Why Hard Forking bitcoin is the biggest mistake possible.
The argument to Hard fork bitcoin is extremely misguided. HF proponents will point to the price of ether and say ‘look, bitcoin can survive too, even in such extreme circumstances." However, with Ethereum, the matter of forking was one of technical problems only. Ethereum is a nerd’s toy and mostly only nerds who knew the consequences were using ethereum or really cared about it. They haven’t left ethereum because they want it for its’ technical application, of which there really isn’t a good alternative to until Rootstock is ready. Meanwhile, with Bitcoin, technical concerns of a hard fork are nothing next to the Economic concerns of forking the MONEY of bitcoin. Ether was never a money. Nobody spend millions of man hours building TRUST IN A CURRENCY by talking vendors and businesses into accepting ether for coffee and alpaca socks. It’s a completely different risk to destroy the trust in bitcoin as money than it was for ether as money. As an example, imagine forking your fiat currency. What would be the economic impact if suddenly, with little warning, there are two USDs or EURs? What if each bill literally split into red and blue versions and the government’s best efforts couldn’t get them to re-combine? Would it have an impact on the price of milk at the grocery store? The savings in your bank account? How many bank accounts would you now have even, and can you access them all? Nerd toys without people’s life savings at stake can of course survive the split. - Bitcoin’s moved far beyond that stage now and the bottom line is we can’t afford to risk all the Trust built up in the money of bitcoin, throwing away all the advantages we’ve gotten from the network effect and 8 years of growth in it.
We've come a long ways and I'm at a point where I've decided I'm going to really pursue this with everything I've got in terms of energy and devotion. I've got a prior commitment hanging over my head towards the end of this month, but once I resolve that, I'm planning on spending a couple months really digging into NYAN and seeing what I can do. So far we've just chipped away at the edges, but already we've seen some pretty impressive results. Just a brief recap of our successes first and then I'll talk about my ideas. We've gone from 1-3 satoshi to 10-30 satoshi prices. Not bad. We've got two new block explorers up in response to the previous one going down. We've got an irc channel and active community members both here and there. And we've got me, the crazy bastard who's locked up 25% of the available supply and is planning to do everything he can to build up NYAN to its proper greatness, and got tipnyan going and did a major giveaway with it. Oh, and we survived a dump of ~10% of the available supply quite comfortably. Probably other stuff I'm forgetting about right now. So, what next? Well, a lot of stuff. This is just a huge dump of ideas for discussion and inspiration. It's not necessarily ordered, although I'll try to have it go roughly from simplest to most complex. These are by no means promises or guarantees. This is just stuff I think would be cool. Some of this isn't a "implement this", it's more of a blog post prompt or general concept.
Faucet - often requested, should be pretty basic
Wheel - easy enough; various nyan gambling would be interesting; it does raise some questions which will need to be considered
Updating the client, by first porting the latest Bitcoin release to a generic ScryptCoin implementation (or find a Scrypt-based coin which is up-to-date and suitable; is DOGE still Scrypt or did they switch when they rebased onto Bitcoin?) and then porting that to NYAN, so we have all the latest updates. Document this process. Release new binaries. Document the Windows build process in particular (doesn't seem to be documentation in the bitcoin repo).
NYANshift - shapeshift concept for NYAN. Support NYAN <=> DOGE to start.
Bounties - post some bounties for various important things; Nyancoin graphics / memes are huge here
Mobile apps - wallets for all major platforms is obviously the biggest step here, but additional nyan presence would be good too
Games - we've got a couple; giving them some more love and making more would be good; bots are a concern, but having some way to pay out NYAN for free NYAN games would be cool
Tie-ins with other coins - DOGE is obvious, but there are also a few others (BAT, MEOW, DIME) which I think have a lot of the same advantages of being "almost-dead" coins as NYAN originally did and which make sense to encourage as related coins where people can get a million a lot cheaper to have a place to start.
