Last Forking Warning For Bitcoin 334
ASDFnz writes "It has been just over two months since the bitcoin block chain was rocked by a near disastrous fork causing the bitcoin price to crash. The culprit of the crash was found to be a bug that prevented pre version 7.1 bitcoin clients accepting large blocks that could be generated by version 8 clients. A temporary fix was put into place by Bitcoin Project lead developer Gavin Andresen that forced version 8 clients to generate blocks that version 7.1 could understand. It is important to note though, the fix was a temporary one! In just under two days on the 15th of May the fix will expire and version 8 clients will once again be able to make large blocks that older clients will not be able to understand."
Crap, the sky is falling (Score:5, Informative)
Oh shit, the sky is falling.
Total disaster, never happens in real world, not virtual one. Except for all the times when 'real world' currencies undergo devaluations, revaluations, forced exchanges, just plain old inflation, all the things that lead to currencies collapsing. I mean name me a paper currency that lasted longer than 80 years on this planet without a major restructuring, without collapsing?
This is a technical problem, I am pretty certain it will be addressed. Not that I care much about Bitcoin in itself, but I like the idea of competing currencies and this is definitely a revolutionary one, so it's interesting to observe. I don't think it's going away any time soon even with technical issues.
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Total disaster, never happens in real world, not virtual one. Except for all the times when 'real world' currencies undergo devaluations, revaluations, forced exchanges, just plain old inflation, all the things that lead to currencies collapsing.
You can remember your currency collapsing during your lifetime?
Re:Crap, the sky is falling (Score:5, Informative)
Re:Crap, the sky is falling (Score:5, Interesting)
I was born in the USSR, I lived through a number of currency collapses just in THAT country and then after the dissolution through collapse of new currencies created AFTER that country collapsed.
Yeah, I remember.
I also know enough history and geography that if you want, I can name close to 50 currencies of top of my head that collapsed. Oh, USA also had that, it was called the Continental. Today it's called the Federal.
Comment removed (Score:4, Funny)
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I don't know, after all inflation and restructuring.... pretty old
Re:Crap, the sky is falling (Score:4, Insightful)
Except that isn't even whats happening here. Its more like an issuing bank telling customers are retailers they are not going to do magnetic strip ATM cards any more and people need to replace their cards and equipment with the RIFD variety. Its a non-event except for people who were expecting to never have to upgrade software.
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It is not a big thing. Countries do this to their paper money all the time. They issue new bills that are harder to counterfeit. Then they set a date - the old bills will not be accepted after that. No big deal because you can change all your old bills for new ones before the set date. Or just put money in some bank and let them sort it out. It seems "big" because the bills themselves gets invalidated, but it is not. It merely means you can't store money in a mattress (or private safe) indefinitely. Normal
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Sure, countries replace currency all the time. But in all those cases there is a central control "the government" which makes it happen "legal force/coercion".
BitCoin doesn't have either. In fact, it is expressly designed to avoid that. There is no central control and the whole experiment appeals to an anti-central-authority no-coercion crowd. Given that, how BitCoin coerces - isn't forcing a software upgrade a type of coercion? - the network of miners into upgrading is kind of an open question.
Fundamental
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The US dollar is still collapsing. and will continue to collapse fast for the next 5-10 years.
When you have real double digit inflation and cost of living increases you have a collapsing dollar. And yes, it's real double digit, the Fed is downplaying it to avoid a panic.
When you cant buy a week's of groceries (real food not ramen) for two people and stay under $80.00 you have a economic crash happening. Clothing, food, housing, gasoline. Cars are at disgustingly high prices... really an econoBox car is
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I am actually surprised the poor are not starting to band together and start killing the rich and stealing their stuff.
And that's why the rich banded together to cause the State to take money from the middle class and give it to the poor. Aka the "Progressive Era" (16th Amendment, Federal Reserve, etc.).
But, yes, that system cannot keep up with a collapsing currency. When I tell people who area concerned about the poor that the 1964 minimum wage was just under an ounce of silver per hour (~$1.25) and that
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When I tell people who area concerned about the poor that the 1964 minimum wage was just under an ounce of silver per hour (~$1.25) and that today's value would be around $25 per hour, their eyes glaze over in disbelief.
Or maybe it's just that they've realised that what's happened is actually that the real-terms value of silver has increased substantially over the last 50 years and that you're therefore talking bullshit.
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that the real-terms value of silver
How do you define "real"? In terms of a paper currency? Certainly not in terms of any other commodity that's on the market, right?
There's no great reason for silver to be more valuable this year than it was 1964. I'm interested to hear reasons if you think it should be.
Re:Crap, the sky is falling (Score:5, Insightful)
Can you please explain the $1.25 -> $25 calculation. Do you have a source for this information?
It's just arithmetic, but perhaps I can explain how to do the calculation. In 1964 a quarter was 90% silver. It weighed 6.25 grams, so 5.625 grams of pure silver. data source [coinflation.com].
