaping the benefits of a hike in the exchange rate. It's very different than IP ranges (which is regulated by continent, you have ARIN, APNIC, LACNIC, etc.) or domains (although it's truth that a guy could buy a desirable domain earlier, like photos.com, photo.com or photography.com), in wither case domains and ranges are not designed to be a mean of exchange. The fact that most until the early 2010 did not moved means nothing to my question, it can be that a owner of a large block sold some, and they waited and then sold some more until he cash out. That study by Adi Shamir did not claim that by using statistics he could determine that there are not many owners with more than 10,000 Bitcoins? What if a guy in this situation keeps selling or has sold a substantial percentage of what he have? (I do not know how Mt. Gox or whatever works, so I just apply how I know stock exchange works). To summarize I do not understand your point, your tone appeared confrontational and answering simply a question I did not asked. EDIT: I see that some guys wrote on the other thread that someone yesterday sold 5,000 bitcoins, although I believe it was a speculative move, could it not be some early adopter cashing out? This is what my question was, in a general setting, asking.
epscylonb 14y ago
The key thing missing from the fiat section is that the main way that governments give a currency value is by demanding that taxes are paid in it. I don't believe that any government of a significantly sized economy will ever accept taxes in bitcoin. I wrote about why here http://www.reddit.com/r/Bitcoin/comments/195k4o/the_case_for_bitcoin_20/ http://www.reddit.com/r/Bitcoin/comments/195k4o/the_case_for.... The short version is that the mining aspect of bitcoin is just too big of liability for reasonable people to accept due to the energy requirements. I'm bearish on bitcoin and bullish on crypto currencies, if a low energy crypto currency comes along, possibly based on proof of stake rather than proof of work, then it will be unstoppable.

bitcartel 14y ago

Devil's advocate: "Any counter-proof that Satoshi Nakamoto did not design a ponzi scheme on purpose?" Cached copy (original was deleted): http://webcache.googleusercontent.com/search?q=cache:XJ8SqHgjQl8J:bitcoin.stackexchange.com/questions/8671/any-counter-proof-that-satoshi-nakamoto-did-not-design-a-ponzi-scheme-on-purpose+&cd=1&hl=en&ct=clnk&gl=us http://webcache.googleusercontent.com/search?q=cache:XJ8SqHg... More discussion here: https://bitcointalk.org/index.php?topic=158111.msg1673645#msg1673645 https://bitcointalk.org/index.php?topic=158111.msg1673645#ms...

deleted 14y ago

[deleted]

baddox 14y ago

> There are some things that markets seem to do a worse job at than governments, and as a citizen with access to clean drinking water, I am perfectly comfortable with that compromise. You seem to be implying that clean drinking water is something that governments can do a better job at than markets. Was that your intention, and if so, do you have evidence to support the claim?

camus 14y ago
halliburton/kbr in Irak ? i would not drink the water they gave to soldiers.
- baddox 14y ago
  You mean the government contractors?
  - camus 14y ago
    that are private businesses.
    - baddox 14y ago
      Yes, but the discussion was about markets versus governments. Government contract work is not being done on the market.

Retric 14y ago

a highly liquid store of value that cannot easily be controlled by a central authority gold already does that, but governments or markets pick one. It's pretty hard to run a stable empire when economic exchange breaks down. Currency's break down as society breaks down not the other way around because currency's value is propped up by the need to pay taxes or loans in that currency. Country's that try to spend more than they take in in taxes or loans devalue there currency other than that there surprisingly stable. Do you believe more in your government The US government is increadably well run when compared to just about every government throughout history. While it's politically useful to suggest otherwise there is a reason per capita GDP is so high and our well run government is a large part of that. Now that's not to knock bitcoins but your comparing it to something with a 99.99+% chance of being around next year and that's a tough act to follow when a single bug could kill bitcoin in a few seconds. Granted the odds are much worse 20 years out, but you get time to move currency around in most failure modes, were again bitcoins can hit zero with Zero warning or just lose 90% of it's value with a mid sized sell off.

kdsudac 14y ago
" The US government is increadably well run when compared to just about every government throughout history" Do you have anything to back that claim up? I have quite a few friends who go on rants about government inefficiency and would be nice to have some hard data. I always just resort to asking: what's a more laissez faire country that you'd actually want to live in? is their approach scalable and sustainable?
- Retric 14y ago
  The United States' State Department recognizes 195 independent countries around the world. People rant about how terrable the US education system is but the United States places 17th in the developed world for education, according to a global report by education firm Pearson. That's well into the 90th percentile. The US is often in the top 20 for metrics like CORRUPTION PERCEPTIONS INDEX 2012 http://cpi.transparency.org/cpi2012/results/ http://cpi.transparency.org/cpi2012/results/ and historically corruption was even more of an issue. Just think back to things like the Magna Carta http://en.wikipedia.org/wiki/Magna_Carta http://en.wikipedia.org/wiki/Magna_Carta. Rome, was considered the height of civilization in there day and yet corruption was rampant and rulers would have people killed on a whim etc. Not to mention extremes like the Inca civilization practiced mass ritual human sacrifice. Even our somewhat tarnished free speech is worlds better than most areas. Not to mention having the #1 most powerful military of all time. People look down on the space program as we have not landed on the moon in a while, but we still send more probes than anyone else. Ditto for infrastructure, there is little point to replacing infrastructure early so while Japan spends more on infrastructure that's not a good sign. PS: I think people really have the mindset that we should be #1 in all things forgetting that there are almost 200 other countries out there.

