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Why UMI Will Not Fall Victim to Inflation: Dispelling Myths of “Deadly Issue”

Why UMI Will Not Fall Victim to Inflation: Dispelling Myths of “Deadly Issue”
https://preview.redd.it/lr1w0ukh2ik51.jpg?width=1024&format=pjpg&auto=webp&s=b413e6e6b2e94d2e9522571040151826b7874e77
With UMI staking, anyone anywhere in the world can generate new coins at the rate of up to 40 % a month, or up to 5,669 % a year, with no risk of falling victim to fraudsters. It means new opportunities for humanity which never existed before. However, many people who are used to miserable interests on bank deposits and financial pyramids that last a few months at most cannot understand what makes this possible. How can you safely earn up to 40 % a month with no risk of losing it all?
Sceptics cannot wrap their minds around this which makes them suspect there’s a catch to it. Therefore, it should come as no surprise that you can find various myths about UMI's “deadly issue” on forums and social networks. The most popular among them say that you simply cannot ensure long-term operation with this kind of “super-high income” and no one has any idea what will happen to this cryptocurrency in 10 or more years. Here's a forecast from sceptics, briefly: “deposits” with this percentage are simply impossible, it will inevitably cause hyperinflation, UMI cryptocurrency will devalue, and will share the fate of currencies in some of the less fortunate countries, such as Zimbabwe or Venezuela.
To counter these allegations, we've prepared a detailed article with arguments dispelling all these myths, nullifying all “forecasts” and putting the lid on this issue. Here we go!
What's the value behind the forecasts?
First of all, 10 or more years is too much of a long term, and forecasting so far in advance is simply impossible. Don't take us wrong here: it's not just about cryptocurrencies; it's about anything in the world. There was a time when people thought pagers, faxes, and landline phones had cheerful prospects, but look at what happened to them. They have been replaced by smartphones and the Internet accessible to all which no one believed was possible in the first place. New technologies emerge out of the blue and transform the world beyond recognition. The old — something everyone is used to — is replaced with something new and more
convenient. Something better.
10 years ago people believed in developing bank technologies, but then, all of a sudden, Bitcoin was created and transformed people's understanding of financial payments. It turned out anyone in the world can make payments with no intermediaries and generate new digital money. It's true that Bitcoin is not perfect, but millions use it all over the world. This number is also growing fast with each passing day.
Do you remember forecasts made for Bitcoin when it first appeared? Both ordinary people and respected world-class experts predicted it would soon die. No one believed it could last for even 10 years.

https://preview.redd.it/q1kzcxfw2ik51.png?width=800&format=png&auto=webp&s=17a12d73b9046a357cf6ecd77253472215c8bb24
Typical article predicting the end of Bitcoin from respected mass media. Source.

Here're some graphic examples from the leading world-class mass media:
“That's the End of Bitcoin.” Forbes, 2011, BTC price — $15.
“Bitcoin is headed to the ash heap.” USA Today, 2015, BTC price — $208.
“R.I.P., Bitcoin. It’s time to move on.” The Washington Post, 2016, BTC price — $382.
“Stay away from bitcoin and ethereum — they are complete garbage.” This is garbage." MarketWatch, 2017, BTC price — $2,345.
“Is Bitcoin Going To Zero?” Forbes, 2018, BTC price — $3,432.
In 2020, the BTC price is almost $12,000. The respected mass media have “declared Bitcoin dead” over 400 times (!!!) referring to its lack of backing, high issue rate, super-high price growth, and the like — just like the skeptics “declaring UMI dead” right now. However, despite all the discouraging forecasts, Bitcoin continues to successfully grow and rapidly gain in popularity.

https://preview.redd.it/6z60xwd13ik51.png?width=791&format=png&auto=webp&s=25a6799fe551c6e7f91aa016907e95ce032d7e5e
Over 12 years, Bitcoin has been declared dead 381 times, but it only grows stronger with each passing year. Source.

All of the above is proof that you shouldn't put blind trust in various forecasts, even coming from respected sources. Forecasts are mere opinions and arguments, but no one can know for
sure what will happen in 10, 100, or 1,000 years. No expert can know that. Similarly, no one knows what will happen to UMI many years from now.
UMI can solve any issues on the fly
We cannot know the future, but we did all we could to make our coin last forever. Most existing cryptocurrencies have a very important problem — they cannot support high-quality growth and rapidly become obsolete.
To explain this, we'd like to quote our Whitepaper:
"Despite the apparition of new technology solutions, the Bitcoin blockchain still holds only about 2,000 transactions, and it takes about 10 minutes to create a block. In 11 years, developers still did not manage to come to an agreement and implement a solution that would allow scaling the system and upgrade performance.
Most other cryptocurrencies face a similar problem. They are launched and keep operating in an almost initial state even after numerous innovative solutions become available. For example, the Ethereum network has been attempting to switch to the PoS algorithm for over two years now, but due to code complexity, security threats, and issues of reaching consensus, this causes great inconvenience."
https://preview.redd.it/ezxzrpx43ik51.png?width=800&format=png&auto=webp&s=207f8a27a59fac760fc541dae6abd30d148296f5
Screenshot of a page in the UMI Whitepaper. Have you read it? It answers a lot of questions. Link.

Bitcoin itself is technically obsolete. This is besides the fact that it has a load of other problems. For instance, BTC is supposed to completely stop coin mining in 2140, meaning miners will lose motivation to support the network. What happens then? The hope is that the main source of income for miners will be transfer fees, but will they want to maintain powerful equipment for a reward in the form of small fees? If fees are big, will people want to pay those? Will they find a different solution? Will users just leave the Bitcoin ecosystem and join more high-tech cryptocurrencies like UMI?
When we designed UMI, we accounted for all these issues and launched a promising project with a conveniently scalable ecosystem. Even if UMI faces some challenges in the future, we will make amendments as the network grows. We will act as appropriate judging from the project's current status. They will be based on the situation and the current state of the project.
It's true that upgrade decisions have been and are being made by all leading crypto projects, including Bitcoin and Ethereum, but UMI supports really safe and rapid innovation. The network can be easily modified and scaled with cutting edge technology solutions. While other cryptocurrencies simply become obsolete, we can handle all kinds of challenges on the fly. The UMI network will grow and improve to be always up to date, keep up with the times, and prevent problems in 10, 100, or 1,000 years.
At this point, the UMI network is in excellent shape, and the smart contract offers you relevant and actionable staking opportunities. We've thought out every detail, and the brisk growth of our community proves it best of all.
There is no "deadly inflation"
And, lastly, let's bring an issue with supposedly too-high emission to a close. UMI is typically accused of paying a too high reward for staking — as much as 40% a month, or 5,669% a year — which no one and nothing else in this world can pay. Eventually, it might end up with inflation as it happened in Zimbabwe and Venezuela, etc.,
Let us look at real facts. Those who consider a 40% monthly growth impossible should look at bitcoin again as the most outstanding example which has proven that nothing is impossible. Imagine how many times your deposit would have grown if 10 years ago you had bought bitcoins or inexpensive mining equipment producing a reward of 50 BTC several times a day.
Please consider the following:
In March 2010, BitcoinMarket.com started operating as the first bitcoin exchange, and 1 BTC cost a lot less than a cent — $0.003.
At the time of writing this article, the price for 1BTC was about $12,000.
It means those who bought bitcoins 10 years ago have increased their "deposit" by nearly 400,000,000% (!!!). Four hundred million percent in ten years! This is a real fact.
Those who bought bitcoins when the price was a few cents or dollars also achieved the perfect result by increasing their "deposit" by thousand or million times.
Well, now the percentage in UMI staking doesn't seem so crazy, does it? The only difference
is that BTC "deposit" grows in line with the BTC price while UMI deposit growth is ensured the growth of the number of UMI coins, which in turn doesn't prevent the price from surging. In fact, both cases demonstrate a multiple growth of the "deposit".
All of the above is proof that the reason for inflation in Zimbabwe, Venezuela, etc is a bad economy, not a high emission. In late March. roughly speaking, in one day, the FED (U.S. Federal Reserve System) released 2.2 trillion dollars to support the economy during the coronavirus pandemic. Similar financial injections are regular in the USA, the country which is the most advanced world's economy.
These facts indicate that UMI has no "deadly issue" at all and, unlike the USA, it doesn't "print" anything.
Here is bare statistics form the UMI blockchain:
The UMI cryptocurrency was launched on June 1. Since the launch, it's been 3 months.
18,000,000 UMI coins were initially issued.
In total, there are now about 18,800,000 UMI coins.
In other words, in three months, the total number of UMI coins increased by only 4.4%. Does it look like "deadly inflation"?

https://preview.redd.it/gsdjbwp83ik51.png?width=800&format=png&auto=webp&s=8d4591a24b3ddc63f8501f1b7fe7a4c02b7da89c
In 3 months, the number of UMI coins has shown a few percent increase. Source.

Let's move on:
We'd like to reiterate that the total number of UMI coins is almost 18,800,000.
There are about 14,500,000 coins on the genesis address today.
Almost 4,000,000 coins are involved in staking.
Thus, only 300,000 UMI (!)are freely circulated on the market. The remaining 18,500,000 coins are either used in staking or have not yet been released to the market.
https://preview.redd.it/f7b28jid3ik51.png?width=800&format=png&auto=webp&s=5ff8338121ebfe398cfb498a0cfcc00446ea6225
The number of coins stored on the genesis address at the time of writing the article. Source.

In real fact, UMI has no super-high emission. This fact has been proven. For a three-month period, which is a quarter of a year, the number of UMI has hardly changed and equals about 1.5% of the total number of coins on the market.
The truth is that UMI economy depends on a lot of factors. For example, burning 50,000 coins to create a structure. However, from a more general point of view, the UMI economic model itself is designed to encourage people to "save" rather than sell UMI coins. This is a crucial point that allows us to make progress, even with a high emission.
Moreover, it will take a billion-dollar staking structure that will be able to provide the highest possible emission on the UMI network a lot of years to appear. While it doesn't happen, all these forecasts can be regarded as irrelevant for today. Keep in mind that a 40% monthly profit will be available to the most successful structures and only after many years of development. To have your coins increased by 40% per month, your structure must have over 50 (!) times more coins than the number of coins initially generated by the network. And since this structure will do everything possible for the benefit of the UMI cryptocurrency, even 40% per month will not pose a risk to UMI's sustainable development.
Conclusions are as follows:
UMI offers no kind of "killing sky-high returns". Please don't take this myth seriously. UMI is growing. The current smart contract offers reasonable and up-to-date opportunities for UMI staking and poses no problem. If, however, a problem arises — we have all the tools to find an immediate solution. All these negative forecasts are not worth a brass farthing. They always have been and always will be. At all times and in all places. But they are highly unlikely to come true. Bitcoin outsmarted the most reputable and shrewd financial analysts. Why don't UMI, which is a lot more advanced than bitcoin, try to do the same?
UMI is a decentralized, strong, and high-tech network. It can exist the way it is now forever. But as it grows, it will improve to be always up to date, keep up with the times and prevent any problems. We are contributing to a great thing — we're creating a free economic system that will profitable for the entire human family. This is an opportunity to overcome social inequality and make regular people financially independent. So let's make every effort to make things go well. Ignore all evil-wishers and their predictions. Just join other users and go towards your dream. Then we will certainly succeed in it all.
Sincerely yours, UMI team
submitted by UMITop to u/UMITop [link] [comments]

Centralized power always corrupts. When we decentralize money we decentralize power. That enables people to have more freedom.