Bank of NYAN - There are a lot of ideas I have here. Let me just give you one sample: NYAN certificates of deposits with decent interest rates, like 12% annual for a one-year to start out with. Now, how is it possible to pay above market rates on interest like that? Well, risky currencies always have to pay higher rates to attract deposits. But it's also because the interest is paid in NYAN, so I can afford to back an unlimited amount because of the fixed supply given my reserves. That is: I could pay a year's interest on the entire supply of NYAN which I don't control at that rate. And of course, I'm not going to have all (or probably even a majority) of the outstanding NYAN deposited with me. So there are a lot of cool things which can be done with this. Again, some issues this raises to consider (legal/accounting), but I believe this can be dealt with.
Recruit graphic design talent - we've got to get back to the shiny nyancoin memes
.nyan TLD - figure out what it takes to register with ICANN. I was inspired on this by .sucks being registered. It used to be that it was basically "be a country" to get a TLD, but that seems relaxed. coin.nyan, bank.nyan, there are a lot of cool options at that point.
We need a NYAN Council/Foundation/entity legal incorporation somewhere eventually. This raises a lot of questions. I believe I have a very good option for this, which will tie into an identity linking I'm going to do. My next post will talk more about this.
Peer exchange/list - Basically an on-going / automated version of the nyan nodes map, which will make it possible to see addresses to connect to, etc.
Going from 'almost dead' to 'survival inevitable' - this is more of a blog post idea, but this is sort of the phase we're in right now; finishing shoring up the essentials and getting to the point where we can lose anything and keep going
Going from 'survival inevitable' to 'steady growth' - Not necessarily growth purely in price, although that, but in community and tech particularly.
Going from 'steady growth' to 'spiky' - This is when we start to launch: when we're getting new buyers coming in and spiking the price. We don't have perfect stability then, but I'm glad to trade stability for growth.
NYANball - If you don't know what it is, you will. I guarantee it.
Ɲ > $ - 'Mars' goal; 3-5 years or longer? But this very idea has a lot of implications to consider. If NYAN can eventually surpass the USD, well, it'll be a very interesting world we'll be in. I consider the 'moon' target to be Ɲ > $0.01, which is certainly a stretch goal, to put it mildly. But it's these sort of dreams which inspire me to work on this project.
MERCH! - one consideration here is that I should try to get in touch with the creator of nyancat to confirm that we're cool and I expect that we'll need to make sure any merchandise is nyancoin and not nyancat to avoid infringing; make stickers, etc. and promote /nyancoins
Buying DOGE to back NYAN - in order to back 1Ɲ >= 1Đ, it's helpful to have a reserve of DOGE ready to buy NYAN. Of course, current market prices don't support 1Ɲ >= 1Đ, but I expect we'll get there again, and I expect DOGE and NYAN to be an increasingly active trade pair.
Using UNO to back NYAN - I'm not exactly sure what exactly this implies apart from making bids in UNO for NYAN. I've got a bunch of UNO (420) and don't necessarily want to keep holding it, so this would be a good use.
The Miracle of NYAN - blog post + general theme; so far what we've done can be seen as a blip; as we keep going, the incredible recovery will be one of the core strengths for us to talk about. It's the resiliency and determination and ultimate vindication. Everyone loves this trope. Well, perhaps apart from some haters, but haters gunna hate.
Rainbow log charts - this just came to me; wasn't on my main list. But now that it's occurred to me...yes, we need this. Graphing NYAN is a little insane. Sort of a U shape, lol.
"Radio" + TV programs / channel - obviously it'll take a long time before this a 24/7/365 thing, but the idea is like a DOGE/etc coverage from a NYAN perspective
ethics of NYAN - working on developing explicit standards beyond simply getting rich; looking at "virtuous circle" (positive feedback) effects from doing good things and not doing bad things; my commitment to disclosing my holdings and intentions is a part of this. We want to be totally up-front and honest in all things.
