tag:blogger.com,1999:blog-8702840202604739302.post2593902671204602187..comments2024-03-28T03:38:53.734-07:00Comments on MacroMania: Bitcoiners: Surely we can do Buiter than this?David Andolfattohttp://www.blogger.com/profile/12138572028306561024noreply@blogger.comBlogger9125tag:blogger.com,1999:blog-8702840202604739302.post-80102841123693911502014-12-08T01:38:40.191-08:002014-12-08T01:38:40.191-08:00Nice writing and fun to read!
Mining is the cheap...Nice writing and fun to read!<br /><br />Mining is the cheapest way to acquire bitcoin, so it does not only carry the payment task. At the same time, mining cost decide a baseline of exchange rate: If it cost nothing to mine a coin, there will be no one buying (everyone will be mining them instead), thus drop its exchange rate to zero, like many late alt-coins<br /><br />By the way, money out of thin air is crime, promise is just a promise, you could default any time. For governments that pay the old promise with a new promise, that is actually an ever lasting scam, unfortunately this kind of scam has become the norm in today's financial world, but they all based on the people's trust of fiat money's value, which is only based on trust, nothing else, it is very fragileAnonymoushttps://www.blogger.com/profile/07202328566308436683noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-68727858305112759192014-12-08T01:35:42.236-08:002014-12-08T01:35:42.236-08:00This comment has been removed by the author.Anonymoushttps://www.blogger.com/profile/07202328566308436683noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-55830205249705968562014-12-01T12:11:13.645-08:002014-12-01T12:11:13.645-08:00David, You are very kind to Mr. Buiter. I find a ...David, You are very kind to Mr. Buiter. I find a lot of inaccuracies in his paper, from the incorrect use of the non arbitrage principle to the use of statements such as "most jewelry gold is an investment" (doesn't he have a significant other?).<br />If you care, read my complete critique @ https://claudiomigliore.wordpress.com/2014/12/01/on-buiter-bubbles-bullion-bitcoin-and-baloney/<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-42347974115045290072014-11-28T08:20:44.448-08:002014-11-28T08:20:44.448-08:00Nick,
Yes, one could compare it to any activity t...Nick,<br /><br />Yes, one could compare it to any activity that ensures the integrity of the monetary/payment system.<br /><br />Is there a cheaper way? The current protocol uses what is called "Proof of Work" and there is very much something like a common resource problem here, with "overinvestment" in computing power (relative to first-best). But the community is working on alternatives, like Proof-of-Stake. But at present, there appear to be trade-offs. Cheaper protocols are also less secure, at least for now. But I expect a big break through in the not to distant future.David Andolfattohttps://www.blogger.com/profile/12138572028306561024noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-70056748887856961922014-11-28T08:17:36.589-08:002014-11-28T08:17:36.589-08:00Thanks, Harald. I know this is hardly a scoop, but...Thanks, Harald. I know this is hardly a scoop, but it is surprising how the misconception remains present even among those who should know better (and I include some members of the Bitcoin in this group).David Andolfattohttps://www.blogger.com/profile/12138572028306561024noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-34718736377790861342014-11-28T03:25:33.455-08:002014-11-28T03:25:33.455-08:00Good post. I expect you could compare it to the co...Good post. I expect you could compare it to the cost of preventing counterfeit notes and coins circulating undetected?<br /><br />But is there a cheaper way to verify the transaction is legit? If there is something inherent in the structure of Bitcoin that makes it more costly to verify, we might say that it is wasteful. Is there a Common Resource problem in "mining", with too many (or potentially too few?) miners all chasing the same fish?Nick Rowehttps://www.blogger.com/profile/04982579343160429422noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-4392483398234588832014-11-28T00:31:20.683-08:002014-11-28T00:31:20.683-08:00You can use as a source the bitcoin whitepaper its...You can use as a source the bitcoin whitepaper itself, if you wish. <br /><br />Very simply, you take a bunch of transactions, add a special transaction from no-one to yourself, use a computationally expensive process to notarize it, and publish that block. If you've followed the rules (for instance, not given yourself more money from nothing than the protocol allows), and you're the first to do it successfully (a question of luck), then your peers in the network will collectively agree on your block as the next block in the chain. <br /><br />Once that happens, all blocks accepted in the future will build on your block, and thus implicitly assert that they recognize the transfers in it. You have to wait some number of blocks (50, I think) to spend the reward you gave yourself from nothing, though. If you try to spend it before, any block including that transaction would be rejected.<br /><br />This is hardly a scoop, this is basic about how bitcoin works. But it's good to see a federal reserve economist gets it :)Harald Korneliussenhttps://www.blogger.com/profile/02909854185625282505noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-39929837476709277352014-11-27T19:57:04.135-08:002014-11-27T19:57:04.135-08:00I think this is well-known in the Bitcoin communit...I think this is well-known in the Bitcoin community. I think Tim Swanson's book covers a lot of ground: http://www.ofnumbers.com/the-anatomy/David Andolfattohttps://www.blogger.com/profile/12138572028306561024noreply@blogger.comtag:blogger.com,1999:blog-8702840202604739302.post-10667484126585896162014-11-27T18:27:58.747-08:002014-11-27T18:27:58.747-08:00It seems you've got a scoop here, Dave, since ...It seems you've got a scoop here, Dave, since every article I've read on Bitcoin mining discusses the resources expended in the mining, with no mention of mining as a byproduct of payments processing. Can you source this?Conscience Warriorhttps://www.blogger.com/profile/13487448481194494386noreply@blogger.com