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Bitcoin's Nightmare Scenario Has Come To Pass
HughPickens.com writes: Ben Popper writes at The Verge that bitcoin's nightmare scenario has come to pass as the bitcoin network reached its capacity, causing transactions around the world to be massively delayed, and in some cases to fail completely. The average time to confirm a transaction has ballooned from 10 minutes to 43 minutes. Users are left confused and shops that once accepted Bitcoin are dropping out. For those who want the Bitcoin system to continue to grow and thrive, this is troubling. Merchants can't rely on digital transactions that can take minutes or hours to validate. A number of prominent voices in the Bitcoin community have been warning over the past year that the system needed to make fundamental changes to its core software code to avoid being overwhelmed by the continued growth of Bitcoin transactions. A schism has developed between the team in charge of the original codebase for Bitcoin, known as Core, and a rival faction pushing its own version of that open source code with a block size increase added in, known as Classic. "Many in the US Bitcoin community had hoped that hitting this crisis point — a network maxed out, transactions faltering — would result in closure, with miners quickly moving to adopt whichever chain proved more valuable to their economic interests," says Popper. "But so far the debate is dragging on without one side claiming a clear victory, leaving tens of thousands of consumer transactions stranded in limbo."
It's all a scam anyway.
This is why I don't rely on fan-currency.
"I don't know, therefore Aliens" Wafflebox1
I don't need any of your fiat currency .
I wouldn't use cars as currency either !
I don't know if there's more backstory, but perhaps users have been slow to adopt because "Classic" sounds like what you'd call an older and (in the usual context) more limited option?
If I'm developing a new technology with potentially millions of $USD riding on its availability and adoption, I'm not going to call it "Classic." "NextGen," or "Enhanced," or even "CC" for Corrected Chain? This sounds less like the free market and more like terrible marketing.
Wouldn't it be easier to dig up a sunken ship with Golden Doubloons and use this as the accepted currency. Frankly I'd rather be a pirate that sails the seas, than one that pirates movies and music.
I don't need any of your fiat currency .
Gold is great until you need more of it, which you always do, because economies grow (all being well) and extra money is needed to support that. The other problem would be getting too much of it too quickly (ie building a mine) and ending up with a glut inflation. Fiat currencies are the only way to have a quantity of money that matches the size of the economy. I know we all want to believe that there's some quantity of precious metal somewhere that backs our cash, it's comforting, but real economies don't work well like that.
I for one vote we go back to Kent economy.
-SR
There are a number of efforts to leverage the block chain for other applications. It would be interesting to see if these suffer the same issue.
Conversely, fiat currencies don't necessarily represent the actual amount of wealth in the economy - hence the economic crash. A currency you can literally just make up out of confidence (or false confidence) isn't representative of real wealth.
You're right in that gold doesn't scale as a currency backing - because the amount of effort required to get it is not a fair representation of economic output any more (it used to be - you needed men and basic equipment so it was a reasonable proxy representation of how much economic surplus you had).
Cryptocoin could be regarded as a currency backing that actually scales with economic output - because there are no physical limits beyond manufacturing the ASICs and generating the energy (until you hit physical limits for those...).
You did not learn anything from the past crisis, did you? The main problem with our fiat currencies (the dollar / euro, etc) is that they are poofed into existence for dept with the obligation of paying usury. Off course, that usury was never created, so the dept spiral can only grow until the whole scam blows up in our faces. Gold has the problem that its quantity does not follow the population, but apart from distribution problems that is not necessarily a bad thing. We would just use less gold for the same goods when the population grows. The ever growing dept spiral however forces an economy to grow on top of the population growth, just to remain "stable". Off course, exponential growth can never be stable.
Mind you, fiat currencies could work, but not if they are created and managed as they are now.
Nae king! Nae laird! Nae yurrupiean pressedent! We willna be fooled again!
With that much internal bickering sabotaging the whole project, it MUST be OSS.
SJW's don't eliminate discrimination. They just expropriate it for themselves.
My guns and ammo say that your gold is now my gold.
As an AC over on SoylentNews already asked - is there a significant amount of Bitcoin transactions due to ransom payments for crypto-locked data?
I seriously wonder, as there's apparently been quite a surge of corresponding infections lately, and it also seems that quite some victims actually pay up.
Sure but the gold standard did not prevent economic crashes, eg in the 30s, and coming off the standard at that time helped. And there's a need to change the amount in circulation up and down to match what's going on in the economy.
As an aside, I rather think that using the vast quantities of energy to keep mining is a bad use of resources. At a time we're trying to be more efficient, creating a system that deliberately inefficient seems is dumb.
