what affects bitcoin difficulty factors
Pretty much anyone who doesn't think about sheep too hard or has intellectual or monetary reasons values believe it. The government currently values a benchmark value for the yuan against a basket of currencies for which bitcoin yuan is then allowed to fluctuate values value by 2 bitcoin during bitcoin day. But the idea that these tax cuts will completely pay for themselves in a short period of time is ridiculous. And those Fed rate hikes, along with sheep resulting recession, will undoubtedly be the dagger that pops the humongous equity bubble and the phony economy that has been built upon free leverage. This dollar-dominance has given America a lot of discretion in running massive current account and fiscal deficits sheep enabling it to borrow money at much lower yields than would otherwise be the case without mandating foreign creditors to hold huge currency reserves. Indeed, deficits are already rising due to demographics, but the swamp creatures in D.
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As a result, a stone rai resting at the bottom of the lagoon is a perfectly functional store of value and means of exchange. But that inflation shock treatment will send interest rates soaring, and its effect on debt service payments will be humongous. The next stock market plunge and concomitant GDP collapse is approaching quickly. Who would put their life savings in that thing? The Deep State is on the attack and voter fraud is widespread. Just because it's popular doesn't mean it's going to replace anything.
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Therefore, to ride against the global tide of central sheep tightening is much more sheep merely unwise. The values respected Paul Volcker gave way to the "maestro," Alan Greenspan, who was equally revered, until he wasn't. It is embryonic A. Oh well, at least I see things bitcoin. Gold is not a zero-sum game. So what does that do to the future of cryptos? The Cryptography of Anonymous Electronic Cash I think its safe to assume that bitcoin the NSA has been figuring out how to deal with this since that the IRS values been figuring out how to tax it since then too.
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Sheep bitcoin values
But I think that it's important to note that while Visa and MasterCard could be Bitcoin denominated, and there's no reason why they wouldn't do that eventually, I think the wider philosophical issue is that wasn't Bitcoin created to send value without going through financial institutions.
And that, I think And the innovation there has been what's called the Lightning Network, which uses the underlying Bitcoin network to secure a secondary network where the properties of it are significantly different in that you're not transmitting every transaction to every node, and you're thus able to send transactions at a much faster rate and at a much lower fee.
And so that currently is under development, and I think there's a lot of frustration within the community that it is still under development and it's not in production yet, whereas Bitcoin's popularity has really outpaced its ability to maintain low fees. So the lightning network or layer two is going to be laid on top of the Bitcoin system, but doesn't that open up the possibility of fraud or double-dealing, because it's in that space between a transaction being settled, or being made to being settled, that's where all kinds of flimflammery comes into being.
That's what happens with Visa cards. Somebody steals your Visa card, they charge a lot of stuff, you don't see it until the next day or even the next month when your account comes in. Then you charge fraud. And then you don't pay that, but that money is spent twice.
So the beauty of the Lightning Network is it's built using Bitcoin payment channels with additional properties, some new op codes, some new scripting has been introduced to the Bitcoin ecosystem that allows for more advanced features. But basically these payments channels, they're made up of individual Bitcoin transactions that are technically valid on the network but do not get broadcast until someone is ready to walk away from the network, so it's closed their channel.
And so in this sense, every single Lightning Transaction that's occurring at a high speed, so if you're having millions of them every second, every single one of them is technically a valid Bitcoin transaction that can be where the Bitcoin blockchain can be brought in to adjudicate a dispute, so to speak, but every single one is fully backed by an actual bitcoin on the Bitcoin blockchain.
And you're confident, though, that I guess for me this is the question. I know when I have fraudulent charges made using a credit card of mine or something, I call Visa or I call my bank and I say, 'Hey, I didn't do that,' and they're like, 'Okay, we'll eat it.
And isn't that part of like using kind of blockchain technology to settle accounts? This is one of the positive things that people are talking about blockchain, that instead of having to wait five days or more for a financial transaction to settle, working its way through various government stamps and bank stamps and all of that, you can do it instantaneously so that that kind of float disappears.
That's where the efficiency and that's where the end of fraud happens. So if there is a float between the transaction being made and settled, it just seems to me like there's going to be fraud. Each Lightning Transaction is being settled. Whenever you send a transaction, all parties involved are signing each of those transactions and settling it.
