Explain Bitcoin Please

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Reilly

Mountain climber
The Other Monrovia- CA
Nov 6, 2017 - 05:46pm PT
If you think Bitcoin is sane economics then yer probably a Bernie lover.
MH2

Boulder climber
Andy Cairns
Nov 6, 2017 - 05:48pm PT
Do not listen to me, but consider what nah000 offered.


There are good reasons for almost anyone in finance to drive a stake through the heart of bitcoin.

Bitcoin seems unlikely to survive, but the idea may.


If governments get behind the program:

All financial transactions become public.

Taxes could be switched from an individual or corporate responsibility to an automatic small per cent of every financial transaction.

Individual taxpayers would save a lot of hassle and anguish filling out forms.



Way too idealistic for the real world, and I prefer secrecy and cash transactions, personally.



edit:

My dearly beloved cash would only be issued in denominations up to approximately $20 to help out street people and old fogies like me.

and the wealthy could still trade in gold and artwork in a shadow barter economy
Ed Hartouni

Trad climber
Livermore, CA
Nov 6, 2017 - 06:05pm PT
I think nah000 covers it, but the basic technology is much broader than the currency application, and allows for tamper-proof information to be exchanged confirming the validity of that information without revealing the path that it took.

This is incredibly important for shipping, for instance, and even for banking where you will find the same technology applied in the coming years, which will provide a more secure way to transfer such information. It is not too hard to see a transition to cryptocurrency from just "normal" banking transactions made more secure.

As for the basis of a currency, we all (the entire world) buy into the idea that the Federal Reserve is the monetary regulator.

Ideas like cryptocurrency make it possible to decentralize the currency system. This may be advantageous in the long run, especially given the limited "lifetimes" of nations.
MikeL

Social climber
Southern Arizona
Nov 6, 2017 - 07:38pm PT
A billion here, a billion there, pretty soon, you're talking real money.” (Misattributed to Everett Dirksen)

Just for comparison, the overnight repurchase market in the U.S. alone by the end of 2010 has been estimated to be about 8 trillion dollars. That’s every single night.

Value and money have a loose association. Money is worth what the market says it is, and that is a game of consensus among a great many people, most of whom are not aware that they are a part of the consensus. Both value and money are socially constructed.

Almost every effort that’s ever been made to control and stipulate the durability of the value of a unit of measurement has been met with failure—the Federal Reserve’s efforts not withstanding. (Perhaps the Gold Standard should be recalled as the monetary standard--just kidding.)

As for printing money, every bank does it with every loan. Loans create money (a multiplier effect).

Inflation occurs for a reason—not just a tangible reason. Ditto for the increase value in any commodity or investment.

A billion here and there won’t be making much of a difference anywhere.

I think Reilly has focused on the right parameter: liquidity. It will enable a buyer or seller to get in or out of a desirable or undesirable financial position.

It might be better to focus on what’s of value to one. I suppose it could be money, but that’s just a count of a unit of measurement.
Ghost

climber
A long way from where I started
Nov 6, 2017 - 07:52pm PT
nah000 has it as far as bitcoin is concerned, but the currently more relevant thing is the impact on pretty much everything in the world of the tech behind bitcoin.

Blockchain offers the possibility of tamper-proof recording of transactions, and, in the industry I work in (logistics) the potential is enormous.

As always, though, all this wonderfulness comes with a couple of caveats:

First, as far as I know, "tamper-proof" is a pretty short-term concept. Eventually someone will figure out how to tamper. But, even so, blockchain is a big step forward.

Second, regarding the original subject of bitcoin: Yes, there have been fortunes won and lost. But I still think you're better off investing in real estate. Cuz they ain't making any more of it.
Dingus Milktoast

Trad climber
Minister of Moderation, Fatcrackistan
Nov 6, 2017 - 07:52pm PT
re: There is simply no way to tell, no governing authority, no rules at all, other than the Prime Directive. this, in some regards, is true. except it's even more true of the current paper u.s. bucks. the prime directive with fiat paper bucks has, at its heart, always been who controls the making and enforcing of the rules.

While its easy to hate on bankers and rules-enforced commerce there is something vital and core to the authority behind it. Consider the old school topic of Weights and Measures, quoting Wikipedia
The earliest recorded systems of weights and measures originate in the 3rd or 4th millennium BC. Even the very earliest civilizations needed measurement for purposes of agriculture, construction, and trade.

Now why do you suppose our ancestors devised systems of weights and measures? Do you think the Tri-Lateral Commission was behind it? The Bilderburgers? The Mason???!!!!!

Clearly, the need for standards arose once the level of trade rose above basic bartering of foodstuffs; this for that. But how to consistently measure disparate trade items in a way that didn't inspire murder because of being cheated?

