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Topic: Bitcoin digital currency (Read 270379 times) |
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Fritzlein
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Re: Bitcoin digital currency
« Reply #30 on: May 25th, 2011, 11:13pm » |
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on May 25th, 2011, 8:03pm, omar wrote:| Yes, I'm seriously considering that since it avoids the transaction fees, would be available in countries where PapPal isn't and you don't have to count on me maintain your Arimaa points balance. But the registration fees would also be in BitCoins. |
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Before making an executive decision to have prizes and registration fees in BitCoins, please open it to discussion with the community. Are you sufficiently enamored of BitCoins that you would support the currency at the expense of Arimaa? That is to say, if it appeared that switching currencies would result in fewer participants in Arimaa events, would you still consider it a good idea?
I personally would find it a nuisance to have to buy into a new currency for a single use, and would immediately cash out any winnings back to dollars. For me it would be a dead weight without any benefit. The only people whom I can see it benefiting are those who can't pay you with PayPal, but honestly, how many such people are there, and how many of them will find it easier to pay in BitCoins?
The "no transaction fee" argument is a red herring. The important issue is not the internal cost of transactions, it is the cost of getting my dollars converted into Bitcoins and then back out again. That certainly isn't free. Mt. Gox charges 0.65% coming and going, and one also loses the 1% spread in exchange rate, for a total of 2.3%, before any fees charged by the financial institution from which the dollars originated and to which they are ultimately deposited. How is someone who is unable to pay Arimaa.com going to be able to pay or be paid by Mt. Gox?
But the biggest problem with BitCoins is the exchange rate. On Mt. Gox the exchange rate has fluctuated 25% in the last twenty-four hours! To me this has all the smell of a bubble. The price of a BitCoin is controlled by the number of people who want to buy it for dollars. The more people that "buy in" to the system (both figuratively and literally) the more the value of the BitCoin goes up. People who got in early are minting money. They traded CPU time for BitCoins, which they can now trade out for dollars from the suckers buying in. And for a while, the suckers who buy in will see their investment pay off as further suckers buy in at an even higher value. As long as new money and new enthusiasm flow in, the price of a BitCoin keeps skyrocketing, and everyone can pat themselves on the back for their financial innovation that is resulting in a "sound" currency that isn't subject to inflation.
But it is all smoke and mirrors. The self-congratulation sounds plausible, just as plausible as Nasdaq 5000 because the Internet was changing the laws of the universe, and just as plausible as Bernie Madoff having secret investment strategies that would never lose money. At base the talk about BitCoin being a sound currency is a cover for a pyramid that must keep recruiting an ever-larger base in order to avoid collapsing.
Money and enthusiasm can flow out as well as in. Today there are fewer old hands taking profits and cashing out than there are new fools rushing in. Maybe one BitCoin will go from $7 today up to $50 or $100 as the fever takes hold, but that bubble won't expand forever. At some point, the balance will swing to people cashing out. Say BitCoins hit $200 and then drop back to $100. Merchants who were accepting BitCoins will suddenly decide they shouldn't accept them any more. People who are holding BitCoins suddenly become afraid they can't buy anything with them any more, so they try to sell them. In a very short time (much shorter than it takes to inflate the bubble) BitCoins will crash right down through $7 back to $0, because they have no fundamental support, no government taxation authority backing them up.
Please don't hitch the success of Arimaa to the inflation of a bubble. If you want to gamble your own money with it, OK. You could actually make money by perfectly timing your exit out of BitCoins into a real currency just before the house of cards collapses. Actually that isn't OK either, because you talk like a true believer that BitCoins are going to work, so you would lose your shirt instead of even realizing that you are gambling. You are my friend and I don't want to see you take a financial hit. But if I can't persuade you out of exchanging real money for funny money, at least let your experimental buy-in to a pyramid scheme be a separate experiment from Arimaa.
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| « Last Edit: May 25th, 2011, 11:26pm by Fritzlein » |
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UruramTururam
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Re: Bitcoin digital currency
« Reply #31 on: May 26th, 2011, 3:34am » |
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on May 25th, 2011, 8:37pm, Eltripas wrote:| I'm pretty sure you can get something more appealing, with some info about how is it hard for computers and that other stuff that makes Arimma interesting. |
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The bitcoins community seems to have quite a lot of smatr programmers so popularizing Arimaa there may result in more bot developers here.