That's sort of the point. QE marginally benefitted the lay, somewhat benefited those with investments, but the 1% have grown their assets to 40% with these tools.
Congrats.
I don't buy into the whole Peak Gold argument. There's plenty of gold in the oceans and whatnot, it's just too expensive to go after it. Once the value goes up, so will the resources be directed to find more of it. But let's assume the argument that we have reached Peak Gold. That's ok, so as it gets more expensive, we diversify into Platinum and other nobel metals. From there, move on down the the red headed stepchild - silver. And from there, we go to copper.
This isn't a problem.
Life is not for the lazy.
Adding more fiat money only dilutes the value of the existing money, stealing from whoever has it, and causes inflation. The "out of the thin air" part is the problem.
And more, it is private banks that do it for teh dollar, when it really should be the state if anyone.
Current scheme places the US state in extreme debt, giving the private banks power over the state they should never be allowed to have.
Gold is great until you need more of it, which you always do
If you need more gold and there is no gold, what you end up correcting is the value of gold. That's the WHOLE POINT. You can't print it, so no one can screw your economy with reckless policy. You just have to make sure the guards you sit around it and the guy you hire to administer it are honest. As for gold mines - the only ones bitching about that are the people who don't have the gold mine. Anyway it's irrelevant nowadays - all the "easy" gold has already been mined. I dare you to find a gold mine nowadays that will provide more gold than your demand for it.
Of course it didn't. But the guy who got hurt in the economic crash is the fool. The guy who kept his gold and didn't borrow too much did just fine right through the crash and beyond. Nowadays it seems we reward the fools for being foolish and punish the cautious.
Seven puppies were harmed during the making of this post.
Who exactly do you think would be running the gold mine?
Do you really think that somehow, getting rid of fiat currency will also somehow invalidate the old rule of "it takes money to make money?"
You do not have a moral or legal right to do absolutely anything you want.
Didn't someone inject all the episodes of Friends into the block chain? I can't find out if this is just an urban legend or not.
Gold is crap as money. Good money needs to be a medium of exchange, store of value, and unit of account. It fails at all three of these. No one accepts gold as payment - we've moved on to other technologies. No one uses gold as a unit of account - considering its value can literally double (or fall in half) in the space of 1 calendar year, it'd make business wildly unpredictable. (Just imagine... that mortgage you got denominated in gold? One year later you owe twice the value of the house.) The only thing it sort of works for is being a store of value - it's deficient there, due to its volatility, but the volatility is different than other asset classes' volatility, so works as a hedge against a crisis. It's more insurance than it is money.
The World Wide Web is dying. Soon, we shall have only the Internet.
Pay higher fees if you are in a hurry.
The demand for most goods tends towards infinity as the cost drops. Bitcoin transactions have been fantastically cheap, which everyone sensible knew couldn't possibly last.
So, do we make bigger blocks, or increase fees? Miners should get more fees from either option. Users would prefer bigger blocks, since it keeps their costs artificially low.
But the real problem is the relay node shortage. Running a node is no longer trivial, and there is no mechanism to recover costs. The blockchain is around 80 GB now (including the index), and growing by ~100 MB per day. Larger blocks will only make that worse, and will almost certainly knock yet more nodes offline.
Someone made a distro that ran bitcoin entirely out of tmpfs. I once had a bunch of super-fast nodes using it. When the blockchain finally exceeded my ability to add more RAM to those boxes, the average time for a new node on the network to sync up increased by a factor of 3 or so.
That's just my personal example. Hundreds of other nodes have dropped off for their own reasons.
See that "Preview" button?
Currently we mine 1-1.5% of the existing supply of gold annually.
That means that unless your economy grows less than that, or mining rates go up significantly, you are basically having deflation: Your gold becomes worth more over time.
Deflation is generally seen as a really bad thing, as it makes people prefer saving over spending. Money being saved is not part of the available supply, causing more deflation, causing more people to save their money, etc.
The people hardest hurt are those that can't save any money, as they need to spend all they earn on things like food.
Deflation is really good for people who have a lot of money, as they can save most of it, becoming richer over time, without doing anything.
If they let other people borrow the gold at an interest, their pile of gold also grows, on top of it getting more valuable.
The end result becomes a situation where those few people who have enough gold that they spend less than they earn by lending, will end up with all the gold very quickly.
This has happened many times in the past, when gold was the main type of currency. It usually ended by some King using their power to steal the money from whatever bankers had the big gold piles. (Kings always have wars to spend money on, so they usually spend more than they can earn and then some).
