View Full Version : Open Source Revolution
This article is epic.
http://www.theguardian.com/environment/earth-insight/2014/jun/19/open-source-revolution-conquer-one-percent-cia-spy
Excellent. I truly hope we are moving the the direction of open source. In the end there doesn't seem to be a way to get the genie back in the bottle.
Excellent. I truly hope we are moving the the direction of open source. In the end there doesn't seem to be a way to get the genie back in the bottle.
I know what you mean. I've learned a lot about open source and distributed networks lately. Bitcoin, is the most salient example, not just the currency but the block chain technology that underlies it. After much consideration and contemplation, I'm convinced that it will prove to be the greatest invention of all time. Additionally, it will make gold as a store of value become completely obsolete.
As outrageous as all that sounds, I can only say that I've done my research.
I don't think it sounds outrageous at all. At least no more so than basing a global economic system on a commodity that a king somewhere 5,000 years ago thought was pretty. Bitcoin is something I'm a bit enamored with simply because its origin remains 'anonymous' (as far as I know), because the world banking elites can't figure out how to profit from it and that because of the automatic triggers that dilute the value its not a way to store wealth. Not sure where it will rank on the all time list, but it certainly has the potential to be a game changer.
I suppose it may share second place with the printing press after the first place wheel. I know the internet is in there somewhere too because it, and Bitcoin are inextricably linked, so it's hard to rank it fairly.
Anyway, the potential makes my head spin.
Paul Krugman, who despite his ridiculous politics strikes me as an excellent economist, has pointed out that money must accomplish two objectives: it must be an efficient medium of exchange and a reasonably stable store of value. I can see how Bitcoin accomplishes the first but not the second.
ApatheticNoMore
7-24-14, 12:38pm
Paul Krugman, who despite his ridiculous politics strikes me as an excellent economist, has pointed out that money must accomplish two objectives: it must be an efficient medium of exchange and a reasonably stable store of value. I can see how Bitcoin accomplishes the first but not the second.
What's that based on anyway? Historical uses of money? Were most of them really stable stores of value?
Not the first time I've been told the block chain technology was revolutionary. But it was over my head why (and skeptical of course), but I tired to understand (which did not seem a popular position versus jumping to surface level narrow confusions like: "bitcoin yuck" even though that discussion was probably not just about bitcoin).
What's that based on anyway? Historical uses of money? Were most of them really stable stores of value?
Not the first time I've been told the block chain technology was revolutionary. But it was over my head why (and skeptical of course), but I tired to understand (which did not seem a popular position versus jumping to surface level narrow confusions like: "bitcoin yuck" even though that discussion was probably not just about bitcoin).
I'm not so much in the "bitcoin yuck" camp as I am curious how successfully it will function in the long run. And while its certainly true that some currencies serve their dual purpose better than others (i.e. the U.S. vs. Zimbabwe dollar), I wouldn't put complete faith in any arrangement. Whether or not that's jumping to a "surface level narrow confusion" I will leave to the deep thinkers such as yourself.
The most basic way to understand why the blockchain technology is revolutionary is because it's the first time that something transferred online can only be transferred once. As opposed to a file that can be copied a million (or billion or trillion) times, each bitcoin is unique. Without this capability there's nothing to prevent someone from giving the same piece of electronic currency to multiple people. (A non-internet example would be if one could make a photocopy of a dollar bill that was perfectly identical to the original. The blockchain technology, by creating a permanent transaction log for each bitcoin that travels with the bitcoin (or fraction of the bitcoin) forever prevents that possibility from happening with a bitcoin.)
Over time I expect that bitcoin or some other digital currency will become both an effective and cheap transactional medium and also an effective store of value. Bitcoin certainly isn't there yet, but digital currency is still very much in its infancy. WIth the pace of advancement in technology I'd be willing to predict that in the next 10-15 years one, or several, stable, easy to use, electronic currencies will exist. Much the same way 20 years ago people didn't think that online commerce would become a major thing. But even a casual observer today can look at the explosive growth of companies like Amazon, Netflix, and Expedia and all the online travel companies, and see how quickly current reality can change drastically.