What we all need to remember is money is simply a representation of labor; that's it. Now if you can exchange labor all on your own, mano y mano as it were, then whatever exchange rate you establish is all your own. No government intervention needed.

But when it comes to trading in dollars... whatever you like or dislike about the Fed and the central bank, it enables modern trade. The notion that an unregulated exchange like bitcoin is going to replace national currencies is ludicrous. Already, bitcoin is subjected to wild speculation and big swings in value. Read up on the history books to understand that wild swings in currency are one of the key ingredients for economic disaster.


F*#king with the currency is like f*#king with the weights in the scales down at the grocery... in the old days if you got caught you got your hand chopped off or worse, now its prison for yas.

What about those alleged missing bitcoins out of that alleged bitcoin exchange? Who went to jail? Who paid up? Who did the peasants lynch below the castle walls?

Who you gonna call?

I would dare say the only folks capable of 'doing the math' are busily speculating and trading away other peoples' labor for their own gain. Folks can't even tell when the gas pump meter is wrong or the produce scale is over-weighing. How in the hell are they (we) supposed to know if they're getting a fair deal through bitcoin.

The very idea of it is ridic.

DMT
Dingus Milktoast

Trad climber
Minister of Moderation, Fatcrackistan
Nov 6, 2017 - 07:55pm PT
First, as far as I know, "tamper-proof" is a pretty short-term concept.

It's actually meaningless since the bitcoin holder has no access ascertain the security of the technology.

A hope and a prayer and those who use it are willing to endure the risk because... they typically have no choice to use public banking; like dope dealers and arms merchants.

DMT
Jim Brennan

Trad climber
Nov 6, 2017 - 08:02pm PT
Bitcoin presently is a refuge for telephone scams and all other forms of con artist.

Not a great start for another "Brave New World" virtual reality.

Ed Hartouni

Trad climber
Livermore, CA
Nov 6, 2017 - 08:14pm PT
It's actually meaningless since the bitcoin holder has no access ascertain the security of the technology.

No, the holder can see everything that insures the security, and make assessments, it is a public ledger system.

As for the promise of quantum computing, so far we have little to worry as most practical systems do not perform much better than "classical" computing.

As for insecurity, oddly, humans are largely responsible...
https://www.nytimes.com/2017/08/21/business/dealbook/phone-hack-bitcoin-virtual-currency.html

'...But Mr. Pokornicky said the virtual currency industry needed to alert new users to the added risk that comes with the new features of the technology.
“It’s powerful to be able to control your money and move things without any permission,” he said. “But that privilege requires a clear understanding of the downside.”'
Jim Brennan

Trad climber
Nov 6, 2017 - 08:37pm PT
Thanks Ed,

Up here in Canada we have the former Prime Minister Stephen Harper to thank for showing his entrepreneurial fundamentalist Christian minister sympathies to the good, hardworking telemarketing boiler room "industry".

He allowed these ass holes to access our personal, paid for privately, cell phone numbers.

Prick.

Jon Beck

Trad climber
Oceanside
Nov 6, 2017 - 08:40pm PT
The recent run up in the value of bitcoin was the direct result of big companies hording bit coin in case they had to pay off ransomware demands. Criminal activity mainly
nah000

climber
now/here
Nov 6, 2017 - 08:59pm PT
DMT: as per the first three lines of your argument... it seems to me your argument is predicated on the assumption that what/how money is/was organized in this day today is somehow necessarily rooted in what/how it originally is/was...

and so while you'll get no argument from me that there is a lineage, i'd argue that the lineage is kind of like the following image of a photocopy of a photocopy of a photocopy of a photocopy of a...:

stolen from the interwebs...
stolen from the interwebs...

ie. there is a semblance of the original in the final, but damn... it's pretty distorted...

so no need on your part to assume any need from my perspective for the bilderburgers, masons, etc.

in no small part, because i ain't smart enough to know exactly how we got from a to b.



but here's what i do know about b.:

when the u.s. ran into troubles because of a bunch of a fUck ups directly at the hands of the financial authorities having "something vital and core to the[ir] authority" guess who footed the bill?

and how was that bill footed?

and as i don't have time to walk all of the way through it, i'll just stick to the most important conceptual distortion, imo.

we talk all the time about how the obama led government took on "debt". simply put, that "debt" that the u.s. took on at that point is as related to the common sense idea of "debt" [taking something that is owned and has therefore been earned by one person, so that they no longer have use of it and giving it to another person who doesn't own it because they haven't earned it] as the word "wench" [which once apparently meant "female child"] is related to the present usage. ie. we're seriously saying that financial private interests creating a ledger line, that did not exist before, then giving it to we the people, so that we can try to get out of the situation that said financial private interests got us into in the first place, is "debt" that we get to pay interest and principle back to the private financial interests on?

