BitCoin represents itself as having value because it is a limited supply. Followers of BitCoin also believe, and the system represents, that it is protecting users from abuses due to the creation of money. BitCoin represents that the US Government debases the currency by declaring more money by fiat.
And yet, every single BitCoin is a new creation. Every BitCoin was created out of nothing. Exactly the same belief system is in place for BitCoin as for any fiat currency. It is valuable because people believe it is valuable.
So BitCoin is, until it runs out of BitCoins, exactly what it criticizes. BitCoin is money creation. At this point in BitCoin’s existence it is something like a village with a goldmine that is almost half mined out. The difference is that as BitCoin states, it has zero intrinsic value, unlike gold, which has utility value as metal. BitCoin claims that BitCoins can only be used for one thing – money.
So, if I declare private money into existence, and then someone takes it away from me, have I lost money? That is the fundamental question of the BitCoinica lawsuit.
But that issue is more complex than it appears. Because, the very act of valuation and representation of loss exposes the real motivation for the founders of BitCoin. Their motivation is precisely the opposite of what they claim BitCoin is about. Their motivation is to create wealth out of nothing, simply by getting people to believe in the BitCoin system. There is no other basis to their claim of having lost wealth.
They are, in a word, hypocrites. They formally criticize fiat currency. And then they turn around and create a currency and claim significant amounts of that currency as their own.
quantiger - A sometimes snarky blog 
It’s there, a link at BitCoinica Suit. But I’ll leave this because others might have the same problem.
Come now. That’s what exists out there. That is about as official as BitCoin gets. And – it correlates pretty precisely with what those talking about BitCoin have to say. You can’t on the one hand say, “BitCoin is a distributed community, a democracy” (sort of – with no protections against tyranny of the majority) and on the other deny the validity of what that community produces.
You could use exactly the same argument to deny the validity of anything said by anyone. If any individual had signed it, you could say that it was just that person’s opinion.
I included the note about the preferred link and people can access that. There aren’t contradictions in all that stuff.
We have gone one full circle around that barn now. That’s my limit. You say that because it’s not the ‘official stance’ that it’s misrepresenting BitCoin. I say that since there is no ‘official stance’ that I have to go to the best and most popular web sites and use that. I have also found agreement in a regular print publication (ieee spectrum). That publication made references to the positions of Szabo. I have verified that the positions enunciated are the positions that people espousing BitCoin mostly believe. With very few exceptions (you may be one) those posting for BitCoin take exactly the same positions. I have also verified that nowhere has BitCoin taken any position against any of the basic errors I discuss.
So – it would be anti-factual to pretend, as you appear to want to do, that BitCoin does not have and does not espouse the positions I have discussed.
Since we have gone full circle here, drop it unless you have something substantive to add. (i.e. official position documents from BitCoin and address to the BitCoin community from major voices in the movement)
Those representations, that idea environment is what sells it to most. Is it apolitical? No, because anything like this has a political impact. Currently BitCoin helps buy illegal things over the internet without an easy to get at audit trail.
If you define it that way. Mostly, that’s how it looks. You are kind of using the Occupy meme.
They are all ears. 🙂
I don’t think I have treated it as either of those things. I have mostly criticized it as a money technology.
You may be the only one. Take a read through comments here. Nobody else is.
That said, I think you need to review what I have criticized in my blog posts.
Ah, those repressive regimes of the Silicon Valley and Europe. So awful. Repression must explain BitCoin’s popularity, since according to the map it is absent in the repressive world.
https://en.bitcoin.it/wiki/Bitcoin_Map_(Collaborative_map)
http://www.bitcoinmap.com/ 🙂
Shorthand for anarchist organization. Since it is headless (nominally) it has plausible deniability for any position or act. That is the position you have been advocating for. In actual practice, Occupy (not making a judgment here) is a creature of its founders who have a very specific agenda. It is, in my opinion (now a judgment) an organization set up and run on passive-aggressive’s who formalized their neurosis into principles of operation. Drives me up the fucking wall. (I have spent more time with Occupy than with BitCoiners.)
No doubt. 🙂
Thanks – my fan. 🙂
I’m sure you are right. It is my experience that most people talking about such matters are waste of time.
Sure. Go ahead. No objection.
The developers or Mt. Gox, et al are as good as any.
http://spectrum.ieee.org/tech-talk/computing/networks/first-bitcoin-lawsuit-filed-in-san-francisco
http://spectrum.ieee.org/computing/software/bitcoin-the-cryptoanarchists-answer-to-cash
No. The crucial difference is who created them and has them. The one is governmental an outcome of a democratic process. BitCoin is private.
That’s not my criticism. My criticism is that BitCoin is creating it’s money while yelling about how created money is bad. Who cares if I sell everybody on the idea I have created 10 QuantCoins or 10 million? It’s still money creation. You, I think also argued that BitCoin isn’t going to be the last such currency.
Let the best salesman win! They have a price because they have a price.
And you are suggesting that the “chance” wasn’t higher in the beginning? You are suggesting that there aren’t people with more BitCoins than others?