NYANworth - Look up the Goldworth radio ads; parody ads based on these sort of things for NYAN
Need to be able to buy alpaca socks with NYAN - because that's a major milestone for cryptocurrencies. Use NYANshift + a BTC alpaca sock provider for this, and have it be a demonstration of skinning.
NYANcon! - just a small get-together of NYAN supporters, rather than something big to flop. But it would be cool to have a meet-up.
online marketing - paid with NYAN? NYAN-based ad network? "Doublenyan"?
NYANVPS - more on this later; not saying it's an imminent possibility, just that my next post will tie into this idea in part
PayNYAN - billing/payment software, integrated so payment can be accepted in NYAN or other coins and automatically converted (possibly backed by NYANshift)
wallet-integrated pay in "any" currency - this would be a pretty damn sweet feature
"From Worst to First" - I highly recommend reading this book. Basically: do things right. People love this story. This is the "Miracle of NYAN" concept; as we keep getting things right and rebuilding, we build an attractive track record.
NYAN:gold analogy - All of the "de-dollarizing" future, hedge with gold types of appeals, but with NYAN. This seems like a massive stretch at this point, and it is, but we should build a track record of outperforming all other assets ultimately. That is the highest possible goal. Much as I normally don't like the expression, this is one of those "shoot for the moon, even if you miss you'll land among the stars" types of situations.
long-term - This is about building up GENERATIONAL wealth; we're not talking about the typical cryptocurrency "long-term" of a few months or a year. We're talking about decades and centuries that NYAN should last. This perspective is critical for building value.
'beginners' coin' - We need to make it easier and easier to get started. Ultimately, a person should be able to go through a Web 2.0 (or whatever we're on now), cutesy intro where they don't need tech knowledge to have an account with, say, 1000 coins to start.
DOCUMENTATION - teach BTC through NYAN. We should review and expand upon BTC core documentation. There is always a need for more and better documentation. This is all aspects, from end-user to core developer.
all-for-one - Cryptocoins work or they don't. We can try to outperform, but it's still largely a matter of everyone working together well or failing in my opinion.
how to beat BTC in long-term price growth - blog post as well as theme; goals for how to achieve this: faster iterations & innovation (we should ultimately be contributing upstream rather than just porting/forking everything), easier starting, no external attacks (we are our own "buttcoin"), humble, cute, non-threatening and high-performing, and ultimately, need a higher demand to buy versus lower supply to sell of course. Having a larger proportion of hodling and such.
NYAN central bank? - not really sure what this concept would be for, but sort of the NYAN Council type of idea but with an OPEC type of concept
NYAN Secret Society - ooops, not secret now. But this seems cool
NYAN religion ! - this seems like a brilliant idea to me. Also, rituals include pot brownies + milk. Because cultcoins are STRONK. See also: BOB
Get a country to accept NYAN as legal tender - okay, obviously it'll be a micronation or unrecognized or whatever, but it'd be a major step regardless and actually making it viable would be badass; needs a higher valuation of course
NYAN dark? - not a new coin, but figure out a way to use NYAN anonymously? shift into DASH or DOGED or something?
How to deal with legality questions - increasingly important as value grows; a lot of this will depend on the country; more on this in the next post
Trade sites - NYAN auctions; NYANlist, etc. As usual, prices listed in NYAN, but convertible payments (so can be paid in BTC and seller gets NYAN, or even can be done in reverse).
"Protect your paycheck with the power of NYAN" - building buyside; pitch NYAN as a cross between a hedge and a lotto ticket.
Politics? NYAN party? Advocates ending the fed and converting legal tender to NYAN. Basically a joke party, but still, doing campaigning would be good promotion and allows some points to be raised potentially. Also, like this project in general, good learning experience. Attempting to get on a ballet is always a good task.
