Re: [LINK] Blockchain

[Kim Holburn]

> On 2017/Sep/22, at 12:28 PM, Jim Birch  wrote:
> 
> On 22 September 2017 at 10:53, Kim Holburn  wrote:
> 
> 
>> I'm not sure this is the case.  The rising value of bitcoin has pretty
>> much matched its uses in China as a way for Chinese to get around
>> government restrictions on moving RMB to foreign currencies.
> 
> 
> This is a factor but it isn't the full story.  Bitcoin is not locked to
> anything much except buyer sentiment.

As is any currency, any way of bartering.

>> But any currency that has major influxes of other currencies flowing into
>> it will have similar volatility.
> 
> Currencies experience fluctuation in value but the fluctuations of bitcoin
> are in a different league to virtually any other currency fluctuation.  BUT
> THIS IS NOT AN ARGUMENT FOR BITCOIN!   This is an argument for judicious
> currency management and controls that armour currencies against
> speculators.  The Asian currency crisis in 1997 involved large swings in
> currency value - though way less than the range of bitcoin - and resulted
> in massive economic loss and hardship.  It might be easy to "whatever" this
> sitting in a country with a robustly managed currency but there was
> enormous and widespread loss of wealth and livelihood in affected Asian
> countries.  For example (Wikipedia):

It's a pity we don't currently have any way much of protecting small national 
currencies against big finance.
> 
> "Thailand's booming economy came to a halt amid massive layoffs in finance,
> real estate, and construction that resulted in huge numbers of workers
> returning to their villages in the countryside and 600,000 foreign workers
> being sent back to their home countries. The baht devalued swiftly and lost
> more than half of its value. The baht reached its lowest point of 56 units
> to the U.S. dollar in January 1998. The Thai stock market dropped 75%.
> Finance One, the largest Thai finance company until then, collapsed."
> 
>> Zimbabwe?
> 
> If you're hoping that Bitcoin allows us to match Zimbabwe in just about
> anything I don't want it.  It's not something we should be trying to
> emulate, or accidentally emulating.

Just pointing out the dangers of all currencies.

>> Except it seems that ethereum is moving to a different, much less energy
>> intensive system of "mining".
> 
> This is a fundamental problem with computation based mining.  Basically, if
> there is no effort obtaining something, there is no scarcity.  It's also a
> problem with metal currency mining :)  It is not a problem for an issued
> virtual currency.

Look up proof of stake vs proof of work.

> They are just the mythologies and fantasies we know.  This is all just a
>> religious argument.  Which mythologies and fantasies we prefer.
>> 
> 
> No it is not.  These mythologies have real world impacts.  

They are still mythologies, fantasies created in the human social mind.

>Of course it is happening inside your head, Harry, but why on earth should 
>that mean that it is not real?”
>  - Dumbledore ― J.K. Rowling, Harry Potter and the Deathly Hallows

> If we are smart,
> I expect we would minimise the number of crazy mythologies we believe and
> take a consequentialist approach.

Right now we at at a point where we are experimenting with some new 
mythologies.  Yes they may well have real impacts, they are already having real 
impacts.  And expect our financial overloads to be on the attack.

>> Or just buying online without having to go through the current gatekeepers.
> 
> I'm totally in favour of frictionless transfers that minimise rentseekers.
> If that means we must have economic chaos, tax evasion, or enable a bunch
> of nasty criminal activities, I might change my mind on that.

We already have that.  We already have cash, and have had it for a long time.  
And cash is good for the whole gamut of human activities so far. Nice and 
nasty.  Are you arguing against cash?  Because our financial overlords agree 
with you and want to be able to control and see (and get a percentage), of 
every transaction you make.  They can't do that with cash although they can do 
it to some extent with bitcoin but not necessarily other cryptocurrencies.

