

The BitCoin Debate: Bridging the gap between economists and programmers - StephenAultman
http://www.economicenquiry.com/archives/75

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hugh3
_I would stress to Tyler and other economists that the ability to have a
completely distributed currency (backed by no one in particular) is an amazing
mathematical/technological accomplishment_

Not really. The real-world example is if my friends and I get together and
decide that pine cones... or rather, pinecones with exactly 45
microsporophylls (yes, I had to look up what the little thingies on a pine
cone are called) are a new and exciting currency that everyone should use.
Then we could all go out hunting for pine cones and trading them with each
other and convincing all our friends that collecting quinquadridecal-
microsporophyllic strobili was the greatest thing _ever_.

It would be surprising if we succeeded in doing this (that is, in raising the
value of pinecones above their natural near-zero value [NB pinecones are
unlike bitcoins in that they actually do have a mildly nonzero value]) but
it's no technological achievement.

~~~
mike_esspe
Actually amazing accomplishment is a "distributed currency", that solved the
double spending problem without backing by central authority.

~~~
rick888
It has a central authority, it's just not as obvious. The The Bitcoin app
developer chooses the algorithm for distribution and mining. Otherwise, there
would not no way to stop someone from generating millions of Bitcoins and
destroying the value.

Because of this, I'm not going to bother with it. I don't want to leave this
sort of responsibility in the hands of someone with little experience and or
proof of success. Especially when it comes to my hard, earned, money. One
mistake and it's gone forever.

I feel like they will run into all the same problems various governments have
already dealt with years ago when currency was first adopted. It also seems
like the system can be gamed too easily.

~~~
mike_esspe
But app developers need to convince all bitcoin users, when they want to
change the rules. If they don't convice them, they will just fork the project.

~~~
rick888
There will most likely be 1 or 2 very popular apps that 90% of the people will
be using (which happens in almost any mature market). Will these app
developers be classified as banks (and have to go through all of the
regulations and restrictions involved with a bank)? If not, what happens when
there is a "bug" and I lose $1000. How do I get it back?

~~~
mike_esspe
"This software provided as is..." :)

If you are afraid of such situations, you shouldn't use open source software.

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nhaehnle
That article is not about bridging the gap between economists and programmers.

It is about one person's vague ideas for how to hard-code their personal
beliefs about how economic policy should behave into the technical design of
the monetary system.

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adw
The real thing I can't get my head around with BitCoin is that, at least in
theory, real-world currencies are backed by force of arms. I know they're kind
of a consensual hallucination, but it's one backed by hegemonic power: the
pound coin I've got here is guaranteed to be good to settle debts I have with
the UK government.

So why is a BitCoin worth anything? It's scarce, but what utility does that
scarcity have without some entity who guarantees to convert it into goods or
services?

~~~
jimktrains2
It's worth something because there are people who will accept it for goods or
services.

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trotsky
I have to laugh at any attempts to present BTC as in any way appropriate for
trade or commerce. The only thing remarkable about bitcoin is that the
cryptography aspect is so appealing to a segment of the population that may
not have been exposed to penny stock scams or ponzi investment schemes in the
past.

Check out this trading chart for the BTC/LRUSD pair (liberty reserve):
<http://www.bitcoincharts.com/charts/bcLRUSD#permalinkbox>

April 7th: 0.60 BTC/LRUSD

April 19th: ~1.17 BTC/LRUSD

Yes, that's right. It doubled in trading value in 12 days. Sounds like a real
candidate for meaningful transactions to me O_o