It's not going to be closed and settled fully on the blockchain, which is a much more expensive process, until later. But even then, with the fraud, that would be something that people can add on top of that, where people can adjudicate different things, because the lightning network can't adjudicate for real goods being sent in the physical world, it can only handle the payments itself.
So people can emerge with business models to help provide fraud services for that. So the Lightning Network has the same property as the Bitcoin payment network of being irreversible, in the sense that someone can't take an old lightning transaction and use it against you. If they try to do that, then they will lose all of the money that they've put into that payment channel. And that's how the lightning network essentially punishes people for trying to commit fraud.
So I don't think that the reversibility is an issue. It's actually, like you were describing, more of the irreversibility that is a problem, where we do need to have services built on top of lightning network that provide consumer protection.
And I know based on reading your guys' stuff as well as the general worldview that you're coming out of, this is exactly what the market is sussing out now. It's a discovery process and a lot of different things are being tried. But you're confident that all of these sorts of issues are not just going to be worked out, but they're actively being worked out now.
And I would also say that I don't base my Bitcoin ideology on the specific success of the Lightning Network. The Lightning Network is just one instance of a technology that people have developed that can act as a decentralized payment network on top of Bitcoin. But time will tell what other kind of decentralized and centralized solutions people can come up with that different people using the Bitcoin network will subjectively value as their preferred means of interacting economically with the network.
So this is the dreamworld of many Austrian economists of competing currencies, or of competing models of exchange, right? Well, it's important to distinguish between the monetary properties of Bitcoin and then the payment network properties, because I'm not particularly attached to using the Bitcoin network as a payment network for my day-to-day transactions.
What I am attached to is having things be Bitcoin denominated and have Bitcoin be the standard of value that we use in society and have that be our sound money. So I think that it goes back to what Michael was saying, is that yeah, it's not so much the specific implementation details of the payment network that I am enthusiastic about. It's more the monetary policy of the money itself.
But a number of Nobel Prize winners, gold bugs I mean, there are a lot of people who are arrayed against Bitcoin, saying that it is fantasy, that it's a craze, it's dumber than tulip bulbs because you don't even get a flower at the end. Do you think anything other than either a kind of jealousy or a failure of vision is motivating those criticisms of Bitcoin? Well, I think it's a fundamental assault on their entire economic vision of the world.
And Bitcoin imposes a strict Austrian economic policy on the economy, and it's also something that they don't get a say in.
No one called up Paul Krugman to ask him if Bitcoin was a good idea. Someone just wrote the code and put it out there, and all of us adopted it despite these people telling us it's bad for years. We've heard from every economist and pundit how terrible it is, and everyone continues to still buy it.
So they don't have the same kind of political clout in the Bitcoin world that they do in government-issued currencies. So the Keynesian god is failing, and I guess it's even broader than that. A lot of very market-friendly economists seem to be upset by it. What about gold bugs? In libertarian circles, I'd say the enthusiasm for Bitcoin is only matched by a lot of negativity coming from gold bugs, who are calling this a joke or a scam.
I understand why a noninflationary monetary system which happens without the benediction of politicians or Nobel Prize-winning economists would piss those people off. What is it about Bitcoin that gets under the skin of gold bugs? I think that its lack of physical, tangible existence.
We're just not used to thinking of digital goods as being scarce. We're used to thinking of them as being abundant, and with Hard drives get bigger and bigger every year, so in a sense we have digital hyperinflation of digital goods, whether it's streaming video or audio or text or blogs and all of this, we have a hyperabundance of digital goods.
And so just the idea of 'oh, well, we're going to make a digital money,' to them is laughable, because there's no physical constraints on the production of this money. I think that obviously the part they miss is kind of how the network functions and how a social consensus can form around a technology like this.
Yeah, and in a way it's like super gold, and obviously people like von Mises and many of the Austrian school like the whole promise of gold as a backer of currency is that it's finite, that the supply is finite.
But the whole idea is that it takes the creation of money out of the hands of political consideration. So Bitcoin is doing that in a way that is more effective and final than the natural world could. The reason I think that it is more effective is that when the price of gold goes up, you see more gold mining happen, because now miners can justify higher costs for digging up gold.
And you don't have that with Bitcoin, because the Bitcoin network has something called the mining difficulty, and that adjusts every two weeks to make sure that the schedule is maintained. So in that regard I do think that Bitcoin is actually a sounder money than gold.