Kim

-- 
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IT Network & Security Consultant
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Re: [LINK] Blockchain

[Jim Birch]

On 22 September 2017 at 10:53, Kim Holburn  wrote:


> I'm not sure this is the case.  The rising value of bitcoin has pretty
> much matched its uses in China as a way for Chinese to get around
> government restrictions on moving RMB to foreign currencies.


This is a factor but it isn't the full story.  Bitcoin is not locked to
anything much except buyer sentiment.


> But any currency that has major influxes of other currencies flowing into
> it will have similar volatility.
>

Currencies experience fluctuation in value but the fluctuations of bitcoin
are in a different league to virtually any other currency fluctuation.  BUT
THIS IS NOT AN ARGUMENT FOR BITCOIN!   This is an argument for judicious
currency management and controls that armour currencies against
speculators.  The Asian currency crisis in 1997 involved large swings in
currency value - though way less than the range of bitcoin - and resulted
in massive economic loss and hardship.  It might be easy to "whatever" this
sitting in a country with a robustly managed currency but there was
enormous and widespread loss of wealth and livelihood in affected Asian
countries.  For example (Wikipedia):

"Thailand's booming economy came to a halt amid massive layoffs in finance,
real estate, and construction that resulted in huge numbers of workers
returning to their villages in the countryside and 600,000 foreign workers
being sent back to their home countries. The baht devalued swiftly and lost
more than half of its value. The baht reached its lowest point of 56 units
to the U.S. dollar in January 1998. The Thai stock market dropped 75%.
Finance One, the largest Thai finance company until then, collapsed."

Zimbabwe?
>

If you're hoping that Bitcoin allows us to match Zimbabwe in just about
anything I don't want it.  It's not something we should be trying to
emulate, or accidentally emulating.


> Except it seems that ethereum is moving to a different, much less energy
> intensive system of "mining".
>

This is a fundamental problem with computation based mining.  Basically, if
there is no effort obtaining something, there is no scarcity.  It's also a
problem with metal currency mining :)  It is not a problem for an issued
virtual currency.

They are just the mythologies and fantasies we know.  This is all just a
> religious argument.  Which mythologies and fantasies we prefer.
>

No it is not.  These mythologies have real world impacts.  If we are smart,
I expect we would minimise the number of crazy mythologies we believe and
take a consequentialist approach.


> Or just buying online without having to go through the current gatekeepers.
>

I'm totally in favour of frictionless transfers that minimise rentseekers.
If that means we must have economic chaos, tax evasion, or enable a bunch
of nasty criminal activities, I might change my mind on that.

Jim
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Re: [LINK] Blockchain

[Kim Holburn]

> On 2017/Sep/22, at 10:22 AM, Jim Birch  wrote:
> 
> 
> Bitcoin might be suitable for short term trading.  Virtual currencies
> certainly have potential for low friction transfers.

This is a key point and one which banks, the gatekeepers of money transfers 
dislike because they do not get their cut of inter-currency transfers. 
None-the-less, if cryptocurrency has only this use it is a pretty decent use.

>> As long as the total value of any kind of currency is small, it is going
>> to be volatile.
> 
> This might be true in general but Bitcoin show classic bubble behaviour,
> not ordinary currency volatility.  

I'm not sure this is the case.  The rising value of bitcoin has pretty much 
matched its uses in China as a way for Chinese to get around government 
restrictions on moving RMB to foreign currencies.  The transaction amounts of 
that has overshadowed all the other things happening.  Now that China has 
started banning cryptocurrencies and exchanges, that will probably settle down. 
 But any currency that has major influxes of other currencies flowing into it 
will have similar volatility.

> Humans are have a fashion-driven herd
> mentality and counteracting this is a key function of economic management.
> 
> 
>> We trust a particular kind of paper money because that government has
>> proved trustworthy so far?
>> 
> 
> Distrusting the government is a minor secular religion in the West - and
> has certainly produced some significant positives - but this is not
> actually an evidence-based argument for eliminating government from
> anything.

