Bitcoin as a viable currency?

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Re: Bitcoin as a viable currency?

#101  Postby newolder » Feb 06, 2018 3:32 pm

Thanks, purplerat. The first paragraph is similar to what I've read before - a seemingly laudable aim. When it gets to the details of implementation is where the glazing over begins.
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Re: Bitcoin as a viable currency?

#102  Postby Thommo » Feb 06, 2018 3:34 pm

purplerat wrote:The central idea is a decentralized economy not controlled by entities like governments or banks. I don't think it's that hard to understand. Even if it's not your "thing" (and if I'm being honest it's really not mine) you'd have to be very naive to not see why such would be very appealing to many people.


Perhaps I am naive, but I do struggle to see it. Can you elaborate a bit?
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Re: Bitcoin as a viable currency?

#103  Postby purplerat » Feb 06, 2018 4:34 pm

Thommo wrote:
purplerat wrote:The central idea is a decentralized economy not controlled by entities like governments or banks. I don't think it's that hard to understand. Even if it's not your "thing" (and if I'm being honest it's really not mine) you'd have to be very naive to not see why such would be very appealing to many people.


Perhaps I am naive, but I do struggle to see it. Can you elaborate a bit?

You don't understand why many people are distrustful of governments and financial institutions or would simply rather be able to exchange wealth without involving them? It's hardly a secret that these institutions will leverage the control they have over the exchange of wealth to control what people and can and cannot do.

Case in point; the state I live in banned online gambling several years ago. They didn't really ban it though, rather what they did was restrict financial transactions involving online gambling. Which kind of suck because used to enjoy playing a bit of online poker. But now enter Bitcoin which has no such oversight or anybody controlling it. If I want to bet it all away that's my choice and the banks and government can mind their own business.

To be clear I'm no libertarian and I can see the arguments for wanting these institutions to control our wealth. I just don't think it's a clear-cut situation where you can say one side is absolutely right and the other absolutely wrong.
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Re: Bitcoin as a viable currency?

#104  Postby purplerat » Feb 06, 2018 4:36 pm

newolder wrote:Thanks, purplerat. The first paragraph is similar to what I've read before - a seemingly laudable aim. When it gets to the details of implementation is where the glazing over begins.

Sorry, I may have misread what you were saying about understanding blockchain. If you understand how the blockchain works then that pretty much explains the implementation. Granted there are many people involved in Bitcoin who don't and just trust that it works.
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Re: Bitcoin as a viable currency?

#105  Postby newolder » Feb 06, 2018 4:45 pm

purplerat wrote:
newolder wrote:Thanks, purplerat. The first paragraph is similar to what I've read before - a seemingly laudable aim. When it gets to the details of implementation is where the glazing over begins.

Sorry, I may have misread what you were saying about understanding blockchain. If you understand how the blockchain works then that pretty much explains the implementation. Granted there are many people involved in Bitcoin who don't and just trust that it works.

I understand that blockchain is the name given to some software. I understand that bitcoin (and loads of other named entities) is (are) instance(s) of that software. I do not, however, understand how instances of software implement "currency without government".
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Re: Bitcoin as a viable currency?

#106  Postby purplerat » Feb 06, 2018 7:05 pm

newolder wrote:
purplerat wrote:
newolder wrote:Thanks, purplerat. The first paragraph is similar to what I've read before - a seemingly laudable aim. When it gets to the details of implementation is where the glazing over begins.

Sorry, I may have misread what you were saying about understanding blockchain. If you understand how the blockchain works then that pretty much explains the implementation. Granted there are many people involved in Bitcoin who don't and just trust that it works.

I understand that blockchain is the name given to some software. I understand that bitcoin (and loads of other named entities) is (are) instance(s) of that software. I do not, however, understand how instances of software implement "currency without government".

gotcha. I'm probably not the best person to try and explain it but I'll give it a shot.

I think many people get tripped up by what's meant by 'currency' when they try to think of it as paper & coin currency. This is not helped by the media constantly using images of physical bitcoins (which don't exist) next to fiat currency. But currency can be anything of value that can be traded.