This is a rumination on centralized institutions, why they fail and why decentralized money is so important.
Communism (dictatorship):
Pure Capitalism (unchecked by democratic laws):
 
Both pure capitalistic and communistic systems fail as they centralize and that leads to less freedom.
 
Democracy is meant to decentralize power. All people should have an equal voice about who leads, and term limits should keep those leaders accountable to the electorate.
The problem is that money disproportionately impacts elections and makes them unfair. Foreign communistic systems use democracy against itself, influencing elections with money in order to destabilize them. On the local level, regional power disenfranchises voters that they think will not reelect them.
In a democracy, the more you remove money from the election process, the more free those people will be.
The main principle is that no matter what system you have, where you have centralized power, the system fails. Money is at the core of power in our modern society. Attaining money is a game that we're all forced to play. The consequences of this game are the difference between slavery and freedom, growth or stagnation, life or death. This is why decentralized money is so important.
It must be decentralized in development (many developers) and have decentralized security (many miners or fair staking). It must be decentralized in operation (peer to peer, without central hubs) and it must have a decentralized record (immutable blockchain).
Decentralized money won't solve all of our problems. There will still be have and have-nots. There will still be racism and hatreds.
However, it could do a few important things:
It doesn't matter if the above solution is called Bitcoin Cash or any other name. I take no stock in what things are called. If it will do the above, then I will support it with my thoughts and actions.
Power to the people.
submitted by Annapurna317 to btc [link] [comments]

Some thoughts on the blocksize from a longtimer

People need to realize, that at the current (and still raising) popularity of Bitcoin, bigger blocks wouldn't help much if at all.
The thing is, it is very easy to fill blocks. If blocks aren't consistently full, users can effectively set fees to as low as they want and miners will include them anyway. Maybe there's going to be some delay, maybe not. Nice and dandy, but it doesn't work for long. It worked for BTC because the number of users was tiny. And it will work for altcoins, as long as they are tiny. But as soon as a given altcoin gets popular enough to be even remotely significant, it will hit the same wall.
As soon as there is more demand than room on the blockchain, some transactions will be left-over and start piling up: the mempool will keep raising until some people are priced out. Some users will say: "well, that's too much, I'm not going to do that test transaction" or "I'm going to use an altcoin for this". There is a "cut-off cliff of pain". I estimate that this pain-price point to be around $10-$20 and kind-of fixed. Exactly between "too expensive for paying for any coffee" and "super-cheap way to make international wires". Where rich users are fine paying, but smaller users have been cut-off. Bitcoin got there already. That's why it's nearing $20k/BTC. That's what many of you wanted, right?
Tip for people with small amounts stuck: get your wallets ready and maybe, if you're lucky, there will another time when network will calm-down a bit (around new year maybe? or maybe when Coinbase finally start supporting SegWit, etc) and either: consolidate all your small outputs into one bigger TXO (segwit one!), or send to an exchange during that time so at least you can sell it. Just three weeks ago we had a period of 2-5sat/B transaction clearing out.
Anyway, there is no other way. We can't have billions of people on-chain. If we had 8MB blocks, we would still fill them up, until some people wouldn't be able to compete with the fees. Maybe we would buy ourselves a month or two.
Also: I've heard many people complain that using the coins is most important, and better for Bitcoin than holding it. It's absolute rubbish. The value of Bitcoin is set by how many people are willing to HODL it at a given price-point, not how many people are willing to spend it. "Spending" Bitcoin is just a transfer of Bitcoin from person A, to person B - nothing in the system changed except current owner of some coins. It's even worse if B automatically sells for fiat immediately. Holding BTC means that your consider it worth more than a current market price. Bitcoin could totally work and be worth millions per piece, even with transactions at $100, as long as people consider it safe and worth holding. As long as I can spend $100 once a year to increase my BTC-retirement-fund, and then spend $100 once a year, once I retired to cash out to some local currency, I'm all good.
Now, I now it sucks if you're not rich, and you can't toy with it, and keep sending between wallets etc. And you feel like altcoins are better etc. And it's true - ATM many altcoins a cheaper way to send small sums of money around. But saving / investing... let me tell you how it looks from my perspective...
I am a software engineer in Sillicon Valley. I have a well-paying job, I eat $20-worth of sushi for dinner, pay $10 every time I trade stocks, pay $3k each month for rent. I can invest $10k in BTC without thinking too much about it. And I'm not telling you this to make you jealous. The wealth inequality is so vast! That's just reality and I think it gives some perspective. I know as I wasn't born here. And I'm no one special here. I'm a nobody. I can't even afford a decent house here. (hindsight is always 20/20, ha)
And there are thousands of software engineers like this. They receive and trade stocks on a weekly/monthly basis, worry about the overpriced stock market, overpriced housing, pilling up cash that they have no idea what to do with. Do you think they care if Bitcoin transaction costs $10? No, they don't. And how many people who complain about $1 fees will take to invest as much as a person like me can? Hundreds. And as I said - I'm nobody. A CEOs here can drop $1MM on Bitcoin, just because they feel playful a given day, or they got jealous of some other CEO friend told them how awesome they are doing with BTC, during a golf game on Saturday. And they wouldn't worry about 50% correction much if at all. And do you think these people buy value-phones and look for good deals on economy-class cars? Do you think they have time to research which altcoin of the day has low transactions? Come on. They will all think something like: "let's put 0.1% of my cash into this magic internet money and see what happens. I want that Bitcoin thing too.".
So, you're free to have your own opinion, but if you ask me, for time being, the people who can not afford to transmit Bitcoin too often will and should just hold it, transferring it when it's relatively cheaper, and use altcoins for playfull spending etc. Just don't expect too much return on your altcoin holdings. I expect Bitcoin to consistently keep growing the fastest, while altcoins keep multiplying. It is a self-fulfilling prophecy. Or an iPhone vs hundreds of Android spin-offs thing. I use Android, but do I believe someone will dethrone iPhone? Nope.
In a sense... you want to invest in Apple stocks, even if you can't afford to drop $1k on an iPhone yourself. Because of people richer than you that can, and will.
And if it makes it any better, I know that LN will solve it all for us. We just need to wait a couple of months.. a year maybe for it to be more common. And I've been through all the early hacks, crashes, MtGox, great depression, forking drama... years and years of problems. And Bitcoin being too popular is like the smallest problem I've seen so far. The problem that smaller coins would like to have, haha. Being patient and some educated faith is what you are rewarded for.
Edit: I woke up, and I have to work, so I'm just going to address some common themes.
Obviously I created this account as throw-away. Duh.
I already can send quickly money for free. I send my friends money with Google Wallet every day. And in many countries in Europe free wires were a thing for like 10 years now. And for purchasing stuff I am very happy with credit cards. They give me points and stuff. If someone thinks Bitcoin can compete as a "payment processor", then I don't know what to say... Wake up, Bitcoin in itself was never really that great at it. Bitcoin won't be a payment processor for the masses. It will be an alternative monetary and banking system. And on top of it, we will get cheap payments and such.
The reason why I hold Bitcoin is that I have something that can't be taken away from me. Through theft, inflation, confiscation, economic crisis, banking collapse, unjust court order, you name it. Noone can prove I have it, noone can take it away. I can keep 1% of my wealth in this weird thing and sleep better at night. Other reasons are secondary, though sure... speculation on the price is a nice thing.
LN networks are going to work. As a software engineer, I understood how Bitcoin works since I've read the whitepaper and did some research. I've always admired how simple it is. Cryptography part requires expertise, but that's OK. LNs are very elegant and simple too. On a daily basis, I work and improve systems that are way, way more complex than BTC + LN.
submitted by hodlforthelongest to Bitcoin [link] [comments]