Five quarters ($1.25) was therefore 28.125 grams of silver. A troy ounce is 31.1 grams, so minimum wage was almost exactly 0.9oz of silver.
The 52-week range [marketwatch.com] of silver has been between $21.12 and $35.30 - currencies are fluctuating wildly with the current financial crisis, but even within that chaos, an equivalent wage would be between $19.00 and $31.78 for the past year. $25.39 is the middle of that range. We also know that the market price is manipulated (like LIBOR and other benchmark rates) since paper funds can't fill their physical orders, so one can consider that price to be depressed to some degree (how much is unknown because it's not a real market).
So, how many of the current financial problems (cost of education, cost of health care, cost of gas, cost of food, etc.) would really be problems if the wages had held steady? The obvious explanation is that those prices are all rising together with monetary inflation and it's just wages that are falling relative to it, causing the economic suffering.
If you follow the 20th Century wage chart, from the beginning to 1971, when the US went off the real-money system, wages rose (in terms of real money) right in step with productivity improvements. Since 1971, productivity has continued to increase steadily, but wages have been flat (the difference goes to the financial sector, on net). If the slope of that chart is extended out to present day, it intersects at about $29/hr, fairly consistent with the real-money methodology. $29 has been the price of 0.9oz of silver in the past year, so with the caveat that prices bounce around from day to day and week to week, on an smoothed basis it's right in the zone of where we should be, or a bit lower.
People aren't taught in school that the Federal Reserve is a private corporation owned by its member banks, with its board and president composed of representatives of the biggest multinational banks. Even though its charge is to protect the value of the US Dollar, the USD has lost 98% of its value over the past century (this year marked 100 years of Federal Reserve control of the currency). However, if anybody suggests that the Fed's policies, which have fabulously enriched the financial sector, led to this currency failure for any reason other than pure chance or bad luck, then they are labelled a 'conspiracy nut'. To avoid being called names, pure faith in their virtue is required and any skepticism must be jettisoned.
Which brings us back to bitcoin...
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median wages grew to compensate and more
Median wages did grow from 1913 to 1971 - at a rate relative to the increase of productivity, and relative to a stable currency, that was fantastic. Many people were lifted out of poverty and the middle class soared.
Since 1971, on an inflation adjusted basis, median wages have been nearly flat, despite a continuance of the productivity increases.
I'm not sure if you're mistaken, or you feel that wages *should* be flat in light of increasing productivity. The usual vi
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Well, the government's budget is way higher it was in 1971, so maybe that's where all the difference that should have been went.
Re:Crap, the sky is falling (Score:4)
You're right, that's part of it that I left out. When the government spends in deficit, the Fed "prints" more USD and buys bonds with it.
If the total number of units of the USD (let's call it D) is worth some valuation (call it V), then each unit of USD (i.e. $1, call it P for purchasing power) is worth the ratio. So, P = V/D. As D increases at a rate greater than V, the value of P decreases.
If a commodity, say coffee beans, has a value of B, and the price of coffee is C, then C = B/P. As P decreases, then C increases.
The coffee bean farmers in Guatemala certainly aren't going to give us a discount because our printing presses are running at full speed.
Now, this is partially untrue, since the Breton Woods agreement set the USD as the world reserve currency, since it was a paper analogue for gold. The US has enjoyed being able to "print world gold" for 40 years now, but over the past several years many of the world powers have moved to exchange their currencies directly, rather than through a USD intermediate. As this trend continues the artificial value of the USD (40-60% by some estimates) will continue to fall, making things seem more expensive to US purchasers.
There are measures put in place to halt this, though. Saddam Hussein was moving to price his oil Euros and Gaddafi was organizing a gold dinar for African oil sales. Oh, but WMD's.
Re:Crap, the sky is falling (Score:4, Insightful)
I checked two [bls.gov] separate [westegg.com] inflation calculators
Yes, they both use CPI, the government-generated inflation calculation that shows no problems with the government's behavior.
Whihc is fine unless you find interesting that the CPI methodology keeps changing to reflect a lower standard of living (e.g. substituting hamburger for steak in the basket of prices), ignoring the price of energy, etc., while the claim of low inflation is trumpeted in the newspapers. Check out what CPI looks like if only the BLS methodology in place from the late 70's to the early 90's is continued [shadowstats.com] as it was previously calculated.
It's not news that people can lie with statistics. It's incumbent upon people who use statistical indicators to verify the validity of those indicators before using them as proof of anything.
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According to that chart the US has had almost 10% inflation for a decade -- it's ridiculous, or at least if it were true, it would call into question the utility of such a measure. If such a measure were accurate, that would mean that real wages have not just been stagnant, but had been declining in excess of 5% a year, and that the median wage-earner's real wealth has been declining precipitously since the 1980s. I guess you can make the numbers look that way, but it's subjectively nuts.
