Bitcoins - digital currency
Bitcoin is a peer-to-peer digital currency. Peer-to-peer (P2P) means that there is no central authority to issue new money or keep track of transactions. Instead, these tasks are managed collectively by the nodes of the network. Advantages:
- Bitcoins can be sent easily through the Internet, without having to trust middlemen.
- Transactions are designed to be computationally prohibitive to reverse.
- Be safe from instability caused by fractional reserve banking and central banks. The limited inflation of the Bitcoin system’s money supply is distributed evenly (by CPU power) throughout the network, not monopolized by banks.
Total size 5,811,700 BTC
or 4,585,431 USD
or 3,545,137 EUR
or 133,094,323 RUB
or 3,849 ounces of gold
Any value to this idea or will it never work?
Bitcoin to $1 million this year?
Lollll. In 2009 I could mine bitcoin on my laptop. My laptop can't mine bitcoin anymore. What what this variance is.
Never said it was.
People always seem to use the point of demand variable as if it is somehow proof that the Asset does not act a a 'store of value'... one of Bitcoins most important feature.
To me, that's one of the biggest questions for the future. Gold (a crappy investment, imo) acts as a store of value because of its long history of people believing it has value. Bitcoin does not yet have that history. And without belief it is nothing (this applies to all investments). But to the original point - it just seems to me that Bitcoin bulls are a little too confident and that makes how they talk about what the future will be too much like a done deal and minimizes the risk.
That is actually untrue... the cost to mine Bitcoin constantly changes... depending on location, energy costs, equipment investments, taxation, labor, rents and leases and most importantly the value of BTC at any given moment.
difficulty algorithm changes and increases with rising hashrates meaning it makes it more difficult to score the reward... while the rewards are fixed, the network fees change or vary.
This is absolutely ****ing up with the difficulty adjustment algorithm is and does. There is no way housenuts would make this mistake.
Show the math. One laptop isn't the math. By the time someone explains the math of the cost to mine, ya'll will realize jbouton is correct and nash ****ed you all.
So 1 laptop, 1 bitcoin....what else is there in the math...
What you're trying to say is that when it only took a laptop the price of bitcoin was $0, so free to mine bitcoin yields to worthless bitcoin.
then when it took GPUs and some level of electricity, say the cost was $1,000, but bitcoin = $1,000 so it offsets, aka invariant.
now it takes asics and substantial amount of electricity, but bitcoin = $44,000 so invariant.
but this isn't accurate. miners are printing money right now. the cost to generate is something like $20k so miners are making 2x. of course there's opex and degrading hardware, but that's ballpark.
hashrate continues to go up, yet price fluctuates. hashrate is substantially higher now than when bitcoin was $69k. this means miners are paying a lot more to mine, and receiving less.
you're going to have to explain what your'e getting up rather than just all caps idiot calling !!!
That guy looks smart as ****
What you're trying to say is that when it only took a laptop the price of bitcoin was $0, so free to mine bitcoin yields to worthless bitcoin.
then when it took GPUs and some level of electricity, say the cost was $1,000, but bitcoin = $1,000 so it offsets, aka invariant.
No this isn't my point of invariance.
But this isn't fair because you aren't stating the cost to mine a bitcoin. If you do then you will agree with me. Its invariant. And BECAUSE its invariant, it becomes an extremely important consideration for Nash's work.
You want to tell me its not invariant, but you refuse to state the actual cost to mine a bitcoin....yet as soon as you do...
This is a dumb conversation
ha, interesting time to look at the post count. I miss TomCollins.
how much does it cost to mine a bitcoin and how come when I ask you to put numbers to your sentiments you call the game dumb and flip the game board?
Its because I'm correct, its cost invariant to produce a bitcoin. It just doesn't seem like it until you actually go over it with the group.
Go to chatgpt, and say 'jbouton thinks bitcoins are mined costly invariantly'. Make it explain to you. Then come back here.
It's not a surface understanding, it will take the group arguing together.
Go to chatgpt, and say 'jbouton thinks bitcoins are mined costly invariantly'. Make it explain to you. Then come back here.