NYAN - love-child of BTC, LTC, DOGE and buttcoin. - this probably doesn't deserve to be elevated to this list but I found it an amusing thought
Elected council? - how would voting rights work? Only thing I can think is a NYAN minimum, and unfortunately, that would seem to be basically the rich get more votes, since they could use multiple identities
Back to the NYAN Community Development Council - I've been meaning to get back to this; basically I need to nominate a bunch of you who have been doing cool stuff and basically declare this into existence
Rent for NYAN - I'll be posting more about this later. Basically, if you happen to have a spare room with an outlet and internet connection, and you wish to get NYAN and support NYAN, talk to me. ;-)
trading using NYAN - get NYAN without fiat and give value to NYAN holders
NYAN support - we've started with this in this forum, but it would be sweet to actually build a professional-style support system for NYAN where people can submit tickets, etc., and have questions answered
virtual nation - already have the currency; constitution? army? air force?
NYAN Financial Times - reporting financial news from a nyan perspective
NYAN connoisseur - all sorts of awesome nyan; something reflecting the cultured tastes of a Ɲekonaut
NYAN culture - building a community taste on 'good things', like cats (dogs are okay too); candy; computers; based on conversation today on IRC, it appears that an appreciation for sexy female British voices is also part of NYAN culture
NYAN for real estate? - requires a much, much larger market. We're going to need $10M+ minimum to consider this really I think.
NYAN stock exchange? - the nation this is based in is going to be critical
Find 'NYAN-friendly' countries - basically libertarian enough to support banking etc. Locate NYAN entities on servers in these countries.
Additional exchanges for NYAN - create our own exchange???
NYAN travel packages - NYANcon types of things
Borrow from FSM - religious worship here includes hodling
"NYAN is a poptart-based lovefest." - self-explanatory
NYANlife - all-expenses included luxury living in
Fix timeout on tipnyan - this is a minor thing I've had outstanding for too long; get to it finally
Liberté, égalité, fraternité (liberty, equality, brotherhood) - National motto of France, but very appropriate for NYAN I think; represents an overall ethic. I think it makes sense for NYAN to support a distilled version of the core philosophy originally behind BTC and to hold onto it (like libertarian principles generally).
NYAN as part of a retirement plan - Advocate something like 1% exposure to NYAN as a crazy hedge / lotto. The thing about its massive growth potential is that the 1% can end up doing better than all of the rest of it, and yet losing 1% completely wouldn't be a significant impact.
One exchange (out of several) experienced technical difficulties (related to being hacked) and suspended trading for a week. Other exchanges kept trading and held the exchange value between 14$-17$. It currently trades at 16.8$.
used to buy Alpaca wool socks and illegal drugs
There is a wide variety of goods&services that's growing daily that you can pay for with Bitcoins. Among them are PC-hardware, Coffee in NYC, IT Consulting, Programming, Webdesign, Web-Hosting and many more. Comparision to other "e-currencies" not thought trough
have been many attempts at creating online currencies — including Digicash, Flooz, and Beenz.
It isn't exactly relevant to compare Bitcoin to these currencies. Beenz and Flooz were value substitutes entirely controlled by a single party. They could only be exchanged by involving that party. Inevitably these parties fell on hard times at some point or another, and had to cease operating, at which point exchange became impossible. That makes them a bad comparision to Bitcoin which is guaranteed not to fall prey to central control and floundering businesses that'd make their exchange impossible. Digicash may have been somewhat similar to Bitcoin, but there are two key differences. Digicash may have been anonymous and somewhat decentralized in exchange, yet the minting of new coins and the client software itself were in the control of a single party. Inevitably when Digicash failed (to run a sound business) Digicash (the currency) became impossible to trade. Therefore the comparision of Bitcoin with these failed "e-currencies" is only insofar of interest as it provides ample evidence of what exactly Bitcoin did better, namely two things:
There is no central mint (central bank or what have you), new coins are minted by a collective effort
There is no central control that would make it infeasible to exchange bitcoins, therefore there is no central attack (like the one by CC companies) that could "kill" it just like that.
Small change is irrelevant to the discussion of Bitcoin
A historical look at currencies over the last 500 years reveals an interesting insight — a key limiting factor to adopting currencies has been the ability to make small change.