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RonWeasley
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Re: Bitcoin digital currency
« Reply #32 on: May 26th, 2011, 2:48pm » |
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I like Arimaa Points. I hope to earn enough to cover all my entry costs so that my arimaa play is independent of my galleons. If I have left-over arimaa points that never get converted to galleons, no to worry. I still got to play all those arimaa games.
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Eltripas
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Re: Bitcoin digital currency
« Reply #33 on: May 26th, 2011, 7:02pm » |
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on May 26th, 2011, 2:48pm, RonWeasley wrote:| I like Arimaa Points. I hope to earn enough to cover all my entry costs so that my arimaa play is independent of my galleons. If I have left-over arimaa points that never get converted to galleons, no to worry. I still got to play all those arimaa games. |
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That's the spirit!, 5 points for Gryffindor!
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omar
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Re: Bitcoin digital currency
« Reply #34 on: May 26th, 2011, 8:05pm » |
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on May 25th, 2011, 8:37pm, Eltripas wrote:
"Arimaa Game Set, handsomely designed animal theme pieces in gold and silver color."
That's a poor description in my opinion, even if you just can use one line I'm pretty sure you can get something more appealing, with some info about how is it hard for computers and that other stuff that makes Arimma interesting. |
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Some suggestions would be helpful. I tried to think of some, but fitting it in one line is hard.
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Eltripas
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Re: Bitcoin digital currency
« Reply #35 on: May 26th, 2011, 8:38pm » |
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on May 26th, 2011, 8:05pm, omar wrote:
Some suggestions would be helpful. I tried to think of some, but fitting it in one line is hard.
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I didn't give a suggestion because English is not my first language so my wording may be poor, but I'll give it a try:
"Arimaa Game Set, an animal themed board game designed to be hard for computers but easy to learn and intuitive for humans."
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omar
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Re: Bitcoin digital currency
« Reply #36 on: May 26th, 2011, 10:03pm » |
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on May 25th, 2011, 11:13pm, Fritzlein wrote:
Before making an executive decision to have prizes and registration fees in BitCoins, please open it to discussion with the community. Are you sufficiently enamored of BitCoins that you would support the currency at the expense of Arimaa? That is to say, if it appeared that switching currencies would result in fewer participants in Arimaa events, would you still consider it a good idea?
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Yes, you're right it might actually be difficult for people to obtain bitcoins now. Also it has started to get quite volatile. The exchange rates are changing too fast, so thats not good for a currency. Maybe in a few years after it settles down. Maybe this will go the way of Napster. But I think the genie is out of the bottle and even if it goes away something else will come along. It's as if the time for a p2p digital currency has come.
In case you're wondering I haven't bought any bitcoins. But I am getting more desperate to trade some Arimaa sets for them 
https://www.biddingpond.com/item.php?id=708
Similar to how I'm intrigued by how the Arimaa challenge is going to play out between the humans and computers, I am also intrigued by Bitcoin. It's going to be interesting to see how this plays out between the cathedral and the bazaar.
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omar
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Re: Bitcoin digital currency
« Reply #37 on: May 26th, 2011, 10:15pm » |
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on May 26th, 2011, 8:38pm, Eltripas wrote:
I didn't give a suggestion because English is not my first language so my wording may be poor, but I'll give it a try:
"Arimaa Game Set, an animal themed board game designed to be hard for computers but easy to learn and intuitive for humans." |
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I like it. Thanks.
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UruramTururam
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Re: Bitcoin digital currency
« Reply #38 on: May 27th, 2011, 7:24am » |
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on May 26th, 2011, 10:03pm, omar wrote:| But I think the genie is out of the bottle and even if it goes away something else will come along. It's as if the time for a p2p digital currency has come. |
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I think so. But will it be bitcoins? Thats a big question.
