[Cryptography] BitCoin bug reported

Phillip Hallam-Baker hallam at gmail.com
Fri Feb 14 11:33:20 EST 2014

On Fri, Feb 14, 2014 at 4:15 AM, Guido Witmond <guido at witmond.nl> wrote:

> On 02/10/14 14:03, Phillip Hallam-Baker wrote:
> A few misunderstandings...
> > Since the upper limit on the value of a bitcoin is set by
> > the cost of electricity to mine it,
> Please don't conflate cost and value.

The price of something is the amount someone will charge, the value is what
someone is willing to pay.

> > the value increases as the
> > difficulty of mining increases.
> The cost increases, the value is dependent on market forces. Currently a
> speculation thing.

Yes, but the speculators are not going to pay significantly more than the
expected cost of mining the coins in the future.

So there is a positive feedback circuit there, but a gradual one.

> Personally, I see the transparency of the ledger as a good thing. Money
> is power. Power corrupts, thus money needs to be checked. I believe some
> big problems in society are due to unchecked power in combination with
> inflation.

And wishful thinking is a large part in every bubble.

Ponzi and Madoff didn't actually sell their schemes themselves. They let
everyone else sell themselves on it. BitCoin is not a Ponzi scheme but it
does seem to be a Ponzi delusion.  The price is going up for no other
reason than the 'investors' think it will continue to go up and so they

BitCoin is super deflationary, the value of goods relative to BitCoin has
dropped to 1% of their original value in a year. In an economy like that,
anyone spending money is an idiot because their money will be worth much
more in a short period of time.

But for the same reason, nobody is going to hire anyone to work in BitCoin
because the cost of their labor will go up exponentially over the course of
the work. Instead of a contract being the price of a new car as expected
when it was signed, it is the price of a house or a private jet by the time
payment is due.

That just isn't a viable economy.

Website: http://hallambaker.com/
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