Merged Bitcoin - Part 3

[dirtywick]

Do I have to?

it would be more interesting if you did. at least a lot faster than me trying to guess what you’re getting at all the time.

Of course you would say that. But all I can see in that introduction is that the "trust based model" (of financial transfers) has problems and we need a system that doesn't rely on trust.

If you see anything else in that introduction that bitcoin didn't successfully address then quote it and I will happily read it.

how about protecting buyers and sellers from fraud

 

[psionl0]

it would be more interesting if you did. at least a lot faster than me trying to guess what you’re getting at all the time.

There is no need to guess. I have stated many times that I have no skin in the game and my only interest is in exposing all of the bad arguments that are made endlessly on this thread (often by posters who think that they are saying something "new"). Most of the types of arguments used here would not be tolerated in any other thread.

how about protecting buyers and sellers from fraud

If you are referring to the line "A certain percentage of fraud is accepted as unavoidable", that was specifically referring to buyers who fraudulently get a financial institution to reverse a payment after receiving what they purchased: "there is a broader cost in the loss of ability to make non-reversible payments for non-reversible services".

Bitcoin transactions can not be reversed (the buyer has to rely on the seller being willing to give a refund) so it solves that perceived problem.

 

[dirtywick]

There is no need to guess. I have stated many times that I have no skin in the game and my only interest is in exposing all of the bad arguments that are made endlessly on this thread (often by posters who think that they are saying something "new"). Most of the types of arguments used here would not be tolerated in any other thread.

lol ok man

If you are referring to the line "A certain percentage of fraud is accepted as unavoidable", that was specifically referring to buyers who fraudulently get a financial institution to reverse a payment after receiving what they purchased: "there is a broader cost in the loss of ability to make non-reversible payments for non-reversible services".

Bitcoin transactions can not be reversed (the buyer has to rely on the seller being willing to give a refund) so it solves that perceived problem.

and in doing so has opened buyers and sellers up to a bunch of different kinds of fraud. success! or rather, not failure! whatever

 

[psionl0]

and in doing so has opened buyers and sellers up to a bunch of different kinds of fraud. success! or rather, not failure! whatever

Other types of fraud are not listed in the introduction (and it is doubtful that they exist only because of bitcoin) so the fact remains that bitcoin achieved what the introduction set out for it.

 

[dirtywick]

Other types of fraud are not listed in the introduction (and it is doubtful that they exist only because of bitcoin) so the fact remains that bitcoin achieved what the introduction set out for it.

and that it opened itself up to other forms of fraud as a result isn't a factor isn't a good argument that it wasn't a failure imo

 

[psionl0]

and that it opened itself up to other forms of fraud as a result isn't a factor isn't a good argument that it wasn't a failure imo

Your argument was that bitcoin failed to meet the objectives set out in the introduction to the white paper. Don't change it now.

 

[dirtywick]

Your argument was that bitcoin failed to meet the objectives set out in the introduction to the white paper. Don't change it now.

i believe it failed to address the problems outlined in the white paper. but it does function as designed

 

[psionl0]

i believe it failed to address the problems outlined in the white paper. but it does function as designed

My offer still stands: "If you see anything else in that introduction that bitcoin didn't successfully address then quote it and I will happily read it."

 

[dirtywick]

My offer still stands: "If you see anything else in that introduction that bitcoin didn't successfully address then quote it and I will happily read it."

i mean, i'll try to explain this one more time and that'll be the last.

bitcoin was created to be a peer to peer cash network, an alternative internet based trustless payment system that eliminates the trusted third party. one of the things it was meant to address was the type of fraud described. it did that, functions as designed. you are calling this something between a success and failure.

in doing so, it actually created a system that was much more prone to other forms of fraud, and thus is a poor peer to peer cash system. for that reason i consider it a design failure.

you don't have to agree, but hopefully you can at least understand the argument being made and why you demanding a direct quote from the introduction isn't really addressing what i'm saying.