AMA - Community Edition

Updated:
11) $5m buyback
12) Release of yp part 3?
13) It is allegedly possible that ICX supply can be doubled in only 4 years thanks to a whopping 20% annual token inflation
14) One of the things that got me excited about crypto was that there was no inflation. I'm a bit disappointed in Icons approach here.
15) Where is the DEX?
16) How far are we from interoperability? Am I correct in saying that interoperability is years from completion?
I'll be answering all questions to the best of my knowledge, this list will update regularly.
1) Clear description how icx will go up by benefiting from the line partnership. -> 2 or 3 practical examples.
Don't forget Unchain is a joint venture, so Unchain is ICON's company as well, their success is directly beneficial to ICON. In a recent interview w Brad, Henry also shed some light regarding this JV and that it is way beyond a simple partnership agreement https://youtu.be/paFYyt1hVWc?t=155
2) Clear description how icx will go up by building private blockchains and connecting them. -> 2 or 3 practical examples.
I answered this to someone on telegram a couple days ago. Here's my example,
"So I asked what's the use for icx with private chains. They have no reason to connect to the public chain and they have no reason to tokenzie their business."
The missing link is interoperability. The private chains need a way to communicate w each other, this is actually how the ICON project was conceived. ICONLOOP(loopchain then) offered blockchain solutions to enterprises and consortiums, but they had no way to interoperate
So I think the argument originated from, if the design paradigm is emergent for private chains to go public, or interoperate through a public chain as a common block
We've heard about those use cases and see actual implementations from U-coin vending machines to hospitals making insurance claims etc
I agree in some cases it doesn't make sense for private chains to go public, if its designing a problem to solve, lets not do that
but i'd say, a random guess, that 90%+ of the private chains have a reason to connect, much like intranet/internet
Let me try another example, we've heard the hospital/insurance too many times
Let's say there's a trade financing supply system of a large manufacturer w thousands of vendors
before their enrollment, you'll probably need to do some identity and reputation check in the public chain (common services like ID validation should readily be available as a public service, like chainID)
that will validate their legitimacy.. then next step is prolly for the vendors who need the trade financing where they need a more complex system like a stable coin to avoid volatility.. and move the money around
instead of rebuilding a coin, they could adopt a coin system within the ICON network
then what happens next.. i guess disputes w goods lost or quality problems.. again, vendors can call for a public arbitration system where there'll be a network of lawyers who specialize in cross-border disputes or arbiters to provide the service
so we need a chain of services that can be called throughout the life cycle, interoperable between private and public chains
there are plenty more use cases, but its not a hard choice to make, its definitely possible to have a common meeting point while maintaining sensitive information within their local blockchain
In the example above, nothing is tokenized, their businesses are on the private blockchain without a native coin, but they use the common services from the public like stable coins or arbitration system
3) Monthly or quartal reports on partnerships, marketing, and the tech.
You mean something like this? https://medium.com/helloiconworld/icon-3q-achievements-8c42ea798a0b
4) Opinion why korean people dont bring icx volume on korean exchanges.
I don't think even president Moon has an answer to this :P But are people really this patriotic when it comes to money? Do Americans invest in American ICOs for being made in USA? I guess some will, but this is not (and shouldn't be) the main driving force of token demand.
5) Clarification what kind of understanding we should have about this 124 teampower - are they employees with 40 hours/week working contracts or just 2 hours, cooperations partners, freelancer, what ever.
I paid a visit to the KR office a couple months back, it was like a giant coding factory running full steam. I can attest to this, they're full time employees working around the clock.
6) Roadmap - stop giving yourself room for delays and interpretations by not offering a roadmap.
My suggestion on this one is to have a % completion roadmap with change logs. I think most people are more interested in progress, less deadlines.
7) Quarterly AMAs.
Sounds good.
8) Why the hell are ICON members still advisors at Sentinel Protocol, a ICO that promoted itself using icon as blockchain and then moving to EOS.
As far as I can tell, the two teams are still in good relationships. Timing was unfortunate, SP always had their first product (uppward) scheduled to launch shortly after their fundraising. Public presale also ended a lot faster than expected (scheduled to run for a week, ended in 3 minutes). During the period ICON was migrating to mainnet V3 and doing token swap. It made sense for them to deploy on a working platform, without compromising their schedule. Their team also said that they haven't ruled out the possibility to migrate back to ICON (although I think its less likely this day).
9) Spend some money on an english translation expert for you social media appearance.
The translations (YouTube subtitles) were a bit sloppy I agree, understandable enough but they should definitely spend more time proof reading, professional presentation is a thing.
10) How much from the received ICO money/ether has been provided directly or indirectly to iconloop.
The raised ETH from ICO are barely spent, you can check on etherscan from the contribution address.
11) $5m buyback
From the key announcement by ICON foundation’s CFO Jay, the repurchase program is a pending legal matter, after consultation with law firms they’ll proceed with the buyback. https://youtu.be/keDitkWssv8?t=160
The team stated two main intentions for conducting this program,
If you read between the lines from the buyback announcement https://medium.com/helloiconworld/key-announcements-from-icon-8ea0f5a18d6f
Repurchases under the foundation’s program will be made in open market or privately negotiated transactions subject to market conditions, applicable legal requirements, and other relevant factors.
What this is saying is that, the buyback has no intention to create short term pumps, otherwise all purchases would’ve been made in the open market under a timed schedule. What this also implies is that, there won’t be a public wallet with an open schedule, to avoid legal obligations (insider trading) or unintended purposes (manipulation).
So what is to be expected? Giving a deadline won't make sense because everything can be timed, so my take is that an announcement will be made after the repurchase has been completed. I don't think anyone can take advantage of this program but will still benefit directly with $5M worth of tokens off the market supply.
12) Release of yp part 3?
This is expectedly a highly anticipated yellow paper, as it will likely outline all the details we need to know about staking. This YP however is not just a simple table with your annual returns, this is also technically far more complex than the previous two YPs.
I provided a very simplified explanation for IISS in this thread: https://twitter.com/2infiniti/status/1020141186797846529
IISS is however a lot more complicated than this, it is a full AI based incentive scoring system to explore the optimal incentive scheme to vitalize the ecosystem. On top of incentives, it is also the base metrics for governance policies (voting). Incentives are designed with token economic studies, to reinforce target behavior, based on operant conditioning principles, eg. dormant accounts, distribution schemes based on activity levels, penalties for malicious nodes etc, and it is very difficult to get right.
If you look into the WP, IISS further explored with things like mitigation of inequalities, weighted average and adjustment, efficiency of IISS, fairness of distribution, prevention of misusage and many other topics explored in depth.
The point is, this YP is very complex, and personally I’d wish the team to take as much time as it needs to get it done right. IISS will ultimately decide the overall health of our ecosystem, its sustainability and well, our passive income.
With that said, I am also with you that I’d love to see the details asap, as I have plans to build a tool similar to the Virtual Step Calculator where people can easily calculate their returns. From the announcement at least, it does look like the team is close to completion and labeled the release "soon", so let's just have a little patience and let them do all the necessary last checks.
Also as a reality check, YPs are researches that need to be formalized, implemented and iterated enough times before an official release. So please don’t expect to start staking right away when YP pt3 sees the light.
13) It is allegedly possible that ICX supply can be doubled in only 4 years thanks to a whopping 20% annual token inflation
Please go to this thread for my explanation: https://twitter.com/2infiniti/status/1060397068852748288
14) One of the things that got me excited about crypto was that there was no inflation. I'm a bit disappointed in Icons approach here.
Most crypto token issuance models can be broken down into these 3 categories
All of the above models can work in their own ways, depending on the behavior its trying to incentivize. Sustainable crypto economies are backed by a recursive loop of value transfer that all participants are incentivized to participate in. The goal is to create an incentive loop that all parties act in their own self-interest, then creating greater value.
Let’s take a look at bitcoin’s incentive loop, a simple model where mining is profitable, more miners create more security and security adds intrinsic value.
Mine bitcoin -> market dynamics decide value -> incentive to mine -> security of network increases -> more incentive to mine ←|
Augur’s case
Trusted prediction platform -> more stakes in events -> more incentive for REP holders to verify truth -> more people verifying, more trusted ←|
In ICON’s case, incentives are centered around i_score, which is a function of activities within the network. The incentive loop would look something like this
I_score rewards and governance control (votes) -> more incentive to participate in activities and governance policies -> increased network security and activity ←|
Similar incentive loop found in SCORE
SCORE staking (virtual steps) -> increased activities -> sustainable SCOREs ←|
Now for continuous issuance models, the goals are no different from other models. They want to issue tokens, just enough that it is optimal for maintaining security and encourage participations, creating a healthy incentive loop.
But can’t these models infinitely issue to a point where my money is worth next to nothing?
Yes, this is in theory possible. For Ethereum, with majority of network miners approving such change (say removing ice age), and a new Ethereum client to accommodate this change, resulting in an issuance similar to a 51% attack. Since issued ETH is also linked to the value of a single token, this will render ETH much less valuable. In practice, this is extremely unlikely to happen, as miners are financially discouraged by doing so, since they have much more to lose, just part of the game theory.
ICON’s issuance is a system implementation which depends on activities happening in the network. There are also preventive measures such as issuance upper bound and representative mitigations. I explained issuance model in full in this thread: https://twitter.com/2infiniti/status/1060397068852748288
15) Where is the DEX?
For this one hear the explanation directly from Min: https://youtu.be/tk2tZpnrI0o?t=1662
16) How far are we from interoperability? Am I correct in saying that interoperability is years from completion?
Not entirely. Interoperability will likely take a few phases to roll out, what we should be anticipating for right now is BTP (Blockchain TransfeTransmission Protocol) specification.
What is exactly is BTP?
From the abstract level, BTP creates a mechanism by which two channels may pass messages to each other. BTP assumes that multiple channels (eg. private blockchains from ICONLOOP) running on the ICON network under their own state and logic, at the same time connecting to the base channel for consensus mechanism. This is the simplest form of interoperability.
Down the road we should expect more and more advanced versions, handling threat models, connection lifecycles, asynchronous requests, and all sorts of optimization and so forth. This is enabling interoperability between blockchains one phase at a time, gradually reaching the end game of hyperconnecting the world.
So how long is this going to take?
I do not know. But the purpose of this reply is to explain that interoperability is not an on-off switch, but will likely take many phases to roll out.
submitted by msg2infiniti to helloicon [link] [comments]

After researching CryptoCurrencies I don't have favorable opinion of the current concept. Where am I wrong? (Long post)

Bitcoin and other currencies addresses some of the problems out current currencies have, but do not solve the bigger problems of inequality, and even create additional problems which current monetary system doesn't have. Right now it is a game money that gets value from the gambling thrill and promises of growth. Majority "play" because it still grows, not because of the coins' original mission. Cryptocurrency market is a stock market. Similar to a company that never made a profit but is worth billions on stock market, and its perceived value can be exchanged for real money in the amount the of the collective thrill other believers are ready to pay real money for.
Humans are inherently lazy, and the cryptocurrencies took off mostly because "mining" promised the free money without any manual labor. Computers did all the work while owner was spending their time better. But "mining difficulty" constantly increases and hours on mining of relatively weak PCs from coin's first days are worth more than days of mining on today's expensive mining farms.
It is based on Supply and Demand. Even though all economy is based on it, it correlates even less to the value of human work. All value is in the hands of early miners and believers, while new people don't have other good incentive to invest except promise it will grow in the future without any additional investment from their side.
People are hording it instead of circulating. Again, it is not invested into advancements of our civilization. It is the game of personal struggle and an emotional play between resisting to spend while fulfilling desire to live the lifestyle based on the newfound wealth - more early miners than the newcomers who are just doing the slave-mining at almost no profit after utility payments, equipment payout, and amortization. It creates new class-system not much different than the current one, were the wealth is the hands of the ones how learned the system, rather than the ones who do actual work.
Processing it consumes electricity as much as a small developed country. Biggest profiteers in actual money are utility providers for electricity and hardware manufacturers, while megatons of CO2 and raw heat are generated contributing to the Greenhouse effect in the age when we try to save the earth from climate change, so we all lose. It is volatile, and even though some cryptocurrencies more grow than fall, its large daily variation again does not correlate to the difficulty or value of daily human labor.
What happens when big companies with actual money behind them, like Apple, Google, Microsoft, Amazon, Alibaba or other make their own currencies that are more convenient to use than current money or all current cryptocurrencies?
It is clear that we need some of the benefits that cryptocurrencies offer that traditional monetary system does not possess, but we also need to get rid of all the flaws from both. Our monetary system is pretty transparent and relatively simple. Anyone can learn quickly how rigged it is for the ones who control it and how money is created from thin-air. How are crypto coins actually created differently than a thin-air dollar, what it represents, how it contributes to advancement of our civilization, or how could someone in the future achieve upward social mobility for their family and children with it, when it is not based on any of our human values or other resources, that is something that is not transparent or apparent. Is it even the beginning of a long term all-encompassing solution, or should we search for something completely different?
submitted by niels1234 to CryptoCurrencies [link] [comments]