The smallest unit of bitcoins is 0.00000001 btc. (https://en.bitcoin.it/wiki/FAQ#How_divisible_are_Bitcoins?). At currently traded (16.8$/btc) that would be 0.000000168$. Bitcoin payments can be specified down to that smallest unit, and there does not have to be any "change". Therefore both the numeration and the precision of payment argument is not relevant. Marginal costs and benefits misconception
But they never caught on because their marginal costs to consumers and merchants exceeded their marginal benefits.
In order to understand the motivation behind bitcoin, it's important to understand the limitations (or costs) of CC and Paypal payment processors. The Paypal issues
Paypal payments in sum incur about 7.5% in transaction cost.
Paypal payments (especially to merchants) are often delayed, withheld or entirely nulled by Paypal. Merchants have no recourse in this.
The Paypal payment processor API is quite convoluted and integrating it is far from easy. Merchants are at the whim of Paypal, and Paypal often decides not to carry a merchant without any reason specified.
If Paypals system go down, or are unavailble, e-commerce built on top of Paypal stops.
The CC in general issues
CC payments are subject to fees ranging between 2-10% Merchant protection with CCs is better, but by no means flawless. The CC payment processors offered are not technically simple to integrate
CC Merchant fees can be substantial Lower fees are offered by third parties, but again (like Paypal) a Merchant is at the whim of these third-parties.
*What Bitcoin does better
Bitcoin does not have forced transaction fees. There is an optional transaction fee, whose sole purpose is to incentivize the faster processing of the transaction by the network. However payments involving no txfees are equally possible (and practised widely).
The Bitcoin API is supremely easy to talk to, and it is a pleasure to implement. It can be acomplished by any programmer in a couple of minutes. And you do not need to sign neither any contract nor ask any permission to do it.
Since bitcoins are not centrally controlled, a merchant is not at the whim of any second or third party.
Bitcoins have no cost (marginal or otherwise) but substantial benefits
CC/Paypal have substantial cost and substantial drawbacks
Repeated misleading allusions as to questionable legality
Is It Legal? as a way to pay anonymously for illegal drugs sold on Silk Road – is the one that has been referred to the U.S. Attorney General as a violation of money laundering statutes. Mann notes that Bitcoin’s ultimate ambition well might be illegal After all, he points out, there are federal statutes that make it illegal to produce a separate currency.
Two main thrusts are presented by you as to the legality of Bitcoins. First you question businesses that use them of being in violation of money laundering laws. Second you allude to the legality of alternative currencies. Both of these things are not issues for the following reasons:
Businesses that accept Bitcoins can easily be required to conform to existing money-laundering laws. The medium of exchange does not change the rules that businesses must play by.
Bitcoins are actually less anonymous then the USD. That is because every transaction of bitcoins is publicly accessible. That means that it is a whole lot easier to follow a money trail in Bitcoins then it is to follow it in USD.
Alternative currencies are not illegal under EU and US laws. After all the exchange of foreign currencies certainly is not. What is certainly illegal is to establish a currency pegged to the national currency such as to represent a stand-in. This would give rise to issues with the central mint of the national currency. The Bitcoin value is not in any way pegged or related to the USD (or any other national currency). It is determined by the exchanges that trade Bitcoins.
Even if by some heavy-handed lawmaking Bitcoins would be deemed illegal, it would prove hard indeed to stamp them out. They are a truly decentralized and international system. They cannot be centrally attacked, so there is no "mint to shutdown" or business to bankrupt etc.
Consumers and Merchants pickup
Unless consumers and merchants can be persuaded that adopting it will make them better off, it’s likely to go the way of other online currencies.
