cryptocurrency
Moderator: Global Moderator
cryptocurrency
the topic of "digital gold currency" reminded me of this [url=http:// http://en.wikipedia.org/wiki/Bitcoin] http://en.wikipedia.org/wiki/Bitcoin[/url] cryptocurrency, it seems to be an idea that would appeal to those who don't want government interference in there money, it is undoubtedly an idea way ahead of its time right now, but it looks like a currency with interesting promise...
Last edited by l82start on Sun Mar 27, 2011 2:17 pm, edited 1 time in total.
-Government 2020+ - a BANANA REPUBLIC - if you can keep it
-Belief is the death of intelligence. As soon as one believes a doctrine of any sort, or assumes certitude, one stops thinking about that aspect of existence
-Belief is the death of intelligence. As soon as one believes a doctrine of any sort, or assumes certitude, one stops thinking about that aspect of existence
Re: cryptocurrency
here is another link about bit coin http://www.bitcoin.org/ with more information
-Government 2020+ - a BANANA REPUBLIC - if you can keep it
-Belief is the death of intelligence. As soon as one believes a doctrine of any sort, or assumes certitude, one stops thinking about that aspect of existence
-Belief is the death of intelligence. As soon as one believes a doctrine of any sort, or assumes certitude, one stops thinking about that aspect of existence
Re: cryptocurrency
Despite this being in the "Cash" forum, I'd suggest anyone wanting to put money in this treat it as a strictly speculative, VP-type play.
Re: cryptocurrency
i agree completely... i stuck it in the cash forum because it is a new type of cash, and i thought it might inspire an interesting conversation about some of the economic questions it raises, not as a suggested replacement for dollars,
when first i heard about this a few years ago it had not been developed yet, i rediscovered it my self just yesterday, and spent the afternoon reading about it, i must admit it appeals to both my libertarian side and my computer geek side,
i am curious to hear what people with a deeper understanding of economics and monetary systems think of bitcoins, on the surface it looks like it might have the potential to really take off.
when first i heard about this a few years ago it had not been developed yet, i rediscovered it my self just yesterday, and spent the afternoon reading about it, i must admit it appeals to both my libertarian side and my computer geek side,
i am curious to hear what people with a deeper understanding of economics and monetary systems think of bitcoins, on the surface it looks like it might have the potential to really take off.
-Government 2020+ - a BANANA REPUBLIC - if you can keep it
-Belief is the death of intelligence. As soon as one believes a doctrine of any sort, or assumes certitude, one stops thinking about that aspect of existence
-Belief is the death of intelligence. As soon as one believes a doctrine of any sort, or assumes certitude, one stops thinking about that aspect of existence
Re: cryptocurrency
The term "cryptocurrency" brings to mind a bank where all the tellers look like the dude from "Tales From the Crypt."
The ATM machines out front would all look like large tombstones.
The ATM machines out front would all look like large tombstones.
Q: “Do you have funny shaped balloons?”
A: “Not unless round is funny.”
A: “Not unless round is funny.”
Re: cryptocurrency
Econtalk: Andresen on BitCoin and Virtual Currency:
http://www.econtalk.org/archives/2011/0 ... n_bit.html
http://www.econtalk.org/archives/2011/0 ... n_bit.html
"Well, if you're gonna sin you might as well be original" -- Mike "The Cool-Person"
"Yeah, well, that’s just, like, your opinion, man" -- The Dude
"Yeah, well, that’s just, like, your opinion, man" -- The Dude
Re: cryptocurrency
To me, what makes gold and other precious metals special as a currency is that they either exist or they don't (objectively) in the physical world. You've either got it or you don't. Your risks are huge, unforeseen deposits being discovered or cost-effective alchemy is suddenly taking place in the nuclear reactors of tomorrow.
In contrast, the fiat currencies of today rely instead on the idea that some central authority creates an artificial scarcity for the currency. It then assigns artificial value to the currency by mandating that all debts within the nation's economy must use the fiat currency (via legal tender laws.) Essentially, they hold monopoly power to counterfeit the currency. The worth of that currency is determined by how wisely and responsibly they exercise that monopoly power.
Cryptocurrencies derive their scarcity properties from the strength of their algorithms. If you completely trust that the algorithm has been properly described and implemented and that the network is foolproof against all present and future attacks, you have a full understanding of how much of the currency will be in circulation (and confidence that no counterfeiting will occur.) In practice, no system is foolproof, so such certainty will always be less than 100%. In addition, you have "alchemy-like" risks if computer scientists learn that P=NP and suddenly the only crypto option you've got left is one-time pad. (Although this is exceedingly unlikely, it would cause the value of the cryptocurrency to drop to virtually 0, as no practical cryptocurrency could be implemented via one-time pad.)
Having said all that, this looks very well-designed. If it takes off, I see no reason that someday transactions couldn't take place in a "basket" of such cryptocurrencies to hedge against the risk that any one of them could be compromised. The cost of doing so would be negligible and lower risks for all parties involved.
At the very least it is an awesome thought experiment. Thanks for sharing.
In contrast, the fiat currencies of today rely instead on the idea that some central authority creates an artificial scarcity for the currency. It then assigns artificial value to the currency by mandating that all debts within the nation's economy must use the fiat currency (via legal tender laws.) Essentially, they hold monopoly power to counterfeit the currency. The worth of that currency is determined by how wisely and responsibly they exercise that monopoly power.
Cryptocurrencies derive their scarcity properties from the strength of their algorithms. If you completely trust that the algorithm has been properly described and implemented and that the network is foolproof against all present and future attacks, you have a full understanding of how much of the currency will be in circulation (and confidence that no counterfeiting will occur.) In practice, no system is foolproof, so such certainty will always be less than 100%. In addition, you have "alchemy-like" risks if computer scientists learn that P=NP and suddenly the only crypto option you've got left is one-time pad. (Although this is exceedingly unlikely, it would cause the value of the cryptocurrency to drop to virtually 0, as no practical cryptocurrency could be implemented via one-time pad.)
Having said all that, this looks very well-designed. If it takes off, I see no reason that someday transactions couldn't take place in a "basket" of such cryptocurrencies to hedge against the risk that any one of them could be compromised. The cost of doing so would be negligible and lower risks for all parties involved.
At the very least it is an awesome thought experiment. Thanks for sharing.
Re: cryptocurrency
On the wall in my office I have a calendar from the American Economic Association. This month is devoted to David Ricardo. I saw the quote below and thought it might belong in this thread.
“Neither a state nor a bank ever have had unrestricted power of issuing paper money without abusing that power”?.
David Ricardo, The Principles of Political Economy and Taxation, 1817
“Neither a state nor a bank ever have had unrestricted power of issuing paper money without abusing that power”?.
David Ricardo, The Principles of Political Economy and Taxation, 1817
"Machines are gonna fail...and the system's gonna fail"