How China Took Control of Bitcoin (nytimes.com) 165
Slashdot reader Rick Zeman quotes the New York Times: In its early conception, Bitcoin was to exist beyond the control of any single government or country. It would be based everywhere and nowhere... Yet despite the talk of a borderless currency, a handful of Chinese companies have effectively assumed majority control of the Bitcoin network. They have done so through canny investments and vast farms of computer servers dispersed around the country...there are fears that China's government could decide, at some point, to pressure miners in the country to use their influence to alter the rules of the Bitcoin network. The government's intervention in 2013 suggests that Bitcoin is not too small to escape notice.
It's been days (Score:4, Funny)
It's been days since we had a Bitcoin story, I was growing nostalgic for one, and whaddya know, one pops up like a gift from Heaven.
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Obligatory: Haha, /. Bitcoin shills. We're not going to buy your overpriced tulips.
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We're not going to buy your overpriced tulips.
Tulips at least look pretty. And gold is shiny. Bitcoin has all the same problems and doesn't even have anything nice to look at.
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We're not going to buy your overpriced tulips.
Tulips at least look pretty. And gold is shiny. Bitcoin has all the same problems and doesn't even have anything nice to look at.
Both tulips and gold suck big time if you need to send them instantly* across the globe.
*(plus pseudonymously, and independent of any business or government, but I guess you could do with tulips or gold too)
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So much for Bitcoin being independent of any government . . .
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Both tulips and gold suck big time if you need to send them instantly* across the globe.
Contracts, futures, and options seem to work pretty well for gold, oil, and other commodities. They'd work just fine for tulips too if anyone was still trading them in such volume. We solved that problem a long time ago, hardly anyone ever takes possession of the physical goods anymore. Same goes for dollars, nobody (legit) is sending around enormous piles of $100 bills.
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Wait... you think that "solved" something ? Only if you ignore the whole host of problems it caused.
Number one: massive fraud. The total amount of gold bullion in the world ever mined is about a cube the size of a tennis court.
The total gold bullion that there are gold certificates for ? Is roughly 3 times that vollume.
In other words - every bar of gold in the world has been sold to at least 3 different people who can all legally prove they own it ! Every gold certificate in existence has been fraudulently
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Hey kids, I've got dollar bills with RFID chips on them to sell you along with that bridge you are stupid enough to buy.
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I find it really funny that bitcoin enthusiasts go on both about the blockchain providing a record of transactions and how it's an anonymous currency. Hey kids, I've got dollar bills with RFID chips on them to sell you along with that bridge you are stupid enough to buy.
I never said anything about "anonymous" in my post. The word I used is "pseudonymous". The analogy with dollar bills is quite apt, though -- it's like tracking by serial numbers, which is only useful if you can establish a connection between a person and the number. With Bitcoin this is even harder, because it's easy to create throwaway addresses.
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I've been telling enthusiasts (who apparently only skimmed the main bitcoin sites briefly, if at all) for years that if bitcoin does rise in utility, then bigger and bigger institutions will come in and swamp the small players -- or force them into their own cartel.
They want a currency created by mathematics, but refuse to look at the logical conclusions it engenders.
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Both tulips and gold suck big time if you need to send them instantly* across the globe.
Get this through your thick skull: A huge, overwhelming majority of people on this planet DO NOT NEED to transfer money across the globe.
So if you don't need it, nobody needs it? What about the countless payments to online stores with Visa, etc? Besides, I don't see how this has anything to do with (a) my original post, or (b) the thickness of my cranium.
Not surprising (Score:5, Insightful)
Bitcoin as an idea is very interesting but, in actual function, it's a scam. I wanted to learn more about it a year ago and so bought some mining ASICs. It doesn't take long before you realize that your magic money printing device was sold to you at a cost that means you will invariably lose money. Which makes sense. If I have a magic money printing device, why the hell would I sell it to you instead of running it myself?
At the time when I bought my ASICs, the Chinese companies that were making them started changing directions and were moving towards a model of letting you rent ASICs that they would host. It's kind of a brilliant plan because it means they can reduce the costs of ASICs by creating WAY more than people will ever buy and then just renting people as many as they want. The rent more than pays for the electricity and manufacturing costs so, no matter what happens, the ASIC manufacturers always win. Unfortunately, they are the *only* people that win.
