No comment here about Kim Dotcom's tweet?

http://www.reddit.com/r/Bitcoin/comments/2xbowj/kim_dotcom_on_twitter_lets_give_bitcoin_a_boost/

It is claimed that PayPal just closed Mega's account, because of pressure from VISA and MasterCard, allegedly because of pressure by US Senator Leahy, allegedly on behalf of the MPAA.

Can you get by helicopter to the top of MtGOX Mt. Everest?

I wonder, did he report the theft to the FBI?

I don't know... I think I would have sent immediately an email to the TCF Bank, with copy to the appropriate FBI address, telling them of the hack and requesting that they block the money.  They may not do it, but it would be something to use against them it they turn out to be less than innocent and diligent in this affair.

Why do you insist with gold?  I said already that I am not a "gold bug".  To me, the speculative overvaluation of gold is almost as bad as that of bitcoin. ("Almost" only because gold does have some intrinsic value, although it has little infuence in the gold's market price.)

I insist: money is not wealth, just tokens that people are willing to accept in exchange of wealth.   All the things above destroy wealth, and move money from some people to other people.

Once again: some forms of money, like dollars, are so stable and widely accepted that people usually count them as wealth, when evaluating the wealth owned by a person or company.  That is a valid assumption for those purposes.  

But when one is discussing the wealth of the world (as in the above) or of a country, it is wrong to count the money owned by its inhabitants.  (Except, in the case of a country, the money that the country could use to acquire wealth that is outside the country, without giving other wealth in return.)

Does not translate.  The replacement of barter by money transactions hugely improved the flow of goods and services, by breaking down complicated multi-party trasactions into independent two-party steps, that could be widely separated in time and space.

Bitcoin, on the other hand, has not yet brought any significant contributions to commerce.  The benefits of bitcoin are, at best, the saving of a few percent in the price of international payments. That is counted as a benefit, because otherwise the payment of those extra fees would have meant waste of work by bank staffers, for services that (allegedly) were not really necessary.  All those saved fees together may barely add up to 10 million dollars.  

The losses caused by bitcoin include, first, all the wealth consumed by the "bitcoin phenomenon": the bitcoin mining equipment and electrical energy used by miners, all the time spent by bitcoiners looking at charts, trading bitcoins, and watching Antonopulos videos, all the time and equipment and electricity consumed by bitcoin companies, all the time spent by non-bitcoiners listening to bitcoiners and trying to understand the thing.  We should also add all the losses and hardships suffered by victims of bitcoin thefts, scams, and collapse of bitcoin companies.  Even if we discount from the latter the losses of wealthy people (which, a communist might argue, were just cases of thief stealing from thief), we can easily get to a billion dollars of damages.  

Hence the claim that, so far, bitcoin has brought 100x more losses than benefits to mankind.


These statements applied to bitcoin because of its huge increase in market price in a short time, which led to large-scale transfers of wealth (hard to estimate, but may be more than a million dollars per day) to the early adopters who sold for a big profit, and from the later investors who are holding the bag and may lose their money.  

Those statements may not apply so much to gold, since, during most of those 2600 years you mention, gold's price has not risen that fast and that much; so the profit that individuals may have made from long-term investment in gold was probably not that significant.  However, in recent times we have seen a gold bubble, and that bubble must have resulted in huge wealth transfers, unrelated to wealth creation -- just as bad as bitcoin.  (I am not a "gold bug", if that is what you thought.)


These statemetns of course make no sense when applied to gold. Banks and governments do not create more gold, and private entities do not create new scarce metals.  It obviously applies to fiat money, such as dollars and cryptocurrencies.

And the Space Shuttle.  I think it was the most impressive technological feat I have seen, except perhaps for the outer planet probes.  Not so much because of the things that it did, but because it worked the first time it was launched, even though it was an extremely complicated machine, completely different from any plane or spacecraft that was built before, and just at the edge of physical viability.

There are things that have more amazing technology in them, such as the modern integrated circuits; but they generally evolved a smal step at a time.  Eevn Apollo 11 was only one step (not so small, granted) beyond the previosu flights.  Not so the Space Shuttle...

On the other hand, I still can see in my mind a special issue of Life magazine from the 1960s, about the US space program, with a timeline of future milestones running across the bottom of several pages.  It had men landing on Mars in 1980, if I recall correctly.

At least we have agreed that Marcus's number is not valuable by itself; the supposed "value" is in the blockchain.  That number is just a seal on the door of a safe, that guarantees that the land deeds that are stored inside the safe have not been adulterated since they were placed there.

That seal contributes in part to the value of the land plots recorded in those deeds, but in a very indirect way.  The "value" of bitcoins is not defined by the protocol, it is defined by beliefs and feelings of the people who buy or sell them.  That value is not proportional to the amount of energy spent in the computing that hash, just as the seal's land's value is not proportional to the cost of the wax and stamp used to make it the seal.

The hashes of the earliest blocks had only a few leading zeros, yet the bitcoins mined in those blocks are assumed to be as valuable as those mined today: that "fact" is not in the protocol either, it is just a belief that bitcoiners have chosen to share.

Every week, several blocks get orphaned: their hashes cost as much as the hashes of the surviving blocks, but the coins mined in them are worthless... unless some day a bunch of people decides that a certain orphan block was legitimate, and starts building a new blockchain branch from that block, and agrees to believe that the coins in that branch have value to them.