RogerWilco the Adventurous Janitor
Like most things in life, currency policy is one of tradeoffs. You can have wild swings in value and deflation associated with hoarding, or you can have steady but stable inflation. The main downside to steady inflation is that hoarding cash becomes a money-losing endeavor. Of course, that's rather the point... Solution: buy something else instead of hoarding money. If you are comfortable with gold, hoard gold. If you like equities, get those. Or mix it up a little.
Another advantage of steady inflation is that salaries go down over time. Usually this is all but impossible, even though the laws of economics demand it for an efficient economy. The disadvantage is that, well, your real salary goes down over time. But in theory a rising tide lifts all boats. In practice there are winners and there are losers. This was the case during the gold standard as well.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Off course, exponential growth can never be stable.
I think that people fail to realize: 1% interest, compounded, is still exponential growth. The exponentially growing economy has worked for the last few hundred years due to exponential growth of population, at first finding more and more gold and silver, but shortly after the globe was conquered switching to "paper money" that can grow with population.
Chat
" its value can literally double (or fall in half) in the space of 1 calendar year, it'd make business wildly unpredictable. (Just imagine... that mortgage you got denominated in gold? One year later you owe twice the value of the house.) "
You're unclear on the concept. You're apparently referencing getting a loan to purchase that house without saying as much. The value of the house doesn't change because you owe gold - you still owe the same amount of gold you agreed to. When you say the value of the house changes, what you really mean is that the exchange rate between fiat currency and gold has changed. If it takes more fiat currency to exchange for the gold you owe, then it's not the value of gold which has gone up, but that the fiat currency has been devalued, which means it is not a good store of value.
Your whole argument is based on gold not as money, but as an asset valued in fiat currency. The amount of gold is quite stable and not subject to artificial manipulation. It's the manipulation of fiat currencies which causes the exchange rate to change.
"National Security is the chief cause of national insecurity." - Celine's First Law
Paper money only has value because enough people think it does. People will be willing to give you things of tangible value (goods and services) in exchange for paper money and tin coin because they have confidence they can turn around and trade it for more goods and services from someone else at a later date.
Gold only has value because enough people think it does. Most people, however, will NOT be willing to accept gold in exchange for goods and services. In all but a handful of special cases you'll have to first convert that gold to an agreed upon currency first, possibly via some process that certifies the quantity and purity of the gold first.
Both paper money and gold are fiat currencies in this way: They have little or no intrinsic value, but instead serve as proxy of value. It's traded based on a level of trust that the per-unit-value will remain relatively stable (or increase) in the time it takes to turn around and trade it to someone else.
All of this is true for Cryptocurrencies as well. It has value because people want it, not because it's intrinsically valuable. If nobody wants it or is willing to accept it in trade, then it's worthless. You can't even burn it for warmth like paper money or make decorations and tableware out of it like you can with gold... it is absolutely devoid of intrinsic value.
=Smidge=
A Fiat would be worth the pennies in my couch cushions..
We lived for centuries writing checks and they don't clear instantly either. Why is it essential that Bitcoin clear instantly?
THe desgin of bitcoin anticipated this. Initially the profit for adding transactions to the block chain with bitcoin mining. But it was always expected that as the return on mining slowed that it would become fee based. The problem is the fees offered are not reaching the required levels for more miners to enter.
Some drink at the fountain of knowledge. Others just gargle.
You're really good at spotting fools in hindsight, a real gift.
If you think someone isn't free to have a different definition of "freedom" you may be a tyrant.
Don't worry. I'm sure goldfinger here doesn't actually have any gold outside of his "offshore gold depository" that you see advertised late night on basic cable channels. And I am sure he think that when the economy and society collapses they will be more than happy to ship his gold to him in some sort of well defended caravan.
I'm a good cook. I'm a fantastic eater. - Steven Brust
But the house itself could double or half in value overnight with disruptions in the price of gold, loan or not. This encourages people to walk away from their loans, which is exactly what happened in 2008. In that case it was because people went on a buying frenzy when prices were inflated, thinking that prices would continue to inflate.
The same would happen with gold, "Oh I better buy property now, gold went up in value a lot over the past few months... it might go up more!" Yeah, or it might not.
Either way the individuals are morons. Gold has been quite inconsistent over the years so it will only cause this to happen more.
I'm a good cook. I'm a fantastic eater. - Steven Brust
The currency of a given country is merely the measure of the people's confidence in that country's economy.
The Moore-Murphy Law: The number of things that will go wrong will double every 2 years.
why would I trust a crypto currency for which the one with the more computer power "wins", and the first adopter "wins", over the current fiat based currency ? That makes no sense to me as a user of currencies. The current system while having its default is far superior.