It's not surprising at all that China controls the bitcoin market. They *are* the market. All the ASICs come from China and if they don't sell the ASICs, they make a profit by running them. If they do sell the ASICs, they make more profit by selling them at an inflated price that speculators will pay. It's a hell of a racket.
Re:Not surprising (Score:5, Insightful)
I mean, this shouldn't be overly surprising. If it is a gold rush, the money is in making shovels. The same is mostly true even if it is a scam gold rush...
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Agreed. But, it's not something you realize until you've bought your shovels. I did it as an experiment so, I didn't mind losing some money to learn about the industry but, I'd like to educate potential miners: The magic money printing machine you bought was sold to you because the people who made it thought it was more profitable to sell it to you than to run it themselves.
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Hence the words "gold rush mentality" applied to shiny new things where you know a lot of the players are going to crash and burn before it's over (dotcom crash, shale mining, etc).
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The problem with this often misused analogy is that you can only make money by making shovels if you're the only one doing it. Otherwise you create a shovel rush which is even worse since the maximum size of the market is significantly smaller for shovels than it is for gold.
It's a fun analogy but no one ever got rich from selling shovels unless they were the only ones, or had a very unique shovel.
Re:Not surprising (Score:5, Insightful)
It doesn't take long before you realize that your magic money printing device was sold to you at a cost that means you will invariably lose money. Which makes sense. If I have a magic money printing device, why the hell would I sell it to you instead of running it myself?
No, what happened is that the cheap bitcoins went away. A cursory examination of the dynamics of the thing would have revealed that mining bit coins increases in computational/electricity cost over time. So as long as value of bit coins exceeds the electricity cost of mining them, then there will be massive computational resources thrown at them.
There's no such thing as a free lunch.
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No, what happened is that the cheap bitcoins went away. A cursory examination of the dynamics of the thing would have revealed that mining bit coins increases in computational/electricity cost over time. So as long as value of bit coins exceeds the electricity cost of mining them, then there will be massive computational resources thrown at them.
This is wrong. You have to take into account the cost of the mining rig as well. If a $1000 mining rig is generating enough bitcoin to pay the electricity bill (which is non-trivial) then you have to look at how long it will take to pay back that $1000. Bitcoins are highly volatile so, today it might seem like it will repay itself in a few weeks. Tomorrow, it might literally look like centuries.
I stand by my statement that the only people that make money from bitcoin mining are the people that make the
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You have to take into account the cost of the mining rig as well.
I was operating under the assumption that the cost of electricity over the lifetime of the machine would be much greater, but doing the math, I don't think that is the case.
I stand by my statement that the only people that make money from bitcoin mining are the people that make the mining equipment.
Do you also stand by your statement that the makers are deliberately selling their product "at a cost that means you will invariably lose money". My point is that even in the face of sincere manufacturers, the costs of bitcoin mining will stabilize a bit below the expected return in bitcoins.
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You mean the free coins are going away. The bitcoins allocated to miners as rewards is drying up rapidly. And all the hypothesized infrastructure that would keep them mining hasn't materialized. So, I'd guess that there is a publicly visible countdown til bitcoins become practically untradable.
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And all the hypothesized infrastructure that would keep them mining hasn't materialized.
That infrastructure has been baked into bitcoins from the beginning. Every transaction requires computation which can be done by bitcoin miners.
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Right, it requires bitcoin miners. The bitcoins for mining are running out. There was supposed to be an infrastructure that paid miners from each transaction in a block. It has not materialized yet.
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Right, it requires bitcoin miners. The bitcoins for mining are running out. There was supposed to be an infrastructure that paid miners from each transaction in a block.
It's already there and has been there since the beginning.
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There were never any free bitcoins, just cheaper ones.
And if you weren't in on the ground floor, yes, you missed the easy money. Now mining is only an exercise in value speculation.
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They were "free" in that the bitcoins were unclaimed by anyone, and mining a new block earned you the bitcoins. Those unclaimed bitcoins are of finite number and running out. Hence, the point is rapidly approaching where there is no incentive to mine because there is no bitcoin reward. In theory, there was supposed to be an infrastructure where people paid to have their transactions' verified. But, that hasn't grown into a thing, and time is running out.