Note that many economists foresee a global monetary crisis around the year 2014 and the cease of "empty money" banking system. Seing what's happening to dollar and euro I think it's probable. If they are right there will be a turn towards a currency that amount in circulation can not be changed at will. They usually point at GSPP (gold, silver, palladium, platinum) based money but in fact a currency like bitcoins also fits there. We shall see. And as I like gambling I have bought 7BTC ($7 apiece). I may well lose $49 but it's a part of fun.  I plan to sell them if they reach $50 each.  If they do I'll contribute about a half of my gain ($150) to AC2012.
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| « Last Edit: May 27th, 2011, 8:38am by UruramTururam » |
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megajester
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Re: Bitcoin digital currency
« Reply #39 on: May 27th, 2011, 9:04am » |
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on May 27th, 2011, 7:24am, UruramTururam wrote:
I think so. But will it be bitcoins? Thats a big question.
Note that many economists foresee a global monetary crisis around the year 2014 and the cease of "empty money" banking system. Seing what's happening to dollar and euro I think it's probable. If they are right there will be a turn towards a currency that amount in circulation can not be changed at will. They usually point at GSPP (gold, silver, palladium, platinum) based money but in fact a currency like bitcoins also fits there. We shall see. And as I like gambling I have bought 7BTC ($7 apiece). I may well lose $49 but it's a part of fun. I plan to sell them if they reach $50 each. If they do I'll contribute about a half of my gain ($150) to AC2012. |
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Good grief, they're 9 dollars already! http://bitcoinprices.com/
By the way, I would like to retract my rubbish about fiat currency. This is not a fiat currency. This is revolutionary.
It's either a bubble, or it's genius. Either way these guys reckon it's the most dangerous project they've ever seen, and I'm starting to agree with them. I want a piece of the action! 
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Fritzlein
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Re: Bitcoin digital currency
« Reply #40 on: May 27th, 2011, 11:39am » |
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on May 27th, 2011, 9:04am, megajester wrote:| I want a piece of the action! |
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on May 27th, 2011, 7:24am, UruramTururam wrote:| And as I like gambling I have bought 7BTC ($7 apiece). I may well lose $49 but it's a part of fun. I plan to sell them if they reach $50 each. If they do I'll contribute about a half of my gain ($150) to AC2012. |
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I hope you both strike it rich! Getting in on a bubble can be very profitable if you get out again at the right time.
Quote:| Note that many economists foresee a global monetary crisis around the year 2014 and the cease of "empty money" banking system. Seing what's happening to dollar and euro I think it's probable. If they are right there will be a turn towards a currency that amount in circulation can not be changed at will. They usually point at GSPP (gold, silver, palladium, platinum) based money |
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And usually such commentators own the metal they recommend as a alternative currency, and would profit handsomely if suddenly governments needed more of it. Come to think of it, all the advocates of a gold standard that I know of are not economists so much as politicians and investors. Who in academia is a fan of the gold standard?
Seeing what is happening with the euro is a lesson for not using the gold standard, at least according to the economists I hear in the news. I have heard economists of several different stripes say that Greece's situation would be tractable if only they controlled their own currency so they could inflate it. Of course inflation causes economic dislocation and pain, but it has virtues as well. Greece can't repay its debt; it must default. However, defaulting within the euro framework will leave the Greek economy in shambles, whereas defaulting while inducing controlled inflation (not hyper-inflation; just more than Euro inflation) would make Greek wages and goods and services competitive in Europe once again. Exports would rise; imports and consumption would fall. Inflation is a way to re-align economic fundamentals that may be less damaging to Greece than what we are going to see happen instead.
Greece's present situation is only one example of the perils of having a currency that you can't inflate. The Great Depression, with its persistent deflation, is another example. Somehow supporters of gold as a currency focus only on the evils of inflation. But what about the horrors of deflation? How do you fight deflation if the money supply is constant but the need for money is expanding? Monetary policy in the United States is between a rock and whirlpool; the gold bugs say, "Ooh, look out for the whirlpool! We need to crash straight into the rock!"
on May 26th, 2011, 10:03pm, omar wrote:| Similar to how I'm intrigued by how the Arimaa challenge is going to play out between the humans and computers, I am also intrigued by Bitcoin. It's going to be interesting to see how this plays out between the cathedral and the bazaar. |
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One interesting facet of open source software (the bazaar) is that it relies on the government to force people to play fair. It is important that nobody can take open code, make changes to it, and make the new product proprietary. Companies have tried to do that, but they have lost in court every time. So the competing models of proprietary software versus open source software are competing on motivation of the contributors and on design philosophy, but both seek government assistance to enforce intellectual property rights.
