I think it's time for some REPL intervention.
Lawyering over the site guidelines here isn't productive, since nobody (that I've seen) is arguing that bitcoin contravenes them directly.
I for one find bitcoin far more "intellectually gratifying" than the hiring thread, which, with great respect to our host, has no interest for me.
There are good, solid reasons to believe that today's monetary and fiscal policy is dangerous and wrong-headed (I say that as a liberal closer to Paul Krugman than Ron Paul but sympathetic to some points made by each).
The trouble is that those seeing the current problems look for pig-in-poke solutions rather than getting a solid understanding of what's happening.
I would strongly recommend a critical reading of Doug Noland's Credit Bubble Bulletin, Paul Krugman's blog and at least a university level text on Money and Banking. Also Charles Mackay's classic Extraordinary Popular Delusions and the Madness of Crowds also merits a look.
Many people have an emotional reaction to money. This emotional reaction is part of what can make something "money-like" but if one wishes to understand what's going on, one needs to get beyond one's immediate reaction.
And what I would say about recent US government policy is that it has been bad when measured by either Keynesian OR monetarist yardsticks.
This is essentially because the massive growth of US financial obligations has gone ultimately to bailing out the large financial institutions rather than to any Keynesian job creation scheme. So essentially you have a situation where neither the free market nor government do anything to create jobs.
Krugman can legitimately say the Federal budget deficit as such is not high. What massively inflating is the "other obligations" - Fannie Mae bonds, student loan bonds, etc. Here we have massive "inflationism" (as Doug Noland would term it).
Krugman is a partisan so he's glossed over the unneeded spending of the bailout in later commentary but he did say "The longer we live with zombie banks, the harder it will be to end the economic crisis."
IE, the bank bailout is a massive money-hole where banks have become "zombie" entities that are neither "private" in the sense of being disciplined by the market nor "public" in the sense of having any obligation to the public. The present situation is one where the money that could go to either a stimulus or a tax-cut is shoveled to these "zombies" instead.
The Fed printing money and giving it to the bank adds to effective over-all spending and so effective deficit spending is going to the banks.
You might idly slice the size of the official Federal deficit any way you wish - high by comparison to earlier GDP ratios, low in comparison to the GDP ratios of other countries (Japan has a public debt of ~100% of GDP - funny how they have the world's highest ratio here despite their huge trade surpluses).
But this slicing doesn't mean much with the Fed and Fannie Mae's activity involving massive shoveling of money into the housing and other sectors.
And it should be clear it doesn't matter if this happens "primarily because the few borrowers who are qualified are not enamored with leverage at the moment". Indeed, the whole point is using money to prop up failing sectors makes it more likely that fewer in the private sector will want to borrow for actual productive investment.
I would agree that Krugman's pushing for larger deficit misses the elephant in the living room that is the bailout. But hey, he complained once and that's more than many did.
Like I said, this is neither Keynesianism nor Monetarism as such but a state "captured" by the various industries which suckle off it (especially defense, financial services, education, health care but also others).
I don't think it's fair to compare the public debt of one country to the annual deficit of another. It is akin to saying "It's alright that I put $8000 on my CC last month because Bob down the street owes $70,000." While Bob may be in dire straits, he probably didn't accumulate all that debt in the last 8 months.
Trifles aside, It's refreshing to see someone with a very different perspective from my own who realizes what is going on.
Public debt to Public debt, the US is not notably high on relative to other industrialized nations.
What evidence would you accept? How does one falsify Keynesianism? High inflation? A bearish currency? High unemployment?
Regardless if this implementation succeeds or not, the idea, the theory, the economics and the politics behind bitcoin are highly interesting.
Bitcoin is perfect hacker news in my view.
HN is growing. As much as it might be nice if it strictly followed the interests of the original visitors/contributors, it's not a reasonable expectation.
Meanwhile, I downvoted all posts in this meta-discussion (if you don't like a posting, just flag it and move on -- like the site guidelines tell you to do)... and yet here I am, participating. Sigh.
(For the record, my interest in Bitcoin-related articles has waned, but I could see how it'd still be notable to others.)