They substitute
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On the other hand, the minimum wage expressed in silver is about the same as the early 1980s, so it can't be that bad...
I assume you mean the very short term spike in silver prices when the market was cornered? Use a 52-week average and re-run the number.
And it could have nothing to do with the fact that in that time production has only doubled while industrial demand has grown much more, on top of which investment demand has grown too...
Shall we figure in every 10c to $1 coin in circulation being made of
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Assuming your numbers are correct, why do you think people should be compensated at a rate proportional to the value of silver?
Silver has been the 'people's money' for thousands of years across various societies because it has most of the properties of good money [preservearticles.com]. Gold is slightly better, because it does not tarnish, but it's so rare that it's hard to have sufficient liquidity for gold.
But silver is just a benchmark - we could use something else. Perhaps bitcoin even. The US used gold and silver from 17
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But silver is just a benchmark - we could use something else. Perhaps bitcoin even.
Why would you use any of those things instead of looking at basic necessities? Why don't you compare the price of a loaf of bread or a gallon of milk, for example? I don't give two shits about gold or silver.
Re:Crap, the sky is falling (Score:4, Informative)
I can, I live in one of the countries in Eastern Europe. We remember economical crash of nineties and the time when paper money become almost worthless - people were losing savings of entire life. There was once a popular form of saving for houses for your children, backed by goverment, paid when kid enters adulthood. In one month you could buy for these savings nice two room flat, in next month you could buy for them maybe TV set or personal computer.
Re:Crap, the sky is falling (Score:4, Insightful)
Re:Crap, the sky is falling (Score:4, Insightful)
However, other currencies don't have this problem where the currency just "breaks" suddenly, and basically stops working.
Imagine if bitcoin had been more popular, if everyone had bitcoin applications on their phone which take months to get updated, where half the world if running v7 and half v8. This would have (as I understand it, and I think I do) just fundamentally broken bitcoin, possibly beyond reasonable repair.
Re:Crap, the sky is falling (Score:5, Insightful)
I agree that the dangers of bitcoin forking have been overstated, and are something of a manufactured drama - technical problems like this are not very difficult to surmount. The real problem with Bitcoin for me is that the system is not transparent, and nothing backs the currency (unlike those fiat ones you mention above).
A currency is a token of trust (trust that others will value it the same amount), and that's a fragile thing.
Bitcoin is currently a small curiosity, it's only just becoming big enough to attract the interest of the real sharks, and I'm not convinced the creators have the resources, motivation or interest to keep the currency fair and secure once serious money becomes involved. Many of the exchanges are still pitifully insecure (run on VPSs !), the infrastructure is not well managed (witness problem above), and the creators probably never expected it to take off or really thought through the implications. Once there is serious money involved, lots of people are going to want to change the rules. If Bitcoin becomes popular it will be easy to coopt, devalue, and tax until it is just another currency, probably tied to a particular corporation or government. There's absolutely nothing you can do about that as a user of bitcoin. If the developers decided to change the direction of the currency you have your life savings in, devalue it, create a new block chain, you don't even have a vote on the matter.
Currently, if the government of your country or anyone else with the power to control the flow of bitcoins decide it should become valueless for you, or illegal, that can easily happen, if someone corners a significant supply of coins, they can manipulate the market (this is probably already happening as there are ZERO controls in place to stop it), if the public panics due to misinformation or rumour in such an illiquid market there is nothing to stop huge swings in value, and if a government decides to coopt the currency, shut down exchanges and change the rules by fiat, no-one is going to be able to trade in it and interest will evaporate. I see that as the largest problem with bitcoin by far - there are no backers putting up their own goods, no-one to trust, and no way to ensure that others continue to play by the same rules as they used to. It's certainly very appealing to utopian crypto-anarchists, but of limited interest to anyone who wants to store value or exchange it, given that it has the disadvantages of cash (anonymous, fungible) with none of the upsides (backed by a sovereign government, relatively stable, regulated to a greater or lesser extent, insurable etc), and a few downsides of its own (massively fluctuating value, built-in deflation, early-adopters privileged).
Because it is untraceable, and not guaranteed by law, it's of no interest to the majority of people who use currencies to store and transfer value and receive payment. I *want* my transactions to be traceable, so that I can prove to gov. and counter-parties that I have fulfilled my part of a bargain, made a payment, and should receive goods or services in return. If I don't want a transaction to be traceable (very rare, but conceivable), I'd use barter or some kind, but a currency outwith the control of government holds little interest for me, *precisely because* it is outwith the control of all the rules of society I value. Those who've had their valuable bits stolen from some VPS have no come-back using bitcoin, and no way to find a thief or enforce punishment - I'd demand far better than that for any currency I put trust in.
Re:Crap, the sky is falling (Score:5, Insightful)
I don't think you know enough about Bitcoin, and I encourage you to read more about it. While it is hugely volatile, and even more hugely risky - not to say stupid - to "invest" in, I think many of your criticisms are invalid.