[uncensored-r/Bitcoin] Some thoughts on the blocksize from a longtimer

The following post by hodlforthelongest is being replicated because some comments within the post(but not the post itself) have been silently removed.
The original post can be found(in censored form) at this link:
np.reddit.com/ Bitcoin/comments/7ks23h
The original post's content was as follows:
People need to realize, that at the current (and still raising) popularity of Bitcoin, bigger blocks wouldn't help much if at all.
The thing is, it is very easy to fill blocks. If blocks aren't consistently full, users can effectively set fees to as low as they want and miners will include them anyway. Maybe there's going to be some delay, maybe not. Nice and dandy, but it doesn't work for long. It worked for BTC because the number of users was tiny. And it will work for altcoins, as long as they are tiny. But as soon as a given altcoin gets popular enough to be even remotely significant, it will hit the same wall.
As soon as there is more demand than room on the blockchain, some transactions will be left-over and start piling up: the mempool will keep raising until some people are priced out. Some users will say: "well, that's too much, I'm not going to do that test transaction" or "I'm going to use an altcoin for this". There is a "cut-off cliff of pain". I estimate that this pain-price point to be around $10-$20 and kind-of fixed. Exactly between "too expensive for paying for any coffee" and "super-cheap way to make international wires". Where rich users are fine paying, but smaller users have been cut-off. Bitcoin got there already. That's why it's nearing $20k/BTC. That's what many of you wanted, right?
Tip for people with small amounts stuck: get your wallets ready and maybe, if you're lucky, there will another time when network will calm-down a bit (around new year maybe? or maybe when Coinbase finally start supporting SegWit, etc) and either: consolidate all your small outputs into one bigger TXO (segwit one!), or send to an exchange during that time so at least you can sell it. Just three weeks ago we had a period of 2-5sat/B transaction clearing out.
Anyway, there is no other way. We can't have billions of people on-chain. If we had 8MB blocks, we would still fill them up, until some people wouldn't be able to compete with the fees. Maybe we would buy ourselves a month or two.
Also: I've heard many people complain that using the coins is most important, and better for Bitcoin than holding it. It's absolute rubbish. The value of Bitcoin is set by how many people are willing to HODL it at a given price-point, not how many people are willing to spend it. "Spending" Bitcoin is just a transfer of Bitcoin from person A, to person B - nothing in the system changed except current owner of some coins. It's even worse if B automatically sells for fiat immediately. Holding BTC means that your consider it worth more than a current market price. Bitcoin could totally work and be worth millions per piece, even with transactions at $100, as long as people consider it safe and worth holding. As long as I can spend $100 once a year to increase my BTC-retirement-fund, and then spend $100 once a year, once I retired to cash out to some local currency, I'm all good.
Now, I now it sucks if you're not rich, and you can't toy with it, and keep sending between wallets etc. And you feel like altcoins are better etc. And it's true - ATM many altcoins a cheaper way to send small sums of money around. But saving / investing... let me tell you how it looks from my perspective...
I am a software engineer in Sillicon Valley. I have a well-paying job, I eat $20-worth of sushi for dinner, pay $10 every time I trade stocks, pay $3k each month for rent. I can invest $10k in BTC without thinking too much about it. And I'm not telling you this to make you jealous. The wealth inequality is so vast! That's just reality and I think it gives some perspective. I know as I wasn't born here. And I'm no one special here. I'm a nobody. I can't even afford a decent house here. (hindsight is always 20/20, ha)
And there are thousands of software engineers like this. They receive and trade stocks on a weekly/monthly basis, worry about the overpriced stock market, overpriced housing, pilling up cash that they have no idea what to do with. Do you think they care if Bitcoin transaction costs $10? No, they don't. And how many people who complain about $1 fees will take to invest as much as a person like me can? Hundreds. And as I said - I'm nobody. A CEOs here can drop $1MM on Bitcoin, just because they feel playful a given day, or they got jealous of some other CEO friend told them how awesome they are doing with BTC, during a golf game on Saturday. And they wouldn't worry about 50% correction much if at all. And do you think these people buy value-phones and look for good deals on economy-class cars? Do you think they have time to research which altcoin of the day has low transactions? Come on. They will all think something like: "let's put 0.1% of my cash into this magic internet money and see what happens. I want that Bitcoin thing too.".
So, you're free to have your own opinion, but if you ask me, for time being, the people who can not afford to transmit Bitcoin too often will and should just hold it, transferring it when it's relatively cheaper, and use altcoins for playfull spending etc. Just don't expect too much return on your altcoin holdings. I expect Bitcoin to consistently keep growing the fastest, while altcoins keep multiplying. It is a self-fulfilling prophecy. Or an iPhone vs hundreds of Android spin-offs thing. I use Android, but do I believe someone will dethrone iPhone? Nope.
In a sense... you want to invest in Apple stocks, even if you can't afford to drop $1k on an iPhone yourself. Because of people richer than you that can, and will.
And if it makes it any better, I know that LN will solve it all for us. We just need to wait a couple of months.. a year maybe for it to be more common. And I've been through all the early hacks, crashes, MtGox, great depression, forking drama... years and years of problems. And Bitcoin being too popular is like the smallest problem I've seen so far. The problem that smaller coins would like to have, haha. Being patient and some educated faith is what you are rewarded for.
Edit: I woke up, and I have to work, so I'm just going to address some common themes.
Obviously I created this account as throw-away. Duh.
I already can send quickly money for free. I send my friends money with Google Wallet every day. And in many countries in Europe free wires were a thing for like 10 years now. And for purchasing stuff I am very happy with credit cards. They give me points and stuff. If someone thinks Bitcoin can compete as a "payment processor", then I don't know what to say... Wake up, Bitcoin in itself was never really that great at it. Bitcoin won't be a payment processor for the masses. It will be an alternative monetary and banking system. And on top of it, we will get cheap payments and such.
The reason why I hold Bitcoin is that I have something that can't be taken away from me. Through theft, inflation, confiscation, economic crisis, banking collapse, unjust court order, you name it. Noone can prove I have it, noone can take it away. I can keep 1% of my wealth in this weird thing and sleep better at night. Other reasons are secondary, though sure... speculation on the price is a nice thing.
LN networks are going to work. As a software engineer, I understood how Bitcoin works since I've read the whitepaper and did some research. I've always admired how simple it is. Cryptography part requires expertise, but that's OK. LNs are very elegant and simple too. On a daily basis, I work and improve systems that are way, way more complex than BTC + LN.
submitted by censorship_notifier to noncensored_bitcoin [link] [comments]

Subreddit Stats: Economics top posts from 2016-12-11 to 2017-12-10 14:09 PDT

Period: 363.96 days
Submissions Comments
Total 998 124701
Rate (per day) 2.74 341.28
Unique Redditors 447 16507
Combined Score 499738 904919

