It's not a scam, it's just inefficient. The reason a notary is so expensive is not because their work is difficult, but because they are liable for the validity of documents they stamp.  It's kind of an insurance for the customer.  Which won't be needed anymore for algorithm-based notaries, of course.

It's easy to underestimate just how much time people need to get their head around new paradigms. Even technically-minded people find it hard to get their head around Bitcoin. Imagine how hard it is for Average Joe. This negative reaction in the comments above is natural and unsurprising. It will only evaporate after many, many repeated exposures to the technology.

It would be disastrous but it would also very likely spawn new chain acceptance rules that make this type of attack at lot more difficult. 

See:
http://gavintech.blogspot.ch/2012/05/neutralizing-51-attack.html

So it would basically be a one-off.  Either bitcoin would recover or a more robust altcoin would take its place.  Either way they attacker would fail in destroying the technology.

It is impossible for words to have a "clearly defined meaning".  All words have fuzzy meanings. That is how the human language works.   Any verbal argument, even if it is based on reason and logic, cannot arrive at absolutist conclusions. All conclusions are only true to a degree.  And it's not a question of finding a more precise language, or better definitions, because human thought is imprecise.  Neural networks deal in degrees and probabilities, not in mechanistic rules.  

The biggest failing of libertarinism is that it treats concepts as binary which are continua in the real word. Take the concept of "force" for instance. For a libertarian, either something is forceful or it isn't.  But in reality there is a spectrum that goes something like this:  gentle persuasion ... manipulation ... thinly veiled threats ... pointing a gun to someone's head.  

Libertarians say that you simply have to define force more precisely in edge cases but I say this is impossible.

For a lot of practical problems, intuitive, fuzzy morality trumps mechanistic ideology by a long way.

I think the basic moral values of the two systems are similar, it's just that socialists have a different definition of "fruits of labor". When they take from the rich and give to the poor, the justification is that it never belonged to the rich in the first place.

The problem with political ideologies, and that includes socialism and libertarianism, is that they base their arguments on ill-defined and messy terms and then at the end they pop out suspiciously clean and elegant conclusions. For example: What does "fruits of labor" actually mean? Labor is just another word for "doing stuff". Sure, if you do stuff it has consequences, but how do you decide which of those consequences are "fruits"?

Elegant moral theories that claim to have a definite answer for every conceivable moral problem should be taken with a grain of salt. Especially if they are based on verbal arguments alone. The human language is incapable of capturing the complexities of the real world.

That's why I don't do ideology.  I treat each moral problem individually, based on reason, evidence, and intuitive morality.

Libertarianism is not incompatible with socialism.  It is only incompatible with coercive socialism.

One of core values of socialism is that the rich have a moral obligation to redistribute some of their wealth to the poor.  However, this redistribution doesn't have to happen by coercive means.

There are also non-coercive ways of achieving this: ostracism, shaming, persuasion, education, prizes, fame, social norms, "whuffie", etc  

The crypto economy has the potential to formalize and automate these redistribution mechanisms (see Vitalik Buterin's SocialCoin idea), making them so effective that coercive, tax-based redistribution is no longer necessary.

Educate people to avoid exchanges without proven reserves.

As long as people are aware that these exchanges are doing fractional reserve, the selling of fractional reserve bitcoins should not affect the bitcoin price. Real bitcoins will trade at a higher price than bitcoin IOUs.

What do you mean? By historical standards the price has been remarkably stable lately.

The bans on cryptography export and the persecution of Phil Zimmerman in the 90s was a more aggressive impingement of free speech than the bitlicense. The constitution didn't protect us then it then and it won't protect us now.

How often? Show us the data please.

Oh I forgot, you don't have any data because it is almost impossible to collect data about this "industry" without doing something highly illegal.

AML/KYC regulations are insanely draconian.