Re: Not surprising (Score:2)
Free as in electricity to run your average PC.
And fees are pretty much required to get your transaction processed.
You get out much?
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I never said free as in beer. I said free as in unclaimed.
The transaction fees are too low to be sustainable right now. They are being subsidized by the free bitcoins.
It's unclear if, once the fees rise to the level to encourage mining once the unclaimed bitcoins run out, bitcoins will lose popularity.
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It looks, upon casual examination, that the max bitcoins (roughly halfing every 210k blocks) is about 21 million. We know of about 14.5+ million minted, and it will likely take until 2033 to get near 20.75 million, unless some massive (2 orders of magnitude) increase in mining activity occurs, given the current mining growth predictions.
Maybe someone will go to work trying to reclaim lost coins. That's an interesting proposition.
Technically, not all possible coins will be minted, due to rounding issues. Be
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The max bitcoins, by spec, is supposed to be 16M. Which makes peak bitcoin pretty darn soon. Even with the rewards recently halving in size.
"Reclaiming lost coins" sounds like "stealing coins" in many ways that are indistinguishable if bitcoin is supposed to be an asset you can store under a rock for later.
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It's a completely open-source scam. If you don't like or understand it, just keep using proprietary alternatives.
The "understanding" bit involves doing your homework when it comes to mining profitability. If you expect Bitcoin value to increase in the future, it's much easier to buy some directly. If not, then maybe there's not much point in mining either.
Re:Not surprising (Score:5, Interesting)
Bitcoin as an idea is very interesting but, in actual function, it's a scam. I wanted to learn more about it a year ago and so bought some mining ASICs. It doesn't take long before you realize that your magic money printing device was sold to you at a cost that means you will invariably lose money. Which makes sense. If I have a magic money printing device, why the hell would I sell it to you instead of running it myself?
Um, because of reality? In this case, cost of capital:
If I can make a machine for $900 that generates $100/year forever, I get an 11% return on capital.
If I can sell it for $1000, I get an immediate return of $100, and can build another machine and repeat the process. At one per day, I make $36,500 in my first year.
If the risk free interest rate is around 3%, the second plan is worth 10x as much as the first plan.
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But, that's not how it works at all. It probably costs less than $100 to build the ASICs and their planned obsolescence is measured in months. So, they will sell you a mining rig that *might* pay for itself in a year. But, they are taking the money you paid and building more efficient mining rigs. The more powerful rigs, once in use, increase the complexity of computing the bitcoins and, pretty quickly, the cost of running your mining rig doesn't cover the electricity costs of running it.
It really is th
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They are very different for several reasons.
1. Your ability to sell a coffee is not dependent on simply owning a machine. You need to be in a right location.
2. The location can saturate, there's only so many people to convert to money so you can't simply buy another coffee machine and double the value.
3. The coffee machine requires a full time trained operator who's skill is critical in selling your product. If you scale up the number of machines you need to scale up the number of trained operators.
4. Coffe
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If you need a coffee machine, you usually are interested in the productivity of the people who drinking that coffee, not in selling coffee.
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Bitcoin wasn't designed as a scam, it was just too optimistic. The concept isn't one of a magic money printing device; the miners do valuable work which keeps the currency functioning. It was originally mined on CPU's then GPU's, so was initially truly the 'people's coin'. It wasn't until ASIC's mining arrived that things started going downhill in this respect.
That's indeed a problem with cryptocurrencies in general, but it's a more serious problem with bitcoin because it uses a relatively simple function,
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No, by "scam" I mean exactly what I said: Why would someone sell you a magic money printing machine instead of running it themselves? The answer is: Because they can make more money selling it to you than they would make by running it themselves. Which kind of implies that buying a mining rig is a losing proposition. A scam.
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What has you buying a mining rig with the intention to make a profit to do with Bitcoin? You're claiming that the former proves the latter is a "scam".
Obviously some people are indeed "mining" (the better term is "verifying transactions on the Bitcoin network") for a profit. And a user of Bitcoin need not care about "mining".
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For a pure user of bitcoin, the Chinese control of the mining is not really an issue, sure. But, when you pull back the curtains, it's very, very obvious that the currency exists solely for the benefit of the companies that produce the ASICs that allow the computational complexity of the algorithms to grow. I understand that the difficulty of computing a bitcoin grows with the CPU power that is utilized to compute it. That's *exactly* what the Chinese manufacturers are banking on you *not* understanding.