What's that based on anyway? Historical uses of money? Were most of them really stable stores of value?
The main historically stable stores of value were gold and silver. There are several examples through history of coins made from them holding value for hundreds of years, (and for over 5,000 years the metal itself has retained significant value regardless of what form it is in). Inevitably, though, an emperor or other ruler wanted a free way to create money out of thin air and would destroy the value of their gold and silver coins, typically by "clipping" them (ie making them smaller so that they contained less of the precious metal.)
Twice so far this year, all external communications to my county have failed. No cell phones, no ATMs, no credit card processing, no wire transfers, no bitcoin. Once was for 8-9 days, the other for only 2-3 days.
Cash still worked, as did local checks and barter. And some amount of local currency in the form of our time bank.
I think there will be a role for resilient local currencies even in the brave new bitcoin world. Especially when the lights go out...
Twice so far this year, all external communications to my county have failed. No cell phones, no ATMs, no credit card processing, no wire transfers, no bitcoin. Once was for 8-9 days, the other for only 2-3 days.
Cash still worked, as did local checks and barter. And some amount of local currency in the form of our time bank.
I think there will be a role for resilient local currencies even in the brave new bitcoin world. Especially when the lights go out...
Or a role for precious metals. Junk silver(pre 1964 US coins that were made from actual silver) will likely be accepted for small type purchases in a significant 'grid down' scenario.
ApatheticNoMore
7-25-14, 1:27am
There was a desire to integrate the block chain into local community currencies. I have no idea if that is feasible (probably) or desirable (what does it add?) or the difficulty and relatedly if the suggestion was concrete in any sense or just theoretical as in: "wouldn't it be nice if .... I have no idea how to bring it about". But the idea seemed to get shot down as being interpreted as literally: use bitcoin itself, long before that point. It will probably be attempted various places sooner or later I figure though.
Twice so far this year, all external communications to my county have failed. No cell phones, no ATMs, no credit card processing, no wire transfers, no bitcoin. Once was for 8-9 days, the other for only 2-3 days.
And if I were further to predict, I'd bet that some future version of digital currency will include a peer to peer way of transfering it between any two devices that still have battery power. to deal with just this contingency.
In any kind of significant grid down scenario I probably wouldn't have a lot of interest in trading my ripe tomatoes for your junk silver. If it were to ever hit the fan hard enough to knock the fan over my future grandkids can't eat silver. If those scenarios tend to be very localized, as in bae's situation, then the groups effected by the techno-fail will inevitably find alternatives that work for them. Beyond a little thought put into what would be 'valuable' in my area if the lights go out I'm not really into prepping for every worst case scenario.
A currency should have a relatively stable exchange rate at which it can be traded for goods and services. If people can't depend on that it won't be successful. Maybe that is what economists mean by a store of value. If so then I would agree that it is an important consideration, but as a long term plan cash is about the worst possible way to store wealth. A person sitting on a pile of money might sleep well knowing someone will always trade food for some of it, but it will not grow at a meaningful rate (anybody have a CD?) and, in the larger sense, it does not benefit the society in which that person lives.
Certainly in the short term if/when a grid down situation occurs food, water, fuel to keep warm and cook with, and other immediately useful things (like real world valuable skills) will be much more valuable than junk silver or any other monetary item. Over time though if the grid down situation turns out to be a long term situation people will begin to find some sort of monetary unit because money is a much more efficient means of exchange than pure barter. That's when the junk silver or the gold coins, and possibly the dollars and bitcoins, will be of value to someone. Ideally one should be prepared for both the short term and the long term.
And if I were further to predict, I'd bet that some future version of digital currency will include a peer to peer way of transfering it between any two devices that still have battery power. to deal with just this contingency.
Bitcoin already has this capacity.
Short term power outages are not a problem if they are anticipated. If there are long term outages, cryptocurrencies will be the least of your problems.
The value of Bitcoin and its block chain technology is the open source ledger that verifies every transaction without the need for central authority. Its value also extends to its superior efficiency as a medium of exchange. With each passing year the price becomes less volatile too, which will make it more attractive to the reluctant mainstream.
