How To Use Bitcoin – The Most Important Creation In The History Of Man

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michaelsuede said:
That is because historically, the strong have dominated the weak.

It wasn't until the invention of firearms that equality of strength in personal arms was achieved.

The gun is the great power equalizer between men. It can make old ladies just as feared as young men.
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Ah so your perfect society of anarchy only works if people are armed to the teeth ? That'll work ! :rolleyes:
 
Of course, the private armies won't be fighting little old ladies in pitched battles in the streets if they refuse to pay the protection money. They'll be shelling them from 20 miles out until their whole town gets the message. Private individuals can't be expected to afford their own howitzers.
 
Anarchy is completely unsustainable on anything above a tiny scale. I can think of a few examples in modern times, of small communities of people living in remote areas with little or no government intervention. But in all those cases, the population leeched off the adjacent governments, which afforded them some degree of protection, municipal utilities, access to a large economy to provide basic necessities and valued durable goods, etc. (I'm thinking of places like The Kowloon Walled City, Freetown Christiania, etc.)

Even those two examples were very short-lived. The Kowloon Walled City was rife with gangsters, illicit drugs and weapons, and the Hong Kong police conducted several raids before evacuating the entire shantytown and tearing to the ground. Likewise, the future of Freetown Christiania is in doubt. Political negotiations are currently underway to annex it to Copenhagen.

Anarchy might be able to work for limited periods under such special circumstances in areas with few resources and tolerant and charitable neighbors, but any economy with valuable resources is eventually going to undergo strife and probably violence before falling under the dominion of some powerful interest or another. Power, like nature itself, abhors a vacuum. In the absence of a strong central government, a struggle will ensue for control over whatever valuable resources, and the most powerful and ruthless factions will inevitably gain power.

Anybody who advocates for anarchy in a society as equitable and socially-mobile as the US needs to have his head examined.
 
Belz... said:
Ah so your perfect society of anarchy only works if people are armed to the teeth ? That'll work ! :rolleyes:
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Yes, you then simply drop all the canned food in Halifax and all the guns in Vancouver. Everyone starts at Thunder Bay and races on foot to the option of their choice.

I thought this thread was about Bitcoins. Here's a news article in the Winnipeg Free Press and it's even on topic:

http://www.winnipegfreepress.com/arts-and-life/life/sci_tech/125900603.html

I liked this part:

Luke Chao owns a hypnosis clinic in downtown Toronto, where he began accepting Bitcoins about a month ago. So far, he hasn't had anyone pay with the virtual currency.
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It's unclear whether you have to be hypnotised first to get into the Bitcoin game.
 
It seems all the proponents of Bitcoin have run away... probably not a bad idea, given how unable they were to refute criticism of the object of their hype.
 
Do I count as a proponent? I'd call it "promising but flawed."

Bitcoin is no economic messiah come to save us from ourselves, but it might turn out to be a John the Baptist to the real system that does. There might even be pharisees to run it out of town on a rail for supplanting their hard-generated imaginary e-gold.

[Edit] Actually, now that I see this thread again, I remember I wanted to bump it once michaelsuede got driven off the forum with sticks. Anyone want to pick up where we left off before the crazy set in? I think I was proposing an alternative bitcoin-like implementation, with a difficulty curve set to keep pace with Moore's law and thus maintain a steady (more or less -ish) inflation rate. That's the beef everyone has with bitcoin anyway, right? That it was set up to be a ridiculous digital gold rush to attract... well, michaelsuede and his ilk?
 
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Beelzebuddy said:
I think I was proposing an alternative bitcoin-like implementation, with a difficulty curve set to keep pace with Moore's law and thus maintain a steady (more or less -ish) inflation rate. That's the beef everyone has with bitcoin anyway, right?
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As I see it, the artificial scarcity/deflation is just one of many problems inherent to the Bitcoin model.

The lack of any sort of mechanism to deal with extreme market fluctuations (that could otherwise destabilize the currency) is another significant roadblock. If it's going to be valuable as a currency, then it needs to serve the purposes of a currency, which means being liquid, transferable, stable and self-correcting in the events of extreme deflation or inflation. Calling it a currency, but engineering it to behave like a speculative investment product is fundamentally dishonest.

The main problem of fixing the stability is one of modeling, prediction and implementation. The market forces that govern the relative value of currencies are highly complex and unpredictable, so how do you build that kind of sophistication and interoperability into a decentralized, distributed system? Perhaps some useful form of complex statistical market analysis could be used to augment Bitcoin's current blockchain "difficulty" algorithm. I don't know, but it seems like quite a programming challenge.

