Gold collapsing. Bitcoin UP.

[jonny1000]

It is out of your hands, the block-size will be raised and it is happening shortly.

Good, that is exactly what I want.

As far as block-rewards are concerned, value continues to grow, not decline. In the year 2140, a single Bitcoin reward will have a value of some $1+ Billion USD.

If that happens, the value will still decline as a proportion of the value of the rest of the system
[doublepost=1468975879][/doublepost]

What I am sure you know (and can reasonably predict with staggering accuracy) is that to keep our options open for scaling bitcoin, (quite literally in this case), entails removing the 1MB block size limit.

Yes I 100% agree. I have now and have always been in favor of increasing the limit. Even 8MB is fine with me, as I told Gavin before he supported XT.
[doublepost=1468976051][/doublepost]

let onchain scaling happen unfettered.

Segwit is an on chain capacity increase and on chain scaling. Increasing the limit is on chain capacity increase but not scaling. I would like to do both.

your Tragedy of the Commons for miners has been debunked by my 3 dozen gvt miner scenario come 2140, which i consider a likely scenario tbh. they have no marginal costs.

I have no idea about your government miner thing, doesnt it sound like centralized mining? A bit like Gavin's "merchants will mine" idea.

Either way, can we please just increase the limit now and then debate the long term issues in a more calm way after we have a higher limit?

 

[cypherdoc]

no, it won't be centralized mining b/c it will be based upon MAD; mutually assured destruction, like we have with today's nukes. public mining, if you will, to ensure a global sound money system ala the 5000 yr gold history we have to draw from. in fact, now that i think of it, it can work exactly the same today as back then with the current fiat system overlaid controlled by interest rates and backed by BTC. if a country goes too far overboard with fractionally reserved fiat lending (too low interest rates), say > 10:1 which is generally considered responsible, then BTC gets withdrawn from that country's reserves as investors sell that country's fiat & withdraw BTC from it's reserves. interest rates in that country then have to go back up to attract those fiat dollars back into the country to restrict overzealous lending (someone check me to make sure i got those dynamics right). this is exactly how it was done back when except gold had to cross oceans to move country to country which was shown to be obviously unworkable cuz pirates, ship sinks, slowness, etc. with BTC, these transfers can be made overnight instantly; keeping countries accountable realtime. could be a great system and wouldn't destroy the existing fiat systems and preventing global chaos. i kinda like it. how bout you?

of course, that doesn't exactly square with how i'd like Bitcoin itself to be the global currency used for direct tx's but maybe somehow we'll have some sort of hybrid.

the other thing being, it doesn't have to be only gvt miners. there could be a healthy private mining industry functioning as well competing for profits from block tx fees. the whole thing sounds reasonable to me.

 

[cypherdoc]

gvt mining is certainly plausible and a likely scenario. remember Nicolas Plassaras's paper regarding the need for the IMF and countries to accumulate BTC?

i've already seen enough to think it will be so; China not shutting down it's miners and Bitfury presumably entangling itself with Georgian gvt. the latter is just an assumption on my part based on those Bitfury videos where they had the President of Georgia up speaking in support of 3 massive facilities being built in the heart of the country. i guarantee BF had to give up something to gvt to get the licenses, building permits, financing, etc for those monstrous facilities. we'll probably see banks get into mining formally first though and their push into private blockchains like R3 is just the beginning.

and it will end up being a matter of national security for gvts. they have to.

 

[lunar]

It is out of your hands, the block-size will be raised and it is happening shortly.

you sound very confident. Have you some inside gossip, or is this just speculation ?

 

[cliff]

Either way, can we please just increase the limit now and then debate the long term issues in a more calm way after we have a higher limit?

Sure.

Following that, how about we de-emphasize debate and instead emphasize collaboration on researching long-term issues?

 

[cypherdoc]

you sound very confident. Have you some inside gossip, or is this just speculation ?

i know. that's the second time he's inferred that. but then of course, he told me Blockstream/Pantera is behind the Avalon buy out. or something like that.

 

[Epilido]

I do not see why 2140 is the key date, the reward falls exponentially from here onwards.