If the thread can't compete, why is the solution penalizing Bitcoin stories?
(Disclaimer: I do not own bitcoins)
I'm not sure if Bitcoin will become a new currency or if something better will come along and blow it out of the water, but I do know that it is highly likely that some crypto currency will be in use in the near future, Bitcoin or not. The reaction central banks and governments have towards Bitcoin will be interesting to watch. I'm going to sit back with a bowl of popcorn and watch the disruption.
I do too, for the same reason that the tulip mania in the Dutch Golden Age
or the South Sea Bubble
are still fascinating. I've known about those failed investment strategies since childhood, but I still see fully grown human beings falling for strategies that are no more reasonable.
looks like supposedly "green" technologies like ethanol from corn are back again 300 years later.
I don't believe bitcoin is an evil planned-out scheme like this, but human nature may trigger this bubble effect.
Early adopters have a huge incentive to convince more people to use Bitcoin. If Bitcoin is successful the value of Bitcoins is guaranteed to increase because there's a finite number of them. Because of this, naturally people will hoard their Bitcoins rather than spend them. At some point people will realize the price of Bitcoins was driven up by speculation, and it will collapse.
I'm not saying Bitcoin was intentionally devised as a pyramid scheme, but that's kind of what it looks like it's turning into.
But I don't see how you could call it a pyramid scheme.
I guess where Bitcoin diverges from a pyramid is that there's no chain reaction of recruiting. Once a user spends a Bitcoin, it's done; he doesn't stand to continually gain further from what the Bitcoin recipient continues to do or from anyone else the recipient brings into the system.
The problem is that these analogies neglect all context and substance. Just because some schemes that benefit early adopters aren't scams doesn't mean that all such schemes aren't scams. Just because not everything called a "currency" isn't dishonest doesn't mean that this one isn't being marketed dishonestly and without regard to the people who will lose money as a result.
What's different between Bitcoin and gold? Bitcoin has very limited history, whereas gold has a much deeper history. Gold doesn't face existential security problems; Bitcoin has faced security compromises (such as an integer overflow in the block chain) even in its short history, and these compromises have had to be corrected using out-of-band mechanisms. The Bitcoin market is tiny, subject to market manipulation, and operates through unregulated and probably illegitimate exchanges. Finally, people buy gold without most people who own it spending a good chunk of their time promoting it dishonestly to others.
A pyramid scheme is a non-sustainable business model that involves promising participants payment, services or ideals, primarily for enrolling other people into the scheme or training them to take part, rather than supplying any real investment or sale of products or services to the public. Pyramid schemes are a form of fraud. (Wikipedia)
promising participants payment, services or ideals
There's an implicit promise that if Bitcoin gains popularity the value of Bitcoins will increase.
primarily for enrolling other people into the scheme or training them to take part
If you take part by purchasing Bitcoin there's a huge incentive to get other people involved in Bitcoin.
rather than supplying any real investment or sale of products or services to the public
There are very few services/products you can actually buy with Bitcoin.
Hence I would argue that it can be argued that Bitcoin is a bubble (i.e. equivilent to investing in a startup that is sure to fail) but not a pyramid scheme.
It's not a traditional pyramid scheme, but I see a lot of similarities between that description and the current state of buying/selling stocks.
There's an implicit promise that if a stock gains popularity the value of the stock will increase.
If you take part by purchasing stocks there's a huge incentive to get other people involved in the stock market.
There are very few services/products you can actually buy with a stock certificate.
Bitcoin is a bubble, but not necessarily a scam.
Even if no market exists to resell a stock, if the company is operating it still has fundamental value, whereas something like bitcoin has no value if nobody else is willing to trade you something.
Given that, I don't think your comparison holds. Yes, a speculative market exists in stocks (and generally, anything else of value.) But the value of a stock is not based purely upon the speculative market that might exist around it - at its root, it has an underlying fundamental value that is not driven by market demand.
Similarly, lots of folks speculate in commodities, but at the end of the day, if you can't sell oil or steel, you can use them to produce other things you can sell.
Market demand for the instrument, that is, right? :)
I don't know -- I see a difference here, but it looks only nominal.