It's not a surface understanding, it will take the group arguing together.
'jbouton seems to be referring to the energy-intensive process of Bitcoin mining, which involves solving complex mathematical problems to validate transactions and add them to the blockchain. The cost of mining Bitcoin can indeed be quite high due to the significant electricity consumption and the specialized hardware required. However, the term "invariantly" might not be the most accurate in this context, as it typically refers to something that does not change or is unaffected by external factors. Mining costs can fluctuate based on factors such as electricity prices, hardware costs, and the overall mining difficulty.
.
Is invariance in cost the holy grail for the basis for Nash's proposal even if Jbouton is correct that bitcoin is cost invariant?
[QUOTE=Nash Ideal Money]A possible non-political basis for a value standard which could be used for money would be [/QUOTE]
Spoiler
A Non-Political Value Standard
A possible non-political basis for a value standard which could be used for money would be a good "ICPI" statistic where this acronym refers to "industrial consumption price index". That could be calculated from the international prices of commodities, such as copper, silver, tungsten, etc. that are used in industrial activities.
Here we can return to the understanding that money has the practical value of creating games for traders that are games with transferable utility when without the money being available the game of the traders would be a game without transferable utility and thus naturally a game with less efficiency in relation to the possibilities for the participants of maximizing their combined situation of gains.
And then if we consider which commodities would be optimally suitable to provide a basis for a means of transferring utility then, if we specifically consider the possibility that the trading partners may be located in different nations and perhaps on different continents then the suitability of such commodities, in relation to the ideal function of facilitating utility transfer, depends on the extent such a commodity can seem to have a value independent of its geographical location.
Clearly, in terms of this geographical perspective, gold has been historically optimal and that largely because the labor cost of moving it over great distances is so small in relation to the value of what is transported. Thus it formed a very efficiently movable medium for the transportation of a value exchangeable for other values ultimately deriving, in one way or another, from human labor (with the achievements of warriors here also viewed as involving labor). But right now platinum would be even better than gold because of having more value per unit of weight.
Crude petroleum could also be used for barter transactions, and in relation to the present state of the global economy it would seem a proper component of an index of prices of internationally traded commodities that enter into the costs of industrial consumption. We can see that times could change, especially if a "miracle energy source" were found, and thus if a good ICPI index is constructed it should not be expected to be valid, as initially defined, into all eternity. It would instead be appropriate for it to be regularly readjusted depending on how the patterns of international trade would actually evolve. Here, evidently, politicians in control of the authority behind standards COULD corrupt the continuity of a good standard, but depending on how things were fundamentally arranged, the probabilities of serious damage through "political corruption" might become as small as the probabilities that the values of the standard meter and kilogram will be corrupted through the actions of politicians.
Also, commodities with easily and reliably calculable prices are most suitable, and relatively stable prices are very desirable.
Another basic cost that could be used would be a standard transportation cost, the cost of shipping a unit quantity of something over long international distances.
So it seems that such an ICPI index could be calculated in an essentially "scientific" fashion, after some practical initial choices were made. And this standard, as a basis for the standardization of the value of the international money unit, would remove, where it would be used, the political ro^les of the "grand pardoners", the state authorities that can forgive the debts of debtors including, particularly, those of themselves. (The "national debt" of a state can, in principle, be "trivialized" by a sufficient amount of inflation.)
[QUOTE=Nash Ideal Money]Here the apparent problem is that the prices of certain commodities which would be ideally suited to measure long term changes in the costs of industrial production may tend naturally to be "volatile" i[/QUOTE]
Spoiler
Refined Indices
If the technical problem of designing an index of prices to serve as a basis for a money of standard value is considered in a more elaborate fashion it seems that there is the possibility of defining the sort of index which would vary "smoothly" and yet would also vary in an appropriate way over longer periods of time. Here the apparent problem is that the prices of certain commodities which would be ideally suited to measure long term changes in the costs of industrial production may tend naturally to be "volatile" in their variations depending on business cycles. And the prices of other commodities or services, etc. might tend to vary much more gradually or smoothly but not be reliable in terms of long term considerations for one or another reason.