This guy sheds amazing light on Bitcoin, fast forward to the 47 min. mark:
https://www.youtube.com/watch?v=2b8RDFuLuRc
The value of Bitcoin and its block chain technology is the open source ledger that verifies every transaction without the need for central authority. Its value also extends to its superior efficiency as a medium of exchange. With each passing year the price becomes less volatile too, which will make it more attractive to the reluctant mainstream.
This guy sheds amazing light on Bitcoin, fast forward to the 47 min. mark:
https://www.youtube.com/watch?v=2b8RDFuLuRc
The current problems with bitcoin that i see are that 1) it can't handle the volume of transactions that the credit card payment networks can. At best I've heard that bitcoin can process 10's of transactions per minute rather than the 1,000's that go through the credit card system every minute of every day all year long, 2) it takes up to an hour for transactions to clear. Not a usable replacement to credit cards, and 3) the value hasn't yet stabilized. The third will likely take care of itself over time, but I am unclear how the first two will be taken care of.
I say all this not as a bitcoin naysayer. I think there's definitely a market for what bitcoin or some other digital currency can provide. I just don't think the current bitcoin technology is ready to answer that need.
Bitcoin already has this capacity.
Short term power outages are not a problem if they are anticipated. If there are long term outages, cryptocurrencies will be the least of your problems.
One thing I've wondered about this is if bitcoin could then be "shut down" similar to shutting down trading stocks? Or just blocking internet traffic?
I don't think there's ever been an end all, be all currency that was the solution for every possible transaction type. Bitcoin makes a lot of sense as a medium that is part of the larger picture. Even as digital currency becomes the norm, and it will, there will still be a place for trading my block of salt for your stringer of fish.
The current problems with bitcoin that i see are that 1) it can't handle the volume of transactions that the credit card payment networks can. At best I've heard that bitcoin can process 10's of transactions per minute rather than the 1,000's that go through the credit card system every minute of every day all year long, 2) it takes up to an hour for transactions to clear. Not a usable replacement to credit cards, and 3) the value hasn't yet stabilized. The third will likely take care of itself over time, but I am unclear how the first two will be taken care of.
I say all this not as a bitcoin naysayer. I think there's definitely a market for what bitcoin or some other digital currency can provide. I just don't think the current bitcoin technology is ready to answer that need.
I'd check your sources. As I understand it, none of that is true.
I actually have experience using Bitcoin and it didn't take an hour to "clear". The first confirmation happened in six minutes. The transaction itself happens in 3 seconds.
When it comes to the value stabilizing, it has reached network effect and adoption has gone far beyond experimental levels. It facilitating trade worldwide and that is value that is stable. The price still goes up and down and so does every other currency. As for the volatility, I think I mentioned on an earlier post that it is decreasing all the time (YoY). It's relative price, unlike the dollar and other fiat currencies, is trending higher.
I agree that local currencies, time banks, barter networks, other crypto-currencies and even gift economies will be useful and necessary too.
I'd check your sources. As I understand it, none of that is true.
I actually have experience using Bitcoin and it didn't take an hour to "clear". The first confirmation happened in six minutes. The transaction itself happens in 3 seconds.
When it comes to the value stabilizing, it has reached network effect and adoption has gone far beyond experimental levels. It facilitating trade worldwide and that is value that is stable. The price still goes up and down and so does every other currency. As for the volatility, I think I mentioned on an earlier post that it is decreasing all the time (YoY). It's relative price, unlike the dollar and other fiat currencies, is trending higher.
I agree that local currencies, time banks, barter networks, other crypto-currencies and even gift economies will be useful and necessary too.