BitCoin is not merely competing with other currencies for mindshare of what money is and how transactions should be accounted, it is also impinging on government authority. It isn't just a question of the motivation of the participants (i.e. what makes money valuable?) it is also a question of who has the authority to issue currency. How can governments regulate transactions, levy taxes, and make some flows of money illegal if it doesn't control the accounting system? If BitCoin starts to become a hub of economic activity, it will surely draw the wrath of governments that will try to kill it. My guess is rather that BitCoin collapses under its own weight economically before it becomes that prominent, but if I am wrong, it will be very interesting to see the legal/political battle unfolding as entrenched powers take arms against it.
Quote:| But I think the genie is out of the bottle and even if it goes away something else will come along. It's as if the time for a p2p digital currency has come. |
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It would be another matter indeed if the technology behind BitCoin were adopted by governments as a replacement for fancy bits of paper and the databases stored at banks. It might be a superior technology for accounting and processing payments. And with government backing, it would have neither its current legal issues, nor the problem of being based on nothing, because governments could demand taxes in BitCoins, making them inherently valuable.
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| « Last Edit: May 27th, 2011, 11:45am by Fritzlein » |
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UruramTururam
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Re: Bitcoin digital currency
« Reply #42 on: May 27th, 2011, 1:47pm » |
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on May 27th, 2011, 11:39am, Fritzlein wrote:| Who in academia is a fan of the gold standard? |
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Ludwig von Mises, Murray Rothbard, Friedrich Hayek and their followers.
In the late 80ies Rothbard predicted to a great detail the credit crisis that happened recently - 20years later. He wrote than "if the reaction to that crisis is adding empty money to the market, the whole monetary system is doomed in 5 more years." He might be wrong. In fact I hope he was wrong, but given his previous good prediction I try to be prepared for the case he was right.
Quote:| The Great Depression, with its persistent deflation, is another example. Somehow supporters of gold as a currency focus only on the evils of inflation. But what about the horrors of deflation? |
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Deflation is painful but necessary period of healing the economy. The Great Depression with its deflation was only the result of cheap credit politics and making money out of nowhere earlier. And it was so long because the government instead of letting it do its job tried to fight it which made it even worse. I strongly suggest you (and the others too!) to read "Man, Economy and State" by M. Rothbard. Also this book is noteworthy but it needs a theoretical background of its reader: http://mises.org/rothbard/agd.pdf
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| « Last Edit: May 27th, 2011, 1:56pm by UruramTururam » |
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Fritzlein
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Re: Bitcoin digital currency
« Reply #43 on: May 27th, 2011, 2:10pm » |
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on May 27th, 2011, 1:47pm, UruramTururam wrote:| I strongly suggest you (and the others too!) to read "Man, Economy and State" by M. Rothbard. Also this book is noteworthy but it needs a theoretical background of its reader: http://mises.org/rothbard/agd.pdf |
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Thanks for the recommendation. I will try to educate myself.
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UruramTururam
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Re: Bitcoin digital currency
« Reply #44 on: May 27th, 2011, 2:21pm » |
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In fact Man Economy and State is a dangerous book. 
A few years ago I could write what you wrote a few posts above that was my way of thinking - based on Keynes economic theories in fact.. Then I've read ME&S and then "Human Action" by von Mises. And after that I yelled: "D...n, those guys are bloody right!" In fact now I agree with about 95% of ME&S and 100% of HA. 95% in the first place because Rothbard is for anarchocapitalism which is unstable (as an organization that specialises in violence - a mafia - may take it over and establish a state installing itself as a government), while von Mises is for minarchocapitalism where state exists but covers only army, a parto of police forces and some (not all!) courts. In fact that was the economic model of early USA.
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| « Last Edit: May 27th, 2011, 2:22pm by UruramTururam » |
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