And software can certainly have value despite not existing physically or being backed by something of "intrinsic value". Think of Google or Facebook. Their value is based purely on their utility and how people value that which is essentially the same as Bitcoin. What Bitcoin offers, via blockchain, that software like Google or Facebook don't is a built-in mechanism for exchanging that value. That's what makes it a currency.

As for the "without government" part, what that means is that typically with traditional currencies you need some sort of regulatory body to manage the economy of said currency and prevent people from doing things like just printing their own money. But with blockchain that is all handled through the code and thus doesn't require that regulation which would typically be handled by a government or financial institution of some sort.

The idea of such decentralized currencies or methods of trade isn't really anything new. But previously such would be completely unworkable on any scale and prone to collapse. Blockchain is an attempt to solve those issue with technology.
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Re: Bitcoin as a viable currency?

#107  Postby newolder » Feb 06, 2018 7:33 pm

Thanks again, purplerat. You write an interesting story until this part:
Blockchain is an attempt to solve those issue with technology.


Blockchain is a set of methods to produce bit strings with placement rules. That's all it is. Those methods were written by a "Priest of the coding". I don't understand how this is any different to any other rule-based system like, say, secular law, the internet or religion.

How, for example, does coffee get from its tree to my mouth in a system without governance that builds roads and other transport infrastructure?
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Re: Bitcoin as a viable currency?

#108  Postby Macdoc » Feb 06, 2018 7:58 pm

I think you are confusing governance with currency.

That was a pretty good explanation.

Let's parse yours.

Contractor in Canada wins contract for a road in Norway.

He is paid by the Norwegian gov in the agreed bitcoin amount. The banks are cut out entirely.

All the other rules of the contract applies ...just no bank intermediary.

Contractor pays staff, materials etc in bitcoin.

That the currency is fluctuating now is no different than the fluctuations between the Kroner and the Cdn dollar except the bank is not taking the cut as an intermediary ( usually .6% total ....each side taking a .3% hit on exchange. )

That's just one tiny example in a very wide range of implications

https://theconversation.com/us/topics/blockchain-11427

this is one of several articles there

New cryptocurrencies could let you control and sell access to your DNA data
January 22, 2018 2.08pm ES

https://theconversation.com/new-cryptoc ... data-89499

Banks are scared to death of this disintermediation as fees and foreign exchange games are their bread and butter. Law enforcement is scared to death of these bank free transactions.

There is a low level "war" on at the moment.

Banks in Britain and U.S. ban Bitcoin buying with credit cards
https://ca.news.yahoo.com/lloyds-bank-b ... ocurrenc...
1 day ago - By Lawrence White and Emma Rumney LONDON (Reuters) - Banks in Britain and the United States have banned the use of credit cards to buy Bitcoin and other ... network, said customers buying cryptocurrencies with credit cards fueled a 1 percentage point increase in overseas transaction volumes in the fourth quarter.



Chase Bank, as of 1/22, considers Coinbase purchases "cash ...
https://www.reddit.com/r/.../chase_bank ... purchases/
Jan 27, 2018 - Imagine if a bank blocked transfers to stock brokerage sites and wanted an extra 25% to do it? That's what this is coming to. .... Makes sense. You can easily buy $750 worth of Bitcoin and turn around and sell it right back into USD and do an ACH withdrawal to your bank account bypassing the cash advance fees otherwise.



https://www.veem.com/blockchain/blockch ... d-to-know/
Jan 18, 2018 - blockchain. The ability to see everything that's going on with your finances speeds up the transfer process and adds a level of safety that banks simply can't offer. Anytime a “block,” or transaction record, is tampered with or changed, it can be seen and confirmed by all parties. As well, all transaction records are encrypted, ...


This is pretty good coverage overall

https://www.tomsguide.com/us/what-is-bi ... -5061.html
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Re: Bitcoin as a viable currency?

#109  Postby purplerat » Feb 06, 2018 8:03 pm

newolder wrote:Thanks again, purplerat. You write an interesting story until this part:
Blockchain is an attempt to solve those issue with technology.


Blockchain is a set of methods to produce bit strings with placement rules. That's all it is. Those methods were written by a "Priest of the coding". I don't understand how this is any different to any other rule-based system like, say, secular law, the internet or religion.