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" it's very, very obvious that the currency exists solely for the benefit of the companies that produce the ASICs that allow the computational complexity of the algorithms to grow."
That's fairly narrow-minded thinking. What about all those *SERVICES* (Like bitcoin ATMs) to provide as well?
It's more than just to drive the sale of ASICs.
Re: Not surprising (Score:2)
Saying bitcoin exists to sell ASICs is like saying banks exists so that they can sell bank safes. Bitcoin exists because there's demand for a currency with special properties. Bitcoin mining exists because people need to trust a currency and people are willing to pay for it. Unfortunately the proof of work function used by bitcoin is susceptible to manipulation because ASICs scale so well and governments have the resources to build enough of them to manipulate them.
Memory hard proof of work functions are no
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it's very, very obvious that the currency exists solely for the benefit of the companies that produce the ASICs
It's very, very obvious that it isn't since for many years Bitcoin proponents didn't even believe there would be ASIC rigs built.
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There are scams around bitcoin just as there are around regular money.
Make $10k a week sitting on your couch, only $299 for the complete package. Is that a problem with regular money? It is well known now that small time folks can't make money mining, yet the whole thing is a scam because some people continue to dump money on mining equipment. Where there is money to be made you will always find suckers throwing it away, that does not mean the money itself is a scam.
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If people don't pump money into mining, what will happen to the currency? I think it's pretty obvious that the "currency" will crash because it's largely propped up by Chinese miners and miner hype. It really is genuinely as scam. Sure, a handful of people have gotten rich from bitcoins but, unless you were in on the ground floor, trying to mine bitcoins is going to be a money loss. Trying to triage them on a meta-market to make some money is pure insanity. Unless you own a silicon fabrication plant, i
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If gold's value was based on it's actual usefulness it would have crashed decades ago. The total gold used for industrial and jewelry purposes is less than 1 thousandth of a percent of the gold we've mined. Nearly all of it was mined as currency and despite not having been used as such for decades it keeps being traded by people who treat it as such (and this even now when 2/3rds of the gold trade is flagrant fraud - same ounce gold owned by 3 different people).
All currency is just a collective agreement to
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Not that I like bitcoin, but it's farming ASICs aren't magic money-printing machines. They are electricity-consuming (pseudo-)money-printing machines.
Someone could conceivably design and build the ASIC, and sell the ASIC, but not want to invest the resources or pay the costs associated with actual farming. It's sort-of like multi-level marketing companies like Mary Kay or whatever. They could sell their own products and keep more of the revenue, but then they'd have to pay the costs associated with retai
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You could mine at a slight loss with the expectation that the price of your bitcoins will rise, no?
If that's your strategy, you'd be better off just buying someone else's already mined coins; and then holding them.
Then you don't take a 'slight loss'.
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If I had to actually DO anything to "mine" Bitcoins, you could have a point.
The problem is, "mining" bitcoins means "turning on the ASICs and wait". I guess it's safe to assume that this kind of "work" can even be done by upper management.
Told lots of people this was going to happen (Score:5, Interesting)
And this is why I did not bother with Bitcoin. That currency value is way too high for its own good and was bound to attract the greedy Chinese speculators once it started gaining 'value.' It is seriously hyper-inflated. I do better with mining and selling gems and mineral samples.
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Greedy communist speculators: How droll.
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China is actually a perfect example of late-stage communism. Most people don't know this but Eastern Europe in 1985 and China today are virtually indistinguishable and they took identical paths about 20 years apart.
Communist countries (and here I am using the term as it was used of the soviet union and such - more correctly called Bolshevism, none of the other versions) were fantastically productive economies, in fact they are wonderful at making things - much better than capitalist countries actually. They
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Except that you deliberately chose the worst possible example while I generalized over a region that included the Soviet Union and East Germany - both major production centres in the past. And if you think communism is a thin patina on top in China - then what you're failing to realize is that from about 1970 onwards that's exactly how it was in the Soviet Union. The communism you know from American movies and propaganda never actually existed.
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What makes you think I fail to realise that? The underlying culture of that nations is very different, as show with the tensions between the USSR and China.