The reward has always fallen exponentially.

 

[NashGuy]

Welcome!

You sound suspiciously like pokertravis.

You will always be able to tell its me even without admission

It is somewhat difficult to follow the train of thought, what you seem to be saying is the 1mb limit forces bitcoin to be a settlement network for a gold-like digital asset.

1 mb isn't what is special here, but the debate, the possibility of changing the limit in order to try to support a high transaction currency, tampers with the markets ability to see bitcoin like they see gold.

A few thought experiments regarding that idea. Who do you think is going to be investing in bitcoin as the transaction fee rises from 15c to several dollars? What use in the world is a digital cash which cannot be used as a form of payment? What do you think will happen to those people (past, present and future) who want to use bitcoin as everything you discuss: a currency, a payment network and a store of value, especially when hundreds of other chains exist which are not hobbled by artificial limitations?

They will either hodl their bitcoin or not. If they decide not to use bitcoin as a currency there is nothing wrong with that. If fees are rising it means other bigger players are valueing bitcoin higher and higher.

Actually if you think about it (and there are many on this thread other than me who have very deeply indeed) then you realise that vanilla bitcoin is probably approaching what constitutes ideal and sound money fairly closely. All a 1mb limit does is abrade the perfect money qualities of the network, whilst increasing costs, decreasing transactional performance and censoring access to just the lucky few (rich).

Ideal Money has a special defintion laid out by John Nash, I just want to make sure that you do or do not intend to use this definition when you use the phrase. Sound money, in this sense refers to a stability of value over time. Bitcoin, scaled to a coffee money won't necessarily have this. Messing with its utility changes its value. I think we all agree on this.

People are using "ideal" in the sense of utility, which is a different argument that doesn't actually attend to the macro economic implications of bitcoin.

No money can be designed to be ideal money? Why not? After the emergence of bitcoin and 'the blockchain' design is far easier. Creating a monetary tool that has value derived from demand from the people all around the world - now that is a challenge. You could argue that bitcoin is amazing from this perspective alone - it is not given value by the end of a spear or because it is denominated on a tax form. But you are probably right it will not be the ultimate solution - why could it not become it though?

It is the special nature of the problem. Ideal Money, by Nash's definition, is a metric for value that is stable over time. It is an objective measuremeant. This suggest it cannot be designed. In each nation they have their own metrics, for example their CPI's, or in other words the cost of a collection of goods over time, inflation measure. But who should choose the goods? And who would know the perfect goods?

To create Ideal Money, to create such a stable, objective, politically neutral metric, it MUST be the markets that ultimate choose it and levate it over time. And in order to entice this process we need a new standard for competition, that is unchanging and predictable in the way that gold is.

Thx.

 

[jonny1000]

Following that, how about we de-emphasize debate and instead emphasize collaboration on researching long-term issues?

Agreed. We need to stop the conspiracy attacks, the FUD and counterproductive attempts to hardfork without consensus. We need to focus more on collaboration, discussion and research in a calm and patient way.

 

[NashGuy]

welcome /u/pokertravis.

you stated the crux of the problem right there. by having a 1MB centrally planned imposed limit enforced by kore dev, Bitcoin is not free to compete on the open market or reach it's full potential. the missing piece in your analysis is why gold never was able to become the ideal money in the modern age compared to what it had been for 5000 yrs. the invention of the internet and it's seamless communication is what has allowed the formation of Bitcoin, the potential ideal money. in fact, John Nash's paper was stimulated in part by the evolution of the internet and this concept of instant communication. furthermore, iirc, his Ideal Money paper envisions a type of money that is widely circulated and used by ordinary ppl, like for coffee etc. he never talked about his Ideal Money being limited in any way nor hobbled down to that of a "settlement layer" like you small blockists gush about. in fact, when you look at the situation, there is absolutely no reason to cripple any money in this 1MB way. it's stupid. and b/c there is absolutely no way Greggy and company can divine that 1MB is the perfect limit, it should be removed or at least increased to allow the "free mkt competition" that you espouse that will ultimately find the appropriate equilibrium block size over time.