Top Submitters' Top Submissions

  1. 24425 points, 17 submissions: speckz
    1. At $75,560, housing a prisoner in California now costs more than a year at Harvard (5125 points, 597 comments)
    2. America’s Lost Einsteins - Millions of children from poor families who excel in math and science rarely live up to their potential—and that hurts everyone. (3231 points, 440 comments)
    3. One in five American households have ‘zero or negative’ wealth (2951 points, 619 comments)
    4. Escaping Poverty Requires Almost 20 Years With Nearly Nothing Going Wrong. The MIT economist Peter Temin argues that economic inequality results in two distinct classes. And only one of them has any power. (2717 points, 631 comments)
    5. After decades of pushing bachelor’s degrees, U.S. needs more tradespeople (2386 points, 587 comments)
    6. The world’s most valuable resource is no longer oil, but data (2200 points, 198 comments)
    7. Employees Who Stay In Companies Longer Than Two Years Get Paid 50% Less (1873 points, 260 comments)
    8. Student Loan Debt Is Now As Big as the U.S. Junk Market (1392 points, 380 comments)
    9. The tech sector is leaving the rest of the US economy in its dust (614 points, 235 comments)
    10. The Countries Most (and Least) Likely to be Affected by Automation. Japan is at the top with 55.7% while the US is at 45.8%. (532 points, 138 comments)
  2. 19191 points, 26 submissions: jimrosenz
    1. Warren Buffett wins $1M bet made a decade ago that the S&P 500 stock index would outperform hedge funds (7205 points, 402 comments)
    2. The Gender Pay Gap Is Largely Because of Motherhood (3325 points, 661 comments)
    3. 'Negligible' link between executive pay and firm's performance, says study (1561 points, 165 comments)
    4. We need to challenge the myth that the rich are specially-talented wealth creators (1231 points, 552 comments)
    5. Will MySpace ever lose its monopoly? (2007) (1219 points, 193 comments)
    6. Should the Government Bring Back Trust-Busting? (1093 points, 201 comments)
    7. Economics isn't a bogus science — we just don't use it correctly (625 points, 176 comments)
    8. ‘Exclusionary zoning’ is opportunity hoarding by upper middle class (559 points, 240 comments)
    9. Index Funds Are Great for Investors, Risky for Corporate Governance (358 points, 75 comments)
    10. Milton Friedman's Cherished Theory Is Laid to Rest (324 points, 156 comments)
  3. 15893 points, 26 submissions: ghostofpennwast
    1. Student Debt Is a Major Reason Millennials Aren't Buying Homes (2228 points, 487 comments)
    2. Americans Are Paying $38 to Collect $1 of Student Debt (1598 points, 150 comments)
    3. Report: America’s marijuana industry headed for $24 billion by 2025 (1350 points, 74 comments)
    4. Solar Power Will Kill Coal Faster Than You Think (1336 points, 243 comments)
    5. Saudi Arabia signals end of tax-free living as oil revenues slump (1013 points, 264 comments)
    6. One-third of Americans say they’d have trouble coming up with an emergency $2,000 (979 points, 346 comments)
    7. Trump Seeks $3.6 Trillion in Spending Cuts to Reshape Government (977 points, 652 comments)
    8. Indian American community richest with median household income of $103,821 (846 points, 201 comments)
    9. Foreigners snap up record number of US homes (825 points, 363 comments)
    10. More Americans Are Falling Behind on Student Loans, and Nobody Quite Knows Why (679 points, 526 comments)
  4. 13354 points, 31 submissions: Splenda
    1. Study: The richest families in Florence in 1427 are still the richest families in Florence (5678 points, 501 comments)
    2. Handing Out Tax Breaks to Businesses Is Worse Than Useless: Study exposes the futility of the $45 billion that states spend on economic development incentives. (1410 points, 120 comments)
    3. The Never-Ending Foreclosure: How can the country survive the next economic crash if millions of families still haven't recovered from the last one? (1061 points, 331 comments)
    4. Memo To Steven Mnuchin: Trump's Tax Plan Would Add $7 Trillion To The Debt Over 10 Years (950 points, 317 comments)
    5. Rural America Is Aging and Shrinking (414 points, 364 comments)
    6. This Is What a Real Middle-Class Tax Cut Would Look Like (387 points, 252 comments)
    7. The coming battle between the Trump team and economists over the true cost of climate change (290 points, 102 comments)
    8. Here’s One Scary Way Trump’s Team Could Manipulate Government Data: It has plans to recalculate the social cost of carbon, which has been called “the most important number you’ve never heard of.” (256 points, 29 comments)
    9. Hot and Violent: Researchers have begun to understand the economic and social damage caused by climate change. (238 points, 90 comments)
    10. How Wall Street Once Killed the U.S. Solar Industry… and how it could happen again. (238 points, 53 comments)
  5. 12703 points, 31 submissions: DoremusJessup
    1. U.S. Wage Disparity Took Another Turn for the Worse Last Year: The rich-poor pay gap is getting wider (1307 points, 323 comments)
    2. European Union finance ministers agreed on Tuesday to close loopholes multinational corporations use to skip taxation on dividends, part of a drive to stop them from parking profits where they pay the least tax (1063 points, 131 comments)
    3. Trump Plan to Slash LLC Rate Is Boon for Top Earners: Cutting pass-through rate to 15% could cost $2 trillion; Top 1% would get tax cut of $76,000 - Tax Policy Center (1046 points, 216 comments)
    4. Robots Are Slashing U.S. Wages and Worsening Pay Inequality: Robots have a real impact on jobs and wages, new research shows (1014 points, 391 comments)
    5. US Adds 156K Jobs; Unemployment Rate Ticks up to 4.7 Pct. Hourly pay jumped 2.9 percent from a year earlier, the biggest increase in more than seven years (883 points, 350 comments)
    6. Norway's sovereign wealth fund, the world's largest, on Friday called for a cap on executive pay and fiscal transparency at the companies in which it invests, further buffing its reputation as an ethical investor (846 points, 78 comments)
    7. U.S. payrolls increase more than expected, wages rise (842 points, 142 comments)
    8. America’s Biggest Creditors Dump Treasuries in Warning to Trump (838 points, 309 comments)
    9. Unemployment in the U.S. Is Falling, So Why Isn’t Pay Rising? (571 points, 228 comments)
    10. Citigroup on Thursday became the first-ever bank to get hit with civil "spoofing charges," after U.S. derivatives regulators said one of its units entered U.S. Treasury futures market orders with the intent of canceling them (511 points, 46 comments)
  6. 12274 points, 1 submission: CADBP
    1. Freakonomics: You're twice as likely to go from low to high income in Canada than in the USA (12274 points, 809 comments)
  7. 11930 points, 4 submissions: trot-trot
    1. Trade school, not 4-year college, is a better bet to solve the US income gap, researchers say (11060 points, 1329 comments)
    2. Libor: Bank of England implicated in secret recording (517 points, 9 comments)
    3. 'These Boots are Made for Walking': Why Most Divorce Filers are Women (273 points, 268 comments)
    4. This Is Le Pen's Plan to Break Up the Euro (80 points, 11 comments)
  8. 11267 points, 16 submissions: unimployed
    1. Basically every problem in the US economy is because companies have too much power, new research argues (7086 points, 372 comments)
    2. The Fraternity Paradox: Lower GPA, Higher Incomes (1440 points, 319 comments)
    3. The Real Reason the U.S. Has Employer-Sponsored Health Insurance (566 points, 95 comments)
    4. US opioid crisis holds back jobs market recovery, says study (563 points, 74 comments)
    5. An important shift in the job market makes the mystery of weak wage growth less puzzling (345 points, 62 comments)
    6. The Economics and Politics Of Flooding and Insurance (266 points, 56 comments)
    7. Economic models are broken, and economists have wildly different ideas about how to fix them (198 points, 130 comments)
    8. Most Americans live paycheck to paycheck (128 points, 56 comments)
    9. Trump preparing withdrawal from South Korea trade deal (97 points, 46 comments)
    10. The Incredible Shrinking Corporate Tax Bill (93 points, 24 comments)
  9. 9635 points, 17 submissions: lingben
    1. I’m a Depression historian. The GOP tax bill is straight out of 1929 (2907 points, 577 comments)
    2. 35 of 37 economists said Trump was wrong. The other two misread the question. (2127 points, 198 comments)
    3. CEOs agree: Corporate tax cuts won't trickle down (738 points, 301 comments)
    4. Trump's Numbers Guy Isn't Great With Numbers (662 points, 111 comments)
    5. Trumponomics Gets The Thumbs Down From Nobel-Winning Economists (563 points, 268 comments)
    6. If Everyone Is So Confident, Why Aren’t They Borrowing? (466 points, 179 comments)
    7. Economists Have No Use for Republican Tax Cuts (447 points, 180 comments)
    8. Corruption Is Still a Problem Ten Months After India's Cash Ban (412 points, 39 comments)
    9. Should the rich be taxed more? (352 points, 554 comments)
    10. Trump Administration Considers Change in Calculating U.S. Trade Deficit (208 points, 19 comments)
  10. 9371 points, 1 submission: RegressToTheMean
    1. Poll: Economists Unanimous That Debt Would Balloon Under GOP Tax Plan (9371 points, 848 comments)
  11. 8887 points, 39 submissions: mberre
    1. Japan logs longest phase of growth in 16 years (846 points, 76 comments)
    2. British Employers Begin To See A Pre-Brexit Exit Of Foreign Workers (746 points, 268 comments)
    3. US unemployment falls to 10-year low (602 points, 228 comments)
    4. U.S. new home sales fall to seven-month low (546 points, 242 comments)
    5. US deficit rises to 2008 levels (538 points, 91 comments)
    6. Iceland to end capital controls from 2008 financial crisis - BBC News (463 points, 48 comments)
    7. Swiss say goodbye to banking secrecy (450 points, 122 comments)
    8. Pew Research: In a Recovering Market, Homeownership Rates Are Down Sharply for Blacks, Young Adults (439 points, 183 comments)
    9. UK wealth gap 'widening over past decade' says report - BBC News (429 points, 182 comments)
    10. Fed's Williams calls for global rethink of monetary policy (387 points, 158 comments)
  12. 7956 points, 6 submissions: johnmountain
    1. Martin Schulz to Trump: Dropping Paris agreement means no trade talks -- ‘Whoever wants to have access to our market needs to respect the European standards,’ Schulz says. (6708 points, 1020 comments)
    2. Paul Krugman in 1998: Internet’s Economic Impact No Greater Than Fax Machine (710 points, 261 comments)
    3. Without Power to Run A.T.M.s, Puerto Rico Is Cash Only (210 points, 15 comments)
    4. A basic income could boost the US economy by $2.5 trillion (150 points, 165 comments)
    5. America's housing inventory crisis is causing home prices to rise at double the rate of a 'normal' market (91 points, 15 comments)
    6. Why Do Cities Become Unaffordable? (87 points, 117 comments)
  13. 6952 points, 2 submissions: mjanes
    1. The U.S. Has Forgotten How to Do Infrastructure: The nation once built things fast and cheaply. Now experts are puzzled why costs are higher and projects take longer than in other countries. (5056 points, 575 comments)
    2. Reaganomics killed America’s middle class (1896 points, 468 comments)
  14. 6290 points, 2 submissions: Nolagamer
    1. 37 of 38 economists said the GOP tax plans would grow the debt. The 38th misread the question. (5268 points, 473 comments)
    2. Opioid crisis: Nearly half of working-age American men who are out of the labor force are using painkillers daily (1022 points, 137 comments)
  15. 5852 points, 7 submissions: PinkSlimeIsPeople
    1. Tax Cuts Don't Lead to Economic Growth, a New 65-Year Study Finds (3816 points, 352 comments)
    2. You're not imagining it: the rich really are hoarding economic growth (841 points, 546 comments)
    3. Vast Majority of Americans Would Likely Lose From Senate GOP’s $1.5 Trillion in Tax Cuts, Once They’re Paid For (347 points, 128 comments)
    4. Commentary: Signs Suggest Trump Budget Will Feature Unprecedented Cuts Plus Large Tax Cuts Favoring Wealthy (323 points, 212 comments)
    5. Eight Market-Oriented Proposals That Reduce Income Inequality (304 points, 280 comments)
    6. Republicans’ tax plan gives the top 1 percent of households a $207,000 tax cut; Bottom 20 percent get $50 (163 points, 154 comments)
    7. Eliminating Two ACA Medicare Taxes Means Huge Tax Cuts for High Earners and the Wealthy (58 points, 67 comments)
  16. 5489 points, 10 submissions: pipsdontsqueak
    1. Americans want U.S. goods, but not willing to pay more: Reuters/Ipsos poll (1219 points, 461 comments)
    2. After a Tax Crackdown, Apple Found a New Shelter for Its Profits (1216 points, 221 comments)
    3. Fed raises rates for third time since the recession (716 points, 170 comments)
    4. U.S. moves to impose tariffs of as much as 219 percent on Canadian jet maker, siding with Boeing (672 points, 120 comments)
    5. Bitcoin hits all-time high after CME Group says to launch futures (637 points, 365 comments)
    6. Trump Is Expected to Name Jerome Powell as Next Fed Chairman (451 points, 58 comments)
    7. Awaiting Trump's coal comeback, miners reject retraining (202 points, 118 comments)
    8. Republicans to propose keeping top tax rate for very wealthy, nodding to concerns (202 points, 63 comments)
    9. Experian fined $3M over 'inaccurate' credit scores (97 points, 3 comments)
    10. Paradise Papers: Apple's secret tax bolthole revealed (77 points, 8 comments)
  17. 5133 points, 2 submissions: MaxGhenis
    1. Something missing from Trump's Cabinet: Economists (4128 points, 575 comments)
    2. San Francisco Bans Salary History Questions (1005 points, 243 comments)
  18. 4744 points, 16 submissions: InvisibleTextArea
    1. New Zealand bans foreign home buyers (1744 points, 533 comments)
    2. EU Audit Admits Greek Bailouts Didn't Go as Planned (811 points, 291 comments)
    3. Renters in the UK spend average of 62 per cent of income on rent (627 points, 104 comments)
    4. Venezuela pulls most common banknote from circulation to 'beat mafia' (369 points, 80 comments)
    5. Yet again, today’s politicians are ignoring basic economics (166 points, 111 comments)
    6. The next crash risk is hiding in plain sight (159 points, 36 comments)
    7. After Universal Basic Income, The Flood (143 points, 118 comments)
    8. Slow economic growth is not the new normal, it's the old norm (124 points, 117 comments)
    9. Cryptoeconomics 101 (88 points, 9 comments)
    10. Of productivity in France and in Germany (85 points, 19 comments)
  19. 4258 points, 16 submissions: kludgeocracy
    1. How Corporations and the Wealthy Avoid Taxes (and How to Stop Them) (787 points, 296 comments)
    2. How “Shareholder Value” is Killing Innovation (637 points, 217 comments)
    3. Capitalism Can Thrive Without Cooking the Planet (547 points, 296 comments)
    4. American builders’ productivity has plunged by half since the late 1960s (519 points, 112 comments)
    5. There's a $136,400 reason so many Americans feel they haven't made economic progress (470 points, 186 comments)
    6. What Happened When 18 States Raised Their Minimum Wage? (242 points, 189 comments)
    7. Democrats just united on a $15-an-hour minimum wage (208 points, 252 comments)
    8. Avoiding Payday Loans Makes the Poor Richer (201 points, 44 comments)
    9. Maybe We’ve Been Thinking About the Productivity Slump All Wrong (167 points, 92 comments)
    10. Researchers have answered a big question about the decline of the middle class (95 points, 50 comments)

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4/18/13 Bricks of gold, bits of code: the worship of things shiny and useless from FT Alphaville

by Izabella Kaminska
If the meteoric rise and fall of the cyber crypto currency Bitcoin this month teaches us anything, it’s to what degree a market can be influenced by speculative flows pumped up by internet hysteria and viral marketing. There is no intrinsic value to a Bitcoin. The asset class, in many ways, behaves just like gold. Bitcoins can never be consumed. They can never be destroyed. They can only ever be hoarded or transacted. If there is value to a Bitcoin (or gold) it is tied to its cost of production, that being the energy it costs to produce it, its restricted supply — a function of a computer protocol — and the cult-like beliefs of its dedicated followers. In many ways the movement is akin to a religion, one spawned from the foundation myth of the pseudonymous Satoshi Nakamoto, the mysterious architect of the high-level programming that backs the system. Its followers are attracted by the promise of a new age of decentralised currency markets, in which Bitcoin reigns supreme under no authority but its own, free of government interference. This anarchic philosophy is propagated on a daily basis through the counterculture internet community, often by vested interests, vying for the hearts and minds of a disillusioned and vulnerable post-financial crisis generation. But just like with any product being pitched by snake oil salesmen there is a twist. The marketing reads “fairer system for all” but the content is actually intended quite strategically to concentrate wealth amongst the view and increase inequality more generally. Proponents of Bitcoin (and gold), of course, cry out for its currency status. But while the nature of money has been long debated, there is a general consensus that its core attributes consist of it being a stable store of value, a universal unit of account and a liquid form of exchange. Some have even argued it is primitive version of technological memory.
If last week has shown anything, it is that the Bitcoin system is fundamentally flawed in that capacity. It is at worst a useless commodity and at best a speculative asset class resembling an investment in a high-risk technology stock. Or even worse than that a money laundering scheme for criminal economy. If it was a currency, it would be a deflationary one by design — hardly the makings of a viable monetary system that spreads wealth. The problem lies in the rigidity of the source code, and its inherent inflexibility and volatility. In a normal commodity market when prices go up, the mining industry responds by producing more to capture as much of the price rise as possible. This inevitably brings more supply to the market, leading prices to adjust to the downside. At that point miners rein in their supply and a new price equilibrium is set. The only exception to that model is if speculators believe, for some reason — perhaps due to marketing — that miners will never be able to satisfy demand in the future even with increased production today. In that case speculators end up paying too high a price for the commodity’s delivery in the future, which incentivises miners to keep producing regardless. These supplies, instead of being consumed, go into financialised hoards — kept safe for the eventual day that consumption demand returns. Like the biblical Joseph encouraging pharaoh to hoard during the seven years of plenty. With Bitcoin (and gold), however, there is never any potential for consumption. These coins can never be consumed, leaving them fit only for hoarding. Miners can also never produce more to respond to a demand shock, making them in some ways worse than the now-notoriously indisciplined Opec cartel. For Bitcoin, when prices go up, production discipline is maintained by the need to solve a statistical cryptogramme, whose difficulty increases as more players enter the game. If you happen to crack the code you get to benefit from the high price. If you don’t, you have to invest in more computer power so that the code can be cracked more quickly. Consequently, the perception of a shortage in the future is always maintained and prices continue to go up until the rush of speculative “retail” interest realises that there is more logic in learning how to mine than in competing for existing supply. When that happens, demand is diverted from speculative inflow to production — or perhaps even into forging a competitive system (like Litecoin, or Ripple) that compromises the monopoly. Either way, the inflection point creates a powerful incentive for more-established miners to cash out. It is greed and fear in its purest form. At that point, the dam holding back hoarded supply inevitably breaks, and the price has no choice but to correct lower. At least until a new Bitcoin cartel can be revived. Exactly the same mechanics apply to gold.
All that said, the phenomenon has had its uses. People are debating the nature of money and the economic system on an entirely new level. It has also taught us that the current e-money infrastructure must be lacking in some capacity. A better universal payments system on a digital level, though hopefully one underpinned by central bank digital currency and not new manifestations of gold in digital form, is what we should be striving for instead.
submitted by Aniolla to Bitcoin [link] [comments]