Zimbabwe?

>> (Unlike bitcoin's value which is basically an emotionalized
>>> fantasy.)
>> 
>> Actually, it's based on mathematics.
>> 
> 
> The mathematics determines the computation requirements to produce a
> bitcoin, or in practice how much CO2 your bitcoin farm needs to pump in the
> atmosphere per bitcoin,

Except it seems that ethereum is moving to a different, much less energy 
intensive system of "mining".  

> but the value of a bitcoin, ie, what people will do
> for control of these funny numbers -  is driven by emotions and
> mythologies.  Government currencies also require mythologies but these are
> deeply bound into fundamental real world economic activities like paying
> taxes.

They are just the mythologies and fantasies we know.  This is all just a 
religious argument.  Which mythologies and fantasies we prefer.

> There is a lot of hype, there is also something happening that no-one
>> thought possible.
>> 
> 
> Bubbles, the black economy and currency optimisation are actually standard
> economic subjects that don't surprise economists.  Virtual currencies are
> here to stay but economics says the real ones are going to be government
> sponsored (and may not be blockchain based).  Bitcoin is as likely to
> vanish in a decade as not.  The major reasons to be involved with Bitcoin
> at all are libertarianesque coolness, and, to facilitate criminal
> activities like tax evasion or dealing in proscribed items.  

Or just buying online without having to go through the current gatekeepers.

> Bitcoin might
> survive as an enabler of these activities but it will be under increasing
> attack by governments because that it enables crime and avoids tax.

No different to cash though.  Less transparent than cash really.

-- 
Kim Holburn
IT Network & Security Consultant
T: +61 2 61402408  M: +61 404072753
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Re: [LINK] Blockchain

[JanW]

someone should tell Chris Berg. Wait, excuse me. Doctor Chris Berg, RMIT.
Steve, are you still here?

At 09:39 AM 22/09/2017, Roger Clarke wrote:

>At 8:51 +1000 22/9/17, Tom Worthington wrote:
>>Blockchain is not the most important innovation this century, let alone in a 
>>century.
>
>An alternative view is that blockchain is a short-term fad:
>http://www.rogerclarke.com/EC/BCD.html
>
>Steve Wilson published his sceptical pieces 4 months before I wrote mine (but 
>I didn't find his papers until after I'd finished):
>http://theconversation.com/blockchain-really-only-does-one-thing-well-62668
>http://lockstep.com.au/blog/blockchain 
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Re: [LINK] Blockchain

[Roger Clarke]

>On 20/09/17 17:46, Jan Whitaker wrote:
>> ... Blockchain is the most important innovation in a century.

At 8:51 +1000 22/9/17, Tom Worthington wrote:
>Blockchain is not the most important innovation this century, let alone in a 
>century.

An alternative view is that blockchain is a short-term fad:
http://www.rogerclarke.com/EC/BCD.html

Steve Wilson published his sceptical pieces 4 months before I wrote mine (but I 
didn't find his papers until after I'd finished):
http://theconversation.com/blockchain-really-only-does-one-thing-well-62668
http://lockstep.com.au/blog/blockchain

-- 
Roger Clarke http://www.rogerclarke.com/
 
Xamax Consultancy Pty Ltd  78 Sidaway St, Chapman ACT 2611 AUSTRALIA
Tel: +61 2 6288 6916http://about.me/roger.clarke
mailto:roger.cla...@xamax.com.auhttp://www.xamax.com.au/ 

Visiting Professor in the Faculty of LawUniversity of N.S.W.
Visiting Professor in Computer ScienceAustralian National University
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Re: [LINK] Blockchain

[Tom Worthington]

On 20/09/17 17:46, Jan Whitaker wrote:


... Blockchain is the most important innovation in a century.


Blockchain is not the most important innovation this century, let alone 
in a century.


It is an interesting idea which will likely be applied to some useful 
applications, assuming that a cryptocurrency crash doesn't turn everyone 
off the whole thing.