Szabo is the one that got everyone on the topic of central-planning via his works that highlight Hayek. Hayek has an explicate definition for this phrase, which important because he cautions us against "central-planning". But you have not used Hayek's definition. Have you read Hayek's or Szabos works on this. Here I explain the difference between the bad kind of central planning vs a good kind: https://medium.com/@rextar4444/central-planning-the-kind-we-should-fear-and-the-kind-that-is-helpful-bb323a0284ad#.cqnbo13y6

In regard to Ideal Money, that John Nash spoke about, we are talking about bringing all of the national and centrally banked currency systems into order. Each system or issuer has monetary policy that effects the value of the currency, but typically there is incentive to devalue and destable the currency from they eyes of the issuer/government. If bitcoin can be introduced as an inflation hedge on an international currency market, then we should expect the competition between currency to force the fiats to play ball. The ultimate result is a market of only Ideal Money.

Players that are pushing for bitcoin to be Ideal Money are not referencing John Nash's definition. But they should be clear about this.

his Ideal Money paper envisions a type of money that is widely circulated and used by ordinary ppl, like for coffee etc.

Actually he talks about how often the money systems that serve the people are often out of the hands of people. He doesn't say what you are saying here. Do you claim to have read this works, I often have to ask this because many people that make opinions on it ultimately reveal they have not read the literature they are trying to quote?

there is absolutely no reason to cripple any money in this 1MB way. it's stupid. and b/c there is absolutely no way Greggy and company can divine that 1MB is the perfect limit, it should be removed or at least increased to allow the "free mkt competition" that you espouse that will ultimately find the appropriate equilibrium block size over time.

There is a reason. Because keeping as many of the parameters the same allow the markets to seek bitcoin like a gold, rather than a highly circulating currency. This is something both sides seem to accept, that capping bitcoin means it won't be used by the average joe, but only large meta/whale players.

there is absolutely no reason to cripple any money in this 1MB way. it's stupid. and b/c there is absolutely no way Greggy and company can divine that 1MB is the perfect limit, it should be removed or at least increased to allow the "free mkt competition" that you espouse that will ultimately find the appropriate equilibrium block size over time.

1mb is not the magic number, it could be 2 or 4mb for all I care, but changing it, and trying to forward plan an "ideal currency" will harm its value as a gold/inflation hedge.

You are talking about free market competition, but we are not referring to the same process. It is the Hayekian thesis to suggest if we try and design ideal money it will fail, but we can design gold. Nash left us all the parameters of why we seek gold as an inflation hedge, and bitcoin as it stands fits it perfect.

Ideal Money, is what the markets must levate, and the markets will brute force the solution/valuation when a gold 2.0 is introduced. This is nashs thesis.

oops, he is /u/pokertravis and i guess i did invite him . did i make a mistake?

anyways, he talks alot about gold (one of my favorite subjects) along with John Nash, whom i've always put right up there with possibly being Satoshi.

let's see what he brings the thread.

Nash's relation to bitcoin came from my insight on Ideal Money.
[doublepost=1468992411,1468991599][/doublepost]

Welcome to the forum.

This would be a strong argument for all parties to cease to squabble over Bitcoin's capacity limit and instead let the free market sort it out. In that way, perhaps Bitcoin could still be asymptotically ideal in Nash's sense.

Keeping Bitcoin centralized in any meaningful way seems a hard thing to do, given that its source code and data (the ledger) are free and public. It would take repressive measures the world over to keep this private money from spreading.

It is a strong argument to seek the squabbling. But there is no free market to sort out the block size debate, thats why it exists. There is only the consensus mechanism etc, which already supports 1mb blocks.

Bitcoin is asymptotically Ideal Money in that there is to be introduced a catalyst, a gold 2.0 that will cause the existing currency market game to change an entice the competition. Bitcoin is GOOD, but its not ideal. Nash says a GOOD currency can start the game.

Keeping Bitcoin centralized in any meaningful way seems a hard thing to do, given that its source code and data (the ledger) are free and public. It would take repressive measures the world over to keep this private money from spreading.