The excessive, unfair advantage granted to early adopters is another big problem, but that could be mitigated if the entire model wasn't designed to skyrocket in value as more users get onboard and coins become harder and harder to create. Widespread popularity ought to spur the proliferation of new coin, instead of stifling it. Of course that dynamic would pretty much destroy Bitcoin's beautifully-balanced security model (that leverages the rewards of "mining" against those of attacking the system) but that model is tantamount to buying off one's enemies anyway. In my view, the security needs to be a separate function from the internal, market regulating mechanisms, otherwise you're just rewarding brute force, and isn't that one of the main criticisms of the current, established, government-backed currencies?

Apart from the market-governing mechanisms of the currency itself, we have the issue of how to run a legal and safe exchange operation. You might have the most rock-solid, stable, and secure cryptocurrency in the world, but it's virtually useless if it cannot be easily, safely, reliably, and universally exchanged into other forms of value. Even though the currency itself is distributed and self-governing, the exchange operations become the weakest point of failure. The bigger and more monolithic those exchanges are, the more centralized the currency becomes, and the sheer size of the operations render them vulnerable to getting regulated or shut down by governments. On the other hand, the smaller and more "distributed" they are, the easier targets they become for unethical hackers and other criminals.

Finally, there are the legal issues of dealing in a non-legal tender.

There's the issue of taxes. If you're one of those people who reads that and says, "**** taxes," then you're part of the problem and not any meaningful solution. Taxes are a fact of life, and going to great lengths to avoid them is only going to get you into trouble in the long run. Unless you're a huge corporation with the power to buy government legislation, you're better off just paying your damn taxes and being done with it, because the risk and cost is far too great in the long run.

Besides the tax problem, Bitcoin is backed by nothing, so if yours gets lost, stolen or deleted (which can happen very, very easily as we've been seeing in the computer security news), you're totally out of luck. Now you may hate the government with a passion. You might despise the Fed, bristle about predatory bank fees, or just feel wary or indignant about relinquishing your hard-earned value into a centralized banking system. However, the plain fact remains that real, government money is backed and insured whereas online cryptocurrency is not. Even in a worst-case scenario where your bank totally collapses along with hundreds of others (as we've also recently seen happen), you can still recover your money. Lacking that kind of surety, consumers will always have their balls swinging in the breeze with no legal protection or recourse in case of foul play.

Finally, assuming an online, distributed cryptocurrency could solve all those problems, it would still have the major drawback of only being available where and when the Internet is available. If you take Net for granted, consider what's happened to Internet access in parts of the world where governments have become destabilized. Any purely online economy is going to be heavily affected by any such destabilization. If you happen to live in a country or region where political circumstance or natural disaster has totally disabled the Internet, how do you think it would compound your problems to also have no access to your money?

I'm no economist, so hopefully somebody with a better understanding of currencies and macroeconomics will weigh in on this.
 
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For the most part, I completely agree with you. I don't like being that guy, but could I trouble you to review my posts in the first couple of pages? I'm really not making most of the claims you're arguing against, which seem to be directed not so much at bitcoin itself as michaelsuede's idea of bitcoin as Libertarian Rapture.

The only real application I'd argue that a bitcoin-like scheme is inherently suited for is transactions over anonymous networks. If people use it for other stuff, great, but as you said there are other options for swapping lucre with many more benefits. Anonymous transactions with those options are already all but illegal, no matter how legitimate your enterprise may be. Which is partly why there's not much going on, economically speaking, on darknets and such.

Beyond that, I don't feel qualified to say. I'm not an economist either, and most of those that are and have chimed in have focused exclusively on the deflationary nature of bitcoins, and how damned stupid that is. I unreservedly completely agree with that bit.
 
stilicho said:
Yes, you then simply drop all the canned food in Halifax and all the guns in Vancouver. Everyone starts at Thunder Bay and races on foot to the option of their choice.

I thought this thread was about Bitcoins. Here's a news article in the Winnipeg Free Press and it's even on topic:

http://www.winnipegfreepress.com/arts-and-life/life/sci_tech/125900603.html

I liked this part:



It's unclear whether you have to be hypnotised first to get into the Bitcoin game.
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In the time since I wrote this, Bitcoins have lost nearly 2/3 of their value.
 
Almo said:
http://www.nestorgames.com/ supposedly takes BitCoin. I'm not quite sure how that works.
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The alleged owner of the company explains when and why his BTC prices change:

Thank you
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I moslty change them when the items expire (so I re-post them), or when BTC fluctuates too much.
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http://www.bitcoinforums.net/threads/nestorgames-sells-board-games-for-btc.319/

That makes Bitcoins sound like Weimar Republic Papiermarks for the 21st century.
 
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