 

[psionl0]

bitcoin was created to be a peer to peer cash network, an alternative internet based trustless payment system that eliminates the trusted third party. one of the things it was meant to address was the type of fraud described. it did that, functions as designed. you are calling this something between a success and failure.

That's exactly what I am saying (except that I call it an actual success) so I don't know why you have been arguing about this for 2 pages.

If bitcoin fails to address other problems or creates new problems then that is a separate issue. Maybe Satoshi Nakamoto intended the trial of his "proof of concept" to unearth these problems. We will never know.

 

[Roger Ramjets]

It couldn't replace all other currencies because of its limited transaction rate (a function of the block size and rate of block generation) which is microscopic compared to the volume of financial transactions in the world. Libertarians might be too stupid to realize this but Nakamoto would certainly have done the maths before releasing the code and generating the first block.

This is true. But 'Nakamoto' claimed that this was Bitcoin's purpose. Since it couldn't happen (your words) that means it was a failure.

So why would Nakamoto launch a digital currency with such a limited transaction rate? I believe that he released it as a "proof of concept". It fulfilled the need he set out in his white paper: "What is needed is an electronic payment system based on cryptographic proof instead of trust,allowing any two willing parties to transact directly with each other without the need for a trusted third party". His memo on the genesis block suggests that he also saw the a need to prevent currency dilution (which bitcoin also fulfilled).

No, it didn't do this either - another failure.

A 'proof of concept' that didn't prove the concept. What could that possibly be but a fail? But let's say he never intended it to be more than a 'proof of concept' and not something that would grow into a vehicle for speculation and money laundering on a massive scale. Then that's another fail.

But let's ignore that and look at the next step, a crypto currency that fixes the flaws in Bitcoin and achieves the goals 'Nakamoto' was aiming for. Oops, another fail!

It is not known if he anticipated the prices that people be would willing to pay for bitcoin nor the enormous amounts of energy that would be used to mine bitcoin. Maybe he planned to develop a digital currency that could rival global currencies pending the results of his bitcoin trial but we will never know. He doesn't exist any more.

Not 'known' but it's a pretty safe bet that he didn't anticipate it because he neither mentioned it nor did anything to prevent it. The word to use here is 'naive' - unless you believe he deliberately created Bitcoin as a way to become insanely rich. I'm inclined to believe the former because libertarians are generally naive.

 

[psionl0]

But 'Nakamoto' claimed that this was Bitcoin's purpose.

No he didn't (unless you can find a quote from the white paper that makes this claim).

 

[dirtywick]

That's exactly what I am saying (except that I call it an actual success) so I don't know why you have been arguing about this for 2 pages.

If bitcoin fails to address other problems or creates new problems then that is a separate issue. Maybe Satoshi Nakamoto intended the trial of his "proof of concept" to unearth these problems. We will never know.

i don't view it as a seperate issue, it's created a bunch of problems and enabled a ton of fraud. that's why i'm calling it a failure and you're calling it a success

 

[psionl0]

i don't view it as a seperate issue, it's created a bunch of problems and enabled a ton of fraud. that's why i'm calling it a failure and you're calling it a success

Why are you still arguing?

 

[dirtywick]

Why are you still arguing?

you know, you might have finally gotten me there after all these years. good point.

 

[Roger Ramjets]

No he didn't (unless you can find a quote from the white paper that makes this claim).

I already posted this two pages ago, but in case you forgot,

The cost of mediation increases transaction costs, limiting the minimum practical transaction size and cutting off the possibility for small casual transactions...

A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution. Digital signatures provide part of the solution, but the main benefits are lost if a trusted third party is still required to prevent double-spending. We propose a solution to the double-spending problem... What is needed is an electronic payment system based on cryptographic proof instead of trust

The purpose of Bitcoin was supposed to be reducing the cost of small transactions.

So why did it fail? Because it wasn't actually about reducing small transaction costs, it was a libertarian's answer to 'worthless' fiat constantly being 'debased' by 'printing money'. Bitcoin couldn't be a part of that, so its inventor created 'digital gold' which had to be 'mined' and had a strictly limited supply. Furthermore it was designed so that the computing cost of 'mining' would artificially increase as more 'mining' was done.