Bitcoin is absolutely traceable - it's far more traceable than cash. Read up about how the blockchain works (and see the Zerocoin proposal to see how it could be made untraceable, optionally, in the future). (The only non-traceable coins are those minted by miners with very paranoid security arrangements).
Cornering a "significant supply of coins" would take a significant investment of "real world" cash to actually corner these coins - not a trivial thing to get your hands on. So I don't think this is a large risk for the current Bitcoin ecosystem.
Also, you suggest that with regard to an entity trying to coopt or alter Bitcoin, "there's absolutely nothing you can do about that as a user of bitcoin". That's not true - simply running the reference software implementation makes you a node in the network, thus enforcing your (i.e. the default software's) set of rules on the transactions you do/do not relay. And additionally, the computing power deployed by today's miners would probably be impossible to exceed except by a very determined and well financed attacker. How much would a government spend to attack Bitcoin?
And if the "creators" (by which I suppose you mean the current set of core devs) try to create a new blockchain, good luck to them - the blockchain is far more resilient and the network runs as a democracy. It wouldn't work unless a vast amount of users also followed.
Your point about exchanges is key of course - they are extremely amateur operations right now. But that's easily changeable by hard work.
Digital cash ought to excite any geek - whether Bitcoin is "it", or simply an alpha version of something better yet to arrive, who knows.
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the whole argument for going thru the pain of adopting a new currency is that it's immune to the problems of the existing currencies. If it's going to have the same sort of problems, what's the point? Does it really matter to you whether the result of your currency being devalued is due to government policy or a bug?
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My government will always accept the current legal tender for payment of taxes
Any one trading in my country has to by law accept the current legal tender in payment
Some people will accept other currencies in exchange for the legal tender or in payment at whatever exchange rate they deem appropriate, but it is not required
No-one *has* to accept bitcoin anywhere, and the exchange rate is therefore *only* subject to market confidence and nothing else - and could be zero tomorrow ....
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Real world currency - A currency that has a value backed by either :
Physical something of real value - Gold, Silver, etc that actually exists in a vault somewhere
A Large entity who guarantee to pay, and are trusted enough to do so (Government/Bank/etc)
And/Or - Fiat currency that will always (and sometimes will only) be accepted for the purposes of paying taxes and so will always have va
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Real world currency - A currency that has a value backed by either :
Physical something of real value - Gold, Silver, etc that actually exists in a vault somewhere
But the value of the gold probably bears little relation to what its intrinsically worth. I.e. if gold weren't being used as a currency of sorts, it wouldn't be as valuable since its uses would be relatively minor (jewelery, electronics, etc). In this respect its very much like a fiat currency - it has an inflated value because people believe they can sell it on for a high price.
A Large entity who guarantee to pay, and are trusted enough to do so (Government/Bank/etc)
The "guarantee to pay" is a little bit meaningless here - I can't go to the government and tell them to exchange my bit of paper
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Legal tender just means a creditor has to accept it as payment of a debt by the debtor.
Untrue. Legal tender means it is legal to OFFER payment in cash. However, nobody is required to ACCEPT your cash payment.
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Untrue. Legal tender means it is legal to OFFER payment in cash. However, nobody is required to ACCEPT your cash payment.
"Legal tender has a very narrow and technical meaning in the settlement of debts. It means that a debtor cannot successfully be sued for non-payment if he pays into court in legal tender."
http://www.royalmint.com/aboutus/policies-and-guidelines/legal-tender-guidelines [royalmint.com]
So ok, no one is required to accept the payment, but they are essentially required to write off the debt if you offer payment in cash, whether or not they actually accept it.
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It is whatever the goverment says it is. In the UK is apparently 'required' that you accept it. It the US, it is not. [treasury.gov]
"This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or n
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AC sibling comment is right, but I think he's neglected to point out exactly what you've already mentioned that explains the difference between payments that must be accepted and payments that can be refused.
Valid and legal offer for debts when tendered to a creditor -- in other words, you do not need to accept my money for goods or services, and provide them, in that order. If you are operating a restaurant for example, and you've provided the service (or goods) first, on honor as many restaurants do, in
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Measured in US dollars gold today takes about $1100 to $1200 to mine to get an ounce, so it's not as far away from it's current spot price as you may think. In fact there are many 'economists' who say that gold is in a bubble completely neglecting the cost of its production (which went up considerably in the last 10 years due to 'noneixsting' inflation, non-existing if you take gov't word for it). They are even saying that gold mining companies will go out of business in this 'gold bubble' because price of
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All real world currencies are usually legal tender - It is required that people have to accept legal tender as payment for good and services
Generally no, only as payment for debts, products consumed or services already provided like eating at a restaurant and paying afterwards. Stores can refuse you for having too large money like $100 bills, too small money like tons of one cent coins or pretty much any reason they want. Having legal tender doesn't force anyone to do business with you.