Yeah, it's even more scarce than gold. It'd be more difficult to create more Bitcoin than it would be to create a nuclear fission device to create gold out of thin air. Do you think that other cryptocurrencies will compete with Bitcoin, not just Bitcoin maximalist, but also Bitcoin exceptionalist, that it's really Bitcoin or bust in the cryptocurrency space? I think that they do currently compete with Bitcoin, although it is also a matter of the pie is growing, and these different alt coins appeal to different people and kind of almost different economic thoughts.
Like there's one that's called Freicoin, which has a phenomenon called demurrage, where essentially they take coins away from you over time so that you're incentivized to spend it.
So each coin kind of has a separate value proposition that it's trying to compete with Bitcoin on. But ultimately at the end of the day, I think that it's a winner-take-most market, the market for money, because the whole point of money is that we avoid barter and that we're all kind of transacting on the same basis. So I think that the natural market process lends itself to Bitcoin maximalism, or amaximalism. And then the reason that there's an exceptionalism for Bitcoin is purely a matter that it was first.
It was the first cryptocurrency to gain traction and to succeed on this level. And there I turn to a phenomenon called the Lindy Effect, which is that the longer that something's been around, the longer you can expect it to continue to be around.
And I think that's a key heuristic of money. So two final questions, one philosophical and one kind of gossipy. The philosophical one is that one of the things that gets talked a lot about with blockchain, and you guys alluded to it before, is that it gets rid of the need for intermediaries in all sorts of transactions.
You don't need trusted third parties to help make something okay, like kind of valorize or validate something. In a weird way, and this is probably more philosophical than practical in this case, but part of the genius of capitalism, of a free market economy, is precisely those intermediaries who add value.
The Marxist critique of capitalism is that there's only these people who get in the way and they suck up all of the value, all of the labor value, and profits are fraud that you just expropriate from people. But really, intermediaries are what make capitalism work. It's people who see sand in the desert that is plentiful and cheap and they bring it to people who need it to make cement or concrete or silicon chips and all of that kind of stuff.
Is there a fundamental kind of contradiction at the heart of Bitcoin and blockchain of that it's perfectly capitalistic, and yet it seems to be all about the abolition of intermediaries?
No, I don't think there's a contradiction. Instead, I think what Bitcoin offers that's so fantastic is that it allows people to start thinking about these institutions as being opt-in rather than kind of forced upon them. Right now if I wanted to interact with dollars, I have no choice but to go get a bank account at Chase or Bank of America or wherever and operate on the Visa network and PayPal and just hope that they don't screw with me. While with Bitcoin, it takes us back to square one at the base level and lets us rebuild these institutions in a way that better reflects people's actual needs and desires without the sort of various fraudulent business models or fractionaries or banking or the unfair business practices of freezing people's accounts.
People now have to compete at a much more rigorous level to create these business models in a Bitcoin world. Well, that assuages all of my fears. Thank you for that. Do you guys have any idea of who Who are the likely candidates, and does it matter? I think that as the leaders of the Satoshi Nakamoto Institute, that it really would be inappropriate for us to even speculate on the matter and lend credence to rumors or gossip.
But I do think that there has been It's clear to me and to quite a few others in the Bitcoin world that today we understand Bitcoin better than Satoshi did when he left Bitcoin. And that's because we've seen how it has scaled and we've seen how people interact with it, and we just have a better understanding of what Satoshi created.
So I think that it is important to its origin story that Satoshi remain pseudonymous, and I also think that it lends itself to a bit of hero worship, which might not be healthy, but ultimately is inconsequential. Well, we will leave it there. Thank you so much for talking. This has been the Reason podcast, and we've been talking with Michael Goldstein and Pierre Rochard, the president and treasurer, respectively, of the Satoshi Nakamoto Institute, a group devoted to promoting Bitcoin and working on the theoretical and practical implications of the world's most fully-realized cryptocurrency.
They also do a podcast called Noded. Go check it out on noded. For Reason , this is Nick Gillespie. Please subscribe to us at iTunes, and rate and review us while you're there. Thanks so much for listening. We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them.
Comments do not represent the views of Reason. We reserve the right to delete any comment for any reason at any time. Bitcoin is a scam that targets the kids who get a kick out of knowing they're smart enough to know they have no fucking idea how it works. And when it fails they'll be the first to cry that government should have regulated it. And they will push for a new financial protection agency with the same blind zeal with which they once defended bitcoin.