acslater00 14y ago

"You are correct that it is not designed to be a stable store of value. Gold shares a similar problem. Price stability is probably not going to be one of Bitcoin's strong suits, for sure. It's primary role might be simply as a highly liquid store of value that cannot easily be controlled by a central authority, which is still incredibly profound." This I think the fundamental problem with the Bitcoin movement in a nutshell. Once you get past the grandiose claims, the fact that Bitcoin is inadequate as a store of value reduces it to an instantaneous transfer means only. But think through the implications of that. Its volatility makes it inappropriate for any transactions which are not instantaneous. Your rent will not be denominated in Bitcoin. Neither will your salary. No loans will be denominated in Bitcoin. Equity arrangements for companies, purchasing contracts, your savings accounts, none will use Bitcoin due to the volatility. So the Bitcoin economy is still dependent on traditional currencies, which means all of these purported benefits of avoiding currency debasement and the like simply don't exist!

smokeyj 14y ago
The price of a 4 year old cryptocurrency is volatile?? Must be broken, let's throw it away. Bitcoin will be more more stable than fiat currency on a long enough time line. In 100 years the US dollar won't be around, but bitcoin will be. Even if it's just us from /r/bitcoin. Finally, fiat currency is a terrible store of value, unless you like loosing it. A quick glance at USD purchasing power will show what I mean.
- srl 14y ago
  "In 100 years the US dollar won't be around, but bitcoin will be." Two claims, no justification. I'll leave the bitcoin issue to the side, since while I don't believe bitcoin itself will be around in a century, I have no trouble with the idea that /some/ crypto-currency will. Claiming the US dollar won't be around is kind of weak, though. It's too easy and too popular to predict doomsday, with little to no evidence, for these sorts of claims to be taken seriously.
  - smokeyj 14y ago

hazov 14y ago

It may not be a Ponzi scheme, but it really gives more power to early adopters (when difficult was much lower), I do not know about it, but is it known if any of the really early adopters cashed out of their bitcoins?

MacsHeadroom 14y ago
It really gives more power to early adopters? What, like IPv4 or the World Wide Web did? No shit. And no, most Bitcoins mined in 2009 and early 2010 haven't moved and probably never will.
- hazov 14y ago
  Well, for money if it gives advantage for the issuer it's called seigniorage, it's not different than a central banking printing money and reaping the benefits of a hike in the exchange rate. It's very different than IP ranges (which is regulated by continent, you have ARIN, APNIC, LACNIC, etc.) or domains (although it's truth that a guy could buy a desirable domain earlier, like photos.com, photo.com or photography.com), in wither case domains and ranges are not designed to be a mean of exchange. The fact that most until the early 2010 did not moved means nothing to my question, it can be that a owner of a large block sold some, and they waited and then sold some more until he cash out. That study by Adi Shamir did not claim that by using statistics he could determine that there are not many owners with more than 10,000 Bitcoins? What if a guy in this situation keeps selling or has sold a substantial percentage of what he have? (I do not know how Mt. Gox or whatever works, so I just apply how I know stock exchange works). To summarize I do not understand your point, your tone appeared confrontational and answering simply a question I did not asked. EDIT: I see that some guys wrote on the other thread that someone yesterday sold 5,000 bitcoins, although I believe it was a speculative move, could it not be some early adopter cashing out? This is what my question was, in a general setting, asking.

epscylonb 14y ago

The key thing missing from the fiat section is that the main way that governments give a currency value is by demanding that taxes are paid in it. I don't believe that any government of a significantly sized economy will ever accept taxes in bitcoin. I wrote about why here http://www.reddit.com/r/Bitcoin/comments/195k4o/the_case_for_bitcoin_20/ http://www.reddit.com/r/Bitcoin/comments/195k4o/the_case_for.... The short version is that the mining aspect of bitcoin is just too big of liability for reasonable people to accept due to the energy requirements. I'm bearish on bitcoin and bullish on crypto currencies, if a low energy crypto currency comes along, possibly based on proof of stake rather than proof of work, then it will be unstoppable.