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"Legal tender" does NOT mean that 'people have to accept (it)'. Legal tender means it is legal to offer cash for payment, but nobody is required to ACCEPT your payment in cash.
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Does Canadian Tire money count?
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Look up the history of currencies just over the last 100 years.
Latest off top of my head is North Korea with 100 to 1 devaluation over 2 day weekend.
90%? How about 99%?
Argentina, Iceland, Hungary, Ukraine, (Score:5, Informative)
"What is the actual 'real world' basis for this sudden notion that major 'real world' currencies can collapse any time?"
There's quite a few currency collapses, you really don't need to go back far, Argentina was the last major one in 2002, since then Iceland, Hungary, Ukraine, Zimbabwe, quite a few African ones.
http://en.wikipedia.org/wiki/Argentine_economic_crisis_%281999%E2%80%932002%29
It's the usual problem with fiat currencies, they spend more than they earn, they print money to cover it, the currency collapses.
When the US had a meltdown in 2007, they did a massive currency swap with the Eurozone. The effect of that meant that the US central bank had euros to sell as well as dollars, and could sell euros and buy dollars to prop the currency up if panic ensued. You came a lot closer than you realize, I find your comment somewhat glib, based on ignorance of how bad 2007 asset collapse was.
Re:Argentina, Iceland, Hungary, Ukraine, (Score:4, Insightful)
Gotta love how libertarians keep blabbing about "fiat currencies" and how the currencies can collapse "at any time". While technically true, currencies collapsed under gold standards, and probably at a rate faster than what you see in today's economy. What folks don't seem to understand is that money has no value in and of itself, but is based on a population's ability to produce goods and services. Whether you use bitcoins, greenbacks, electrons on a hard drive or gold doesn't change this truth.
By definition, money is simply a means of exchange... tying it to an arbitrary material is silly. In the old days, countries manipulated currencies through artificial means and like today when those means run their course, bad things happen.
So, gold, paper or electrons, a country's prosperity is tied to the competence of its government. While this is a scary fact, it is the truth.
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By definition money is store of value, means of exchange and unit of account. Fiat currencies have nothing to do with gold standard.
Gold is the money, gold standard means that there is an equivalent amount of notes (not fiat money, but redeemable bank notes), so you can get the weight of gold back for that paper from the bank. It's like using deposit box keys where you store gold as medium of exchange. Gold as money doesn't 'collapse', but currencies that are supposedly backed by gold can collapse because
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Re:Argentina, Iceland, Hungary, Ukraine, (Score:5, Insightful)
By definition money is store of value, means of exchange and unit of account.
Things only have "value" if (1) other people need them, or (2) you can convince them that having those things will allow them to get other things that they need. The first type of value leads to direct barter; the second leads to a medium of exchange... a currency... "money." What form that "money" takes is up to the people in power who hoard it or give it out and can convince other people to accept it.
Gold is the money, gold standard means that there is an equivalent amount of notes (not fiat money, but redeemable bank notes), so you can get the weight of gold back for that paper from the bank. It's like using deposit box keys where you store gold as medium of exchange. Gold as money doesn't 'collapse',
Gold could easily "collapse" if no one wanted it. If I'm starving out in the middle of the desert, and you offered me some food and fresh water or a bag of gold coins with a thousand times the value of the food, which do you think I'd take?
Anything relatively rare can function as money, but only if people actually believe that anyone else would take it. Your "shiny rocks" don't have any more inherent value than someone else's "green pieces of paper," since neither is particularly useful to humans absent some sort of power structure that endows that "money" with value.
Suppose the world economy completely collapses and all of your fiat currencies go in the toilet. You have 17 gazillion tons of gold in your own personal vault, but nothing else. I have a few crates of canned food and a pile of random rare old bottlecaps that I like to collect. I start telling people I'll accept these particular rare bottlecaps in exchange for food. Pretty soon people in my town understand that those bottlecaps have value, because I -- who have control of food, something people actually need -- accept them as currency.
Now you come to town and try to buy food or other essential goods with your gold. Do you seriously think anyone will sell anything to you? Nobody wants your shiny rocks. The person in power likes rare bottlecaps, and that's the only "money" that matters now... aside from actual food.
The idea that "shiny rocks" have any inherent value is just as stupid as the idea that "green pieces of paper" have inherent value. If you can't see that, I don't know else to say.
Thailand, Indonesia, Ruble, Turkey, America (Score:2, Informative)
Oh and Thailand in 1997, followed by Indonesia (dropped 83% of its value), South Korea... (remember the Asia crisis?), the post soviet Russian ruble collapse, Turkey Lira collapse went right up till 2001, in 2004 they had to knock *six* zeros of the end of the bank notes!