Actually I think we largely agree. Your 6 minute transaction proves my point that bitcoin isn't going to replace credit cards at this point. Imagine if everyone at the grocery store took, on average, an extra six minutes to check out. I also agree that over time the value of bitcoins is likely to stabilize and rise. At least it will unless some problem happens that scares people off. But if one looks at volatility over the past year, say, it's simply too great for the average person or large corporation to consider storing any significant amount of their wealth/assets. Despite it's ever falling value over the long run the general perception, widely held, is that the dollar is a stable currency. If someone makes it easy for the average person to use bitcoin for transactional purposes with a way to rapidly convert back into dollars I can see them becoming popular for that purpose. NPR's planet money did a show on bitcoin and interviewed one of the fundraising people for NPR and got pretty much that response when asked if they would ever accept bitcoin donations. The npr rep had no interest in keeping the donations in bitcoin because he didn't want to have to Worry about currency risk, or in developing some process to transact donations of bitcoin. But if someone developed a reliable service that made it possible for them to receive bitcoin as easily as they now receive credit card donations, and if that service included immediate conversion into dollars he'd be happy to accept them.
I will be curious to see how the nation-states will continue to react to the threat bit-coin and other systems with similar properties pose to their protection rackets :-)
In the mid 1980s, I and a Stanford CS fellow invented some protocols which would allow for secure, anonymous funds transfers between parties that did not necessarily know or trust one another. It had some of the properties of bitcoin, and some additional features which I believe bitcoin will develop over time to allow for the brokerage/arbitrage functions to be handled nicely.
This was based on some crypto work we had done a bit earlier, work that some nice gentlemen from Fort Meade had suggested we not present fully at a crypto/statistic conference with international attendees, and fools that we were about our grant funding, we decided to hold back as requested.
When we were along the road to turning this into what we had hoped would be a highly profitable enterprise, our initial market research produced some troubling thoughts about the nature of the early adopters of our technology, what they might want to use it for, and how they might want to be...involved...in our operations.
We decided we liked living quiet, uneventful lives in the sunlight, and moved on to other ideas pretty quickly after that :-) It wasn't all a loss, we recycled some of the ideas to kick off a company that produced highly secure networking equipment, something our friends at Fort Meade bought a lot of.
Actually I think we largely agree. Your 6 minute transaction proves my point that bitcoin isn't going to replace credit cards at this point. Imagine if everyone at the grocery store took, on average, an extra six minutes to check out. I also agree that over time the value of bitcoins is likely to stabilize and rise. At least it will unless some problem happens that scares people off. But if one looks at volatility over the past year, say, it's simply too great for the average person or large corporation to consider storing any significant amount of their wealth/assets. Despite it's ever falling value over the long run the general perception, widely held, is that the dollar is a stable currency. If someone makes it easy for the average person to use bitcoin for transactional purposes with a way to rapidly convert back into dollars I can see them becoming popular for that purpose. NPR's planet money did a show on bitcoin and interviewed one of the fundraising people for NPR and got pretty much that response when asked if they would ever accept bitcoin donations. The npr rep had no interest in keeping the donations in bitcoin because he didn't want to have to Worry about currency risk, or in developing some process to transact donations of bitcoin. But if someone developed a reliable service that made it possible for them to receive bitcoin as easily as they now receive credit card donations, and if that service included immediate conversion into dollars he'd be happy to accept them.
When it comes to the double spend/confirmation problem there are solutions here: http://www.reddit.com/r/Bitcoin/comments/239bj1/doublespending_unconfirmed_transactions_is_a_lot/cgutssr
The merchant could also have customer I.D.s for zero confirmations, they could have cameras in the parking lot (some already do) to get license plate numbers, or they could just ask for a license.
Stores could even offer to have one guestimate on the high side how much they'll be spending before they get groceries and pay first which would leave enough time for confirmation. If one guessed to high they just send you the change, which you get immediately. If you guessed to low, one could send the difference unconfirmed if it was reasonably small.
There are other solutions being tested as I type this.
I'm old enough to remember when credit cards were used early on, one had to wait until the clerk at a business checked lists of stolen credit cards before they went through the imprinting process. Bitcoin is in a similar early stage and its innovators will solve this problem more effectively or it will be done in a variety of ways (if it's not already more effectively solved -things move fast in high tech)
It's worth mentioning that I bought lunch with Bitcoin today and they didn't ask me to wait around.