If we start to try to target bitcoin's idealness in the nashian sense, through the block size debate, we will ruin its gold like properties. The markets then won't view it as an inflation hedge. That is what hayek warned us about in regard to central planning.

central planning isn't necessarily bad. Rather the type of central planning hayek warned us about is trying to target something through design that cannot be achieve. So for this central planning the 1mb limit, in the way big block proponents talk about, is NOT what Hayek warns us about, but trying to target bitcoin's value through raising the transaction capacity IS. It won't do what players are suggesting, rather it will destory bitcoin's gold like properties.

 

[Zarathustra]

Agreed. We need to stop the conspiracy attacks, the FUD and counterproductive attempts to hardfork without consensus. We need to focus more on collaboration, discussion and research in a calm and patient way.

We need to stop the conspiracy attacks, the counterproductive attempts to destroy an essential rule (blocks must not be full; a blocked stream must not be allowed) by a 5% 'consensus'.

 

[Zarathustra]

Each system or issuer has monetary policy that effects the value of the currency, but typically there is incentive to devalue and destable the currency from they eyes of the issuer/government. If bitcoin can be introduced as an inflation hedge on an international currency market, then we should expect the competition between currency to force the fiats to play ball. The ultimate result is a market of only Ideal Money.

Interest rates (which in the middle and long run are positive) are the inflation hedge. A currency with a 1 mb limit cannot be a currency, because it's not used as a currency. It's a commodity, which is more of a speculation than a hedge.

https://bitco.in/forum/threads/gold-collapsing-bitcoin-up.16/page-543#post-19814

 

[NashGuy]

Interest rates (which in the middle and long run are positive) are the inflation hedge.

Are you suggesting its accepted economic science to suggest that an interest rate is used as inflation hedge when fiat is perceived to be losing its value in regard to other commodities and currencies? I'm not sure that make sense to say.

A currency with a 1 mb limit cannot be a currency, because it's not used as a currency.

This is in DIRECT contrast to observable reality in the present day.

It's a commodity, which is more of a speculation than a hedge

Are you saying then that gold is not used as an inflation hedge? I don't think accepted economic science supports your claim.

 

[Zarathustra]

"Are you suggesting its accepted economic science to suggest that an interest rate is used as inflation hedge when fiat is perceived to be losing its value in regard to other commodities and currencies? I'm not sure that make sense to say."

Economic science is more theology than science. Look at the chart (the reality). FIAT Bonds obviously didn't lose its value in regard to commodities. It's the opposite. Gold did lose against FIAT. A crushing defeat.

"Are you saying then that gold is not used as an inflation hedge? I don't think accepted economic science supports your claim."

Yes, the losers used it as an inflation hedge. The winners didn't.

 

[NashGuy]

I don't know if we can consider it rational to suggest that a certain science is not science. I'm not sure that is a supported theory.

It's the opposite. Gold did lose against FIAT. A crushing defeat.

On that graph aren't you refer to cash and gold? Isn't cash fiat?

 

[freetrader]

It is a strong argument to seek the squabbling.

Seek the squabbling? Is that a typo or do you seriously advocate it?
To avoid such confusion, I would suggest copying and pasting quotes when you reply, as well as generally running your posts through a spell checker, also to get a consistent capitalization of names such as Hayek.

But there is no free market to sort out the block size debate, thats why it exists. There is only the consensus mechanism etc, which already supports 1mb blocks.

I disagree - the free market consists of alternative clients which support a predictable planned increase to higher block sizes. Miners can choose which client to run, and in this way bring about the necessary consensus. That they have not voted in that direction YET does not mean choice does not exist.
And the spectrum of client choices is set to increase.
The penultimate freedom is that anyone can take the free and open source code and adapt it to their liking, and take their modification as a proposal to the market (of Bitcoin users) to see if consensus can be obtained for it.
The ultimate freedom - within Bitcoin - is that anyone can take the free and open source code and create a non-elective hard fork of the currency, to ask consensus from the community by way of voting with their own "CPUs", in case any party in the ecosystem (e.g. miners) have become too powerful/controlling (e.g. wish to exercise a 5% veto).