uh. ok.



to be clear, i'm not arguing that the way we do things is necessarily "wrong". there are pros to having centralized and privately held authority to modes of exchange that are quite literally created as ledger lines out of thin air.

only point i'm trying to make is that it hasn't necessarily been all peachy over the last bit.

ok i guess there are two points, with the second being that the terminology we use to describe our system is as related to what we common sense think it is, as old school wench is to the new school version.

and don't worry i don't think bitcoin, or the blockchain is necessarily "our lord, and saviour", either.



alls i am saying is that new modes of human organization will require new modes of human organization.

and blockchains [and bitcoin] are very early explorations of new modes of human organization.

that's it, that's all.





as far as: What about those alleged missing bitcoins out of that alleged bitcoin exchange? Who went to jail? Who paid up? Who did the peasants lynch below the castle walls?

who went to jail when those u.s. dollar banks "busted" recently [and to be clear in your example above it was the equivalent of a bitcoin "bank" and not bitcoin itself that went bust]? and all those people that lost their homes? who got lynched? who paid up?



anyway i could keep going but i have one final point: What we all need to remember is money is simply a representation of labor; that's it.

no. this is only true to us plebs.

as a whole money is simply a representation of value. that's it.

whether bitcoin comes to represent value in a way that threatens the u.s. or other national bucks is hard to say.

in no small part because if it did, i suspect, the dudes with the nukes will end it... or at least distort it, so that it becomes a facsimile of a facsimile of a facsimile of a...



time will... as always... tell.
Dingus Milktoast

Trad climber
Minister of Moderation, Fatcrackistan
Nov 6, 2017 - 09:05pm PT
DMT: as per the first three lines of your argument... it seems to me your argument is predicated on the assumption that what/how money is/was organized in this day today is somehow necessarily rooted in what/how it originally is/was...

Actually I was pointing out the need, not the method. I didn't talk about gold or scales or paper money or electronic transmission.

You missed it by a long shot.

Its the regulation and authority over trade, and standards of measure. It is one of the most fundamental jobs of government. I have yet to see any convincing argument, much less evidence, that this stateless utopian currency is any more than a way to fleece the ignorant out of their hard earned labor.

But enjoy, if that's what you want. Ask your employer to pay you in bitcoin. Cash em in down at the... oh wait. No bank! No cash.

Good luck with your new ways to try to execute the same ole function.

DMT
nah000

climber
now/here
Nov 6, 2017 - 09:08pm PT
^^^^

if that's what you got from what i said, it looks like we're talking past each other.

all the best.
Dingus Milktoast

Trad climber
Minister of Moderation, Fatcrackistan
Nov 6, 2017 - 09:09pm PT
I didn't misquote you:

it seems to me your argument is predicated on the assumption that what/how money is/was organized in this day today is somehow necessarily rooted in what/how it originally is/was...

DMT
IntheFog

climber
Mostly the next place
Nov 6, 2017 - 09:09pm PT
I think Bitcoin enthusiasts are more like to go for Ron Paul than for Bernie. Among other things, Bitcoin makes it hard for the government to see how much you are spending, and on what. It's hard for the government to tax what it can't see. I'm not sure wiping out taxes works for Bernie's bros.

PS FWIW, Neil Stephenson's Cryptonomicon is all about the computer currency/tax linkage. It was written long before Bitcoin or even Paypal, but it's full of insights, especially about the computer currency/taxes/war linkages. Taxes are, after all, the sinews of war.
Cole

Trad climber
los angeles
Nov 6, 2017 - 09:28pm PT
A lot of people in this thread bashing bitcoin like they're an expert or something. Blockchain technology and crypto currency are extremely complex and new, I seriously doubt anyone in this forum understands what is going to happen, so acting like you do seems a bit foolish.
nah000

climber
now/here
Nov 6, 2017 - 09:33pm PT
DMT: i was referring to this:

But enjoy, if that's what you want. Ask your employer to pay you in bitcoin. Cash em in down at the... oh wait. No bank! No cash. Good luck with your new ways to try to execute the same ole function.

as a response to what i wrote.

i'm pretty sure i pretty clearly stated the antithesis to a bunch of that...



as far as your quote of mine misrepresenting what you wrote.

even though i still disagree with you on that, it's possible that i might not have understood what you were intending for me to take away...

hence the we are talking past each other...
Dingus Milktoast

Trad climber
Minister of Moderation, Fatcrackistan
Nov 6, 2017 - 09:46pm PT
Cheers

DMT
Reilly

Mountain climber
The Other Monrovia- CA
Nov 6, 2017 - 09:59pm PT
nahoo explained it? I explained it in 4 sentences, or was it 3? WTF?
Here, 8 words:
No liquidity, no accountability, no transparency, no regulation.
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