I don’t see Bitcoin as revolutionary in the sense that agriculture, metallurgy and gunpowder were revolutionary. It’s just another transaction clearing system. As currencies go, it seems as vulnerable to theft or mismanagement as any other (as Mt. Gox demonstrated). It would seem to me that government interference is as likely here as for any other economic activity. If FDR could invalidate contracts denominated in specie or Nixon could close the gold window, surely Bitcoin would not be out of reach. And surely referring to anything as “secure” is to issue a hubristic challenge to Fate or Bulgarian hackers.
Bitcoin (or some other competing brand) may indeed represent a step forward, but more on the order of Post-It notes than moveable type.
I don’t see Bitcoin as revolutionary in the sense that agriculture, metallurgy and gunpowder were revolutionary. It’s just another transaction clearing system. As currencies go, it seems as vulnerable to theft or mismanagement as any other (as Mt. Gox demonstrated). It would seem to me that government interference is as likely here as for any other economic activity. If FDR could invalidate contracts denominated in specie or Nixon could close the gold window, surely Bitcoin would not be out of reach. And surely referring to anything as “secure” is to issue a hubristic challenge to Fate or Bulgarian hackers.
Bitcoin (or some other competing brand) may indeed represent a step forward, but more on the order of Post-It notes than moveable type.
If you think that Bitcoin is just another transaction clearing system I have one name for you: Ethereum. If you don't know what that is, check it out because if you understand what can be built on an open source ledger and block chain, you understand that Bitcoin the currency is just the first app of a protocol that is a paradigm buster like no other.
Bitcoin is vulnerable to theft and Mt. Gox mismanaged its security of Bitcoin. If a bank doesn't take the steps that are industry standards to guard against being robbed, do you say the dollar is no good?
The kind of economic freedom which Bitcoin makes possible is messy and it requires a higher degree of vigilance and responsibility on the user who has been conditioned to let third parties do it.
Government interference will likely happen. But this is global and there isn't just one government. The ones that ban it or heavily regulate it may find that it can only be slowed down and not stopped. Keeping data from propagating on the internet that has security that is the same as what controls nuclear silos use worldwide is a tall order. They are also behind the curve and are frequently uniformed and dismissive of the technology.
The investment, adoption and circulation of Bitcoin is growing exponentially by larger and larger corporations and attempts to thwart that industry will be viewed more and more as tyranny. Nixon and FDR did not live in a world in which a currency can manifest self emergent properties of an evolving organism.
Any time there's an attack against the network, when it is detected it evolves new protections and is made stronger than it was before. This is not to say that Bitcoin is invincible, it doesn't have to be. If it goes down, Bitcoin 2.0 will be up and running in a day or two. If someone is able to bring down the protocol upon which Bitcoin, the currency runs, once again it can be reinvented because no army can stop an idea whose time has come.
If you think that Bitcoin is just another transaction clearing system I have one name for you: Ethereum. If you don't know what that is, check it out because if you understand what can be built on an open source ledger and block chain, you understand that Bitcoin the currency is just the first app of a protocol that is a paradigm buster like no other.
Bitcoin is vulnerable to theft and Mt. Gox mismanaged its security of Bitcoin. If a bank doesn't take the steps that are industry standards to guard against being robbed, do you say the dollar is no good?
The kind of economic freedom which Bitcoin makes possible is messy and it requires a higher degree of vigilance and responsibility on the user who has been conditioned to let third parties do it.
Government interference will likely happen. But this is global and there isn't just one government. The ones that ban it or heavily regulate it may find that it can only be slowed down and not stopped. Keeping data from propagating on the internet that has security that is the same as what controls nuclear silos use worldwide is a tall order. They are also behind the curve and are frequently uniformed and dismissive of the technology.
The investment, adoption and circulation of Bitcoin is growing exponentially by larger and larger corporations and attempts to thwart that industry will be viewed more and more as tyranny. Nixon and FDR did not live in a world in which a currency can manifest self emergent properties of an evolving organism.
Any time there's an attack against the network, when it is detected it evolves new protections and is made stronger than it was before. This is not to say that Bitcoin is invincible, it doesn't have to be. If it goes down, Bitcoin 2.0 will be up and running in a day or two. If someone is able to bring down the protocol upon which Bitcoin, the currency runs, once again it can be reinvented because no army can stop an idea whose time has come.