It is also worth noting that someone with more computing power can get more BitCoins in that system. Not so? Lots of ways to do that, including taking over a corporations computers at night, getting people to install clients that identify as your BitCoin account.
Seriously, I fail to see much connection between those sentences. Does not follow.
What? Are you suggesting to me that when BitCoins cost $30 each on Mt. Gox, that it cost $30 each to produce them? And then when the price dropped that it cost that amount? Not a chance. Look at the chart. http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zv
Besides that, there is no long run yet. You are basically just saying that because you would like to believe it.
First, calling bitcoin privately issued is stretching the word to it’s limits. Bitcoin is about as publicly issued as you can get. More publicly and openly issued than any governmental currency. (and yes, I know the definitions for those words in this context doesn’t agree with me. I choose to disagree with the definitions here as they are, in my opinion, obsolete.)
I didn’t say the limit criticism was yours. That’s what the Bitcoin FAQ you linked to ought to present as the criticism. The lack of limit on the creation of money rather than criticizing the creation of money itself.
I did say that I don’t believe Bitcoin is going to be the last currency. I still believe that. Anyone can create things and claim they’re valuable. It’s up to other people whether they are valuable in practise or not.
Of course the chance was higher in the beginning. It’s also very likely that most of the 2 million bitcoins created during the first year (2009) of operation are lost. That was the time when they were easy to get with pretty much any computer at all. The bitcointalk.org forums have no lack of posts from people lamenting about not keeping their wallets from that time. Others are lamenting that they didn’t mine more at that time.
People who actually foresaw that Bitcoin adoption would increase to today’s levels back then have earned what they got, if you ask me. No, I’m not one of them.
No, I’m not claiming they have ever cost $30 each to generate. The price didn’t stay at that level long enough for that. The exchange rate increasing does not increase the mining power used that fast. It’s just how markets work that causes this.
If there’s big enough profits to be made, people will invest in mining equipment. This increases the costs for generating each bitcoin as there are more people competing for them. If the exchange rate drops enough, people will stop mining and the costs will drop too. This is what I mean with the long term.
This graph has the mining difficulty along with the exchange rate, as you can see, it reacts to changes in exchange rate trend with some delay:
That’s fair. It’s the equilibrium-seeking argument. That idea of equilibrium is not correct, in reality it always overshoots and equilibrium is never reached. Thus, the stock market graph is fractal, not asymptotic, not even a decreasing sine function with time. But, it’s valid enough for our purposes here. I get what you meant and I should have seen it immediately.
What gives money value is ultimately the people. Government is merely acting as a proxy and a system for facilitating this.
In Bitcoin’s case, the value comes from people as well. In this case, though, it’s the Bitcoin system that works as a proxy for this.
Yes. BitCoin is a community of users and money is an agreement to use something as a medium of exchange. Not sure that you are using the word proxy properly in either case though. The US government does more than facilitate. It is legally required that US dollars be accepted as payment to settle debts. Anything else is voluntary. But if you pay in dollars, regardless of what a counterparty asks for, that courts will consider it paid.
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I’m going to be a little hard on you because it’s obvious you didn’t bother to read the blog and make use of all the educational resources here. And, you don’t think straight.
I am referring to what BitCoin actually
is
doing. You are referring to what BitCoin
says
it wants to do. BitCoin is adding to the amount of money. Period. That this supply of new will run out someday does not change that it is all newly created money now.
You haven’t read this blog very well fella. Having a limit set by the amount of gold is what led to dropping the gold standard. Please review money-lending, temple-lending and banking.
No kidding. My dear, please take the time to understand what banking and money-lending is. Click on the links I provided for you above. You are showing you are at best a lazy-arse.
That inability to create new BitCoins is precisely what is wrong with BitCoin. Now read the damned blog better before you post rubbish.
Some situations require chargebacks (AKA refunds). ID the customer and it can be done. Just like regular money.
A man who thinks his cash evaporates when the banks close AND has not seen an ATM machine. And dear, their back end computer systems run 24/7. Your ‘Always open’ comment is idiotic.
I can do banking by phone. Who cares if I can’t use email. (Although, in one instance I did use email several years ago.)
We shall see if BitCoin can’t be frozen the first time it runs up against the FBI or some other nation’s police. I predict it can.
Again, read this blog more completely – all the articles on BitCoin. BitCoin has gone up and down.
Fun to use? I have fun spending dollar bills too. That’s just a silly comment.
I presume you have never opened a numbered Swiss bank account? Ahem. Pseudononymous is old hat dearie.
Nah. You are an uneducated lazy-arse who doesn’t know he is uneducated. That gives you the confidence to blap half-baked rubbish. Educate yourself.
See that list on the left side of my blog pages? It’s titled “Top Posts and Pages”. A bunch of them are for BitCoin. And at the top of the page are educational materials. Use them.
Well, neener to you too. It would help your case to mention those secrets you are guarding. At present, I just think you’re an ignorant pain in the arse. If you had something worth reading it wouldn’t be a total waste of my time.