And then Jamie Dimon will step in and say, "I warned you, didn't I? And he will establish a tax on all transactions to pay for his new war on crypto currencies. Which will establish a black market in cryptocurrencies which are useful if they are backed by a real asset and hard working taxpayers will have to pay their government to 'protect' them from the stupid kids who get caught dabbling in it.
Assets have value because people think they do, not because it's in their nature. I value holding gold now, but not while I'm swimming in the open ocean! Commodity assets have value because they have utility. So what you want to look at is 'how useful is this commodity, and how useful is it likely to be in the future generally speaking'. In the case of your analogy, the guy drowning might not value gold but since the entire rest of the planet does who really cares about their opinion? They aren't going to be trading shit out in the ocean by themselves while drowning.
It's just a bad analogy, perhaps, but Maslow was fairly clear on that point. As a more on topic post, bitcoin isn't valued by the people who matter which are the people you would want to buy things from.
It's only 'valuable' to people in terms of those who want to trade it for actual currency to idiots. For now, I laugh. Chipper Morning Baculum 1. There are precious few things you can do with gold. Generally, it's used to make things pretty Do you think the change in price of gold from to today has to do with its utility or because people didn't trust governmental money?
Ironically gold is a prerequisite for your bitcoin to go anywhere in many cases. One could say that Bitcoin is just another form of petrodollar, even up to the point that you could say that it's a commodity currency since it is in fact made of a commodity electricity but in bitcoins particular case you can't ever get the useful commodity it's comprised of back out of it, and in fact it's continued existence continues to waste a useful resource. Not sure a "prerequisite" can be true only in "many cases".
I would think it would have to be true in all cases, but whatever That may remain true, but if you can use it as money, then not having to either physically move it is "useful", or, if using bank notes to not have to physically move the gold , not having to have a government back it up is VERY useful.
But yes, for now, gold is more "useful". It's true depending on your network since, notably, gold is neither 'the best' nor 'the only' conductor around but it is one that's used in many high quality electronics, ergo I can't say confidently if it is, or is not, a prerequisite but I can say that electricity is a prerequisite for your money to continue to exist in Bitcoin format.
This was really my main point, in that gold has more 'real world' utility than Bitcoin and that it likely always will. Bitcoin is possibly the single most wasteful form of currency in current existence since it requires constant power to continue existing. Not many forms of currency require money to continue being money or they evaporate into the ether. As a matter of fact, I can think of just one form of currency that functionally should lose value over time since they exist as a cost.
Amusingly no one seems to bother factoring the electrical costs of Bitcoin into the equation, or if they have it's baffling that they would continue to use a currency that costs them real cash to use. In fact I recall an article on Venezuela here at Reason that talked about how the 'free' electricity given the citizens of that nation was being used to mint Bitcoin's, and how that subsidy was probably the main thing that made it cost effective for them at the time along with their toilet-paper valued currency of course.
That is mostly true, however, I would argue that requiring electricity is a much smaller issue than requiring massive, evil initiations of force governments. I have heard it, actually. People like Rickards need to be called out for saying these things. He would, of course, have a ready excuse for this, but we at least have to put him to task to explain why, with all of his analytical aides and his arrogance he is wrong.
That in itself speaks utter volumes on the character of the man….. So many people disregarded the Prophets because Trump was elected. I would encourage you to begin planning on a way to keep your site alive after they remove any one from the net who exposes them and their lies. WE will be in desperate need of your site and others who will bring us the truth.
Greg, there are plenty more where he came from. The Left has no interest in cooperating. As I have stated before, the only way out of this is collapse or revolution.
Elections and politics are now irrelevant. Yes, but Michele could run. Best Mannarino interview yet. And, right on the money as usual. Still have several already made and ready to go. Good gift for Christmas. And just so everyone knows, Greg does not make any money or have an interest in the T-shirt sales. T-shirts are at http: Can he get in that way?
Is it theoretically possible? We must continually expose the lies … seems the poor Russians get blamed for everything by the fork-tongued politicians … and as Pocahontas can testify to … it is not only men but women lie as well Hillary is a clear example … http: According to Putin there was an agreement in that N.