This is an astute observation and I applaud it for that. However as a system Bitcoins do not depend (financially) on that pickup, and the speculative part of the Bitcoin economy will be able to live quite a while entirely without it. That being said, there is some pickup of bitcoin in genuine e-commerce and other fields. Closing Bitcoin has many desirable qualities, from an organizational, economic and technical point of view. Your article is not a very good representation of Bitcoin as it is, nor of what it can be, or what it's core issues really are. I'd invite you to write a retraction and correction in your next article and consult a Bitcoin specialist for review and input. If against all "odds" Bitcoin should prove to be more successful then you thought, think of it as collateral for your journalistic integrity. You can read comments about this open letter on the reddit post about it: http://www.reddit.com/Bitcoin/comments/ic92x/open_letter_to_forbes_peter_cohan/ Kind Regards, Florian Bösch TL;DR Peter Cohan has a poor grasp of bitcoins and presents a number of fallacious arguments that are not relevant.
Warning: wall of text, read only if you have nothing better to do. I was originally introduced to Bitcoin in late 2010. Wrapping my head around the whole thing took some time and some reading, but I immediately became infatuated with it. At the time, I think the most exciting thing you could buy was alpaca socks. I remember seeing it around $0.50/BTC. I didn't have a whole lot of disposable income, so investing wasn't really an option, but I got a little bit of BTC from the original Bitcoin faucet and a fun pyramid scheme site (anyone remember that FXnet site?). Flash forward... I watched as BTC hit parity with the dollar. I strongly believed (still do) in the principle of decentralized currency, and felt like I should support it. I PayPal'd $100 to someone in the IRC channel in exchange for 100 BTC. I'd like to have invested more, but that was all I really could do at the time. I figured I could lose it all, but even if that happened, it was capitalizing a good cause, and maybe the next e-currency would be successful. (In hindsight, should have sold a kidney for money to buy-in with.) I experimented with trading on Mt. Gox, but only broke even. I didn't know what I was doing so I decided to just "buy and hold" and get in for the long run with my 100 BTC. I quit logging on to Mt. Gox and just watched the price. Not long afterwards, that nicely animated "What Is Bitcoin?" video came out, and Silk Road started getting some press. BTC has just climbed and climbed. The more it climbs, the more excited I get. Over the years, I've watched my $100 buy-in become worth $1,000, then $10,000. And recently, as we all know, BTC hit $1,000. My $100 buy-in became worth $100,000. That is an absolutely inconceivable amount of money to me. I hate to use the term "life changing" in regards to money, but at this point $100k is. I recently logged into my Mt. Gox account. Not to trade or anything, but just to look at it (still kind of in shock that I own a $100k asset). What I saw surprised me. I didn't have 100 BTC, I had $100 USD. Frantically, I went to my order history. Then I saw it. When I made that decision, years ago, not to trade anymore, I still had an open sell order. It executed a few days later. These last couple of years I've watched the prices, thinking I owned Bitcoin, but I had almost no stake in it at all. I haven't been able to think or read about Bitcoin for the last week or so. The thought of it just makes me sick to my stomach. I can handle making the wrong buy/sell choice, but the fact that I lost $100,000 to a simple mistake just really makes me angry at myself. Not much I can do about it now though. I'd like to have my 100 BTC back of course, but it's hindsight at this point. I found another wallet of mine and it had a bit less than one BTC in it, so I'll start there. This is my first day back from completely avoiding the BTC community. Just needed to vent. Thanks. TL;DR: Bought 100 BTC at $1 several years ago, grew to $100,000. Checked my balance and discovered I had accidentally sold them all in 2011.
11-18 21:12 - '[quote] No. What I'm saying, once again: / If one needs to buy bitcoins and has US dollars to spend, the choices are many. By going [here], for instance, one is offered 990 willing sellers, many of whom don't requi...' by /u/BitcoinistanRising removed from /r/Bitcoin within 321-326min
you're basically saying that until everyone else jumps on board it's not worth the interest.