Then there is also be bigger market of cryptocurrencies that compete with Bitcoin, such as Ethereum, Litecoin. ... a veritable currency competition. Once again, there is freedom of choice. The cryptocurrency market is as close to a free market as any I've seen.

If we start to try to target bitcoin's idealness in the nashian sense, through the block size debate, we will ruin its gold like properties. The markets then won't view it as an inflation hedge. That is what hayek warned us about in regard to central planning.

central planning isn't necessarily bad. Rather the type of central planning hayek warned us about is trying to target something through design that cannot be achieve. So for this central planning the 1mb limit, in the way big block proponents talk about, is NOT what Hayek warns us about, but trying to target bitcoin's value through raising the transaction capacity IS. It won't do what players are suggesting, rather it will destory bitcoin's gold like properties.

Your worry that raising the block size limit once is a harbinger of instability is perhaps a reasonable one to have, but has to be seen in the context of other cryptocurrencies which have performed similar changes (and it has not had a detrimental impact on their valuation).
Bitcoin's gold-like property is its scarcity - most importantly the 21M coin limit.
There is the additional factor of a mathematically predictable inflation schedule, guarded by strong consensus that this is one of the key properties. There is no similar consensus for a limited transactional capacity, which is why this debate exists.
We may agree that the acrimonious debate and lack of consensus has harmed Bitcoin's value.
If the limit had been lifted substantially or eliminated as far as technically possible (which is what Bitcoin Unlimited is doing) much earlier on, then we would not have had this protracted debate over many years.

Can you propose a feasible solution to increase Bitcoin's transactional capacity without effectively raising the block size capacity?

 

[NashGuy]

Seek the squabbling? Is that a typo or do you seriously advocate it?
To avoid such confusion, I would suggest copying and pasting quotes when you reply, as well as generally running your posts through a spell checker, also to get a consistent capitalization of names such as Hayek.

No I mean cease. I generally try to quote and spellcheck but I will never be good at it and you'll always have to pay attention to how I am using my words. Sorry, its the nature of my thinking style. I'm supra rational, not super ;p

I disagree - the free market consists of alternative clients which support a predictable planned increase to higher block sizes. Miners can choose which client to run, and in this way bring about the necessary consensus. That they have not voted in that direction YET does not mean choice does not exist.
And the spectrum of client choices is set to increase.
The penultimate freedom is that anyone can take the free and open source code and adapt it to their liking, and take their modification as a proposal to the market (of Bitcoin users) to see if consensus can be obtained for it.
The ultimate freedom - within Bitcoin - is that anyone can take the free and open source code and create a non-elective hard fork of the currency, to ask consensus from the community by way of voting with their own "CPUs", in case any party in the ecosystem (e.g. miners) have become too powerful/controlling (e.g. wish to exercise a 5% veto).

Then there is also be bigger market of cryptocurrencies that compete with Bitcoin, such as Ethereum, Litecoin. ... a veritable currency competition. Once again, there is freedom of choice. The cryptocurrency market is as close to a free market as any I've seen.

Yes Satoshi basically said: Go ahead and change it, you just need consensus. But as you admit, with new proposals and increasing number of ideas, we should expect less chance of consensus over time. We needed consensus early on. This is why core and other players are simply stalling, until the entropy builds up and such change can't happen.

The free market, is not in regard to proposals, although it is free in a sense, it is a different use of the word free market, than the standard economic science use.

Yes e-currencies have provided a freer market and will free up our fiat and commodity markets, and this is the mechanism we should rely on to bring about Ideal Money, because valuation and evolution of our money through these markets is not central planning that hayek warned us about.

But designing bitcoin so be implemented as Ideal Money in itself is a central planning folly. It cannot be done. Thats why Satoshi didn't try to do it.

Your worry that raising the block size limit once is a harbinger of instability is perhaps a reasonable one to have, but has to be seen in the context of other cryptocurrencies which have performed similar changes (and it has not had a detrimental impact on their valuation).