some questions for smarterer shibes

here are some of my concers regarding the future of crypto currencies and i hope someone smarter than me can debunk my issues. i also hope my english is sufficient.
as i understand it "mining" is just an entropy pissing contest, the one who wastes the most energy (by making the most guesses while trial and error "solving" meaningless mathematical inequations) has the highest chance of "winning the lottery".
question one: would it be possible to use the calculation power of the network to something more meaningful, e.g. [email protected] or [email protected] or similar while still ensuring the functionality of a decentralized blockchain ?
as the finite number of coins of a currency approaches its limit the rewards for each block go down. at the end only the transaction fees will be distributed between the miners. am i right in the assumption that the relative net hashrate would drop until the difficulty is so low that the costs of hashing (electricity) is covered by the now low rewards. imagine the whole networks mining power is only at 10% of what it was. almost everybody quit mining because it wouldn't even cover the power costs. in as an example bitcoin right now there is one "mining pool" that has over 30% of the whole networks hashing power. wouldn't it be possible for anybody, or better, any corporation with such a high hashing power to completely alter the blockchain to its will by switching the pool on/off as it pleases ? so could a huge company with a very big server farm switch it's servers to mining for let's say an hour immediately after they've given a huge transaction to alter the blockchain so that it says they diddn't.
if so, are there any ideas/ways to prevent this ?
thanks in advance
submitted by lewwerwoschd to dogecoin [link] [comments]

Radio Host goes Anti-BTC, help me set this straight.

So the following negative article was written by a radio host that is obviously of a different mindset regarding Bitcoin. I would like to ask my fellow bitcoin enthusiasts to rebut and set this straight. I'd like to address this to Mr Dietrich. I am requesting your assistance in forming a logical and comprehensive reply to the points addressed here:
BITCOIN PROVES THE LIBERTARIAN IDEAL OF PARADISE IS HELL-ON-EARTH DOP (Direct Open Post) From MISTER SHON CLEMONS To > DOUGLAS DUANE DIETRICH: "Douglas, I was curious as to your thoughts on Bit Coins and the surge to make all drugs across the board legal and the advent of darknet BlackMarket sites such as The Silkroad and Agora? I reference silk road because that is the one most are aware of due to the media. "There are many such sites on the DarkNet as I am sure you are aware of. "Such sites are no different than a gun or even knowledge. It can be used with honorable or dishonorable intent."
Per DOUGLAS DIETRICH: Not So By Way of Bitcoinage, Mister Clemons. As a Supervillain-of-Necessity myself, I can Assure Thee BITCOIN IS FOR CRIMINALS. Libertarians love Bitcoin (a Warning Signal if ever there was one [Libertarians Advocate Elimination of Child Labour Laws]).
About 44% of the online cryptocurrency's users self-identify as Libertarians (id est, Clinical Psychopaths). They love the fact that it's not controlled by a government or central bank — so no online Fed can "print" more of it and inflate our way out of trouble. They love that it's decentralized; it's the currency of The People, not The Man. They love that it's "mined," a bit like gold, because that makes it a bit like the gold standard, which libertarians think real currencies ought to be tied to. They love that Bitcoin isn't taxed, so you can hide your income from the government if you want to. They love the way its value reflects pure supply and demand, and not a value forced into the system by regulation or monopoly. And they love that it's fairly lawless — it's difficult to enforce rules (other than the rules of the market) when everyone in the market is anonymous.
So the Bitcoin experience gives us a glimpse of Libertarian paradise: What life would be like with as little government interference as possible, in a market free of burdensome laws and taxes. Unfortunately, that experience proves itself a total nightmare. It's characterized by radical instability, chaos, the rise of a boss-class of criminals who assassinate people they don't like, and a mass handover of wealth to a minority even smaller than the 1% that currently lauds it in the United States.
If Bitcoin were a state — Libertarialand ? — it would be like Somalia (a State-In-Failure). Consider: Bitcoin is most exploitable to Sociopaths.
Currently, for ordinary people, cash and credit work just fine. While some mainstream businesses do take Bitcoin, there is no compelling reason — yet — for ordinary people to use it. If you're a criminal, however, there are very compelling reasons to use it: you can transfer vast sums of cash completely anonymously. Cash transfers are a real problem for criminals. When you can't use bank accounts, lugging around vast sums of cash gets old pretty quickly. Bitcoin solves that. So Bitcoin is very, very empowering for criminals. The Bitcoin "Economy" manifests as a crime wave.
Given that Bitcoin is good for criminals, it should not be surprising that those criminals are targeting other Bitcoin users for thefts. The most spectacular theft so far is the Sheep Marketplace robbery, in which one hacker appears to have emptied a massive Bitcoin marketplace of up to U$D220 million in Bitcoins. Note that Sheep Marketplace was basically a trading post for drug dealers. Bitcoin exchange and account thefts are very common. Herewith a historical scan of recent moral atrocities as committed in currency of Bitcoinaige.
Bitcoin-backed Libertarian "law" is enforced by paid assassins.
The most shocking aspect about the indictment of the Silk Road operator Ross Ulbricht was not the amount of money in Bitcoin he controlled (U$D28 million, approximated). Rather, it was the fact that when other drug dealers ripped him off, he didn't put it down as the price of doing business. Instead, he is accused of hiring a hitman to murder six people he believed had stolen from him. Ulbricht was a Libertarian. In other words, there will be laws in the Bitcoin Libertarian paradise: And the people with the most Bitcoins will decide what that law is, when it should be applied, and how "justice" will be meted out. In Libertarialand, the sentence for nonviolent financial crimes evidently includes the death penalty.
There is literally a Bitcoin market for assassinations.
There have always been people engaging in murder for hire, using old-fashioned cash. But the operator of this Bitcoin website seems to believe that Bitcoin creates enough anonymity to allow assassination to take place "at scale (to borrow the parlance of the tech startup world)." He wants to destroy "all governments, everywhere." Bitcoin as a currency is horribly unstable.
This chart (e[lectronically]-ttached) tells you all you need to know. One day you're rich, when Bitcoin approaches U$D1200; the next day half your wealth is wiped out as it plummets to U$D700. Bitcoin isn't backed by any government's bonds or central bank gold. It's literally an asset without an underlying asset. So its price is determined entirely by its flows.
Libertarialand makes the Weimar Republic look sedate. Even if you could live with the crime, the instability makes transactions wildly unfair to the party on the downside. Bitcoin has produced farcical wealth inequality.
Libertarians don't care about inequality, of course. They see it as a reflection of individuals' natural talents, and as an incentive to work harder. But even the most hardcore free marketeer ought to blanche at the incredible level of inequality already endemic to Bitcoin. Just 47 individuals own nearly one-third of all Bitcoins. About 927 people control half the entire currency. There are just over 1 million Bitcoin holders — the vast majority of them own mere crumbs.
Bitcoin hoarding will inevitably produce a cartel that controls all Bitcoin. A study from Cornell has concluded that if Bitcoin miners co-öperate, they could end up controlling most Bitcoins and thus control the currency's price. The cartel could beggar or enrich all Bitcoin holders overnight, depending on how they trade it.
That kind of thing just doesn't happen with the dollar.
Even if you can live with the crime, the inequality and the cartel, you might not tolerate the accidental chaos. When you have a normal bank account with cash in it, you're almost guaranteed not to lose the money. The bank can burn to the ground, be robbed or even go out of business and because of federal deposit insurance you'll always get your money back. You can't "lose" US dollars if they're parked in a checking account.
Not so with Bitcoin. If you're ever unlucky or careless with your Bitcoin wallet, you're just completely f__ked: This guy lost about U$D600 because he reset his mobile phone — permanently deleting his Bitcoin wallet. This guy threw away an old hard drive — and now he's looking for U$D6.5 million in a landfill. This guy lost about U$D90 000 because he hit "delete" at the wrong time. Sure, the entire Bitcoin economy isn't run by criminals YET — but it WILL be. There is a price to pay for the freedom and anonymity that Bitcoin provides, and that price is a lack of enforceable laws that benefits only the most ruthless.
The Bitcoin dream of Libertarianism is a literally criminal idea, and you don't ever want to live there ....
submitted by ryolitex to Bitcoin [link] [comments]

[Table] IAmA: We Are the Hosts of the Let's Talk Bitcoin! Show! We just spent 4 days at Bitcoin2013, Ask Us Anything!