As an example, blockchain might be applied to education: 
http://blog.highereducationwhisperer.com/2016/11/blockchain-learning-system.html



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TomW Communications Pty Ltd.PO Box 13, Belconnen ACT 2617, Australia
Liability limited by a scheme approved under Prof. Standards Legislation

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https://cecs.anu.edu.au/research/profile/tom-worthington
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Re: [LINK] Blockchain

[Kim Holburn]

> On 2017/Sep/21, at 10:31 AM, Jim Birch  wrote:
> 
> Would he know?  The blockchain has great appeal to libertarians because it
> doesn't, or apparently  doesn't, require government management control to
> work (and, as we all know, government is the real evil.)
> 
> However, the practical reality of bitcoin is a running disaster.  

On the contrary, to have any kind of trust that is not based on government is 
pretty amazing.

> Could anyone commit to a major investment on bitcoin financing?  

Well, people have been.  Mostly Chinese people. 

> Would you take a two year loan in bitcoins, repayable in bitcoins?  

That's the same as a loan in any currency other than your own.  

> You might as well go to the local casino and drop your cash on black.  
> It works for drug deals but anything long term?  I think not.

I'm not sure anyone uses bitcoin for that at the moment, it takes too long.
Monero is the current cryptocurrency of choice for that, I believe.  

> While it is certain that stable working virtual currencies will appear,

As long as the total value of any kind of currency is small, it is going to be 
volatile.  That will never change.  It's why people like Soros can destabilise 
a whole nation's currency.  It's why your US currency is so stable.  
Effectively stable cryptocurrencies have already appeared.  

> it is completely unnecessary for them to be blockchain-based.  The blockchain
> mechanism is mainly desirable because it requires no central authority.
> However, a reliable currency is tied to a reliable government.  The US
> dollar is not a reliable currency because it is a cool idea (though it is a
> cool idea.)  It's fundamental basis is that the US government requires
> taxes to be paid in US dollars.  As long as the US government collects
> taxes and goes after anyone who misuses the currency - eg by stealing it or
> printing their own notes - the value of US dollars is assured.  Moreover,
> it value is loosely constrained to the value of the goods and services that
> it represents.  

We trust a particular kind of paper money because that government has proved 
trustworthy so far?

> (Unlike bitcoin's value which is basically an emotionalized
> fantasy.)

Actually, it's based on mathematics.

> Interesting article on government-backed virtual currencies:
> 
> https://bankunderground.co.uk/2017/09/13/beyond-blockchain-what-are-the-technology-requirements-for-a-central-bank-digital-currency/
> 
> Blockchains have other potential uses for secure distributed communications
> but they are unweildy and, even while the chain itself may be wonderfully
> secure, that's not how hacking hacks stuff.  It goes after the breakable
> parts.
> 
> Methinks that CB may be engaging in a bit of futurology.  It's historical
> record, especially for technology, is not all that good.

There is a lot of hype, there is also something happening that no-one thought 
possible.

> 
> Jim
> 
> 
> On 20 September 2017 at 17:46, Jan Whitaker  wrote:
> 
>> You'll love this.
>> 
>> Chris Berg, IPA now RMIT I guess, just said on The Drum that Blockchain is
>> the most important innovation in a century.
>> 
>> Hype much?
>> 
>> Jan
>> 
>> 
>> 
>> I write books. http://janwhitaker.com/?page_id=8
>> 
>> Melbourne, Victoria, Australia
>> jw...@janwhitaker.com
>> Twitter: JL_Whitaker
>> Blog: www.janwhitaker.com
>> 
>> Sooner or later, I hate to break it to you, you're gonna die, so how do
>> you fill in the space between here and there? It's yours. Seize your space.
>> ~Margaret Atwood, writer
>> 
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Re: [LINK] Blockchain

[Jan Whitaker]

At 10:31 AM 21/09/2017, Jim Birch wrote:
>Blockchains have other potential uses for secure distributed communications 
>but they are unweildy and, even while the chain itself may be wonderfully 
>secure, that's not how hacking hacks stuff.  It goes after the breakable 
>parts.
>
>Methinks that CB may be engaging in a bit of futurology.  It's historical 
>record, especially for technology, is not all that good. 