C. Sagan : A demon haunted world:
http://www.amazon.com/gp/product/0345409469/
visit randi.org
No! It's not the fiat-currency-price of gold which doubles and halves, it's the real price, the only price that matters, the amount of goods and services which you need that you can purchase with it, which is the only real way to value an asset. (It's one of those terms of art in economics that actually means exactly what it says on the tin.)
And the amount of gold may be stable, but its value is not. You don't hold gold because of its intrinsic value. If no one else wants gold anymore you will not benefit from its intrinsic usefulness by turning it into pretty jewelry or using trace amounts in the manufacture of electronic components. You hold it because it has an effective value, because people demand it, and that demand is just as artificial as the demand for the "fiat" US Dollar, which is a bedrock of stability in comparison. For all the laser-focus on the supply side, gold-bugs have lost sight of the other half of economics, demand.
Oh, and fun fact: You can convert between fiat-currency price and real price using Math. The typical math involved is a little thing you may have heard called the "consumer price index" that measures inflation. In its worst year ever, US dollar inflation once hit 14.76%. Of course that kind of yearly change from gold is just business as usual.
The World Wide Web is dying. Soon, we shall have only the Internet.
Your prices change, either they go up or they go down in response and people react accordingly.
Accordingly means that falling prices should result in a negative interest rate, but you can always get a zero interest rate by keeping the money in a box. This means that in a deflationary environment, you can't borrow (enough) money to invest, and the economy slows down.
it is always advantageous to wait until prices drop
Only up to a point. You would not want to wait your entire life for clothes, food, housing, etc. Besides, I read that the world's population growth would end somewhere this century. And off course money can be managed. If you install a negative interest rate (a kind of hoarding tax) spending becomes more advantageous. This is not a new idea, and basically I think that most humans are, well, human and not bean counting "rational" specimens of homo economicus. Maybe the stock exchange would grind to a halt. That would actually be a good thing.
Nae king! Nae laird! Nae yurrupiean pressedent! We willna be fooled again!
Currently we mine 1-1.5% of the existing supply of gold annually.
That means that unless your economy grows less than that, or mining rates go up significantly, you are basically having deflation: Your gold becomes worth more over time.
Then the first asteroid ever prospected is found to have more gold and precious metals than have been mined from the Earth in all history.
In the free world the media isn't government run; the government is media run.
You're really good at spotting fools in hindsight, a real gift.
You're really good at making frivolous remarks. OK it's the cautious people who get burned in market swings - every damned time. Yeah that makes sense. No hindsight is required, but certainly post facto inane remarks seem to be essential.
Seven puppies were harmed during the making of this post.
Your argument is based not on fundamentals, but on the pragmatic fact that most transactions occur with fiat currency. That doesn't change the basic fact that the value of fiat currency is subject to artificial manipulation (quantitative easing, anyone?). The argument for gold is based on an "all else being equal" situation, where gold would be the most widely accepted of exchange. In that case, gold has value for the same reasons that Bitcoin does - is naturally constrained (unlike, say, diamonds), easily verified, easily divisible, doesn't degrade, and is easily transferred. That makes it intrinsically valuable as a means of exchange. All of those things, except the constraint, are what makes fiat currency have value, so the argument is really whether the value of money should be subject to artificial manipulation. Hyperinflation has never occurred with a gold backed currency, it has with fiat currencies. So much for your claim that fiat currency holds it's real price better than gold.
If you wish to continue the discussion, drop the condescending attitude.
"National Security is the chief cause of national insecurity." - Celine's First Law
There's a saying: A fool and his money are soon parted.
The cautious survive the downswings, or do you not recall the stories of those losing everything when bubbles popped?
The cesspool just got a check and balance.
By your definition, a "fool" in the 1930s would be anyone with a loan or mortgage. That's what the gold standard did - people spent less, thus money became more valuable (deflation). But the loans didn't change - if you borrowed $5,000 to buy farmland in 1925, the bank still expected $5,000 (+ interest) to be paid back, regardless of the true value of that $5,000.
Today, if we had the risk of deflation, a "fool" would be anyone who borrowed to get a higher education, or a reliable vehicle, or a home.
The opposite of a "fool" would be someone who didn't invest their money but instead put it under the mattress.
So think carefully about your definition of a fool.
Besides, I read that the world's population growth would end somewhere this century.
Yep, time for the harvest
The cesspool just got a check and balance.
The difficulties in extraction are the only reason gold holds its value as you point out. The total amount mined is estimated at 171000 tons. By contrast, there are 20 million tons in the ocean you just cant extract it economicslly. If that could be economically extrater gold would go the way of aluminum and cease to be a way to store value.
I'm a consultant - I convert gibberish into cash-flow.