You're right in that it's a rule-based system. What you seem to gloss over is that (at least in the implementations we are discussing) it is incorruptible and truly democratic. At least that's the theory. Of course, many other systems make similar claims but the idea with blockchain is that by being strictly code based it can actually achieve that.

newolder wrote:
How, for example, does coffee get from its tree to my mouth in a system without governance that builds roads and other transport infrastructure?

You seem to be confusing currencies with economies.
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Re: Bitcoin as a viable currency?

#110  Postby newolder » Feb 06, 2018 9:24 pm

purplerat wrote:
newolder wrote:Thanks again, purplerat. You write an interesting story until this part:
Blockchain is an attempt to solve those issue with technology.


Blockchain is a set of methods to produce bit strings with placement rules. That's all it is. Those methods were written by a "Priest of the coding". I don't understand how this is any different to any other rule-based system like, say, secular law, the internet or religion.

You're right in that it's a rule-based system. What you seem to gloss over is that (at least in the implementations we are discussing) it is incorruptible and truly democratic. At least that's the theory. Of course, many other systems make similar claims but the idea with blockchain is that by being strictly code based it can actually achieve that.

newolder wrote:
How, for example, does coffee get from its tree to my mouth in a system without governance that builds roads and other transport infrastructure?

You seem to be confusing currencies with economies.


As for the "without government" part, what that means is that typically with traditional currencies you need some sort of regulatory body to manage the economy of said currency and prevent people from doing things like just printing their own money. But with blockchain that is all handled through the code and thus doesn't require that regulation which would typically be handled by a government or financial institution of some sort.

Where is my confusion? What's the difference between a legal system and a bit string generated by code? (Perhaps you think code runs at zero cost?)

And "Handled through the code..." isn't part of an implementation, it's a request to be robbed.
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Re: Bitcoin as a viable currency?

#111  Postby newolder » Feb 06, 2018 9:38 pm

Macdoc wrote:I think you are confusing governance with currency.

I did not intend to.
That was a pretty good explanation.

I agree. It explained how a shift to blockchain is little different to current systems. (Unless you think code runs at zero cost?)

Let's parse yours.

Contractor in Canada wins contract for a road in Norway.

You assume an infrastructure connecting Canada with Norway. Ok, how is it maintained and by whom?

He is paid by the Norwegian gov in the agreed bitcoin amount. The banks are cut out entirely.

All the other rules of the contract applies ...just no bank intermediary.

Contractor pays staff, materials etc in bitcoin.

So there's no discernible difference between the new and old systems. You've simply replaced the work of banks with the work done by code. (Which is neither free nor negligible.)

That the currency is fluctuating now is no different than the fluctuations between the Kroner and the Cdn dollar except the bank is not taking the cut as an intermediary ( usually .6% total ....each side taking a .3% hit on exchange. )

Transactions are free (no energy costs) too are they? (I don't thinks so - keeping track of the blockchain sees to that.)

That's just one tiny example in a very wide range of implications

https://theconversation.com/us/topics/blockchain-11427

this is one of several articles there

New cryptocurrencies could let you control and sell access to your DNA data
January 22, 2018 2.08pm ES

https://theconversation.com/new-cryptoc ... data-89499

Banks are scared to death of this disintermediation as fees and foreign exchange games are their bread and butter. Law enforcement is scared to death of these bank free transactions.

There is a low level "war" on at the moment.

Banks in Britain and U.S. ban Bitcoin buying with credit cards
https://ca.news.yahoo.com/lloyds-bank-b ... ocurrenc...
1 day ago - By Lawrence White and Emma Rumney LONDON (Reuters) - Banks in Britain and the United States have banned the use of credit cards to buy Bitcoin and other ... network, said customers buying cryptocurrencies with credit cards fueled a 1 percentage point increase in overseas transaction volumes in the fourth quarter.