If I purchase shares in a privately-held small business that hits tough times, my claim on the output of that company can essentially evaporate -- they won't be paying dividends as no profit exists, I might not be able to sell the stock because no market exists for it, and once the company goes belly-up they pay the bank and lenders before shareholders get anything.
I'm sure a difference exists; I'm no serious investor, so it's easy for me to not see it.
You can argue that currency is a kind of stock in the "enterprise" of the sovereign printing that currency. But is there a qualitative difference between that and bitcoin?
It is in fact the opposite of a claim on the printing operation of the issuer, given that the more currency is printed, the less valuable the currency you hold becomes.
If nobody will accept a currency, it does not continue to have value, because its value is based upon what someone is willing to trade you for it.
It also doesn't hurt that lots of people stand to gain financially from bitcoin hype.
in which the top ten contains four books by Ayn Rand and three by L. Ron Hubbard.
In particular, the use of proof-of-work chains to create an eventually-consistent global view of a distributed database is quite interesting, and I think there's applications outside of currency.
The current volatility of the bitcoin economy means that every single story on HN increases the value of their bitcoin "investment".
Look at the distributions of the types of people that vote up the story, look at the differences in the average number of upvotes once it hits the front page, look at how many people flag it, but if you need to hard code things that legit users upvote you are basically imposing your view of what is good content over thousands of other people. This isn't a Viagra ad, this is a cryptography based, near-zero transaction fee, distributed, open source, online currency.
No wonder it always hits the front page, any of those five categories could hit the front page.
You just throw simple stats at the problem. You look at what a typical distribution of a normal submission looks like (30% of users < 60 days old, 20% of users < 100 karma, etc) and then you negatively weight submissions which breach the pattern by a certain sigma.
My bitcoin stories sometime got voted up to get to the front page for a brief time but they often drop out the front page fairly quick.
You can't help but sit there enthralled!
I have to admit, however, I can't resist commenting on the bitcoin articles when they show up. It's the classic "Someone is wrong on the internet!" reaction. Maybe those of us who aren't zany bitcoin-boosters need to make a pact to stop commenting on these articles and hopefully once robbed of controversy they'll go away.
It is interesting from a technical perspective but from a societal/historical point of view, not at all. This same cycle has played out infinite times in human history and will play out infinite times in the future. People always manage to convince themselves that "this time it's different".
it has risen and fallen many times already
a huge crash is inevitable and unavoidable because the market is thinly traded and very psychological at the moment
but when all is said and done, the bitcoin network will still be there, people will still have their bitcoins and will be able to transfer them across the globe is a short amount of time
i don't have a crystal ball, i can't tell you if bitcoin will become a successful currency, but you should realise that what is going on at the moment is a sideshow and doesn't reflect bitcoins true potential
a more constructive comment from you might have proposed a "fairer" system of minting than rewarding early adopters...
Most bubbles start by accident -- this one was carefully engineered.
How do you engineer a bubble? First you invent an asset. But if it's an asset that only you own then nobody will want to believe it's valuable. So you make it possible for the first round of early adopters to get it for free, by "mining. The first adopters talk the second adopters into trying it too (they can still get significant amounts by mining) and... well, you know the story. You also wrap it in some political anti-fiat-currency anti-bank anti-Fed anti-government anti-whatever pro-cryptography political wrapping to make it appealing to a certain constituency. But the key thing is to give out the "asset" for free at first, and to a lesser extent as time goes on, to incentivise early adopters without requiring 'em to actually put their hands in their own pockets. It's quite brilliant, the best memetically-engineered scam since Scientology.
And now I'm really getting tired of discussing bitcoin. I think I'll write a big long blog post in the form of a FAQ, submit it, and never mention bitcoin ever again.
The ROI is fantastic.
Is it possible that the number of people saying that bitcoin is a bubble is so high because bitcoin is a bubble? I mean, I'm not sure how anyone could even deny that bitcoin is a bubble -- the best you can hope for is that like gold it's a bubble that never ends. There's only been one of those in human history, though (two if you count silver as well), and it has at least a seven thousand year head start on bitcoin.