Verified? (This bot cannot verify AMAs just yet)
Date: 2013-05-24
Link to submission (Has self-text)
Link to my post
Questions Answers
Hi all! I was wondering, what do you think it would take to get bitcoin from a niche currency used mainly by internet denizens to go mainstraim? I know the slow creep of more small companies accepting bitcoin helps, but what do you think that final cusp will be, and will it ever come to that? Thanks for taking the time to do this! There are several potential tipping points, but my favorite one is a large corporation accepting Bitcoin.
Amazon has an incredibly small operating margin, less than 1% - They have more than that in transaction costs, so if they were to accept Bitcoins for product and offer Bitcoins as payment to their affiliates it would cause a rush of other companies to jump onboard for the same reasons.
Once that happens with one large company, it sets a precedent. Doing something new is scary, and when the regulatory environment is uncertain like it is with Bitcoin the choice to accept could potentially cost you a lot of money later if it's retroactively made not OK and the value of the currency plummets.
But once a company like Amazon or Google jumps in, they have enough political swing and momentum that attacking Bitcoin becomes attacking them, and they'll fight that tooth and nail if it's saving them money.
Another example of a tipping point would be a country, ANY country, adopting it as their formal currency OR issuing a new currency with Bitcoins as the transparent backing of it. With bitcoin you can have a functional gold standard, because the gold doesn't need to be hidden from sight.
It is the hiding that makes gold standards dangerous - The people who issue currency with the gold as backing have no reason to issue the correct amount when only they know how much is out there, and how much gold they have.
I guess the Supreme Court has decided this does not apply to taxes, which is crap. Or are you talking about other countries? Thank you :) I actually mean something along the lines of "It is illegal to trade dollars for any cryptocurrency that does not have a real name and social security associated with it"
Will bitcoins ever be able to be traded like other recognized currencies in similar ways to Forex? More specifically, will there ever be retail brokers offering margin trading accounts that allow you to buy and sell bitcoin with leverage? There are already really small niche sites you can trade Bitcoin at leverage with, but it's just a bad idea. With a "normal" commodity market, like say chickens, if you think chickens are undervalued and want to profit from them you can buy forward production of say, a million chickens. Then when the option comes due, if you're on the profitable side of the trade you can essentially sell it for cash and the chickens never need to be delivered. In that way, it almost doesn't matter if the chickens ever existed to begin with because you never intended to take posession. With Bitcoin, it's different - Converting a bitcoin options contract into US dollars, yen, whatever actually is more expensive and time consuming than just "accepting delivery" of the bitcoins themselves. You can still sell them for whatever currency you want, but it is at the time of your choosing rather than at the point of settlement. What that means is that if you sell an option and the Bitcoins don't really exist, you could be screwed. You either default or buy them at market price which can be very painful given how volatile the pricing is right now. It is a bad idea to play with leverage in Bitcoin because if you lose, you potentially lose very big. Additionally, it's bad to buy an option because you introduce the possibility of the counterparty (supply) not being able to deliver, whereas if you just bought Bitcoins you have the Bitcoins.
Do you believe bitcoin is important locally as well as on the internet? If so, how are you promoting bitcoin in your local communities? Cryptocurrencies (of which Bitcoin is the most prominent) are the first real competition to the types of money we've used all our lives. With Dollars, Yen, Whatever - Ultimately there are a handful of people who get to decide how and why the currency should be managed.
If they did a good job, it might be fine - But the reality is the decision made affecting all users of the currency are to the benefit of a very few , at the cost of the many.
Bitcoin is different - The rules that govern it, are the rules that govern it. Nobody can break them, and if they're ever broken it's because more than 51% of the distributed power in the system (anyone can buy a mining rig and join this group). For me, that's incredibly important. Rules should apply evenly to everyone because otherwise they're not rules at all.
Local communities can benefit because it removes payment processors from merchant relationships, removes chargeback risk, and basically acts like Cash on the internet.
What are some of the more exciting things you (each of you?) envision for Bitcoin in the short to medium term? Discounts :) We've been talking about the deflationary business model, and during this period where the value is going to go up pretty fast (over the next several years) as adoption ramps up, businesses are going to be giving major discounts to those who choose to spend them.
From the merchants perspective, this is actually a huge win - They get to have lower prices than their US Dollar (or local currency) competitors, and the value of the Bitcoins they receive goes up over time instead of going down with printed currencies. Once this becomes pervasive in the Bitcoin economy, it will mean that even at those discounted prices they are STILL profitable because their suppliers are also offering them discounts to pay in Bitcoin.
Right now we're at the beginning of this cycle, you can see BitcoinStore.com is attempting it (Disclosure - They have sponsored us in the past, we run a 30s advertisement for them per show) but it's hard to be the first one doing it because it looks like you're sacrificing yourself when really it's just the model that makes the most sense.
Not to be the doom and gloom person but in the future what do you think will/would be the "last nail in the coffin" for Bitcoin? It depends what you mean by "last nail in the coffin"
How did you meet/find Andreas and Stephanie and how did you persuade them to be part of your show? I put out a call for staff several months ago, Andreas found me through that and joined the team initially as a correspondent providing expertise and commentary while Mt.Gox was having a lot of problems. Once we re-started the show as a twice-weekly, he graciously offered to join the hosting staff and gladly took him up on it.
I found Stephanie through her show Porc therapy, and a listener named Justus - He mentioned she did voicework, and I hired her to do some of our early introductions and advertising spots. When we went through the re-organization I offered her an occasional hosting role, and never bothered finding other hosts because I was so happy with our dynamic and varied viewpoints.
Both of the other hosts on the show are real professionals, and it's been my distinct pleasure to work with them.
Thanks for responding! Andreas is my fave (though I enjoy yours and Stephanie's comments too). Everybody has their favorite :) I think the fact that we all have people disagreeing with us at times means we're doing the job, and providing multiple and varied perspectives.
What recording tools are you using? We started off using Skype, Virtual Audio Cables (VAC) and Adobe Audition (creative suite)
Now we use Mumble instead of Skype, but the rest is the same.
I edit the host segments for content (sometimes we go on and on and on) and I edit the interviews for presentation, rarely removing any content. Many times the skillset that enables you to have a really smart idea is not the same skillset that lets you present that idea, perfectly, the first time. Our interview subjects tell me all the time "I love how smart I sound" and I get to say "You are smart, I just removed the brain processing noises"
Assuming bitcoin reaches critical mass, how does bitcoin cope with the criticism of rewarding early adopters? Do you see a potential uproar about inequity? Is there outrage against people who bought Apple stock at $30? Bitcoin is a currency that right now, and for the next few years, acting like an IPO. People who got in early got in cheap, but there was a whole lot of risk because people weren't using it much, there wern't vendors accepting it, so the use case is much more speculative.
We're very much still in the early adoption phase right now - Less than %.01 of internet users are Bitcoin users, as that number grows while the number of coins being added to the total pool grows at a much slower rate, the price per coin has to go up. If Bitcoin fails and everybody abandons it, this works the opposite way - but it actually solves a number of problems (microtransactions, fees, international money transfers, automated payment systems) so I'm not super concerned about that.
One of my favorite quotes, by Douglas Adams.
>It is a rare mind indeed that can render the hitherto non-existent >blindingly obvious. The cry 'I could have thought of that' is a very >popular and misleading one, for the fact is that they didn't, and a very >significant and revealing fact it is too.
What do you make of the download trend of the bitcoin client software in China? Isn't this a big story? China has lots of restrictive controls on their local currency, so Bitcoin has a real use case there. This is one of many scenarios where given even 1% adoption, the price must go very much above where it is now.
You commented on a recent episode about how Satochi Dice was going to block US traffic to the site due to uncertain regulations. Can't bitcoin work around that? If you send bitcoin to the addresses of the various bets - it still works right? Thanks for your show - I await each new podcast. Yes, if you already have the specific betting addresses it doesn't matter where you are in the world. It is only the website that does not allow US IPs, they did this to be very clear they were trying to respect the US gambling laws.
I spoke with Erik Voorhees about this among other things at the conference, you can find that interview here Link to letstalkbitcoin.com
I'd like to thank all three of you for doing this podcast, it's always thought provoking and fun to listen to. Plus, Stephanie does have a very sexy voice... But I do have a question, Right now, I don't know the answer to that question.
How do miners determine which transactions will be confirmed first and which get put to the back of the line? Shouldn't they be confirmed in a 'first come, first serve' basis? But the development team has made it clear they're moving towards a market-based mechanism where Miners set the minimum transaction fee they will accept, and process on a first-come/highest-fee model. People who want their transaction to process fast will put a higher fee and it will be prioritized, while people who don't care about delivery time will be able to send no fee and be subsidized by those paying higher fees.
*edit: As well, do you still plan on using some time on the show to go into more detail about mining? I think it was mentioned a few weeks ago that the topic might be explored in further detail. There will be fewer miners who accept free or very low fee transactions, so there you go.
How would Bitcoin change our financial system as we know it? In the same way the automobile changed the horse-and-buggy system as they knew it. If you play out the logic, one functionally obsoletes the other. I was talking with a financial reporter the other day who has been coming around to bitcoin, and he said to me "You know, if they were building the banking system from scratch today I think this is pretty close to what it would look like"
Andreas answered a question below about bitcoin and self driving cars, fixing spam on the internet by using Bitcoin addresses with tiny amounts of BTC in them to prove you're a real person and not a single-use bot, there are so many crazy and impossible things that become actually probable when you're talking in the context of a world built on decentralized, rules-based, cryptographically secured, instantly transmittable, person to person internet cash.
I have never been so hopeful for our future as I am now that I've thrown my days into bitcoin. Bitcoin 2013 was a fine conference and a wonderful experiance, so many very smart people have quit their jobs or left their studies to do the same thing I have.
We know we're building the future, and it's a better one than we have today.
Have any of you heard about how in Africa much of the exchange in value is done with mobile phone minutes? It seems to me - whatever the US attempts to do with Bitcoin - there will be other places that it will bubble up in. What about Argentina and other places where they actually understand what damage a desperate government can do to a currency? I would agree with you. Until recently it's been impossible to use Bitcoins on a "dumb cell phone" - That changed recently with Link to phoneacoin.com and others.
Bitcoin solves problems that the world has had for decades, it takes the power to destroy the currency away from government so they cannot do it no matter how much they want to, or how desperately they think they need to.
No government wants to destroy a currency, they just don't want to acknowledge they've trapped themselves with debt and have no way out.
Who invented Bitcoin? What is to stop whoever did so initially issuing themselves the equivalent of $79 zillion in Bitcoin currency prior to it taking off? Is there commission charged on each transaction that occurs? If so, how much, and who receives this? The true creator is not known, he went by a false name "Satoshi".
He actually holds about 250,000 coins if I recall correctly because he was the first miner. Bitcoin is a protocol, a set of rules. It's open source, and anyone who wants to look at it can see that there is not a mechanism to just create more coins by typing in a magic word. There are no commissions, although there are fees that go to the miners who process and verify transactions.
Great podcast, can't wait for the next one! It depends on the mesh. If the mesh was never connected to the internet, it would be a parralel Bitcoin network able to transact with itself but if it was ever connected to the larger network any conflicting transactions would be "lost" as the two ledgers (the big one, and the disconnected one) try to reckon their differences. Only one winner, so that means there is a loser.
You discussed mesh networks in 3rd world countries and how bitcoin could be used in such a scenario. If the [mesh] network is disconnected from the internet, how would transactions on the blockchain be verified? Couldn't the time the mesh network was disconnected make it vulnerable to hacking the [mesh network's] blockchain? More interesting might be disconnected communities running their own fork or version of Bitcoin, that way if they're ever connected it can be an exchange process (trading their coins for "bitcoins" rather than a reckoning (Seeing who has a bigger network and canceling out transactions on the smaller one that conflict)
1) The price for one Bitcoin seems to fluctuate quite a bit. The most successful currencies remain relatively stable over time (e.g. the Dollar). Will Bitcoin ever need to reach a certain level of stability to be a successful unit of trade? and if so, what do you think needs to happen before then? 1 - Yes! Once everyone who has purchased Bitcoin has purchased them, the price will stabilize. In practice this will start happening long before absolute stability, and as soon as people start thinking about prices in terms of BTC instead of their local currency it almost doesn't matter.
2) If Bitcoin ever becomes a widely accepted form of payment (seems a lot of businesses already accept it), how do you think the US government will proceed/react/regulate/etc. considering that technically only the feds can issue currency? 2 - "The Feds" are not the only ones who can issue currency - They have legal tender laws which mean people MUST accept their money, but nothing prevents you from circulating a voluntary currency like Bitcoin.
Do you foresee companies like paypal incorporating bitcoin into their businesses in the future as a more credible exchange than these ones that are currently running? No. Paypal again is the proverbial horse-drawn-buggy manufacturer- Sure they might go to the worlds faire and while observing the new fangled automobiles say to themselves 'we might integrate this into our existing machines!' when the fact is that it obsoletes those existing machines.
Paypal makes their money by standing in the middle of transactions collecting fees, Bitcoin serves its function by connecting people who want to do commerce directly to one-another, and what fees are paid are a tiny fraction of what Paypal does. If paypal accepted Bitcoin, it would not be Bitcoin any more because they would have mechanisms to freeze accounts at the very least to mitigate risk. That is not possible with Bitcoin by itself.
Thanks for the well thought out response, I genuinely appreciated that you took the time for this! I do have a follow up question, how does one get bit coin in an easy way? Lets say I have 300$ that I want in bit coin.. whats the best way to approach this? Probably a company like bitinstant.com, bitstamp.com, or btcquick.com - For larger amounts they don't make too much sense but at that level its your best bet.
Not to be rude, but how do you expect for a currency without a standard like gold silver etc. to not crash down in a blaze of glory? What standard is your currency backed by?
Hi There. I was at the San Jose convention hall last weekend attending Big Wow Comicfest and that's where I saw Bitcoin2013! Mostly Bitcoin 2013 was an opportunity for people building the future of Bitcoin to meet each other and network. There were speakers talking about a wide variety of issues, and vendors of Bitcoin services who were showing their latest innovations and systems.
What information was presented at this event that couldn't be done justice disseminated over the internet? The information will eventually be online, but the probably 200 people I got to meet in real life will not (in real life)
What resources do you think I should review as a total newbie to bitcoin? Or if possible, what's the one sentence pitch to get a newb involved? For people brand new, www.weusecoins.com is a good place to start For people who want to learn how it works, www.letstalkbitcoin.com/learn will direct you to the Bitcoin Education Project, which is a series of free and very high quality lectures that will tell you everything you ever wanted to know and more about Bitcoin, How it works, and all the little sub-topics that you'll eventually want to learn about.
The pitch is "It's like cash that lives on the internet, and is as easy to spend on the internet as buying a candybar in a store with a dollar"
Would any of you hazard a guess at the bitcoin exchange rate at the end of 2013? Sure, i'll make a wild guess.
$1000.
If and when a large user comes onboard, I think thats the next price at which we'll bounce around for a while, just like 100 became the sticky point after the last major bout of adoption.
How do bitcoins relate to the law? For example, what would be the crime if somone hacked your account and stole your bitcoins? It's not exactly theft of money, or is it? Bitcoins are your property, it's illegal for someone to steal your property whether it is money or not. Right now there is little that can be done about theft, but eventually I expect a class of "Blockchain Forensic Investigators" to emerge who will track down your stolen coins for a % based fee.
On your last show you mentioned the diversity of the Bitcoiners who attended BitCoin2013 - which nation was most represented in your opinion? Were there any Chinese nationals present (we've heard that they've suddenly gotten the bitcoin bug in the last month)? Did the other nations talk about regulatory problems or is that just a US concern? I met the gentleman from BTC-China, but other than that I actually didn't see any obvious chinese nationals. We saw lots of eastern europeans and south americans.
Other nations are not talking about the regulatory issue as far as I can tell, it seems like everyone is waiting to see what the US does, which is not abnormal in a very new situation like this.
Isn't having an inherently deflationary currency a terrible idea? How is bitcoin different from geeky goldbuggery? Because you can't divide a gold coin into .0001 without incurring cost and expense. That's not the case with Bitcoin, so the deflationary aspect of it is largely moot.
There is a tendency to listen to modern "economics" which makes this arguement, saying that the money supply must expand because otherwise it drives down profitability in a race to the bottom.
I think in practice we'll find that people don't work against their own best interest, and while during the initial adoptions stages of Bitcoin there will be significant discounts offered to those who pay with Bitcoin vs. legacy currency, once the market becomes saturated and the price levels out those discounts will be scaled way back.
Right now it makes sense to heavily discount, because the expectation is that the value of the Bitcoins will go up during this period of adoption, that won't always be true and the discount is a reflection of anticipated future returns.
Was it bad when people saved money in banks that paid 10% interest? No, that's called capital formation. There is a thought that given a deflationary currency nobody will spend any money, that's nonsense. Just because your currency gains value over time doesn't mean that you no longer have costs that must be paid for. What Deflationary currencies do is say "Ok, you could spend it on that, but is it worth it relative to what you'll gain by not?"
That's a good thing. Our system right now works on the opposite theory - Spend money NOW because if you're dumb enough to keep it in the bank it will actually lose value over time between the couple points of "official" inflation and less than 1% artifical interest rates. The situation is like this now because the fed is trying to make people spend as much money as possible with the hope that the flows will "restart the economic engine"
Too bad this isn't how things work, not that it'll stop us from trying it over and over again.
In the 2008 financial crash, govts bailed out the banks because there was no other way to maintain the whole financial ecosystems of payrolls, invoices and trade, all of which go through the banking system. Honestly? No. Bitcoin would be great in this role, but governments around the world rely on their ability to expand the money supply (print money, or sell debt) in order to fund their deficits. They also manipulate interest rates to be low so that debt is very inexpensive.
Can you envisage another financial crash in the future where govt says, "We don't need to do a bailout, as we've got this alternative payment system" and then instructs businesses and employees to just get themselves a bitcoin address and work through the Bitcoin system? Bitcoin doesn't have a central control mechanism, so there is no group or person who can say "OK - the interest rate is 1%" - If that's really what the interest rate wants to be based on market forces, it'll be that - But if not, there isn't much anyone can do to stop it.
What type of notes and agenda does the team coordinate on before a show? We use Basecamp, and it really depends. Right now we have a show prep thread that has 30+ posts in it for episode 11, we'll probably use 5 of those.
The agenda is really basic - As we get near recording time topics are selected (generally by me, but I like to get the other hosts to do it since they provide most of the commentary in Host segments) and I form a schedule, then we run through the recording session hitting each topic.
Over the last weeks we've brought two researchers onto the team, so that has helped a TON.
I first learned about Bitcoins on an episode of The Good Wife. The one with Jason Biggs as the creator of BitCoin. Have you watched that episode and how accurate does that episode portray what's happening with Bitcoin in terms of legal stuff? Not having seen it but knowing TV, I'm gonna go out on a limb and say "not very well" Satoshi has not been identified, was a throw-away identity that was cryptographically secured, so probably never will.
Are there any conferences in Chicago anytime soon? I think a Q&A in public would be helpful for your show as well as bitcoin. I'll be speaking at an event in NYC on July 30, there will be one or two meetups while I'm there. There is also an event in October in Atlanta. I remember talking with a guy at Bitcoin2013 wearing a shirt that said "BitcoinChicago" so I'd suggest looking for a user-group.
We're planning on doing Q&As often, but none of us are really near Chicago so it's tough. Happy to do virtual Q&As over skype, live or recorded.
Oh dear. You're not all perfectly grammatical orators on the first try? I'm crushed! I really value my own time, and I know other people out there do too. I try to make the show as information dense as possible, thats the criteria we've been operating under from really day one.
We're actually talking about cutting the show in half and releasing it more often (still recording the same amount) because people can get tired of listening to such dense content for an hour or more.
US Treasury recently issued a directive stating they would be monitoring any entity attempting to exchange virtual currency for USD (or any other currency, goods, or services), indicating that federal authorities take a dim view of what amounts to private coinage. Do you anticipate a Supreme Court case here defining what is and is not private coinage? 2.And given bitcoin's noted extra-legal uses, do you have any indication it is being decrypted by NSA? 3.Taking it a step further, do you think it could be a national security-sponsored international sieve for money laundering? It may eventually go to Supreme Court.
I think the market has done fine for bitcoin so far. I think the market will continue to take care of bitcoin. The idea of giving in willingly to regulation makes me cringe. There are two camps. Some people think that regulation is inevitable, and since it's going to happen anyways it's better to participate in the process and try to make it less bad. The other side thinks that by participating, you accept their authority to regulate it when really they have no right to regulate money and have proven to do a very bad job at it now for quite a number of years.
Thanks so much for doing this, I love the Bitcoin system, but hate the volatility. How do you recommend dealing with that? I've heard to convert it quickly to the currency of choice after any exchange has been made to avoid any more changes to the price. The easy solution is just buy and hold - If you need to buy something, do it when you need to and not before. Do not pre-order anything.
What is your prediction of the price for 1 btc in USD, exactly one year from now? Just for fun, since I know it is impossible to even guess the day to day price swings. As a wild guess number I'd say $1000 or less than a dollar. Very little middleground because if it's regulated out of existence it will still exist, but be hard to find and cheap - If adoption continues to path the price should accelerate with wild spikes up and down.
My partner is buying into bitcoin as well as litecoin. Any advice for him? (I personally don't understand it) Don't panic, invest for the long term, and don't buy any more than you can afford to lose 100% of because there are still things that could dramatically reduce the price of bitcoin (mostly regulatory stuff, I answered this elsewhere in the thread)
Hello, I just wrote a long post about the functions of using BTC to facilitate a 'free bank' using the principals of free money, similar to the WIR bank. Link to en.wikipedia.org Do you think that something like this would be possible using Bitcoin? Probably. Not really my area of expertise.
Why did bits take a dive at the same time gold took a tank? I don't pay attention to price, sorry.
We take full credit for any rise and blame others for any decline. Feel free to tip us from your gains! Lol.
Just wanted to say I love your show. I encourage you to please continue making high-quality podcast episodes. Thank you. I'm really excited to be able to be a journalist in such an exciting field in a time when journalism is under attack. Not sure if you've been following the so-called "AP scandal" but now is a weird time to be trying to report the truth in this world, and we couldn't have picked a more controversial topic to the global macro picture.
Bitcoins are the stupidest investment anyone could ever make. Pass. Link to static.quickmeme.com
Unfortunately, quickmeme doesn't let you copy image urls directly. Link to i.qkme.me
Yes, but they started being worth a set value. bitcoin was never backed by anything so its value was kind of made up. how do you expect to make a non goverment currency anybody with a computer can print to retain value? Because the pie is only so large, the more people who have computers devoted to the work just each get a smaller and smaller piece.
The rate of issuance for Bitcoin is currently 25 bitcoins every 10 minutes. Only one person or pool gets the whole 25 bitcoins, it's a race to find them. If there are 10 people looking, chances are pretty good you'll find some. If there are 100,000,000 people looking, chances are much less good that you'll find them first, but if there are that many people looking those 25 coins are probably worth a whole lot more.
The system is self balancing in this way, unlike the government currency system where they create 65 billion USD worth of new value every month to buy mortgage backed securities for face value to try and prop up the market. With more than a trillion USD being added in this way each year, how can a government currency retain its value?
Because the governments "pie" does infact have limits to making it, and only dropped gold standard after over 150 years of the doller having a defined worth, unlike bitcoin, where a random hacker can just print endless money. I'd direct you to security researcher Dan Kaminsky. Link to www.businessinsider.com
You'll find it's a little harder than you're describing. Like, impossible.
Last updated: 2013-05-29 11:06 UTC
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How Bitcoin mining actually works - What is the ... Is BITCOIN MINING Profitable RIGHT NOW In Mid 2019? - YouTube Mining Bitcoin with pencil and paper - YouTube Bitcoin mining difficulty example. THIS IS CRAZY!! What is Bitcoin Mining? - YouTube