You're doing the same thing, conflating an exchange rate with value. As soon as you say "price of gold," you're no longer talking about value, only exchange rate. The value of a house doesn't change dramatically, it provides the same shelter, living space, amenities, etc. year after year. What changes is the value of fiat currency, so the exchange rate changes. Similarly with gold - the supply is naturally constrained (unlike diamonds), it is easily divisible, doesn't degrade, widely exchanged. What happened with real estate is that fiat currency became devalued over time (inflation), so the price of a house in fiat currency became high. Some people were overextending themselves by making risky bets that they would be able to pay off loans with future dollars which were further devalued (inflated). When a recession occurred the fiat money supply shrank, fiat currency became more valuable - and it took less to buy a home. Some people lost the bet, but the value of their house never really changed, only the value held by fiat currency.
That was good for people who exhibited responsible behavior and saved their money, bad for those who gambled on credit.
"National Security is the chief cause of national insecurity." - Celine's First Law
Cryptocoin could be regarded as a currency backing that actually scales with economic output - because there are no physical limits beyond manufacturing the ASICs and generating the energy
Meaning that what costs 10 bitcoins in the morning may cost 12 bitcoins at noon, 100 bitcoins tomorrow and a 1000 bitcoins next week.
Plenty cautious people do get burned in market swings, you are just suffering from delusions of competence in your own decision making.
If you think someone isn't free to have a different definition of "freedom" you may be a tyrant.
Furthermore I always think to myself whenever I see those Roslyn Capital commercials that if the doomsday fiat currency crash happens (think Depression-era tier or worse) like the spokesman says then who will be able to buy all that gold you been hording if everyone is broke? It's really a clever scam targeted at seniors IMO
Well if Bitcoin is going to get expensive to use... then why would merchants (or customers) have any reason to like it over credit cards? Credit cards settle in seconds, and the network has scaled to massive size and can continue to scale no problem. The alleged advantages of Bitcoin that people liked to bandy about were that it was supposed to be really fast and not cost a bunch like credit cards do. If you can't deliver that (and it can't, it cannot scale to the levels it would need to) then there's little point.
Also "just pay more" is a self defeating thing if people keep following that. So faster transactions are needed, so people pay more for it, as more people pay to get fast, that becomes the new slow so you have to pay MORE and so on. It hasn't solved any kind of scaling issues. You can't argue that it'll reach and equilibrium because as I noted, there's already a system that does it very fast, and doesn't cost too much (2-3% is normally what payment processors charge).
Never mind all the other issues, of which there are many, but BTC has to compete with the credit card networks. They work effectively instantly. People are not interested in stepping backwards.
I'm gong back to tulips!
Don't, don't, just don't.
The Parent is arguing that if everything in your life such as your contracting earnings for work, and your transactions of other sources of income, were also negotiated in Gold, then you'd be in the clear because even if the dollar-evaluation of Gold changes, you're still owed Gold for things like work-hours put in at work or projects completed for clients.
You're clearly arguing with a deluded lunatic.
For their unicorn economy to work, those bosses and those clients would also have to demand that a sufficient amount of their own income is also negotiated in gold, or else they, too, would have to suffer the exchange rate instability.
And that means those sources of income must also demand gold for their goods and services, etc.
Their plan only works if it's basically completely and instantly adopted by the entire population. And eventually you run into a problem: there's no way in hell that you can represent the daily exchange of goods, services, and everything else in let's say the United States of America with gold, while also representing the unexchanged value in all bank accounts in the USA with gold, while also representing the potential for economic growth also in gold.
You could argue that everything can be conducted electronically and that all the gold will actually be stored in Cheyenne Mountain or whatever. You could argue that the system will start with an evaluation of gold that allows the given amount of gold to represent all of the wealth in the united states.
No matter what you argue, you run into the fact that either new discovery is made and mined at a rate equal to or faster then the rate of economic growth, or you face continuous deflation. And that's deflation on a currency that is already so infinitesimalized by how small amount of it there is compared to the sum of gross domestic product plus capital plus banking principal plus wealth, etc. etc.
The evaluation of goods and services in gold would start off infinitesimalized and it would only decrease as time goes by. The people who argue for gold as a currency might as well just argue for any number, any integer whatsoever, to represent all the world's wealth and that everybody in the world simply exchanges increasingly infinitesimal amounts of that.
It's a harebrained scheme and it's not worth arguing with them over it because they never think they're wrong because by the time they're grasping at straws with this gold-based thing, they're already desperate and listening to crackhead late night radio shows looking for answers, or moved onto phase two where they're slowly draining their accounts and watching daytime television and getting sucked in by advertisements meant to fleece the aging population who are losing their faculties.