America had it's collapse of the continental, courtesy of the states printing money:
http://en.wikipedia.org/wiki/Early_American_currency
"Continental currency depreciated badly during the war, giving rise to the famous phrase "not worth a co
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My Great Grand Father lost more currency value then you want to imagine by insisting on holding the Weimer Currency. I am guess just under a 1/2 billion in today's dollar valuation, also he lived in sweden, so it wasn't like he had to own weimer's money. It didn't ruin him but it cost him most of his wealth. So I know that the Weimer wasn't some fly by night currency people bought it and held it just like you might hold Europes, Yen, etc. The lesson I've taken from this is that paper money is meaningless al
Re:Crap, the sky is falling (Score:5, Informative)
What is the actual 'real world' basis for this sudden notion that major 'real world' currencies can collapse any time? Yes, they can fluctuate a few percentages, that is very very very different than 60-70% loss of value recently for Bitcoin (or 90%+ the last time the price crashed).
The question I would ask is less 'can real world currencies collapse?'(yes occasionally one does, albeit generally one of the lower-tier ones); but 'do real-world currencies collapse outside of conditions where things are going all to shit across the board?'
Given how much fun it isn't, it's not as though you go through a round of hyperinflation just for giggles. It's not as though everybody wakes up one morning and says "I can see it so clearly now! My fiat currency is nothing but a political construct subject to the whims of politicians! It's all over!" and the currency's value against real assets suddenly dives for the floor. If the situation, as measured in actual economic activity, commodity availability, etc. goes to shit, the currency may well follow; but at that point your problem isn't that your currency is a paper lie; but that things have gone to shit, at least within the jurisdiction that minted the currency, if not more broadly.
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albeit generally one of the lower-tier ones
- I don't know what you consider to be a 'lower-tier one', when one is used on 1/6th of the total land mass of this planet, is it a 'low tier one'? I am talking about the USSR ruble in this case. I think that probably was the biggest currency collapse in terms of land area that used it.
Of-course in the former USSR there were many currency collapses, a number of times ruble was redefined and restructured all due to inflation and lack of productivity but huge government spending. That's what it takes: lack
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Fiat is by definition not real money and instead an abstract controlled (inflated) by the politicians
Can any money be "real"? Isn't money by definition an abstraction that we use because we don't want to keep swapping deer hides for horseshoes?
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No, gold is real money. Fiat means 'by law' or 'by decree', real means that the people use it without anybody forcing them, they just see it as money and gold fits that very well.
Also as to 'price' of gold or value, today it costs mining companies about 1100-1200 USD to mine an ounce, so that's inflation. All these people saying: there is no inflation, are they insisting that inflation only limits itself to the gold mining sector?
How about the stock market at 15000, you think that's based on actual economi
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When you compare Bitcoin fluctuations with 'real world' currency fluctuations as somewhat the same - which major currencies has recently lost 2/3rds of value overnight like Bitcoin did? If you had significant money in Bitcoin the sky was falling. Its value behaves exactly like very speculative stocks.
A couple of months back I posted that the value of BTC looked reasonably stable to me in the vicinity of $100. It's still in that vicinity. There may have been a bubble in the interim that has now burst, but anyone with sense should have seen that coming and avoided purchasing while it was overvalued.
Re:Crap, the sky is falling (Score:5, Informative)
It's just that the new Bitcoin and the old Bitcoin are becoming two different currencies. People need to convert all their old Bitcoins to new ones to avoid this.
Bzzzt. Users of Bitcoin don't need to do anything beyond download a client written in the past year. They don't need to convert anything, they don't need to send themselves their balance to make sure the new program sees it, they don't even need to re-download the block chain. Just update their software.
Nothing about the currency itself has changed; just the removal of an artificial cap on block size placed in the original client, from back before the early developers expected it to take off so well.
Re:Crap, the sky is falling (Score:4, Funny)
Just update their software.
Yes, "that's all" clients need to do. But since the BitCoin enthusiasts are generally anti-government anti-central-control Libertarian types, how do you force anyone in particular to upgrade? Won't they see that as some sort of central control coercing them against their will?
To me, this is the most fascinating about BitCoin so far and I'm interested to see how it is handled. In a network with no central control made of anti authority anti coercion attitudes, how to you force a client software upgrade? Maybe some dedicated hardware miners can't upgrade?. Especially if a significant block of miners remains on pre-bugfix clients? Maybe they just won't give a shit and ignore post-bugfix signature blocks.
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Which is one of the weaknesses of bitcoin, the currency an
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Which touches on a long term problem. As bitcoin support/bridges slowly work their way into other systems, upgrading clients becomes a bigger and bigger problem. For technically inclined individuals this is not a problem, but clients integrated into larger stacks like ecommerce systems or even banking/payroll systems.. well... those tend to change much more slowly and requiring an update in order to be able to use the currency is not a small deal.
Which is one of the weaknesses of bitcoin, the currency and the implementation are intertwined.
if/when it inches it way it will be done by few central players who sell it as service, so that 99% of businesses wouldn't be running their own bitcoin. that's pretty much how businesses which accept bitcoin already work.