No. What I'm saying, once again: If one needs to buy bitcoins and has US dollars to spend, the choices are many. By going [here]1 , for instance, one is offered 990 willing sellers, many of whom don't require your banking details and may be met in the meatspace -- a hipster cafe, a roadside McDonald's, a shithole motel room, or even a poorly-lit alleyway reeking of piss, behind a dumpster. Adventure! Or one may get bored with spy vs. spy bullshit, bite the bullet, and share one's highly private and very personal info with an actual exchange, the sort grownups use, and buy enough BTC for one's jenkem fix alpaca socks. But if one absolutely, positively needs a jenkem fixalpaca socks to get one's BTC within a finite timeframe like, let's say a month? Don't go [here]2 . Because there's no BTC there. You'll have a better chance of scoring BTC at your local pig station. ''' Context Link Go1dfish undelete link unreddit undelete link Author: BitcoinistanRising 1: loc*lbitcoins***m*bu*-bit*oins*o*l*n*/usd/ 2: s*6.po*t*mg.*rg/*48lifa*1*Cap*ure*gif Unknown links are censored to prevent spreading illicit content.
Some thoughts on the economy of Bitcoin. BTC is fractional reserve and the US Gov has more control over it than you think.
I've given a lot of thought to the arguments and analysis surrounding Bitcoin and I'd like to know what you think about my take on it, and one of my concerns. Please pardon the clickbait-y title, I promise I'm not asking this to push a pro or anti-BTC agenda. Part 1 theorizes that properties similar to "fractional reserve" are shared by most currencies including cryptocurrencies that aren't centrally managed. Part 2 presents a question about liquidity and US government market-distortion power. Part 1: Thoughts on the economic model of currency So first, many of the arguments for BTC and against fiat focus on monetary ecosystem aspects that BTC and fiat actually seem to share. "Fractional banking" and "no intrinsic value/off the gold standard" are often criticisms of fiat money. As many here have already observed: Crypto and fiat both primarily derive their value based on the willingness of others to accept it in exchange. Neither carries any intrinsic utility value. USD black markets in Argentina and Venezuela (and possibly Cuba) are good examples of how governments can exercise enormous power over citizens through law, monetary supply manipulation aka money printing, official exchange rates and capital controls, but cannot prevent independent price discovery or market valuation of their currencies above their actual worth in exchange. The informal acceptance of Canadian Tire Money by Canadians and the acceptance of casino chips by Las Vegas cabbies is an example of how items other than currency (though to be fair, they are dollar-denominated and exchangeable) have organically come to be accepted as money substitutes despite lack of government decree. As for fractional reserve and debt-based supply, those are just mechanisms - scalar multipliers - that allow a currency's admins to change the money supply. Fiat supply is controlled by board of admins. BTC has a fixed time schedule by which the supply is algorithmically controlled, but that doesn't mean its valuation in the market doesn't behave like a fiat currency. The immediate value of the currency/stock unit is what it can buy right now. This is what most people focus on: how many dollars is cabbage corp stock worth, or how many Monopolycoins does it take to buy a cheeseburger. There's the supply: outstanding stock shares or monopolycoins issued. There's the amount of resources that the monetary supply can theoretically purchase - the market cap, or issued_monopoly_coins/cheeseburger_market_price. There's the amount of resources that the monetary supply can actually be exchanged for, or "access": the net worth of cabbage corp, or the actual number of cheeseburgers that can be made by the restaurant. The supply of a stock or currency will always account for more resources than it is actually based on. The difference between the two, I'm told, is what controls liquidity. This is not necessarily bad. In the case of stocks it allows expected growth and investment returns to be priced in. In the case of currency, ideally it allows the amount and velocity of circulating currency to match the amount and velocity of circulating goods. Both USD and BTC share this property - can I call this ratio "fractional reserve liquidity"? Please correct me if this theory is incorrect. I would like to postulate that the liquidity of currency and the currency price of goods reflects the amount of circulating currency, not the actual supply. Both goods and services derive demand from