Re: Bitcoin P2P e-cash paper

[Ray Dillinger]

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


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Re: Bitcoin P2P e-cash paper

[Satoshi Nakamoto]

[Lengthy exposition of vulnerability of a systm to use-of-force
monopolies ellided.]

You will not find a solution to political problems in cryptography.

Yes, but we can win a major battle in the arms race and gain a new territory of 
freedom for several years.

Governments are good at cutting off the heads of a centrally controlled 
networks like Napster, but pure P2P networks like Gnutella and Tor seem to be 
holding their own.  

Satoshi


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ADMIN: no money politics, please

[Perry E. Metzger]

List Moderator's Edict of the Day:

A bunch of people seem anxious to branch the discussion of
cryptographic cash protocols off into a discussion of the politics of
money. I'm a rabid libertarian myself, but this isn't the rabid
libertarian mailing list. Please stick to discussing either the
protocols themselves or their direct practicality, and not the perils
of fiat money, taxation, your aunt Mildred's gold coin collection,
etc.

Perry

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