Quote from: JorgeStolfi on January 06, 2015, 05:51:55 PM

Quote from: NewLiberty on January 06, 2015, 02:42:59 PM

The fundamental issue is that the centralization, which is inherent in Bitcoin, is incredibly minuscule when compared to EVERY OTHER FORM OF MONEY with its almost nonexistent barrier to entry. It is the reason many of us like it. Governments are busy trying to set up barriers for people to be their own banks with Bitcoin and force people to use the current banking cartels, but ultimately it is a bit difficult to prevent so long as it is easy to download and run a node..

I fully agree that the banking sector is an oligopoly. And the same is true of the economy in general. And centraliaztion of the economy invariably results in centralization of political power and collapse of the democracy.

But I do not agree that bitcoin is somehow different from banks. Because:

* The same economic process that created the banking oligopoly has already created a mining oligopoly; namely, the big fish grows faster than the smal fish, and may even eat it.

See ¹

Quote from: JorgeStolfi on January 06, 2015, 05:51:55 PM

* The mechanisms that are supposed to protect the bitcoin users and the protocol from abuse by the dominating cartel do not work:

See ²

Quote from: JorgeStolfi on January 06, 2015, 05:51:55 PM

** Acting in its self-interest, the cartel will be careful not to destroy its market, but will try to maximize its gain in the long term;

** The cartel will charge monopoly-level prices and provide monopoly-quality service;

See ¹

Quote from: JorgeStolfi on January 06, 2015, 05:51:55 PM

** Users who object to the cartel have no alternative except to do without the service, or to use a much inferior one;

See ²

Quote from: JorgeStolfi on January 06, 2015, 05:51:55 PM

** For that reason, most users just accept the cartel as a fact of nature, and even try to be friends with it;

** For that reason, the cartel can define and change its terms of service, and not even a supermajority of the users can stop them;

** New providers (banks or miners) who want to enter the market and survive must submit to the cartel;

See ²

Quote from: JorgeStolfi on January 06, 2015, 05:51:55 PM

** Therefore, unhappy users may take their money to another bank or miner, but cannot break free of the cartel's power;

And so on.

By the way, a majority cartel could, by following the same script outlined in my reddit post, also undo the Bitstamp heist. All it needs to do is block withdrawals from that address (which it can do immediately and unilaterally, by its veto power), and then force the users to upgrade to a version of the software that includes a built-in table of exceptions: transactions that violate the normal rules, but should be considered valid anyway. For the time being, that table would have only one transaction, moving those 18'000 coins from the thief's address to the new Bitstamp's address. The input would have 'FuckAllThieves' as the signature; which of course is not valid for that address, but the exception table will override that.

This change to the protocol will surely cause more revolt among the fundamentalist users than the mere extension of the reward schedule. On the other hand, it would be much easier to justify to the general users, since it would undo what is universally viewed as a crime, redress the loss of the victims, and create a powerful deterrent of future bitcoin thefts. In fact, this hack will probably make bitcoins more valuable, increase adoption, appease hostile governments, etc. etc.. And the non-ideological users are already used to the banks doing that sort of thing.

And you can see how this will end.

The fact is, you do not really own your bitcoins, even if you are the only person who knows their private keys. Since bitcoins cannot exist outside the blockchain, they are actually owned by the miners. Your bitcoins will stay or move only if and where the miners are willing to keep or move them. At present, the miners will only move coins if they get a transaction request with the proper signature. However, if a majoritary subset of the miners agrees to do something else, they will have the power to force the users to accept it -- as long as it is less harmful to the general user than being cut off from the service.

Just like them banks.

It seems your opinion is that there is no need for bitcoin and that banks and arbitrary enforcements based on claims of thefts conducted by centralized controls of wealth ledgers are the way to go.
This is fine for you. Others may want alternatives to this to exist in the world and use each type of wealth unit for its purpose.

Generally, we disagree on most everything in this post, with especially your assumptions about what future behaviors will occur. These things haven't happened yet. With vigilance and individual action, these things may never happen because it is done in the open, and not in secret banking ledgers, as pointed out previously in my last post to you (which you apparently ignored).

¹Certain of the matters discussed in this post are about future performance and constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those anticipated. Such statements are based on the poster's beliefs as well as assumptions made. When used herein, the words anticipate, intend, estimate, "may," believe, expect, plan, should, hypothetical, potential, forecast, project, variations of such words and similar expressions are intended to identify forward-looking statements. Factors that may cause actual results to differ are often presented with the forward-looking statements themselves.

²They have worked so far. Check the block chain to see if it is still incrementing. Since your assertion is contrary to established fact, please show evidence.