Yes, but none of that is really new. Markets have always sought out ways to effect more secure trades, preferably outside the reach of the regulators, taxing jurisdictions and thieves of the time. This isn’t some new form of life emerging from the primordial soup of capitalism. It’s just another gambit in an ancient game. Whether it will prove as enduring as precious metals or national fiat currency, or it’s just the 21st century version of the wooden nickel remains to be seen.
Government interference will likely happen. But this is global and there isn't just one government. The ones that ban it or heavily regulate it may find that it can only be slowed down and not stopped. Keeping data from propagating on the internet that has security that is the same as what controls nuclear silos use worldwide is a tall order. They are also behind the curve and are frequently uniformed and dismissive of the technology.
In my thinking that is the game changer (or one of them). The beauty of open source, from the POV of a closeted anarchist, is that due to the very nature of bureaucracy it will always be several steps ahead of those who would control it for their own purpose. At least I hope that's true. I'm ready for a change.
Yes, but none of that is really new. Markets have always sought out ways to effect more secure trades, preferably outside the reach of the regulators, taxing jurisdictions and thieves of the time. This isn’t some new form of life emerging from the primordial soup of capitalism. It’s just another gambit in an ancient game. Whether it will prove as enduring as precious metals or national fiat currency, or it’s just the 21st century version of the wooden nickel remains to be seen.
Precious metals has not endured as a useful currency. All fiat in history has always reverted back to its original value: zip. The current expansion of money supply is unfolding world wide by governments in an effort to perpetuate an economic system which has no future.
If you can watch this video:
https://www.youtube.com/watch?v=vaPgfErzeu0
and still say that Bitcoin is nothing new, then nothing can ever be new.
I can see why some think that Bitcoin is a marginal experiment in technology if one only looks at the currency itself. But when one looks closer, one can see that this is a monster revolution in technology as big as the internet itself. It is even going through an early stage like the internet in which there is widespread misunderstanding and fear about it.
It will change banking, accounting, stock trading, government administration, political power, law, commerce and other ways which cannot be foreseen yet; just as no one could have predicted YouTube and Facebook in the early 90's.
I assure you a tsunami of change is already well underway and the mainstream will be made fully aware in about 6-24 months because exponential growth never looks like much its early stages.
Precious metals has not endured as a useful currency. All fiat in history has always reverted back to its original value: zip. The current expansion of money supply is unfolding world wide by governments in an effort to perpetuate an economic system which has no future.
If you can watch this video:
https://www.youtube.com/watch?v=vaPgfErzeu0
and still say that Bitcoin is nothing new, then nothing can ever be new.
I can see why some think that Bitcoin is a marginal experiment in technology if one only looks at the currency itself. But when one looks closer, one can see that this is a monster revolution in technology as big as the internet itself. It is even going through an early stage like the internet in which there is widespread misunderstanding and fear about it.
It will change banking, accounting, stock trading, government administration, political power, law, commerce and other ways which cannot be foreseen yet; just as no one could have predicted YouTube and Facebook in the early 90's.
I assure you a tsunami of change is already well underway and the mainstream will be made fully aware in about 6-24 months because exponential growth never looks like much its early stages.
Still not convinced. Call me a reactionary, but such evangelizing zeal applied to financial products brings out the bear in me.
Whenever I hear “This time is different”, my first instinct is to take a contrary position. Is there a reliable way to short Bitcoin? I don’t mean through contracts on an exchange run out of some guy’s spare bedroom.
https://www.youtube.com/watch?v=Wq8yOMl8IUs
Still not convinced. Call me a reactionary, but such evangelizing zeal applied to financial products brings out the bear in me.
Whenever I hear “This time is different”, my first instinct is to take a contrary position. Is there a reliable way to short Bitcoin? I don’t mean through contracts on an exchange run out of some guy’s spare bedroom.
I wouldn't say, "this time is different", that would infer that this has been tried before.
There has never...ever been an electronic, worldwide, public ledger before.
Referring to Bitcoin as a financial product is like referring the wheel as a transportation product.