utility and scarcity, and scarcity refers to available units, not units in existence. That is, if 1000 units of Monopolycoin circulate in an market economy where 100 cheeseburgers are being traded (and nothing else), the cheeseburger will be 10 coins. If the circulating money supply increases to 2000 coins, the cheeseburger will soon increase to 20 coins. However, if 5000 Monopolycoins are were issued and being circulated around in some other country, cheeseburger prices will not reflect those coins until they begin to circulate among the hungry diners. Part 2: The liquidity concern A much better explanation of this issue is made by Stanislav here: http://www.loper-os.org/?p=1009 I have no disagreement per se withe fact that early miners, coin thieves, other large holders and possibly "Satoshi" have ownership of a large part of the Bitcoin economy. Sure, a lot of people are jealous of those who struck it rich on Bitcoin, and a lot of people believe it's unfair for someone to obtain value without productively creating it. A sentiment I agree with, though in the case of Satoshi, I would say that Satoshi definitely deserves to gain millions from the brilliant creation of the theory and the well thought out software (things like choosing the longest chain by total difficulty and not the block height, network time based on 5 peer median excluding outliers past 70 minutes, safe mode, show a really mature product), and the early adopters who evangelized the system with things like faucets also deserve to benefit. My concern is when you add in risky liquidity. There would be no unease if there were enough assets, meaning alpaca socks, US dollars, burgers and pizzas being transacted, that a large market action would not disrupt the Bitcoin economy. If there are 100,000 Monopolycoins minted and US $50,000 being traded around supporting a $1:1coin price, then it doesn't matter so much if 20k of those were stolen and 20k were pre-mined and hoarded by the creator, because a very healthy 50% reserve means that a 20k coin cashout won't take out too much capital. It's the fear of putting dollars, burgers, and development work into the ecosystem and having most of it sucked out by a few actors that has people screaming "ponzi". Now, it's not Satoshi that I'm worried about - whoever Satoshi is would be smart enough to slowly and gradually sell off whatever coins they have to avoid affecting the price. According to this article, the US FBI has the world's largest Bitcoin wallet: http://www.wired.com/wiredenterprise/2013/12/fbi_wallet/ About 1%, according to this list: http://bitcoinrichlist.com/top100 Keep in mind that while that $94 million number represents the worth of 1% of the outstanding coins, $94 million is a much higher percentage of the actual worth of the Bitcoin economy. To disrupt Bitcoin, the U.S. government doesn't need to build supercomputers and run a 51% attack, or even try to attack it all. There's a good chance the FBI will sell the entire lot of seized coins at once, or within a short period. It's not like they care about market timing. Whether or not the Bitcoin economy is resilient to such an event depends on the amount of capital and confidence invested into the system at that time. I wonder: How much value (primarily foreign exchange reserves, some physical goods) is inside the Bitcoin economy? How much value (iPhones, oil exports, foreign reserves and so on) are in the U.S. Dollar economy? How do the exchangeable assets match up to the total market valuations for both currencies?
So as a rite of passage into the Bitcoin world, I had to buy some Alpaca socks! I will use it to demonstrate how to make a payment with the Bitcoin client. How to send a payment Buying Alpaca Socks I ordered some Alpaca Socks from Grass Hill Alpacas. After confirming the current price (including shipping) with the seller, I clicked on the "Send Coins" button at the top left, which brings up a ... Bitcoin Legal Countries - Free Bitcoin Wallet Online Bitcoin Legal Countries Alpaca Socks Bitcoin Reddit Bitcoin Miner App This happened back in 2014 when Bitcoin’s price wavered around USD 360 to USD 760. Meanwhile, Salmon was confident about his bet, stating how Bitcoin’s value will indeed increase but not because of its use but rather based on a speculative rise in value. He cited how those who bought Alpaca socks using Bitcoin would regret, noting the price increase, and would have preferred sitting on it ... Schau dir unsere Auswahl an black crew socks an, um die tollsten einzigartigen oder spezialgefertigten handgemachten Stücke aus unseren Shops für kleidung zu finden. ONE SIZE FITS ALL, 100% COTTON.
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