The Future Of Money

[Saorsa]

I think we can have a lot of monetary expansion without a lot of inflation these days simply because of a lot cheap goods from places like China being sold at hyper-competitive retailers like Walmart.

Austrian school economists never built big-box style price destruction into their theories, therefore their theories are inadequate for explaining how Sam Walton has made us all richer.

Folks sure like to bitch about him and his kids though for selling stuff so cheap.

 

[Pertinacious Tom]

I didn't know they had destroyed prices. Looked like retail prices last time I was at MegaLoMart. But if everything's free now, I'm going back soon!

 

[spankoka]

There are any number of things that MegaLoMart is now selling at the same or lower prices than the same stuff went for in 1985. In Las Angeles these days one of the big problems is how to prevent the poor from dying an early death from diabetes or obesity from drinking cheap Super Gulpees or whatever-because even the poor now have too much. Scolds like von Mises and Hayek never warned us about all that because we were supposed to be struggling with catastrophic inflation right about this time. Ergo, I question the classical economical paradigm of limited resources chased by possibly too much currency.

 

[Battlecheese]

People interested in the direction of this thread might also be interested in Maelstrom, which is now in beta.

http://blog.bittorrent.com/2015/04/10/project-maelstrom-enters-beta/

The idea is a bittorrent-based web client - you can get at regular pages, but also pages hosted by other people running the browser [ie, no single hosted server).

Obviously only good for pages that don't run off a database, so no good for pirate bay, but interesting never-the-less.

 

[Pertinacious Tom]

Bitcoin Block Size Limit Near

...Satoshi instituted the one megabyte rule as a temporary anti-spam measure in Bitcoin’s early days. It wasn't a problem for most of Bitcoin’s history, since the "market for block size" tended to be far below Satoshi’s capricious limit—like a price ceiling set far above the prevailing market norm. Satoshi and other developers expected that a higher block size limit would be gradually phased in as the network matured and block sizes slowly approached the limit, which is projected to occur in late 2016.

What happens then? The same thing that always happens when demand exceeds an artificially limited supply: the price will increase. In this case, it’s the "price" to send a transaction; Bitcoin users would pay more in either time or transaction fees.

Users unable or unwilling to entice miners with generous transaction fees may find themselves experiencing longer and longer confirmation times. The Bitcoin "haves," on the other hand, could simply pay for priority blockchain access. Bitcoin miners, meanwhile, would enjoy higher-than-market returns for lower-than-competitive service. It’s quite possible that only large, perhaps institutional, transactions would remain cost-effective in such a market. Or perhaps, its core value proposition undermined, Bitcoin would slowly die out.

A number of proposals have been floated to address the impending limit. Two of the most public-facing developers, Gavin Andresen and Mike Hearn, support increasing the limit to 20 megabytes, with the option of increasing it further in the future as necessary. Others have suggested that gradual block size increases could be overseen by a simple rule, similar to how the Bitcoin supply schedule is programmed to automatically increase.

Fundamental changes to the Bitcoin protocol require a "hard fork" with which all Bitcoin users and miners must agree to upgrade. Gathering such a strict consensus is even harder than it sounds.

Hah! I don't envy the cat-herders.

The market answer to this problem is that they will all agree to a workable answer that is beneficial, or at least acceptable, to all Bitcoin miners, node volunteers, and users. If they don't, Bitcoin deserves to die.

 

[BeSafe]

Bitcoin Block Size Limit Near

Fundamental changes to the Bitcoin protocol require a "hard fork" with which all Bitcoin users and miners must agree to upgrade. Gathering such a strict consensus is even harder than it sounds.

Hah! I don't envy the cat-herders.

The market answer to this problem is that they will all agree to a workable answer that is beneficial, or at least acceptable, to all Bitcoin miners, node volunteers, and users. If they don't, Bitcoin deserves to die.

Yea, that's gonna be a challenge. Not quite 'all' users.. Bitcoin mining (updating the ledger+busy work) is a tyranny of the majority but a 51/49 split would be a freaking logistics nightmare and would deeply undermine overall credibility. The 49'ers would PROBABLY loose eventually but chaos would reign. A strong consensus by the major players really is necessary for a smooth transition.

 

[Pertinacious Tom]

Uh oh. What if people want to pay a small fraction of the Western Union price to send money around the world?

From the Bitcoin FB page:

 

[tuk tuk Joe]

Uh oh. What if people want to pay a small fraction of the Western Union price to send money around the world?

From the Bitcoin FB page:

Good for us, bad for the US banking cartel...

 

[Pertinacious Tom]

This Augurs Well for the Future of Gambling

Coming this fall, Augur will allow participants to wager money on any future event of their choosing. Software will set the odds, collect the bets, and disperse the winnings. The price alone should give Nevada sportsbook operators pause; an estimated one percent of every pot will go to keep the system running. The average vig today is about 10 times that.

Augur isn't a full-fledged casino. You can't play roulette or poker, and running lotto on the platform would be tricky. But it'll be great for sports betting.