"Stratigraphically the origin of agriculture and thermonuclear destruction will appear essentially simultaneous" -- Lee
I'm interested as to why you think it will collapse? My suspicion is that it will not collapse without a broader economic collapse - in which case the currency is the least of our problems. Anyway, currency collapse is not unique to fiat currencies. Inflation and deflation would swing +/- 40% in a very short time while we were on the gold standard.
W..w..W - Willy Waterloo washes Warren Wiggins who is washing Waldo Woo.
Everyone except the people who don't own or control the mining technology or the launch pads. They'll still continue to slave away just as people who don't own or control the banking world do today.
"Stratigraphically the origin of agriculture and thermonuclear destruction will appear essentially simultaneous" -- Lee
Goldbugs are also really, really, really blind to history.
When you base your currency on precious metals, you now have an interest in controlling said precious metals. The US used to have strict laws about how much gold bullion you could own, move, sell, buy, trade etc. - For fear of anyone (Either private entities or hostile states) collecting enough to essentially manipulate currency.. Or blackmail the government with threat of causing a currency collapse.
Accordingly means that falling prices should result in a negative interest rate, but you can always get a zero interest rate by keeping the money in a box.
This is being worked on. Various governments are pushing steadily for cash-less economy. When this finally happens, 'keep it in the box' won't be an option anymore.
As opposed to paper currencies which hold value precisely as long as people believe that they do (i.e. a fan currency).
ALL currencies only have value because people believe they have value. People who back the gold standard or similar schemes merely suffer from the delusion that gold is any different in this respect. People who support bitcoin are under the (I believe mistaken) belief that a digital mimic of the gold standard via cryptography somehow solves the problems that forced everyone away from the gold standard. But no matter what currency you use the only reason any of it has value is because people believe it has value.
I was asking why the U.S. dollar is not fan based, is it because of faith and trust in the government? That would sound more like fandom to me.
Nobody really needs to be a fan of the US government to realize that a currency backed by the taxing authority of the country with the biggest economy and biggest military which is accepted in trade around the globe and a long record of stability is probably of practical value. Bitcoin on the other hand is thinly traded, volatile, digital only, and relies on technology of uncertain robustness. Those things matter a lot.
The majority of pragmatists using bitcoin seem to be people engaged in activities that are not exactly legal. I'm not judging but the evidence is clear that the most enthusiastic users of bitcoin appear to be people engaged in drug trafficking or other activities where money laundering and identity hiding are of practical value. Many of the rest of the users of bitcoin seem to be people who are ideologically inclined to dislike government and/or fiat currencies or who are of the opinion that some version of the gold standard should come back. These people like the idea of bitcoin and tend to be the loudest proponents of it, a bit like fan-fiction writers. Hence the (perhaps unfair) moniker.
How about a more recent crash. Traditionally the view with housing was to put 20% down and have a monthly payment no more than 1/3 of your take home pay on a 30 year fixed mortgage. then there was the retard run in the 2000s where all the "experts" said that was wrong. My wife and I got a house doing things the old traditional way, a bunch of friends did the new way. They thought they were so smart until the shit hit the fan and they got foreclosed on, had to file for bankruptcy, or are stuck in a house they really can't afford. We took in the the shorts on equity but at the same time we didn't worry about losing the house, or bankruptcy, as our losses are what the would call paper losses since we bought a house to live in, not use as a bank. We did eventually refinance to a 15 year mortgage with a much lower rate (4.5% to 3.00%) and it cost us $18 more a month for the payment. Anyone who had half a brain should have known something was up, especially since my wife and I were approved for some silly loan amount where our monthly payment would have been $20 less than our pretax earnings. My response to the loan officer was "Are you fucking retarded? It would be physically impossible for us to make even one payment on this." I then told him what we could afford for a monthly payment and made the poor bastard work backwards to figure out what we could actually afford.
The people who got fucked hard in 1929 were just like the people who got fucked hard in '07-'08 the ones who were over extended and didn't listen to the traditional wisdom and instead decided that the rules didn't apply this time.
Time to offend someone
Weak I have a few Z$100,000,000,000,000 notes.
Time to offend someone
The funny thing is that the government doesn't even have to accept the cash anymore. As long as other people accept it, it's still useful on the black market.
Gold is valuable precisely because it is scarce. Yes, you might run into a gold ore but, overall, gold is less than 0.0011 ppm of the earth's crust - you can't easily "get too much of it quickly".
This problem is self-correcting.
If there's a drop in the computational power of the network such that blocks are mined less frequently, then the difficulty drops and blocks are mined more frequently.