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>What makes you think I fail to realise that? The underlying culture of that nations is very different, as show with the tensions between the USSR and China.
What's that got to do with their economies ? Which is the subject I was discussing.
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A vast amount. Centuries of merchants versus centuries of serfs. Go speak to someone old from China and it's a very strong bet that they were quietly chasing after profit even while Mao was around.
Re: Told lots of people this was going to happen (Score:1)
Sure one can for example smuggle some drugs and weapons to the nearest star system and make good profit, but Bitcoin is a way to diversify one's investments, and goes well with the risk seeking personality.
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Sure one can for example smuggle some drugs and weapons to the nearest star system and make good profit
Hello. Out of curiosity, can you point me towards those star systems? I've got a few bars of gold plated latinum for you, if you would be so kind...
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I think it's an interesting concept and technology. I got a little mining setup, just a cheap one, as a toy. Interesting, but a basic understanding of economics is enough to see why it's inherently a very unstable currency at any time scale.
I learned two things from my miner: That they can run really fast when you immerse them in silicone oil, and that only a fool invests in bitcoin mining at anything less than mass-scale.
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Actually, if you look at the history of Bitcoin the Chinese are the good guys.
Early Bitcoin mining was with western developed software, first on CPUs, then GPUs, then FPGAs and finally on ASICs. A number of western companies appeared offering ASICs, but failed to deliver any working hardware and mostly just stole people's money.
Some Chinese companies then started making actual working ASIC hardware and selling it at reasonable prices. They met the market demand in a way that western companies had completely
More power! (Score:1)
How much of all our generated electricity is being thrown into this pit?
we're pissed (Score:5, Interesting)
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Yeah right, you bought Bitcoins in 2009 and you're pissed? Why? Because you're a multi millionaire and evil Chinese speculators made it possible?
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My guess is that he is one of the guys that was sitting on about 20000 of them in 2009/2010 and got bored with it and sold them for a 100 bucks. That would sting.
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Maybe he invested a small fortune in mining equipment, which back then would have been fast CPUs and then GPUs. I remember people paying insane amounts of money for certain high end Radeon cards that had the best power/hashes ratios, and then building PCs with multiple PCI-e expanders and 1000+W power supplies to run them all.
Now all that gear is worthless because a single $10 ASIC is an order of magnitude more powerful. It went from being a hobby that individuals could excel to to being a commercial enterp
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Every last person thinks China can go straight to hell.
They sound like likely Trump voters.
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I wasn't. And that you're "PISSED" just makes me laugh at your self entitlement. (And at your ignorance.)
Anyone with a clue has seen this coming for years.
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They are exploiting a design flaw in the Bitcoin network. One that was known pretty much from the start. One that was obvious as being a breaking point. As soon as Bitcoin becomes important enough for national governments to worry, you really thought this wouldn't happen? If the USA wants to destroy Bitcoin, they wouldn't turn on the NSA supercomputers as miners for a few days and be done with it? Please.
CureCoin benefits the USA & the World (Score:3, Interesting)
rule changes (Score:2)
there are fears that China's government could decide, at some point, to pressure miners in the country to use their influence to alter the rules of the Bitcoin network
The Chinese miners can't change the rules of the bitcoin network, because the bitcoin network uses cryptography to see if anyone is breaking the rules. The Chinese government could attempt to pressure miners into using their influence over the bitcoin world, but Chinese miners only have influence because the rest of the world does not currently view them as anti-bitcoin. However, if Chinese miners suggested, for example, that the supply limit be changed to something other than 21 million, they would be seen
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1. Effect a DDos by producing empty blocks. All transactions would grind to a halt
2. Commit a double spend
3. Create a longer fork in private for several days, and then publish it, causing all of the transactions within that time period to roll back and completely destroying the faith of those invested in
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Bitcoin has always been based on that notion, "the moral majority will have the most hashing power"
Yes, that's true. And, if the majority of miners use their hashing power to attack the old network, then they will be proving that notion false, which will destroy faith in bitcoin and ultimately hurt those same miners. People hold bitcoin because they believe 1) their money will be safe, and 2) the fundamental rules won't change. If miners successfully attack the old network, then they will have proven at least one of those beliefs to be false, which means that many users (myself included) will dump their
Re: rule changes (Score:2)
You may think everyone would revolt. You may also think the people would demand autonomy over the currency they are invested in, but no one has tested that so far. There are no longer just purists like yourself invested in Bitcoin, bu
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You may think everyone would revolt.
