Bitcoin Costs More than Gold?

[LC475]

Bitcoin started out the same way in that Satoshi could have unilaterally made changes to the project to steal peoples money. But he didnt. If Satoshi did that, it would have consequences. The later he took unilateral action in the project life the worse the consequences.

Stealing money is not the only unilateral action he could have taken. He could have sent out an e-mail, "Hey, I discovered a really bad bug in my C code. Here's a new Genesis Block." Everyone would have switched.

Certainly the content and nature of the actions being taken in the early days matters, and is pretty much all that matters (or certainly matters the most). And I agree with you that the actions being taken by ethereum are poor, while those that were taken by bitcoin were better, and that differentiates them tremendously!

My point is just an academic one. Human networks and institutions must start out centralized. Here with bitcoin, we have a network that consciously is setting out to be decentralized. It really, really wants to be decentralized! More than anything else! That's its top priority, and the point of the whole project. And yet even it could not be decentralized in its early, formative stages. It literally could not. Why? Because of the nature of new networks. They are high-trust environments. Everybody trusts each other, and everybody trusts the government (Satoshi).

Machiavelli averred, and correctly I believe, that no new human institution can be created except under absolutist authority. (Discourses on Livy)

[Libertarian666]

Machiavelli averred, and correctly I believe, that no new human institution can be created except under absolutist authority. (Discourses on Livy)

Then how was government created?

[bitcoininthevp]

My point is just an academic one. Human networks and institutions must start out centralized. Here with bitcoin, we have a network that consciously is setting out to be decentralized. It really, really wants to be decentralized! More than anything else! That's its top priority, and the point of the whole project. And yet even it could not be decentralized in its early, formative stages. It literally could not. Why? Because of the nature of new networks. They are high-trust environments. Everybody trusts each other, and everybody trusts the government (Satoshi).

If your point is that everything starts out as an idea in some single individuals head (and then their code) and therefore it is centralized in the beginning, then its hard to disagree with that. Im just unclear on the productivity of such a definition and it borders on a truism.

Point of clarification for any onlookers to the conversation:
With respect to bitcoin, the second Satoshi released the source code (on day 0) people could have changed it and run more nodes than Satoshi did and taken over the network. The only reason people followed Satoshi voluntarily was because it was in their best interest to do so. Not because Satoshi had any degree of coercive advantage of force over them.

[LC475]

Machiavelli averred, and correctly I believe, that no new human institution can be created except under absolutist authority. (Discourses on Livy)

Then how was government created?

Well, it depends what you mean by government (which can mean many things involving "governance," including wholly voluntary things you would approve of), but as far as states go, the general pattern in history is:

Personal monarchy and absolutism > Increasingly law-based rule > Republic or something else more loose-knit > Incredible wealth and success > Empire > Collapse

[LC475]

If your point is that everything starts out as an idea in some single individuals head (and then their code) and therefore it is centralized in the beginning, then its hard to disagree with that. I'm just unclear on the productivity of such a definition and it borders on a truism.

No, my point is different than that: about networks. Specifically networks made up of and created by humans. A network of one man (coding away in his basement) is not much of a network, right?

The Bitcoin network or community started out to a degree centralized. This even though a specific goal (meta-goal?) of the network was to make themselves into a decentralized network!

It's just interesting.

And it is relevant. Because, you see, decentralization is gone off the internet. Dead. No more. And it might be quite wonderful to bring it back. So that brings up questions like "Why did it die?" and "How could we try again and build something in such a way that it would end up lastingly and sustainably decentralized?" See:

https://medium.com/@urbit/design-of-a-d ... b6b3109902

[Libertarian666]

If your point is that everything starts out as an idea in some single individuals head (and then their code) and therefore it is centralized in the beginning, then its hard to disagree with that. I'm just unclear on the productivity of such a definition and it borders on a truism.

No, my point is different than that: about networks. Specifically networks made up of and created by humans. A network of one man (coding away in his basement) is not much of a network, right?