None of those currencies can compete with bitcoin because of that. Look at ethereum and what change has done for them. Great ideas, but the whales cannot seek safe haven in such instable designs.

Bitcoin's gold-like property is its scarcity - most importantly the 21M coin limit.

This is not the only property and in this context gold is not actually very or relatively scarce.

There is the additional factor of a mathematically predictable inflation schedule, guarded by strong consensus that this is one of the key properties.

Yes and this mirror's bitcoins in regard to what Nash points out as the cost of digging deeper for gold. gold has had this predictable inflation rate historically it seems. But in regard to inflation we are basically also refering to the stability of its value over time (or the predictability).

There is no similar consensus for a limited transactional capacity, which is why this debate exists.

Yes which is another way of saying some people think bitcoin should be like gold and some people don't. Gold isn't really highly transactable, bitcoin already crushes gold in this regard.

We may agree that the acrimonious debate and lack of consensus has harmed Bitcoin's value.
If the limit had been lifted substantially or eliminated as far as technically possible (which is what Bitcoin Unlimited is doing) much earlier on, then we would not have had this protracted debate over many years.

Yes we do agree here, and so there is no reason to keep debating. And the fast we decide we shall never debate this subject again, the quicker we can bring the worlds monetary systems into order. If we have this debate and change the nature of bitcoin, what is to stop us from changing it over and over? The markets cannot seek it as a gold with such instability of design.

Can you propose a feasible solution to increase Bitcoin's transactional capacity without effectively raising the block size capacity?

There is no purpose is "solving" bitcoins transactional capacity, it is a feature, not a problem. It renders bitcoin like gold by the significant definition.

 

[satoshis_sockpuppet]

About this patent stuff again:

I've read a bit more and I'm convinced that this is a very important and great move by Blockstream, that should be highly respected. Regardless the other negative impact they have and had. I believe certain actors from BS (you know who) have a very negative impact on Bitcoins development, but this step from Blockstream should be applauded nonetheless. Credit where credit is due.

It is the best thing a single company can do in regards to these toxic software patents and I can't see how Blockstream is doing anything bad with that. It looks like a lot of people just created their own story about "Blockstream and patents" when they selectively read the headlines from reddit threads etc.
Read https://blockstream.com/about/patent_faq/ and tell me where this isn't good work by Blockstream.

If there is anybody to criticize it's the other companies in the Bitcoin space, that patent their software without using such a licence. And any company that doesn't use the same licence should be viewed as opposed to free and open Bitcoin development.

edit: Oh and if even if their policy had any loopholes (as far as I can tell it's as legally binding as possible), they just made it (much) harder for them to sue people for patent violation. They didn't made it easier by openly declaring their stance and posting a lot of information.

 

[freetrader]

@satoshis_sockpuppet : After reading their documents and the discussion, I arrive at the same conclusion. This should be supported by all other companies in the space. It's a best possible short-term way to neutralize the harmful effects of software patents. I also applaud Greg's willingness to extend the patent protection to Ethereum etc. if they are willing to join forces.

The unfortunate side-effect is that it slightly legitimizes software patents, because in order to be useful as a defense, such patents have to be filed in the first place and contributed to the pool. Doing this at the same time as fighting against software patents seems a little conflicted. But reality is probably that messy.

From a more idealistic perspective, an open source cryptocurrency, with anonymous contributors seems well protected from the vagaries of IP law. A problem arises when you incorporate to profit from that protocol.

I am eager to see how other important Bitcoin and technology companies react to this. There's bound to be lawyers behind the scenes, poring over it at some big corps.

http://www.groklaw.net/articlebasic.php?story=20040911222432234

 

[Zarathustra]

I don't know if we can consider it rational to suggest that a certain science is not science. I'm not sure that is a supported theory.

On that graph aren't you refer to cash and gold? Isn't cash fiat?

Cash is a tiny fraction of Fiat. Nobody is hodling cash. The majority is hodling Fiat as Bonds and Stocks, which outperformed Gold by orders of magnitude. Soros and Buffet are the winners, Peter Schiff a loser.