Proof of work is not "the" solution to the Byzantine General's Problem, it is only "a" solution, even if it is the only one known.  As used in bitcoin, it is a tremendously expensive solution; but its worst defect is that it leads to centralization of mining, which in the end defeats its goal. For that reason, some (myself included) conclude that the PoW "solution" is not really a solution.

(There is also the question of whether the bitcoin PoW puzzle is really hard, or whether there is a clever algorithm that solves it in a millisecond.  No, it is not "guaranteed by math" at all. But let's not get into that now.)

Edit: seal and land analogy.

You bet.

Money is not real wealth, it is just a token that one can exchange for real wealth.

Some kinds of money have reasonably stable exchange value, and nearly universal acceptance (at least within one country) that we get used to think of them as wealth; and for the purposes of personal wealth accounting, that is a good principle. 

For the purpose of understanding the world's economy, however, it is important to distinguish wealth from the money that merely represents it.

The "hyperfinancialization" of the economy has created excessive amounts of money, that, if taken at its market value, would correspond to immensely more wealth than actually exists.  Many people believe that they own (through the money proxy) a lot of cars, land, pizzas, etc; but there is not enough wealth to actually realize those claims. 

The financial system is like a land registrar that keeps multiple records of ownership for the same piece of land; except that, since money is not attached to any specific piece of lad, no one can tell which money is good and which is bad.  Sometimes the fiction becomes untenable, and then politics or violence decides, more or less arbitrarily, who keeps the real wealth (usually big financial corporations) and who loses it (usually the plebs).

Here is an even nicer number:

000000000000000000000000000000000dffb334bffcaaff3333fffffffffffffffffff

You say that a couple thousand dollars of electricity were used to find your number?  How stupid.  I found mine by just typing hex digits at random.  Yet it is a hash of some string too, like yours.  So, explain again, why is your number "wealth", as much wealth as a laptop or a good bike?  Why isn't mine "wealth", too?

I rather stay a stupid electronics engineer turned computer scientist turned appled mathematician..


Real wealth is houses, land, cars, food, services, etc.  Wealth gets created and destroyed, sometimes both in quick succession, as when a cook prepares a meal that gets eaten right away.  

Bitcoin does not create any wealth. Its contribution to productivity, by (allegedly) being a more efficient payment instrument is tiny.  In fact, the contribution of bitcoin to world's production of wealth, so far, has been humongously negative: 100 times (at least) more wealth has been destroyed by the bitcoin network than has been created thanks to it.

It is not because of that tiny positive contribution that large early adopters have become wealthier, either on paper (if they are still holding) or in reality (if they cashed out).  Bitcoin's effect has been mainly to move property from some people to other people, mostly independently of their actual contribution to society.   The gains from the early adopters, in particular, came from the (substantially bigger) losses of  those who have bough coins and are still holding them.  If bitcoin's price ever reached a million, as the holders dream, then trlliions of wealth would be transferred -- little by little, imperceptibly -- from those who buy bitcoins to those early adopters who hold most of the coins.  If a country like Greece adopted bitcoin, that wealth would be taken from its citizens.  

That is the same trick that governments and banks use when they create more money, indeed. But when the government does it, it is just another kind of tax: the government is supposed to use the wealth that it buys with that new money for the benefit of its citizens.  When banks do it, of course, there is no such return: there is net and permanent transfer of wealth from the general people to bank owners.

And that is the case too when private entities create new money, whether it is gift certificates or Linden Dollars -- or cryptocurrencies.  *That* is why cryptocurrencies are a scam, even if they were to succeed.  


The work of the miners is not constructuve but destructive: the world gets poorer by their work -- with less coal, less water in the hydro dams, etc..  If someone gets rich by destroying wealth, he must be taking more wealth from someone else.

Coindesk does it all the time.  Like when a Deputy Director of the Statistics Dept of the PBoC became a "PBoC Director".

That is terrible, of course.  But replacing a failing currency by a crypto that, if successlul, will make trillionaires of Satoshi & friends is even worse.  Where will those trillions come from?

And if the crypto fails, there will be no one to exchange it for euros at a fixed rate.  Again trillions will have changed hands, with no relation to work done.

The first one (30'000) was indeed won by Tim Draper, who said he would use the coins in the Vaurum fund/exchange.  But the second one was won by a consortium (syndicate) of small bidders, who apparently could not afford bidding for a whole 2000 BTC block.  SecondMarket organized the syndicate but promptly distributed the coins to the individual bidders (the splitting can be seen in the blockchain).

Until now I believed that Jon Matonis was one of the few sensible and realist people in the bitcon scene (even though he is a bitcoin salesman).  But that is just too naive (or insincere).  Oh well...

Bullish! Here comes the trollion-dollar bitcoin!

Since one needs some mental effort to answer a question with a question, and it would be embarassing to send two posts in a row, woudn't that goal be much easier to achieve by posting to the Wall Observer thread, where those obstacles do not exist?

It seems that bitcoin does have a public image problem:
https://www.youtube.com/watch?v=J8fGNM_Km_Y

But no sweat, help is on the way:
http://blogs.wsj.com/moneybeat/2015/02/24/bitbeat-for-bitcoin-some-good-press-finally/

On his next video, Roger Ver will be on a luxury boat, sipping champagne, surrounded by sexy models in bikini...

You should at least have added a thank you to the hoarder, new or old, who paid the other 110$ of your bill by buying that bitcoin now.  He may be reading this thread at this moment