The Bitcoin network or community started out to a degree centralized. This even though a specific goal (meta-goal?) of the network was to make themselves into a decentralized network!

It's just interesting.

And it is relevant. Because, you see, decentralization is gone off the internet. Dead. No more. And it might be quite wonderful to bring it back. So that brings up questions like "Why did it die?" and "How could we try again and build something in such a way that it would end up lastingly and sustainably decentralized?" See:

https://medium.com/@urbit/design-of-a-d ... b6b3109902

There is indeed something lastingly and sustainably decentralized.

You may have heard of it: it's called "the market".

[LC475]

There is indeed something lastingly and sustainably decentralized.

You may have heard of it: it's called "the market".

Yes, I agree. I love the market!

Here, maybe this better explains the idea I'm trying to convey:

http://urbit.org/blog/dao/

[dualstow]

WSJ says bitcoin trading fees can be US$5-6 per transaction. So, no buying coffee with it, they point out.

[bitcoininthevp]

WSJ says bitcoin trading fees can be US$5-6 per transaction. So, no buying coffee with it, they point out.

Currently the bitcoin network supply of available transactions is being overwhelmed by demand for those transactions which is causing the spike in transaction costs.

There are plans to add new technological capabilities to bitcoin which will allow for more available transactions. However, change is slow in bitcoin.

Side note: I'm not sure coffee buying is an appropriate use case for bitcoin's decentralized censorship resistant protocol. You can if you would like but I think credit card works better for everyone at this point and bitcoin offers no efficiency for coffee purchasing.

[dualstow]

I agree, but wasn't that the original idea for bitcoin?
Not for investing or hoarding, but for commerce?

[Jack Jones]

I agree, but wasn't that the original idea for bitcoin?
Not for investing or hoarding, but for commerce?

Yeah. Unless the Bitcoin devs get their act together, Bitcoin will become a clearing system for large players. So you'll hold your bitcoin at a site like Coinbase, and if I use that bitcoin to pay you, another Coinbase customer who owns a coffee shop, that transaction will never actually go on the bitcoin blockchain; Coinbase will just make note of the differences in our accounts there. Due to high fees, the real bitcoin blockchain will only be used for large transactions.

[Libertarian666]

I agree, but wasn't that the original idea for bitcoin?
Not for investing or hoarding, but for commerce?

If so, it hasn't fulfilled that requirement.

One of the desirable attributes of money is a reasonably predictable purchasing power, at least in the short run.

[dualstow]

I guess that's why I don't think of gold as money.

[Marlb10]

I was planning to get a few bitcoins and the price is more than what I searched yesterday 1947.45 British Pound. It has increased by 10 Pounds.

[Marlb10]

I guess that's why I don't think of gold as money.

Gold is like Bonds, Bitcoins. Sort of currency but not money.

[Marlb10]

Spikes in trading is very creepy man. Check the history of these 2 months. I lowest touched point was 1,456 SP.

[bitcoininthevp]

I agree, but wasn't that the original idea for bitcoin?
Not for investing or hoarding, but for commerce?

Yeah. Unless the Bitcoin devs get their act together, Bitcoin will become a clearing system for large players. So you'll hold your bitcoin at a site like Coinbase, and if I use that bitcoin to pay you, another Coinbase customer who owns a coffee shop, that transaction will never actually go on the bitcoin blockchain; Coinbase will just make note of the differences in our accounts there. Due to high fees, the real bitcoin blockchain will only be used for large transactions.

Doesn't the world have plenty of ways to pay for a coffee extremely efficiently? I love bitcoin more than anyone but I use my credit card 100x more.

What the world does not have is an uncensorable digital money.

Sure it would (will?!) be nice to do micropayment transaction of $.00001 in bitcoin real time to view an article or listen to a song. Its not out of the question.

But the priority of many of the core bitcoin developers is bitcoin-as-a-settlement-layer. Then building second layers on top (coinbase sure, but also other networks like lightning network, rootstock, etc).