Korean assets and their bank accounts … N. Korea then withdrew from the agreement and relaunched its nuclear program! Koreans just as the Yemenis consider the blockade against them an act of war!! And just like they broke the agreement with N. Korea … the fork-tongued US warmongers want to break the agreement with Iran … as one 1 war is not sufficient for their blood lust … they need two 2 wars to satisfy their insatiable greed for money and power!
Paul, Do you hate America??? Where do you live??? There is no evil in NK or Iran??? Give me a break!!! You see the difference??? You know as well as I do if you criticized Turkey and your president, and kept doing it inside the borders of Turkey, the secret police would come to your home and put you away for a very long time. You would not even use a real last name with this namby pamby response. I rest my case.
Part of what I am doing is what I hear Greg suggest to many of his guests. Pay off debt, new tires,ect. The best NO risk thing regular people can do. I would add things that save money. I am trading my pension have more investment than it taking my profits out paying the taxes and paying off debt with what is left then things tangible.
Greg your investment advice would hurt no one at any time. What if btc is from the government to acclimate us to the no dollars system they and the banksters want? And blockchain would be the precursor of the mark of the beast driven by greed to cash in…no mark no payday. However AI is changing the rules and even if it is still a Ponzi scheme it is a new beast, Just go to this site: What this has to do with our subject?
Great Greg Mannarino interview. Bitcoin — What is the underlying real asset? Not going to touch that. It was pointed out, by Fox News, that the final push came from Birmingham which is heavily democratic. Three 20, vote surges at the end of the election for jones, when Moore was leading by 7 points. The world awaits your wisdom. By a jury of your peers or do we judge people by innuendos now? Judge Moore owes it to his supporters to have a recount. The shenanigans of the democrats will not stop unless exposed!
He lost by a mere 0. TY We know that room temperature bodies get votes per corpse, required, for the living, only one each. If Democrats had any ethics and integrity, they would agree to a recount, however, we all know they do not have those traits.
Interesting how a local city employee in Mobile, AL. In this last election especially. The welfare state gets a point on the board. The NY Times reported black turnout was higher than in and when Obama ran for president. This seems highly unlikely. Why does it seem unlikely? Less voters does not point to higher voter turnout; it points to lower voter turnout.
Either those voters stayed home, were electronically disenfranchised with vote flipping, or a combination of both. The fix is in. Election Fraud proven in the vote tallies. If there is no recount of the physical ballots, no one will ever know what really happened.
See the proven Alabama Senate Election Fraud here: Alabama had major voter fraud. This happend in Arkansas when the Clinton machine was there with bussing in voters. Dressing them in different clothes to vote in different precincts. If this is a prelude to elections next year were sunk. Republicans will never win. No matter who ran against Jones, the Dems would have played the same dirty tricks on any Republican candidate.
He was never banned from a mall. Legally allowing destruction of electronic voter records guarantees it. The Deep State is on the attack and voter fraud is widespread. These election results dont pass the smell test, they stink.
Honky tonk lying women have taken many a good man down. Is Gloria Allred getting any credit for this. Like Alabama she is in need of a red state makeover.
Lets call her Gloria Allblue. So roughly , more Republicans voted in the General than the Run-off. But over , more Democrats came out to vote in the General than in the Primary. Does this seem reasonable? Cheating is cheating, period. If they cheated their way in, that does NOT make it better than if Moore won and then they outed him another way they manufactured. It does if it was a set up.
And they stopped it. Roy should call for a revote because of this https: Yep the trolls are making money, money, money today. Where are all the Republican votes in this election??? Principles, Trends, Opportunities, and Risks. Social Science Research Network. The institute of economic affairs. An Analysis of Google Search Data".
Order without Law in the Digital Age. Guardian News and Media Limited. Gox, but not limited to it. The latter corresponds to the amount of money entering and leaving the Bitcoin network, and statistics for it are readily available The only conclusion we can draw from this comparison is that Silk Road-related trades could plausibly correspond to 4.
Drug marketplace seen as the next Silk Road shut down by Dutch police". Silk Road creator convicted on drugs charges". Pedophiles Launch a Crowdfunding Site". Bitcoin for the Befuddled. Mac malware spread disguised as cracked versions of Angry Birds, Pixelmator and other top apps". Security researchers warn that DevilRobber malware could slow down infected Mac computers". Guidance for a risk-based approach.
US Securities and Exchange Commission. Gox hacked, Bitcoin businesses face sting of free-wheeling ways".