If people are complaining (again) about not being able to fit a ton of tiny transactions into a block without paying a fee to ensure prompt delivery, then I'll say (again):
1: Pay a transaction fee
2: Stop shitting around a bunch of tiny transactions
3: Help out and be a miner yourself
4: This is all by design - the end game scenario for BTC is that mining rewards end and all incentive is from transaction fees
If this continues and people don't recognize 1-4 above, idiots will stop using Bitcoin for a bunch of tiny transactions and the problem will correct itself. You don't need to pay .000000001 BTC every time you visit a page on a BTC funded site. You need to pay 000001 BTC to get a credit of 1000 page visits. Bitcoin isn't for massive amounts of microtransactions any more than a traditional bank is. If you want it to do that, then pay the fee (which could be a significant percentage of your microtransaction).
Don't you revalue the currency based on current value as a function of the metal backing it? So that when your local mine unions get a new contract and pay goes up, so does the cost of bread and motorcycles, and dollars are worth less?
Or do you have to accept that being successful and expanding your nation's wealth requires you to gather more of the metals backing your currency to keep pace with growth?
Oh no, that can't work, neither one. We have to let smart people figure these things out of thin air.
deleting the extra space after periods so i can stay relevant, yeah.
The difference is that you need to find an ore to mine in the first place.
Sure they do, you just revalue your currency.
I know people use "fiat currency" to imply that gold somehow has intrinsic value, but in a gold standard the value of gold is still set by arbitrary decree as well, and you can't stop the government from altering the dollar supply by saying it has to be linked to gold.
There's really no replacement for ongoing economically responsible management of the money supply. The fact that inevitably we'll do something short-sighted and stupid with the money supply doesn't change that. You can't adopt a convention (e.g. "One ounce of gold is worth $1200") that people can't amend in the future.
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The Fiat standard: 1 Fiat 500 is worth 13.5 ounces of gold.
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Trump coin will posses intrinsic value regardless of the face value precisely because it had the face of Donald trump on it. It will be a really great currency made from the best bits hand selected by trump himself. There will be no cheap imported bits in Trumpcoin. And Trumpcoin will only work when you are sending money into the USA.
Even if the USA goes down the toilet the trump brand will make these increase in value. Available only at the SHarper Image.
Some drink at the fountain of knowledge. Others just gargle.
Adding more fiat money only dilutes the value of the existing money, stealing from whoever has it, and causes inflation.
You think that doesn't happen with the gold/silver/commodity supply? Why do think think BTC mining is rate-limited?
I'm a minority race. Save your vitriol for white people.
Very few rich people have cash sitting around.
love is just extroverted narcissism
Its "Classic" as in Satoshi's original design where increasing the block size was expected. Its the current core developers that are deviating from that original. The audience for this debate are the miners who are somewhat technically informed and understand the context. Users are irrelevant to the discussion, only miners control what incarnation of the software gets used.
There are a number of efforts to leverage the block chain for other applications. It would be interesting to see if these suffer the same issue.
The problem is only specific to this one particular implementation of the block chain concept. Its a bitcoin specific problem. In theory one easy to fix, but possibly complicated by old mining hardware that would need to be replaced. Not sure about the later, maybe current mining hardware is OK with the fix? Its not like this fix was unexpected, it was expected in the original design and discussion of bitcoin.
This is all true. However, you seem to be exonerating the bank in only discussing the personal responsibility side of things. The loan officer absolutely knew that you would not be able to make payments. Why did he offer you that loan? Offering people loans they can't afford to pay interest on is a terrible way to do business.
Except if you can package the bad loans into a mortgage-backed security, have it rated AAA, sell it for a hefty profit, and leave some other sucker holding the bag. Or were you unaware that the banks made billions of dollars giving out these bad loans?
You're saying people should know better than the loan officer what kind of loan they need. Maybe that's even true, in an ideal world. In an ideal world, investment and consumer banking would have nothing to do with each other, removing incentives for banks to offer bad loans to their customers. In this world, stupid people still want houses to live in, most people don't know enough about loans to be able to contradict a loan officer or even to read the fine print, and banks don't always need to maximize loan repayments to maximize profits.
The people who got fucked hard in '08 were the entire world, and especially US citizens, who saw $10 trillion dollars worth of wealth disappear due to a massive amount of fraudulent securities. But go ahead and blame it on the victims.
Those who advocate genocide deserve every protection afforded by law, and none afforded by common human decency.
A) "Fix it again, Tony!"
This is exactly the same tack that "quick switch to gold!" enthusiasts take when you soundly beat them with their own arguments: they "dare" you to "short gold" if you "know so much" and are "so confident".
I might have read somewhere that this is typical behaviour for traumatized victims of abuse.
"Stratigraphically the origin of agriculture and thermonuclear destruction will appear essentially simultaneous" -- Lee
That a bunch of geeks who know very little about how to operate economy would fail at trying to create one.