Chase Bank, as of 1/22, considers Coinbase purchases "cash ...
https://www.reddit.com/r/.../chase_bank ... purchases/
Jan 27, 2018 - Imagine if a bank blocked transfers to stock brokerage sites and wanted an extra 25% to do it? That's what this is coming to. .... Makes sense. You can easily buy $750 worth of Bitcoin and turn around and sell it right back into USD and do an ACH withdrawal to your bank account bypassing the cash advance fees otherwise.



https://www.veem.com/blockchain/blockch ... d-to-know/
Jan 18, 2018 - blockchain. The ability to see everything that's going on with your finances speeds up the transfer process and adds a level of safety that banks simply can't offer. Anytime a “block,” or transaction record, is tampered with or changed, it can be seen and confirmed by all parties. As well, all transaction records are encrypted, ...


This is pretty good coverage overall

https://www.tomsguide.com/us/what-is-bi ... -5061.html

Thanks for that.
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Re: Bitcoin as a viable currency?

#112  Postby purplerat » Feb 06, 2018 9:47 pm

newolder wrote:
Where is my confusion? What's the difference between a legal system and a bit string generated by code? (Perhaps you think code runs at zero cost?)

The difference is that legal systems, and the other types of systems you mentioned, have been consistently proven to be easily and readily corrupted. That's because they rely on people to run them and people easily and readily corrupted. Code, especially on a distributed network, not so much.

As for the cost I haven't a clue what you are getting at. Do you think I've suggested this stuff is free? That would be rather odd given that I've described how I personally make money directly from those costs.

newolder wrote:
And "Handled through the code..." isn't part of an implementation, it's a request to be robbed.

Ah, the "gonna be hacked" argument. While I wouldn't swear it's unhackable the response that because it's code that means it will be hacked is pure ignorance. Rather than try and explain why it's very unlikely that a blockchain will be hacked I'll simply ask if you can find any examples of such code being compromised. I mean there are hundreds of billions of dollars worth of cryptocurrency available out there so if it's so easy where are all of the examples.

To be clear I'm talking strictly about a blockchain itself being hacked. Not somebody leaving their computer open with their wallet running and their keys in a text document on the desktop named "BITCOIN PASSWORD" getting "hacked". There have certainly been many thefts along those lines but that would be akin to somebody leaving their wallet on a park bench to later find it empty blaming their loss on the bank's security.
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Re: Bitcoin as a viable currency?

#113  Postby newolder » Feb 06, 2018 10:03 pm

purplerat wrote:
newolder wrote:
Where is my confusion? What's the difference between a legal system and a bit string generated by code? (Perhaps you think code runs at zero cost?)

The difference is that legal systems, and the other types of systems you mentioned, have been consistently proven to be easily and readily corrupted. That's because they rely on people to run them and people easily and readily corrupted. Code, especially on a distributed network, not so much.

I guess I don't share your confidence in code.

As for the cost I haven't a clue what you are getting at. Do you think I've suggested this stuff is free? That would be rather odd given that I've described how I personally make money directly from those costs.

So, no benefit there then.

newolder wrote:
And "Handled through the code..." isn't part of an implementation, it's a request to be robbed.

Ah, the "gonna be hacked" argument. While I wouldn't swear it's unhackable the response that because it's code that means it will be hacked is pure ignorance. Rather than try and explain why it's very unlikely that a blockchain will be hacked I'll simply ask if you can find any examples of such code being compromised. I mean there are hundreds of billions of dollars worth of cryptocurrency available out there so if it's so easy where are all of the examples.

The easiest work-around seems to be to dominate the mining - see China.

To be clear I'm talking strictly about a blockchain itself being hacked. Not somebody leaving their computer open with their wallet running and their keys in a text document on the desktop named "BITCOIN PASSWORD" getting "hacked". There have certainly been many thefts along those lines but that would be akin to somebody leaving their wallet on a park bench to later find it empty blaming their loss on the bank's security.

I don't know of any specific bitcoin hacks but neither could I hack an NT server before I was shown how.
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Re: Bitcoin as a viable currency?

#114  Postby purplerat » Feb 06, 2018 10:12 pm

I'll just say that you'd make a good miner with your propensity to continue digging despite already being in a hole.
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Re: Bitcoin as a viable currency?