See if you can really hear this: Bitcoin the currency is to Bitcoin the block chain, as email was to the internet. If there was no digital money here, it would still be a game changing technology. This is the part that you, et al, seem to be missing because media focuses on the negativity and sensational nonsense.
There have been many people that have been dismissive (and frequently so) of Bitcoin who are now deeply involved in it. This demonstrates that it is a lack of understanding, not any serious defects in the technology that causes dissent around it.
But, as you said or inferred, time will tell. The country to watch for this in the short term is Argentina.
As for shorting the price...I've got a much better currency for that: the F.R.N.
At least the trending price of Bitcoin is UP!
Isn't bitcoin a difficult investment (long or short) by design? How or why would you invest in something designed to drop in value at predictable intervals? Short answer as I see it is...you wouldn't. That kind of seems to be the whole point. I know very little about this, but from what I do know it seems pointless to analyze it through the lens of the current global monetary systems because whatever anonymous person invented it didn't set it up so that it could be used as a profit generator. At least not an ongoing profit generator. Only as a means of exchange. Xmac, please tell me if that assessment is off base. I see a certain symmetry to a 'currency' that can't be shorted or hedged in any meaningful way. It may or may not be the intent of the inventor to frustrate the hell out of the world's currency traders by introducing a viable product that is not intended to show a profit, but I'd say they're doing a pretty good job of it so far.
Its fascinating that my generation can not grasp that someone would invent something like bitcoin with anything but monetary profit in mind. My youngest (DD2=18 yo) got it right way. Her dad didn't. Honestly, I'm still working on that part. No metaphysical hoops to jump through here, just think its interesting the tech and the product are out there to use so it will come as natural to her as it became for me to type here.
Greg, I think your assessment is incorrect. During the early stages when bitcoin was easily mined the value was likely to fall. Now we're no longer at the easy mining stage but more coins are indeed being mined with more effort/time. The value now fluctuates depending on fluctuations in the ratio of people using them to the number of coins being mined. Eventually, though, assuming continued growth in use of, and acceptance as currency of, bitcoins the value will go up because there will be more people using the same quantity of coins. Basically it will be the opposite of all fiat currency where everyone is already using it but the central bank forever prints more, thus devaluing the existing. Assuming that nothing derails the continued growth in the use of bitcoin this will be a game changer in economics. No longer will people need to "invest" to defend the value of their savings from central bankers whose universal goal is a relentless devaluation of currency. Simply holding them will be an effective method of protecting one's wealth. People will still be able to loan bitcoins out if the see a good business opportunity, but fractional reserve banking and the whole "finance" industry will be gone.
Also, I would suspect that the inventor of bitcoin has plenty of bitcoin of their own and has the expectation of becoming wealthy over time as the value increases. So, no, he may not be profiting in the short term. The long term, however, is another story.
Isn't bitcoin a difficult investment (long or short) by design? How or why would you invest in something designed to drop in value at predictable intervals? Short answer as I see it is...you wouldn't. That kind of seems to be the whole point. I know very little about this, but from what I do know it seems pointless to analyze it through the lens of the current global monetary systems because whatever anonymous person invented it didn't set it up so that it could be used as a profit generator. At least not an ongoing profit generator. Only as a means of exchange. Xmac, please tell me if that assessment is off base. I see a certain symmetry to a 'currency' that can't be shorted or hedged in any meaningful way. It may or may not be the intent of the inventor to frustrate the hell out of the world's currency traders by introducing a viable product that is not intended to show a profit, but I'd say they're doing a pretty good job of it so far.
It doesn't seem to me that Satoshi N. had any plans to keep this from being a speculative investment because it is one. The price is not predictable. Long term, to those who see its inherent value, it is a very good long term investment. In fact, those who saw it in 2009 and 2010 for what it was, have cleaned up and are Bitcoin millionaires and possibly some Billionaires.
The origins of digital money go back to the seventies. It was tried a few times since then but no one could solve the "double spend" or "Byzantine General's problem" of computer science until Satoshi Nakamoto did in 2008 by creating the block chain.
This is the value and the whole point of Bitcoin and I believe the intention of its creator.
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