Actually, I see bitcoin as the revolution, and if the rebels turn on each other, then the revolution stops. In other words, if the bitcoin world goes to war, then that creates a climate of uncertainty that drives the average investor away.
It's true that the businessmen probably outnumber the purists. However, businessmen like certainty, and certainty is especially important when you're buying something that is supposed to rival the certainty of owning a hard asset like gold. If the 75% network starts attack
Re: rule changes (Score:2)
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but no amount of computing power would give them the ability to change the rules (because cryptography).
That depends.
If you have more than half the hashing power then you can unilaterally make the rules tighter. Blocks contining transactions that do not satisfy your rules will not be used as a base to mine on by your miners and so will be quickly forked off. For example you could require a transaction fee of a minimum percentage of the transaction value or you could require that all bitcoin addresses were registered in a govrnment database.
On the other hand you cannot unilaterally make the rules looser withou
Comment removed (Score:3)
Re:Bitcoin is for pigs (Score:1, Offtopic)
No, this is about bitcoin in China and China's much more about the pork. You can get beef, but it's the pig that powers the bellies of China. So it should be:
You are all pigs. Pigs say oink. OOOOOINK! OOOOOINK! Oink pigs OOOOOINK! Oink say the pigs. YOU PIGS!
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I thought that the Wall Street Journal was the Wall Street propaganda rag.
If the New York Times was going to be considered as a propaganda rag, it would be for Liberal minded intellectuals and not businessmen.
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Works fine for me. Maybe Linux is your problem.
Fiat demand via taxes (Score:1)
> Any value attributed to bitcoin is essentially in the eyes of the people who choose to use it. I know this could be said of any fiat currency
It's been said, by people who forgot about one essential element of fiat currency. Almost everyone in the US is required to pay taxes in US dollars. (Many of them get "back" more than they pay, but even they have to pay it first.) Because people have to pay taxes in US$, they need US$. That creates guaranteed demand for dollars. The US dollar is valuable, if f
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Not only that, but the sovereign debt of the U.S. is issued in U.S. dollars. Lots of governments and individuals around the world own U.S. debt, and they are all invested in the dollar remaining strong so as to maintain the value of that investment.
And this ignores commerce conducted in U.S. dollars, like the international oil market, which while beneficial to the dollar as a whole, could probably be swapped out for another currency (the yuan renminbi I assume at this point, given that the euro doesn't loo
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Erh... no.
The value of the dollar is mainly that there is a huge economy behind it and that economy stabilizes the currency. If that was not the case, it would be trivial to buy dollars come April, because everyone wants to get rid of them and would love to take your "hard" currency in exchange so you can pay your taxes.
For reference, see any country in existence with a runaway inflation.
A stable economy doesn't force people to use USD (Score:2)
The proposition out forward is that "like Bitcoin, any fiat currency has value -only- because people choose to use it".
You mentioned one of many reasons that people do choose to use USD. What you mentioned is an important reason. That's already covered under "people choose to use it".
There is ALSO another category that applies to fiat currency, but not Bitcoin. People are forced to use USD. Fifty million people get their monthly checks from the government denominated in US dollars; they can't choose to ge
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Just because you get your wage in a currency and that you have to use it to buy stuff in that country doesn't mean that the currency has any "real" value. For reference, take any ex-East Bloc country. There has even been that old joke:
There's little difference between West and East: For West-Money, you can buy anything!
And that was quite true. When you drove over to Eastern Europe, you could rest assured that at every parking lot near a mall you'd find a LOT of people offering you money. For exchange rates
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Any value attributed to bitcoin is essentially in the eyes of the people who choose to use it.