Bitcoin are granted to computer programmes (miners) for solving tough mathematical problems. These are released every 10 minutes via blocks paid to miners with block reward halving every 210,000 blocks until we reach the 21 mn. number. As a result of Bitcoin's unique incentives to encourage mining, miners worldwide are locked into an ever-escalating arms race of computing power to solve hash functions and win bitcoin. Once the domain of amateur enthusiasts, Bitcoin mining is now a big business requiring expensive, highly specialized equipment. Various dimensions of inequalities exist in the digital realm, based on different access, digital skills, self-confidence and motivation in using ICTs. In this vein, Van Dijk (2005) and Did you know, bitcoin mining is basically the same as dice rolling? There are many articles for non-technicians about bitcoin mining, where the mining process is often explained as "solving complex equations". And these equations get more complex, when more miners compete, so the difficulty raises. That's wrong. But mining, the process of producing bitcoins by solving mathematical equations, uses high-powered computers and a lot of electricity, the researchers said.

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How Bitcoin mining actually works - What is the ...

When a Bitcoin Miner Mines, what is happening? Dr Mike Pound exposes the process.. note: at 3:39 Mike mentions a Bitcoin is mined every ten minutes when it i... In this video I try to breakdown the "cryptographic problem" that people reference when they talk about bitcoin mining. In previous videos I told you that before A block gets added to the block chain, a node on the network must be the first to solve a mathematical formula. This difficult formula satisfies the proof ... Bitcoins are mined using a cryptographic algorithm called SHA-256. This algorithm is simple enough to be done with pencil and paper, as I show in this video.... Bitcoin mining difficulty example. THIS IS CRAZY!! This is a great example of how fast the bitcoin community is upgrading their hardware and leaving my micro rig in the past.

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