For example, the prices of copper and nickel might very well represent, over long time periods, the actual costs of industrial production, while the prices of silver and gold might tend to vary, comparatively, much more "smoothly" than those of the baser metals. It is possible to construct a price index, based on "moving averages", that would have the smoothness of the prices of the gold and silver and yet, over longer time periods, would basically follow the values of the baser metals. This could be done by computing a "moving average" of the base metals index computed by pricing them modulo the index of the precious metals.
In actual application it would not be a matter of "base" and precious metals but rather of a variety of commodities that would be selected for their suitability in one sense or the other. And in the index formed from things with naturally "smoothly varying" prices it seems that it would be intrinsically quite feasible to make use of costs of services, or energy, or prices that depend on the national location of the definition of the commodity, service, or asset being priced.
So by using this approach the temptation to include things that would otherwise seem inappropriate just to obtain stability or smoothness can be avoided.
And of course the fundamental principle remains that if a political basis existed for changes in a standard index that it is not unlikely that a form of "corruption" would appear. This is comparable to the issue that was raised recently in the USA where certain interests wished to devalue the original CPI computed by the Labor Department so as to have more federal budget money available to reduce taxes or for other purposes with Social Security beneficiaries being given less.
jbouton, before someone else states a cost to mine bitcoin, are you able to explain why bitcoins are mined cost invariantly? (Legitimately curious, not just trying to be argumentative. I don’t know much about this topic.)
[QUOTE=Nash Ideal Money]But a modern alternative is possible, one that would provide a good standard independent of state "pardoners". This idea occurred to me comparatively recently.
But the possibilities with regard to actually establishing a norm of money systems which could qualify as of "ideal" type are dependent on the political circumstances of the world.[/QUOTE]
[QUOTE=Nash Ideal Money]Another basic cost that could be used would be a standard transportation cost, the cost of shipping a unit quantity of something over long international distances.[/QUOTE]
[QUOTE=Nash Ideal Money]Thus I think that "asymptotically ideal money" is a real possibility and that problems of political coordination do not make this very difficult to be achieved. But also, if there is in the first stage of progress the advent of "asymptotically ideal" currencies then after that level of what might be called "rationalization" is achieved there would be the possibility of an international collaboration to set up value standards analogous to the standard measures used in the internationally accepted "metric system".
And here a side remark can be made, partially humorously, and just for illustration, that a POSSIBLE standard of value would be simply the cost of making a duplicate, of precisely the same composition and weight, of the "standard kilogram" located at Sevres near Paris.[/QUOTE]
so we have 2 claims from jbouton:
1) Nash is looking for a cost invariant peg for a our money systems
2) bitcoin fits that definition of cost invariance.
Why would nash be remarking that using the standard of a kilogram would be an example of a basis for ideal money? how does that make sense?
Why is the cost to produce a standard kilogram an ideal basis for money....
why does jbouton think that bitcoin's blocks are created with an invariant cost basis?
Are we talking a chinese kilogram or a canadian kilogram?
jbouton, before someone else states a cost to mine bitcoin, are you able to explain why bitcoins are mined cost invariantly? (Legitimately curious, not just trying to be argumentative. I don’t know much about this topic.)
Yes, the difficulty adjustment algorithm asymptotically corrects for this. It is the crux of its design. In other words if I am correct about Nash's expression, or if we take my understanding of it, bitcoin's code is simply a translation of that desire...
code me up something that is cost invariant to produce, and we will use that for my proposal...thats the spirit of nash's proposal.
@housenuts:
[QUOTE=ideal money]Therefore we propose that by convention (national or preferably inter-national) that a normative index of costs and/or prices should be defined and established. Then, if a sort of "central bank" or "currency board" or "treasury" were issuing a form of currency related to this normative index, that the proper duty of this source of the currency would be to act so as to achieve that IN THE LONG TERM that the index of costs should be asymptotically constant (or fluctuating around a constant mean value).[/QUOTE]
you mined, what was the cost to mine and was it normative like nash needs here?
lets do some maths.