You should have heard them all gushing. Adrian whosits from CSIRO Data61 was as 
well, mostly about secure communications, and not currency in particular. But 
all I kept thinking was, "and you work for a government agency?", remembering 
all the fuss Defence Signals put up over even strong encryption. It's like 
these guys don't talk to each other and it takes us'ns on the outside seeing 
the larger picture to point this out to them.

Of course I found it suss when Berg was gushing, Mr Libertarian who is now 
turning greyheaded. Not sure if IPA did that to him or his "doctorate". Yeah, 
he sports Dr now in public, and RMIT. It all was just too bizarre, like I'd 
stepped into a different universe.

Jan


I write books. http://janwhitaker.com/?page_id=8

Melbourne, Victoria, Australia
jw...@janwhitaker.com
Twitter: JL_Whitaker
Blog: www.janwhitaker.com 

Sooner or later, I hate to break it to you, you're gonna die, so how do you 
fill in the space between here and there? It's yours. Seize your space. 
~Margaret Atwood, writer 

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Re: [LINK] Blockchain

[Jim Birch]

Would he know?  The blockchain has great appeal to libertarians because it
doesn't, or apparently  doesn't, require government management control to
work (and, as we all know, government is the real evil.)

However, the practical reality of bitcoin is a running disaster.  Could
anyone commit to a major investment on bitcoin financing?  Would you take a
two year loan in bitcoins, repayable in bitcoins?  You might as well go to
the local casino and drop your cash on black.  It works for drug deals but
anything long term?  I think not.

While it is certain that stable working virtual currencies will appear, it
is completely unnecessary for them to be blockchain-based.  The blockchain
mechanism is mainly desirable because it requires no central authority.
However, a reliable currency is tied to a reliable government.  The US
dollar is not a reliable currency because it is a cool idea (though it is a
cool idea.)  It's fundamental basis is that the US government requires
taxes to be paid in US dollars.  As long as the US government collects
taxes and goes after anyone who misuses the currency - eg by stealing it or
printing their own notes - the value of US dollars is assured.  Moreover,
it value is loosely constrained to the value of the goods and services that
it represents.  (Unlike bitcoin's value which is basically an emotionalized
fantasy.)

Interesting article on government-backed virtual currencies:

https://bankunderground.co.uk/2017/09/13/beyond-blockchain-what-are-the-technology-requirements-for-a-central-bank-digital-currency/

Blockchains have other potential uses for secure distributed communications
but they are unweildy and, even while the chain itself may be wonderfully
secure, that's not how hacking hacks stuff.  It goes after the breakable
parts.

Methinks that CB may be engaging in a bit of futurology.  It's historical
record, especially for technology, is not all that good.

Jim


On 20 September 2017 at 17:46, Jan Whitaker  wrote:

> You'll love this.
>
> Chris Berg, IPA now RMIT I guess, just said on The Drum that Blockchain is
> the most important innovation in a century.
>
> Hype much?
>
> Jan
>
>
>
> I write books. http://janwhitaker.com/?page_id=8
>
> Melbourne, Victoria, Australia
> jw...@janwhitaker.com
> Twitter: JL_Whitaker
> Blog: www.janwhitaker.com
>
> Sooner or later, I hate to break it to you, you're gonna die, so how do
> you fill in the space between here and there? It's yours. Seize your space.
> ~Margaret Atwood, writer
>
> _ __ _
> ___
> Link mailing list
> Link@mailman.anu.edu.au
> http://mailman.anu.edu.au/mailman/listinfo/link
>
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