Try to interact with any kind of business in the financial sector that is even slightly "innovative", and soon you will run into exactly the same barriers. This problem is not isolated to Bitstamp or even just Bitcoin businesses.

Last year I tried to invest a paltry 300 GBP into a biotech startup via a crowdfunding initiative. My investment was blocked by the crowdfunding company because of "not passing AML/KYC checks"  Not delayed or hindered by identity checks, but outright prohibited.  The reason given was that I am suspicious because am a resident of The Netherlands and have the audacity to invest in the UK!   These are two highly developed EU countries; surely the ability to invest across them is something you would take for granted?  A that point, I felt more like I was living in Venezuela than the EU.

Similar experience with Transferwise. Tried to send a relatively small amount from UK to Eurozone. Again, my transaction was frozen with no advance warning and they refused  to release my money it unless I send them sensitive info like passport scans etc. Again they cited AML/KYC compliance.  Funnily enough, when transferring a much larger amount directly from UK bank to Eurozone bank (and paying a ripoff exchange rate) no questions were asked.  

Based on these experiences and others, I am actually surprised that Bitstamp isn't being more restrictive with its customers than they are being right now.

As for btc-e, I find it incredible that they have managed to get away without doing AML/KYC checks in this kind of regulatory climate.   The only way that I can explain it is that there is something shady going on there.  

Are you serious? A social network is already decentralized by its very nature. Facebook is not a social network.  Facebook is just a social network mediation service.  The only reason people use a centralized website for that in the 00s and 10s is because websites are easier to program and maintain and the technology of p2p applications hasn't caught up yet, especially in terms of UE.  Trolls and spammers are not an issue in a high trust environment where you get to choose who is allowed to communicate with you.  They have only become an issue for Facebook users who don't use Facebook as a social network, ie. people who have lots of strangers as Facebook friends.

I would be very surprised if 20 years from now social networks are still mediated by centralized websites. Everyone is going to have their own agent that communicates with other other people's agents via standardized interfaces. The power and flexibility offered by agents is no match to a one-size-fits-all website.

As for decentralization of leadership, I agree that there is no replacement for a human leader when it comes to giving a group of people vision and inspiration.  One aspect of leadership can be decentralized though: power.   Democracy is an attempt to do just  that, though it didn't quite get there because it still relies on human power custodians.  DACs could take this one step further and replace the custodians with consensus networks.

Your mistake is that you are letting your emotions influence your decisions. There is nothing wrong with that when it comes to making personal choices such as choosing a career, partner, or house. 

When it comes to the impersonal world of trading, this is a terrible strategy.  Emotions are predictable is that is precisely why more experienced traders are making money off of you.

To be successful in the trading game, you need to be an ice cold bastard.  Few people have what it takes emotionally and the ones who don't should stay away from it.

You are basically assuming that marginal utility is constant; that an extra $10 is just as valuable to Bill Gates as it is to someone begging for food on the street.

For most people that is very far from the truth.  Most people won't even accept a 5% risk of their children becoming homeless even in exchange for an expected profit of 100-fold.


That's what people used to say about $100.  Creating an alternative that will overtake Bitcoin is a lot harder than creating an alternative that will overtake Wikipedia (which also hasn't happened so far). There are multiple, powerful network effects at play.

Unlikely. Bitcoin is held mostly by enthusiasts and speculators at this stage. It's very high up on Maslow's hierarchy of needs.  I doubt that a lot of people feel compelled to buy more BTC when their income drops.

Bitcoin is a lot more like a Veblen good.

The net effect of China on Bitcoin can only be positive.  True, a lot of Chinese will avoid Bitcoin because of the government's hostility towards it.  But even if just 1% of Chinese were to start using Bitcoin, that would be a huge boost for Bitcoin's user base.

In China there is a lot of pent-up demand for a good store-of-value, but very limited supply.  In the long term, something has to give.