#115  Postby Macdoc » Feb 06, 2018 10:41 pm

You assume an infrastructure connecting Canada with Norway. Ok, how is it maintained and by whom?


again you confusing a government with a currency.
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Re: Bitcoin as a viable currency?

#116  Postby zoon » Feb 07, 2018 11:09 am

Macdoc wrote:I think you are confusing governance with currency.

That was a pretty good explanation.

Let's parse yours.

Contractor in Canada wins contract for a road in Norway.

He is paid by the Norwegian gov in the agreed bitcoin amount. The banks are cut out entirely.

All the other rules of the contract applies ...just no bank intermediary.

Contractor pays staff, materials etc in bitcoin.

That the currency is fluctuating now is no different than the fluctuations between the Kroner and the Cdn dollar except the bank is not taking the cut as an intermediary ( usually .6% total ....each side taking a .3% hit on exchange. ).....

If the exchange rate between the Kroner and the Cdn dollar was fluctuating as wildly as the price of Bitcoin, I doubt whether the Canadian contractor would be happy to receive payment in Kroner. The international system, including the major banks, has regulations and associated costs in order to reduce this source of uncertainty, which would otherwise inhibit international trade.

From Wikipedia here, noting especially the sentence: "Trade could only reach as far as the credibility of that military":
Originally money was a form of receipt, representing grain stored in temple granaries in Sumer in ancient Mesopotamia and later in Ancient Egypt.

In this first stage of currency, metals were used as symbols to represent value stored in the form of commodities. This formed the basis of trade in the Fertile Crescent for over 1500 years. However, the collapse of the Near Eastern trading system pointed to a flaw: in an era where there was no place that was safe to store value, the value of a circulating medium could only be as sound as the forces that defended that store. Trade could only reach as far as the credibility of that military. By the late Bronze Age, however, a series of treaties had established safe passage for merchants around the Eastern Mediterranean, spreading from Minoan Crete and Mycenae in the northwest to Elam and Bahrain in the southeast. It is not known what was used as a currency for these exchanges, but it is thought that ox-hide shaped ingots of copper, produced in Cyprus, may have functioned as a currency.
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Re: Bitcoin as a viable currency?

#117  Postby Crocodile Gandhi » Feb 07, 2018 11:11 am

More like shitcoin, tbh
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Re: Bitcoin as a viable currency?

#118  Postby newolder » Feb 07, 2018 11:25 am

purplerat wrote:I'll just say that you'd make a good miner with your propensity to continue digging despite already being in a hole.

My mining days are long gone (the costs in electricity and lost computer related production took care of that) and I left the bitcoin black hole, thanks. Still, if you (or anyone) would like to unload their almost worthless coins I'm more than happy to supply a wallet address: 1weZApGxAcTPRkD3zNuzWVZmXpL5ZenaV

:cheers:
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Re: Bitcoin as a viable currency?

#119  Postby minininja » Feb 07, 2018 11:52 am

purplerat wrote:What you seem to gloss over is that (at least in the implementations we are discussing) it is incorruptible and truly democratic.

That's only true if your definition of "incorruptible and truly democratic" is "whatever occurs under an entirely laissez-faire system". The reality, if such systems were used globally to a significant amount, would be a recipe for even more extreme wealth inequality, which among other things can encourage all sorts of corruption. How is it democratic to remove the right of people to vote for a government that can manage its own currency supply? Why would you want governments without that power when it would mean countries with a trade deficit could literally go bankrupt?
[Disclaimer - if this is comes across like I think I know what I'm talking about, I want to make it clear that I don't. I'm just trying to get my thoughts down]
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Re: Bitcoin as a viable currency?

#120  Postby juju7 » Feb 07, 2018 1:27 pm

zoon wrote:
If the exchange rate between the Kroner and the Cdn dollar was fluctuating as wildly as the price of Bitcoin, I doubt whether the Canadian contractor would be happy to receive payment in Kroner. The international system, including the major banks, has regulations and associated costs in order to reduce this source of uncertainty, which would otherwise inhibit international trade.


Which Bitcoin has completely failed to do. Therefore as a currency it cannot be viable.

Thank you for concluding the discussion.
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