Re:Crap, the sky is falling (Score:5, Informative)
Just so you know - You have that exactly backward.
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The problem was old clients did not allocate enough Berkeley DB locks in order to process every valid combination of transactions. Newer clients correct this problem, and users are recommended to upgrade.
If they can't upgrade, then all they need to do is add a configuration file to the directory containing the database with the right MAX_LOCKS setting.
There are no force upgrades here, no forking of the currency - just correcting a misconfiguration that we didn't notice until recently.
Re:Crap, the sky is falling (Score:4, Insightful)
This isn't an issue of "two different currencies". What other time in history has a government issued a new currency, exchanged the "old currency" for the "new currency", and *let you keep* the "old currency" when handing you new currency?
The inability to deal with prolonged netsplits sanely is a fundamental limitation of the Bitcoin protocol.
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This isn't an issue of "two different currencies". What other time in history has a government issued a new currency, exchanged the "old currency" for the "new currency", and *let you keep* the "old currency" when handing you new currency?
The inability to deal with prolonged netsplits sanely is a fundamental limitation of the Bitcoin protocol.
Erm. That is not even approximately what's happening here. There is no old or new currency, no exchanging happening, and no inability to deal with "netsplits" as you put it -- there is a built-in algorithm that is used to resolve cases of chain forks. It is unfortunate that some of the older mining software out there won't recognised the existence of the fork and will therefore happily carry on working on the broken incorrect chain, which may therefore cause some buggy older clients to report transaction
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What technical problem is there?
It's just that the new Bitcoin and the old Bitcoin are becoming two different currencies. People need to convert all their old Bitcoins to new ones to avoid this.
Like old francs vs. new framcs.
Version 8 was quantitative easing.
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If it's troll, it's a 0/10 one. If it's not: "blocks" are basically pages in a global bitcoin ledger. This 7.1/8 fork was because 8 uses inch step for binder's punch holes, and 7.1 used 2.5 cm, so they can't file new pages from 8. The only effect of your client producing blocks too big is getting them not accepted by anyone else.
In the 2020s bitcoins will run out anyway (Score:4, Insightful)
Making the whole thing nothing more than an interesting academic exercise. Anyone who thinks bitcoin is the new gold or even frankly a replacement for ordinary money transactions is utterly deluded.
Re:In the 2020s bitcoins will run out anyway (Score:4, Informative)
In the 2020s bitcoins will run out anyway
What do you mean by that? I thought that the very idea of bitcoins is that at some time no more can be produced, thereby causing deflation.
Rather obvious isn't it? (Score:2)
It means only a tiny fraction of the worlds population can ever possess any. What fucking use is that if its to be taken seriously as an online currency?
Re:Rather obvious isn't it? (Score:4, Informative)
With 21million BTCs dividable into 100million satoshis each I think the world will have plenty of artificial bits to spread around.
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Re:In the 2020s bitcoins will run out anyway (Score:5, Informative)
Consider this. Since there a some limit on the maximum number of Bitcoins any that are lost are gone forever. Wallet file misplaced or destroyed, coins stolen but unspendable (because although they are anonymous they are traceable), or simply sitting on forgotten hard drives somewhere.
Governments can print new notes to replace old ones that no longer exist or are presumed lost. Bitcoin has a hard limit.
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Making the whole thing nothing more than an interesting academic exercise. Anyone who thinks bitcoin is the new gold or even frankly a replacement for ordinary money transactions is utterly deluded.
Yes and no: By design, 'the' bitcoin block chain will ever only have a limited number(20-odd million, I think...) of bitcoins associated with it. However, there is nothing mathemagical about this one, rather than the zillions of other possible ones.
If people were so inclined, any number of bitcoin-protocol chains could be run concurrently(subject only to computational constraints), each providing another chunk of the things. Of course, given how many of bitcoin's biggest fans are cyber-goldbug deflation ent
Re:In the 2020s bitcoins will run out anyway (Score:5, Informative)
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Bitcoins are not consumables. They can be reused infinitely. They do not "run out".
They are data, though, and we all know how good at keeping backups people are...
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"Bitcoins" are kept in the blockchain. That means that there's tens of millions of "backups" all over the world. What people customarily mean by "bitcoins" is actually the private keys to sign them over other people (your bitcoin "wallet" contains not bitcoins - they're in the blockchain - but the decryption keys that prove that you own them).
Backing up decryption keys is not hard. If you use a deterministic wallet, you just need to remember a passphrase, making it even easier.
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It isn't that backups are 'hard'(though in complex situations they can be harder than they look), it's that people don't do them, or don't know that they were doing them wrong until it comes time to find out the hard way. They also forget passwords, get hit by trucks, and otherwise suffer from unexpected data loss.
My thesis is hardly that 'zOMG, all the bitcoins will disappear!!!'; but that there will be attrition over time, with greater attrition if they gain traction with the relatively clueless.