There was no good reason for this 'digital gold' idea to be a part of the scheme. The obvious result of the limited supply and increasing mining cost was that the value of each Bitcoin would have to increase as the total value of transactions in the system increased - IOW it was highly deflationary. This is a deliberate choice that 'Nakamoto' made to fulfill his real goal, which was to replace that debased fiat with money that retained its value. Why would he want that? Because libertarians are selfish pricks who think their wealth should increase all by itself without them having to do anything.

Of course this meant it would soon attract the attention of speculators, who would throw far more money into the pot than was needed for those 'small casual transactions'. This would blow up the price even more and create an 'arms race' of miners making more and more powerful computers using more and more electricity, a possibility that I'm pretty sure 'Nakamoto' never considered. He probably thought that everyone would just use their personal computers to mine Bitcoins in the background. Typical libertarian naivity.

 

[psionl0]

The purpose of Bitcoin was supposed to be reducing the cost of small transactions.

So it wasn't about replacing global currencies after all (unless you simply forgot what you are talking about).

Incidentally, bitcoin did reduce the cost of small transactions by not requiring a "trusted third party" to monitor transactions to prevent double spending. Unfortunately, bitcoin's exorbitant price now makes the transaction fee too high for it to be used in smaller transactions.

Of course, you are assuming that Nakamoto never intended to refine his design after it was evaluated.

 

[Roger Ramjets]

Of course, you are assuming that Nakamoto never intended to refine his design after it was evaluated.

No, I'm actually assuming the opposite, that he did intend to refine it - but for some reason didn't - another fail. Perhaps he died or was incapacitated in some way, but his continued anonymity is suspicious. I think he created a monster and then couldn't stop it - or didn't want to.

 

[psionl0]

No, I'm actually assuming the opposite, that he did intend to refine it - but for some reason didn't - another fail. Perhaps he died or was incapacitated in some way, but his continued anonymity is suspicious. I think he created a monster and then couldn't stop it - or didn't want to.

The fact that none of his bitcoin wallets was ever touched again after Nakamoto went dark tends to lend greater support to the demise theory (it is not easy to tell the world who you are if you are dead).

 

[Roger Ramjets]

So it wasn't about replacing global currencies after all (unless you simply forgot what you are talking about).

You are very confused.

Bitcoin was supposed to be the answer to reducing the cost of online (and other) electronic payments. In New Zealand for example, 92% of transactions made by individuals are electronic. If Bitcoin was able to offer cheaper transaction costs and was safe and stable most businesses would go for it. But this hasn't happened. Instead everybody still uses EFTPOS and credit cards - which rely on banks using fiat currency. Had Bitcoin done what it promised it could have taken over from fiat for most daily use. The Bitcoin white paper hints that this was intended when it says that the technology was 'needed' for efficient internet transactions.

The fact that none of his bitcoin wallets was ever touched again after Nakamoto went dark tends to lend greater support to the demise theory.

The demise theory doesn't seem to be popular. For example it isn't mentioned at all in the Wikipedia article on Satoshi Nakamoto. However there is evidence that 'Nakamoto' lost interest in Bitcoin during its early development.

Satoshi Files: Gavin Andresen

As 2010 drew to a close, Satoshi was pushing more and more responsibility onto Andresen’s shoulders – responsibility he wasn’t that happy about accepting... Over the following four months, Satoshi stepped further and further away from Bitcoin, until finally, on April 26, 2011, he decided to leave Bitcoin forever. He told Mike Hearn, another early Bitcoin developer: “I've moved on to other things. It's in good hands with Gavin and everyone.”

Serious problems were becoming apparent if Bitcoin was to scale, and 'Nakamoto' didn't want to deal with it himself. Sounds kike a typical libertarian - thinks the world should embrace his ideology, but doesn't want to put any effort into making it work. I think he lost his private keys when it didn't look like Bitcoin was going anywhere, never dreaming that his 'seed' coins would eventually be worth billions. This is more evidence that he didn't understand what he had created.