China is a bit like a huge bucket submerged in water. The bucket is mostly watertight, but it does have numerous microscopic cracks where water is constantly leaking in.  The government is constantly trying to mend the cracks but new ones keep appearing.  Slowly but surely the bucket is filling. It might take decades but eventually the bucket will have the same water level as the outside world.

Either bitcoin fulfills a need for you, or it doesn't. Why should it matter whether you are female or male?

it is decentralized not in the sense that every node is equal but that every node has equal opportunity. A bit like the internet itself. The free market leads to a power-law type distribution of  node importance.

That is an utopian ideal that goes against human nature.  The real economy simply doesn't work like that.  It hasn't worked like that ever since the invention of agriculture, and probably not even before that.

If the economy worked like that, then a subsistence farmer in Africa would earn the same hourly wage as a star football player. By any objective measure, both work equally hard. So why do their hourly wages differ by a factor of 100,000?

In a free market, people do not get rewarded for work.  They get rewarded for creating value.  There are many ways of creating value.  For most of them work is a necessary, but not sufficient ingredient.  But humans are very similar in their capacity and willingness to work. Even the hardest working human on the planet cannot put in more than 20 hours a day.  The crucial ingredient for creating value is not work but access to capital.   The variability in amount of work is tiny compared to the variability in access to capital.

In the information economy, smart allocation of information capital is the key to getting rich. It is also the key to boosting our living standards far beyond what a more labor-oriented economy could achieve.  This is why I don't worry about tech entrepreneurs getting filthy rich.

Sure it would be nice if everyone on earth had equal access to capital.  But it is in the nature of all living things, including humans, to pass capital to their offspring, and thus capital accumulates over generations.  And I don't just mean money that is inherited, I am also talking about things like social and cultural capital.

Utopian cures to this "disease" have proven disastrous.



Economic activity, by itself, is neither good nor bad.  What matters is the type of economic activity, not the quantity.  Economics is all about the allocation of scarce resources.  Forget about money for a moment.  A desirable economy is one that allocates resources such in a way that maximizes utility for the biggest number of people.   The optimum amount of economic activity in the right sectors is what achieves this.   Indiscriminate boosting of economic activity is almost always detrimental to this.  Money is just an auxiliary.  Resources are still allocated irrespective of whether all money is being circulated all the time.



See above. This is not necessarily a bad thing. There is an optimum amount of work that makes most people most happy.  When people work more than that they become unhappier again. Maximization of work is not desirable. Maximization of happiness is.



Bitcoin will only grow fast as long as it's in diffusion phase. Once established, price will be relatively stagnant like for any other established stock or commodity.


Yeah, because people would rather starve than part with their precious bitcoins?

Even a perfectly rational, error-free free market can fuck up, in the sense that it doesn't lead to the most optimal outcome of all possible outcomes.

Markets are dumb incremental optimizers. They often fall into social traps that are locally stable.  They are good at fine tuning once the starting conditions have been set, but they are totally blind to finding the "correct" starting conditions in the first place.  They don't see the bigger picture because they are incapable of cognition and design.

The situation for real markets is not as simple as that because the space of "all possible outcomes" is not static and  is itself dependent on previous outcomes. But there are a lot of cases in practice in which the above still temporarily applies.

To me, market intervention is justified if the existence of a social trap is easy to prove and there is a strong consensus among participants that everyone would be better off if the trap could be escaped.  

To me, things like air traffic control and other public goods are a no-brainer.  Monetary policy, not so much.  Sure, unemployment can be alleviated, but the problem is that nobody really understands the long term and unseen effects of interest rate and money supply manipulation. We are messing with a chaotic system. It might become even more unstable as a result of our intervention.  Also, there is a lack of consensus about an "optimal" rate of unemployment and so on.

I don't know whether democratic government is the best Leviathan. DACs seem like a promising and less error-prone alternative.  Anyhow, a good government should not be a decision maker but merely an executioner of consensus.  Thus it is incapable of making strategic errors in the first place.