Here’s what’s truly novel about Augur: It won’t be controlled by any person or entity, nor will it operate off of any one computer network. All the money in the system will be in Bitcoin, or other types of peer-to-peer cryptocurrency, so no credit card companies or banks need to be involved. If the system runs afoul of regulators—and if it’s successful, it most certainly will—they'll find that there's no company to sue, no computer hardware to pull out of the wall, and no CEO to lockup in a cage.

This is new legal territory. If Augur catches on as a tool for betting on everything from basketball games to stock prices, is there anything the government can do to stop it?

I'd say the answer is no. The internet tends to interpret government regulations as damage and route around them.

 

[Pertinacious Tom]

The Future of Money? Nobody Cares.

The businessman who controls the Wall Street Journal and Fox News, Rupert Murdoch, and the former mayor of New York City, Michael Bloomberg, both recently sounded similar themes. Bloomberg asserted that the Fed's low interest rates have "exacerbated the wealth gap between the poor and the rich because the rich have assets. And that is what is being hiked here because of low interest rates, whether they own stocks or real estate or whatever the case may be." And Murdoch wrote on Twitter that "Fed trillions ended inflating existing assets. Stocks, real estate, art."

A New York Times editorial puzzles over home prices and asserts, "only investment income has been rising steadily in the recovery, while wages from work have stagnated." Much depends on whether the cost of employer-provided health insurance is included in wage income, but even so, and without mentioning the Fed, the Times editorialists sound a bit like Bloomberg and Murdoch.

Maybe the presidential candidates think this is an issue too complicated for ordinary voters to understand? By that theory, voters are supposed to be fascinated by the details of H1-B visas, Iran's nuclear centrifuges, elementary school student testing and teacher evaluation, hydraulic fracturing, and health insurance—but not at all interested in the value of a dollar. Could be.

Gee, I would have thought that printing a bunch of money and thereby inflating the values of real estate, stocks, and artwork would have had huge benefits for poor people. This monetary policy stuff is way more complicated than I imagined. Who could have figured out that poor people don't collect art or own stocks?

 

[Pertinacious Tom]

Bitcoin XT

Is increasing the block size necessary progress or a coup?

Seems like the former to me. No one has to adopt it. If it's better it will succeed and if not, not.

 

[Battlecheese]

This change would have the blockchain getting larger much faster than it has so far.

There is a school of thought which suggests that instead of just making more space, some demand should be permitted.

Maybe transactions should not be free.

Currently there are other systems using the blockchain for their own purposes, they really should piss off and start their own blockchain. Like the link to Etherium you provided a few months ago.

 

[Pertinacious Tom]

This change would have the blockchain getting larger much faster than it has so far.

There is a school of thought which suggests that instead of just making more space, some demand should be permitted.

Maybe transactions should not be free.

Currently there are other systems using the blockchain for their own purposes, they really should piss off and start their own blockchain. Like the link to Etherium you provided a few months ago.

What do you mean by "some demand should be permitted" above?

I thought transactions were cheap, not free.

 

[Battlecheese]

Currently the blocks are only "nearly" full. Noone is yet missing out, or paying a premium to make sure their transaction gets through in a timely fashion.

Fees currently are negligible and largely voluntary. This will not fly in the long term, as the people currently mining bitcoins will go do something else if it starts to cost them money.

http://www.coindesk.com/new-study-low-bitcoin-transaction-fees-unsustainable/

https://en.bitcoin.it/wiki/Transaction_fees

http://bitcoinfees.com/

 

[Pertinacious Tom]

Currently the blocks are only "nearly" full. Noone is yet missing out, or paying a premium to make sure their transaction gets through in a timely fashion.

Fees currently are negligible and largely voluntary. This will not fly in the long term, as the people currently mining bitcoins will go do something else if it starts to cost them money.

http://www.coindesk.com/new-study-low-bitcoin-transaction-fees-unsustainable/

https://en.bitcoin.it/wiki/Transaction_fees

http://bitcoinfees.com/

The first one says the current fee practices may be unsustainable in 5 to 20 years.

20 years?

That's a long time on the internet, where business models go obsolete pretty quickly.

That's probably about three boom/bust cycles of printing a bunch of money, inflating markets, and watching another crash.

 

[Battlecheese]

Alternatively: 5 years?!?!?!?!?!!?

That's a whole lot of cats to herd in one direction in only 5 years. Time to get on it and maintain the momentum, otherwise it'll all fall in a heap when people give up mining.

 

[Pertinacious Tom]

If mining doesn't pay and collecting fees does, the cats will herd themselves in that direction.

 

[Battlecheese]

If mining doesn't pay and collecting fees does, the cats will herd themselves in that direction.

Better make sure you have the fees all ready for prime time good and early then. IT doesn't herd all that well.

 

[Pertinacious Tom]

Bitcoin is too independent of government and must be banned.

Funny thing is, the reason he wants it banned is a major reason I support it. It hurts the war on some drugs and undermines the power of the Fed to create boom/bust cycles as they have been doing.

 

[Pertinacious Tom]

Bitcoin Bigshot Says It Can Survive Hard Fork