You can always build a censorable layer on top of an uncensorable one. But you cannot build uncensorable transactions on top of a censorable layer.

Bitcoin's most impactful original idea was uncensorable money.

[LC475]

Bitcoin's most impactful original idea was uncensorable money.

Could you explain why you think Bitcoin is "uncensorable"?

Perhaps I am just too imaginative, but it seems to me if I were in the government I could come up with a number of effective ways to "censor" it.

[eufo]

I get the sneaking suspicion that once Bitcoin becomes sufficiently large enough, the US Government will make it officially illegal. This may not stop its use entirely, but it will almost entirely halt its use by corporate entities as an acceptable form of payment, which would be devastating enough.

[dualstow]

But the priority of many of the core bitcoin developers is bitcoin-as-a-settlement-layer. Then building second layers on top (coinbase sure, but also other networks like lightning network, rootstock, etc).

Rootstock, chicken stock, I don't know. It just seems like bitcoin was going to be a neat medium of exchange for the masses, and now it's something clever MIT students mined and/or hoarded early, like getting in early on a pyramid scheme.

(edited grammar)

[Jack Jones]

I get the sneaking suspicion that once Bitcoin becomes sufficiently large enough, the US Government will make it officially illegal. This may not stop its use entirely, but it will almost entirely halt its use by corporate entities as an acceptable form of payment, which would be devastating enough.

The US Government is figuring out how to sink its teeth into it, so I have doubts that it will become illegal:

http://fortune.com/2017/07/10/bitcoin-irs-coinbase/

[eufo]

I get the sneaking suspicion that once Bitcoin becomes sufficiently large enough, the US Government will make it officially illegal. This may not stop its use entirely, but it will almost entirely halt its use by corporate entities as an acceptable form of payment, which would be devastating enough.

The US Government is figuring out how to sink its teeth into it, so I have doubts that it will become illegal:

http://fortune.com/2017/07/10/bitcoin-irs-coinbase/

That's just the beginning... trust me.

[bitcoininthevp]

Bitcoin's most impactful original idea was uncensorable money.

Could you explain why you think Bitcoin is "uncensorable"?

Perhaps I am just too imaginative, but it seems to me if I were in the government I could come up with a number of effective ways to "censor" it.

I think the onus is on you to explain your ideas of how the government would censor bitcoin.

This might be a good place to start: https://en.bitcoin.it/wiki/Weaknesses

Some from that list that come to mind that a government might be able to undertake:

Attacker has a lot of computing power
Denial of Service (DoS) attacks
Breaking the cryptography
Attacking all users

Or maybe you had another?

[bitcoininthevp]

I get the sneaking suspicion that once Bitcoin becomes sufficiently large enough, the US Government will make it officially illegal. This may not stop its use entirely, but it will almost entirely halt its use by corporate entities as an acceptable form of payment, which would be devastating enough.

Totally agree that this would be devastating to the the price in the short term.

But there are 200 other governments in the world of which most of the world's population belong to. Maybe they would have a use for it? Maybe the people in the US that ignore laws would also still find a use for it? (this might be also be a large % of bitcoin users according to my research)

Maybe the USG banning bitcoin would actually make it more appealing for its governmental rivals as well?

[bitcoininthevp]

But the priority of many of the core bitcoin developers is bitcoin-as-a-settlement-layer. Then building second layers on top (coinbase sure, but also other networks like lightning network, rootstock, etc).

Rootstock, chicken stock, I don't know. It just seems like bitcoin was going to be a neat medium of exchange for the masses, and now it's something clever MIT students mined and/or hoarded early, like getting in early on a pyramid scheme.

(edited grammar)

Bitcoin as a store of value AND "a neat medium of exchange for the masses" is still not out of the question. Perhaps once scaling issues are worked out (if successful) that can still be a use case for bitcoin.

Re hoarding: http://nakamotoinstitute.org/mempool/im ... -have-any/