On Tue, 2008-11-04 at 06:20 +1000, James A. Donald wrote: > If I understand Simplified Payment Verification > correctly: > > New coin issuers need to store all coins and all recent > coin transfers. > > There are many new coin issuers, as many as want to be > issuers, but far more coin users. > > Ordinary entities merely transfer coins. To see if a > coin transfer is OK, they report it to one or more new > coin issuers and see if the new coin issuer accepts it. > New coin issuers check transfers of old coins so that > their new coins have valid form, and they report the > outcome of this check so that people will report their > transfers to the new coin issuer.
I think the real issue with this system is the market for bitcoins. Computing proofs-of-work have no intrinsic value. We can have a limited supply curve (although the "currency" is inflationary at about 35% as that's how much faster computers get annually) but there is no demand curve that intersects it at a positive price point. I know the same (lack of intrinsic value) can be said of fiat currencies, but an artificial demand for fiat currencies is created by (among other things) taxation and legal-tender laws. Also, even a fiat currency can be an inflation hedge against another fiat currency's higher rate of inflation. But in the case of bitcoins the inflation rate of 35% is almost guaranteed by the technology, there are no supporting mechanisms for taxation, and no legal-tender laws. People will not hold assets in this highly-inflationary currency if they can help it. Bear --------------------------------------------------------------------- The Cryptography Mailing List Unsubscribe by sending "unsubscribe cryptography" to [EMAIL PROTECTED]