Anyway, my response to your comic is this:
Is bitcoin a bubble? Not from what I seen concerning economic activities and what users report about themselves.
But can bitcoin fail? Yes. Is it 100% likely to fail? I think not. Is it a good idea to put in a few dollars as a hedge? Yes.
That being said, I am in bitcoin for the long haul, whether or not it ultimately fails, and possibly consequently lose all the value in bitcoin.
Well, they'll say, was only a few dollars.
Ultimately though, you've got got to wonder where all those few dollars went.
I wrote the strip, or at least the concept. I commissioned it from an artist called Joey Dangerous and pay the guy in bitcoin.
It does seem to need a punchline. Perhaps a zoom out to a larger group of people saying "Bitcoin Rally!" sitting on piles of Bitcoins that they're compulsively counting.
How is gold not a ponzi scheme BTW? Ponzi schemes don't run for 3000 years.
For a bitcoin to be completely worthless rather stretches the imagination. At a minimum they are a sort of geeky collector's item and inherently limited in supply. They also cost next to nothing to store.
I think for a lot of people, though, Bitcoins are what twitter was to me a year ago. I just didn't get what the big deal was, and couldn't understand why I kept seeing so many topics on the story.
Don't need to demote Bitcoin, or other subjects people want to hear about, just need to promote special features.
It's like my wallet is open to everyone!
One such innovation that takes advantage of a publicly visible blockchain is an online lottery. With a public transaction log, one can wager and know that the operator isn't cheating by not revealing all wagers. BitLotto, for instance just had a monthly draw. I know exactly how many tickets were bought because each wager appears in the blockchain. I can then know that the winning tickets was chosen fairly because I can replicate the algorithm myself. And I can know that the payment to the winner was made as that will appear in the blockchain as well.
Because nearly all the expenses of running a lottery are absorbed by the bitcoin network, these lotteries can be run profitably even when paying out 99% of the amounts wagered.
In other words, Bitcoin is versatile. When anonymity is desired it can be attained. When a fully auditable transaction register is needed, there are methods to allow that as well.
If instead you want an example of a payment network where your wallet is "open to everyone" see WingCash: http://forum.bitcoin.org/?topic=4232.0
There is no transaction necessary to send money from a completely new address, other than the transaction itself. All of your addresses point to the same wallet.
I hope they review what they need to and decide to put the donation link back.
Sorry, but what does that have to do with it? The ruling is a 1A issue.
i get a big impression that all(most) would at least agree what we have in place now is more flawed than bitcoin. corruption is but a moral decision away (to those in the right positions). politics are slimy, and rub off on current currency models. violence has strong leverage over societies current credit symbol (crack-head in dark alley - good luck punching your way into my SSH box on the other side of the world. and if you do, ill just make a transaction, rendering my wallet you stole useless).
whats holding you back from going all in? hmm, IF ONLY everyone would put some faith behind a new system, and accept it as the new standard. that system could grow, and overtake the current shady one in place (or at least parallel it). it could become as common as visa, accepted everywhere.
ahhh, but not everyone will adopt this overnight - it will be a long slow road. don't look for the overnight solution. if i told you bitcoin would overtake the worlds currencies in 100 years, would it be worth taking a slight risk now? what have we got to lose? a shitty status quo?
honestly, i don't have any bitcoin ...yet. and i say all this by ignoring the fact there seems to be at least a slight whiff of scam afoot... perhaps a few admins with access to a few petaflops are laughing away printing these bits like water... as long as that's not the case, wellll, GO BITCOIN! but even GIVEN that scenario, it would be just as easy (if not easier) for many more people to print counterfeit paper. but at least there is a maximum amount that can be scammed in bitcoin, and then that's that - bitcoin could live on and fulfill its purpose.
Yeah maybe it'll crash one day. Maybe it'll go from $1000 clean down to $100, destroying much of the world economy (i.e. that part that was backed by speculation rather than real stuff to begin with) in the process.
Alone, that's just speculation. Backed by a massive marketing push that doesn't convey the right message to the public, it's functionally indistinguishable from a pyramid scheme.