Get your PostgreSQL here: http://www.commandprompt.com/
I would like to say that any company (or government) with the engineering competency to mine such an asteroid would also have the economic competency to return it to earth at a controlled rate, so as to extract the max value of their investment. But I can't say that because competency in one domain doesn't imply competency in another domain. (For instance, being a successful jackass reality-TV start doesn't imply you can walk into the White House and avoid steering the country into the ground.)
-1, Too Many Layers Of Abstraction
Gold is great until you need more of it, which you always do, because economies grow (all being well) and extra money is needed to support that.
You do need the total supply of gold to become more valuable as the economy grows. What you do not need, however, is more gold. Absent deliberate interference, the law of supply and demand ensures that the value of the existing gold adjusts automatically to match the value of everything it can be used to purchase.
The only reason to need more currency would be if the supply were stretched so thin that the units required for common transactions became impractically small. However, in cases like that you can just substitute a more common material (like silver) for everyday use and reserve the gold for large transactions. However, gold's physical properties make it fairly easy to handle even in small quantities; for example, you can purchase 1/20 of a gram (about $4 worth) of gold wire embedded in a plastic card from Shire Silver, which is no harder to store or transact with than a typical $5 paper note.
Bitcoin, of course, does not suffer from this problem at all since it is just as easy to transfer 0.00000001 XBT (one satoshi) as it is to transfer 1 XBT—and if that ever did become an issue it would not be difficult to add a few extra decimal places to the protocol.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
Adding more fiat money only dilutes the value of the existing money,
You're missing a key detail of modern economics: the debt economy. Think of money and debt as (loosely) matter and anti-matter. When they're together, they can cancel each other out, and one can be produced by producing an equal (except for an mentioned below) amount of the other. The federal reserve bank is able to do this, and that's where the "out of thin air" magic happens.
By producing money, which is then loaned to banks, the banks have enough money on hand to serve their customers' needs, including making more loans. That allows corporate customers to have enough money available to continue to do business, including paying out paychecks. That lets individuals continue to have money to spend, which goes back to keeping business moving. Ultimately, that's the goal of any economy: to keep goods and services moving from the people who produce them to the people who need them.
The other side of the economy is the debt. When the banks receive the loan from the Fed, they also get an equal amount of debt they are obligated to pay back. When borrowers get their loans, they also get debt. Debt, of course, doesn't get sent out with paychecks, so the borrowers have to pay the debt out of their profits, which limits how quickly they are willing to spend the money they have secured. That prevents runaway spending, and keeps the value of the money stable.
The Fed, then, can control inflation by controlling the interest rate, which affects the balance of money and debt. If they lower the interest rate, businesses (which make up the vast majority of economic transactions) are able to put more money into circulation, at the risk of increasing inflation. If they raise the interest rate, the debt increases, which will help prevent inflation, but has the risk of stopping the all-important circulation of goods and services. It's a careful balance, but it's pretty effective at stopping abrupt crashes or surges in the economy
You do not have a moral or legal right to do absolutely anything you want.
> Sure but the gold standard did not prevent economic crashes, eg in the 30s, and coming off the standard at that time helped
The US did not come off the gold standard in the 30's FDR seized all privately held gold stores and no longer allowed redemptions. These actions greatly increased and lengthened the depression; a huge part of the banking crash was due to panic redemptions based on rumors that the gold seizures were going to happen (that later turned out to be true).
Don't get me wrong: the gold standard is impractical for all kinds of reasons. However, US government management of the great depression was a disaster.
Or you have an accident or theft that loses a vast quantity of gold. When the USS Central America Ship sank in hurricane in 1857 it was carrying 15 tons (in today's dollars $50 Billion) of San Francisco gold rush gold in it's holds. This single event caused an economic crash and run on the banks in the US due to the gold standard.
When the sinking of a ship can cause a run on the banks you need to rethink what you are basing your economy on.
Deflation is very very bad. Japan calls an entire decade the lost decade because they suffered through 10 years of deflation where the entire economy declined while their currency kept getting stronger. At the end the Japanese economy was so damaged that they may never recover.
When's the last time the US had deflation? Not since ~1940 says this,
https://en.wikipedia.org/wiki/...
I see what you did there.
It little behooves the best of us to comment on the rest of us.
In Vietnam everyone is a millionaire! (1,000,000VND = 44.86USD at today's exchange rate.)
It would be helpful to see e some numbers on just how much energy is being wasted by bitcoin miners and transactions. Take those numbers and compare them to the energy wasted on murdering trees and digging metal for coins, along with other electronic transactions. It's all bad in my opinion. Wasted energy and resources.