The same is true of anything whose value depends on a perception of value; Spain learned this when they started minting the famous 'Pieces of Eight' in the 15th century in such huge numbers that the actual value in term of what you could buy with them tumbled - and they were made of very pure silver. Money is, even at best, not real value, but only a token that you can exchange for goods and services of value. We continue to believe in certain currencies only because we believe in the entities that guarante
Re:All but for one fatal flaw (Score:5, Interesting)
At least in theory a fiat currency is tied to the productive labour of the people of the country - which is why hyperinflation only ever really happens in countries that first had some other kind of social unrest or plague or war destroy their productive capacity (look it up - every example of hyperinflation* in history was first preceded by an unrelated and massive problem that destroyed the productive capacity - printing money only *really* becomes a problem when there isn't any production for it to represent). Bitcoin isn't even tied to that. ... well any of the things we added to money over the centuries to solve the many problems we encountered over the past ten thousand or so years. Which pretty much leaves it vulnerable to every single one of those long-solved problems, problems we solved so successfully and so long ago that most people have forgotten they ever existed.
It's, at best, tied to the energy it costs to mine - which you need to buy, for a fiat currency... which makes it nothing but a substitute for fiat currencies without any official recognition or supply controls or consumer protections or
*Well, all but one but the one time that it actually WAS the money supply in isolation is never mentioned by the goldbugs. That was the Spanish hyper-inflation problem which ultimately led to the collapse of the Spanish empire. The reason they don't mention that one is that goldbugs are mostly also free market fundamentalists who think inequality, no matter how severe, is the proper state of the world - so they don't want to mention that one because the key driving force of it was extreme inequality. The money supply was massively increased (by conquistadors coming back with gold and silver mined in the new world by slaves), but this increase went entirely to a tiny elite (the conquistadors). So businesses raised prices massively to get at that new money from the conquistadors who had it to spend. Of course this meant the money was worth a lot less than when they arrived - so their brutality in the mines got worse and worse because no matter how much they mined they never got much richer back home. Meantime every merchant's prices had gone through the roof selling at a fortune to the conquistadors, so the suppliers raised their prices to cash in on the newly-moneyed merchants... etc. etc. and the average workers (mostly farm-workers then but others like bricklayers and the like too) did not see their incomes increase. While the prices of food and clothing were set at the rates only the super-rich could afford, the country starved... until civil war followed.... so basically the end result is the same as every extreme inequality in history, just with a side-trip into hyperinflation that aggravated the problem.
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free market fundamentalists who think inequality, no matter how severe, is the proper state of the world
Those that believe that don't understand free market economics. True free market economists believe the free market provides equality. They believe that people are paid fairly based on their contribution to society. i.e. Poor people don't contribute as much as rich people. However, in reality that is not the case, and rich people manipulate the system for their further financial gain.
The example of free market economics in action that I like t
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I don't think anybody seriously thinks everybody should earn the same. But I do think the degree of inequality matters. Too much is just as bad for the economy as too little.
You need some, because some people are only motivated by money - so you need the ability to have more as the only way to get those people to do anything. But too much and you end up with severe wealth concentration, which utterly skews the entire economy - and can leave you with productive economies that, nevertheless, fail at their mos
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Generally - I think a well functioning society would see the wealthiest person earn roughly twice what the poorest person earns.
Ben And Jerry's used to use a 5 to 1 ratio. [wikipedia.org] I've heard others use a 7 to 1. But most companies are just ridiculous. CEO's don't add much value. Most of them are simply asserting their power over the employees by paying themselves that much money.
The greatest example of libertarian hypocrisy is that every libertarian I have ever met opposed anti-trust laws and supported right-to-work laws and didn't even REALIZE that philosophically they regulate exactly the same thing: what type of exclusive supplier arrangements are acceptable.
I have only recently come to this realization myself. But you're right. If companies can't form a cartel to manipulate a market, why should union's be allowed to? And vice versa. The answer is power. How do you measure power? How do you make sure the unio
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> If companies can't form a cartel to manipulate a market, why should union's be allowed to?
Now for me, this is easier to answer: because union formation will most likely increase the overall fairness of the market by raising the negotiation power of people who individually have very little or (often) none at all. While cartel formation decreases the fairness of the market by increasing the negotiation power of organisations that already have too much.
Since I measure the validity of regulation by outcome
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Finally someone gets this.
Bitcoins, like any fiat currency, only has its value as long as people see a value in it. People put faith in Dollars and Euros because they consider them "stable", something they can trust to not lose their value. Should they do, you'll see them becoming worthless. The value of Bitcoins is exactly in the inability to track their flow. Should they become trackable, you'll see their value plummet.
So if China takes control of Bitcoins, fear not (unless you have a lot of Bitcoins, of