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I used scripts available from https://www.bitaddress.org/ [bitaddress.org] to make paper backups of some of my bitcoins (offline). And I made sure that the private key wasn't stored anywhere else. This way, I have some of my bitcoins stored on an exchange, some stored on devices I own and some stored just like paper money. It's unlikely that all 3 of these are going to have a catastrophic failure in 2020, so even if everyone else's bitcoins "run out" I will likely still have some of mine. I'll sell them to you for the right
Re:In the 2020s bitcoins will run out anyway (Score:5, Insightful)
Re:In the 2020s bitcoins will run out anyway (Score:4, Informative)
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If someone breaks the encryption:
Hard to say, exactly. Assuming a full breach of SHA256, things would be pretty bad, the worse the longer it takes for the breach to be publicized. Once it is, the consensus would likely be to cease accepting Bitcoin transactions until a fix is issued - likely moving to a different algorithm, and considering all or some transactions since the breach retroactively invalid. There would be a lot of drama over this, understandably, and I don't kn
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His claim is that bitcoins are backed up and cant be destroyed.
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So if my computer crashes, I can call someone and get all my bitcoins back?
No? Well then it's a scam.
Do you hold all your cash in person or do you use a trusted third party to hold most of your cash (digitally)?
Re:In the 2020s bitcoins will run out anyway (Score:5, Insightful)
That's a feature, but it's not a good feature to have (for Bitcoin). A currency's success is measured by its ability to facilitate commercial transactions, not by its ability to make you rich simply by holding it. That's what *investments* are for. Currency isn't an investment and shouldn't be.
The fact that there could never be any more Bitcoins ever again would encourage speculation and hoarding, which is not what you want from a medium of exchange.
If you're worried about currency devaluation and put some of your money/time into Bitcoins, that makes sense as a hedge against inflation (ie. an investment), but nothing more.
Those disastrous forks (Score:5, Funny)
Damn (Score:5, Funny)
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So upgrade the clients to version 8. (Score:2)
So upgrade the clients to version 8. Problem solved.
Or are we worried about updating the bitcoin clients we've installed on our criminally trespassing/theft of services botnets?
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So upgrade the clients to version 8. Problem solved.
It worked so well for windows, didn't it [gigaom.com]?
Extra value! (Score:3, Funny)
As a digital coin collector, I am extremely excited by these rare, limited edition "forked" bitcoins that will soon no longer be tender. I am trying to gather up as many as I can.
ASDFnz is a liar (Score:3)
Right. Near fucking disastrous. You can see the effect right here [bitcoincharts.com], after clicking the "DRAW" button. At least, if you look very hard, and squint just right, you might just be able to pick up the crash that happened 2 months ago.
Actually, I can't see a bloody thing. ASDFnz is a liar.
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2 moths ago, price was 240. Now it's 120. That's half the size it used to be. I think the trouble is you have trouble seeing the screen with your head up your ass. Enjoy your nerdcoins.
2 months ago bitcoin was at 46, now it is 118 :)
The was a sharp in this period, but overall it has been growing steadily so far.
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So let me get this right, Deflation is bad and inflation is good?
If I have a currency that is worth less tomorrow than it is today then it is a good thing?
Sorry, I like the idea of a deflationary currency. It encourages saving, thrift, and money management where as inflationary currency encourages spending, and waist.
The whole idea that inflationary currency is good for the economy is based on the idea that it artificially forces spending as no one wants to hold onto it. Believe it or not that is a new idea
Tulips anyone? (Score:2, Funny)
Or beanie babies? Anyone? Anyone?
Let me see if I understand this (Score:5, Funny)
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Long block chains are like double decker buses and the 7.1 client is like a taco bell drive throught with only 9ft of clearance?
Last forking warning (Score:2)
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2 months ago (Score:4, Informative)
The crash was not caused by a fork. The crash was caused by over-valuation coupled with the largest DDoS MtGox had ever experienced. The trading system slowed to the point that user's sell / buy trades weren't going through and it caused a panic. MtGox was taken down while they upgraded network infrastructure to deal with the shitty DDoS people. When they came back up, other exchange's had already begun the dive. It dove and corrected repeatedly, until it panned out and has been relatively stable since.
The article is bullshit.
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The crash was not caused by a fork. The crash was caused by over-valuation coupled with the largest DDoS MtGox had ever experienced. The trading system slowed to the point that user's sell / buy trades weren't going through and it caused a panic. MtGox was taken down while they upgraded network infrastructure to deal with the shitty DDoS people. When they came back up, other exchange's had already begun the dive. It dove and corrected repeatedly, until it panned out and has been relatively stable since.
The article is bullshit.
AC is correct. The fork was two months ago. When the fork happened, the price on the historical chart is not even perceptible. Heck it may have gone up that day from all I can tell. AFTER the fork, the price climbed to 4 TIMES the value of before the fork, and is currently trading at more than double that price. So the article is just an out and out lie and FUD. We should not consider any more submissions from this submitter.