aside: bitcoin

Article: Intel's Sandy Bridge Graphics Architecture
By: hobold (hobold.delete@this.vectorizer.org), August 17, 2011 2:47 am
Room: Moderated Discussions
I do not use or own any bitcoins. Nor do I believe specifically in bitcoin. I will play devil's advocate a bit, though, because algorithms and theory behind bitcoins are kinda neat.

David Kanter (dkanter@realworldtech.com) on 8/16/11 wrote:
---------------------------
[...]
>Unlike dollars, pesos, rubles, etc. bitcoins are not legal tender *anywhere*.
>There is nobody standing behind them who will guarantee an exchange for a currency
>which can be used to purchase goods and services.
>
This will be true of any "new type of currency" that begins to compete with established currencies. In the long run, no bank or government is strictly required, though. It is the people at large who need to believe in a currency. If they don't, then no bank or government can uphold value, either.

Or, in other words, this is not a problem specific to bitcoin. Still a problem, of course.

[...]
>One of the fundamental differences between a currency and a bitcoin is that there
>are no financial instruments denominated in bitcoins. Every nation collects taxes
>in their local currency, creating a liquidity demand. Who needs liquidity for bitcoins?
>
Who needs taxes? And who needs governments? I am not an anarchist, and I think I know reasonable answers to both these questions. But the questions are not purely rhetorical ones. Bitcoin was specifically designed to be a decentralized, uncontrollable currency. It's not a bug, it's a feature.

David's question is a very good one, though. As of today, a disproportionally large percentage of bitcoin users allegedly are actively avoiding taxes and governments. Bitcoin is their dream come true.

(I believe that governments will eventually ban bitcoin, if it ever catches on widely. This is especially true of governments that are traditionally repressive. But the free "capitalist" governments will have as much motivation to do so, because control over money is their main way of exercising power. The current financial crisis is the result of governments giving too much of that power away to the mightiest bullies.)

[...]
>So you have 0 demand for bit coins. On the other hand, the supply is very large,
>since not only are people generating bitcoins...whoever created the idea probably
>has a huge pile sitting around. When supply exceeds demand, prices will fall, and in this case, probably to 0.
>
The demand is as high as there is demand for fleeing from taxes and governments. Bitcoin supply is designed to be finite. The rate at which bitcoins can be mined is designed to be finite as well. There is such a thing as a "last" bitcoin that will be mined one day (and I think that date is already fixed, but you better check more authoritative sources).

The bitcoin creators did set aside a pile of bitcoins, because initially they were the only people mining the coins. But since the amount of bitcoins that can exist at any point in time is limited, that initial purse full of coins is now dwarfed by the total amount in circulation. This is because bitcoins are kinda old by now, but they have existed below the radar of public interest.

(I believe that designing in an absolute upper limit will eventually kill a currency. Bitcoin will suffer from this if it lives long enough to run into its built-in limit. From that point in time on, bitcoins will deflate, i.e. gain value as time goes by. So there will be strong incentive not to spend any of them. Consequently, circulation will come to a halt. This defies the purpose of a currency. There were game worlds that tried to limit their virtual economy like that, and failed.)

>Moreover, there are all sorts of problems with the fact that technical changes
>are fairly discontinuous. Bitcoins must have a way to deal with arbitrage at any
>point in time around the introduction of new hardware.
>
They do deal with that. The bitcoin clients form a peer to peer network, and while no client can see all transactions, each client can see a fairly representative sample (cryptographically anonymized). The clients will only accept "newly minted" coins when those represent the solution of a sufficiently hard computational problem. Where "sufficiently hard" is a criterion that is constantly being re-evaluated.

Older bitcoins carry a (cryptographically obscured) transaction history with them, that proves they were in circulation earlier (i.e. they must have been already minted when "sufficiently hard" meant less).


I don't think bitcoins will take over the world. But I find them interesting because a lot of thought went into their design. It just so happens that my own interests have shifted towards human societies, and game design of massively multiplayer games, but all that on top of the mathematical and computer science education I got.

Bitcoin is a clever hack from my point of view. Maybe they are something else, too, but I don't really know that.
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TopicPosted ByDate
Sandy Bridge GPU article onlineDavid Kanter2011/08/09 02:53 AM
  Sandy Bridge GPU article onlinesJ2011/08/09 06:29 AM
    Sandy Bridge GPU article onlineDavid Kanter2011/08/09 11:11 AM
  Sandy Bridge GPU article onlineKevin G2011/08/09 06:32 AM
    Sandy Bridge GPU article onlineDavid Kanter2011/08/09 11:14 AM
      Sandy Bridge GPU article onlineanon2011/08/09 10:43 PM
  Sandy Bridge GPU article onlineJosh2011/08/09 08:39 AM
    Sandy Bridge GPU article onlineMr. Camel2011/08/09 11:39 AM
      Sandy Bridge GPU article onlineJosh2011/08/09 11:48 AM
        Sandy Bridge GPU article onlineDavid Kanter2011/08/09 12:06 PM
          Sandy Bridge GPU article onlineJosh2011/08/09 12:18 PM
            Sandy Bridge GPU article onlineDavid Kanter2011/08/09 12:50 PM
              Sandy Bridge GPU article onlineJosh2011/08/09 01:22 PM
                Product release milestonesDavid Kanter2011/08/10 09:42 AM
      Sandy Bridge GPU article onlineSeni2011/08/09 01:27 PM
    Sandy Bridge GPU article onlineDavid Kanter2011/08/09 12:12 PM
  Sandy Bridge GPU article onlinerscheidegger2011/08/09 12:27 PM
    Sandy Bridge GPU article onlineDavid Kanter2011/08/09 12:45 PM
      Sandy Bridge GPU article onlinerscheidegger2011/08/09 03:34 PM
      Sandy Bridge GPU article onlinerscheidegger2011/08/09 05:03 PM
  Sandy Bridge GPU article onlineSi2011/08/10 04:15 AM
  Some error on the chart?Ron2011/08/10 08:33 AM
    Some error on the chart?David Kanter2011/08/10 09:35 AM
  Sandy Bridge GPU article onlineGroo2011/08/10 09:01 AM
    Sandy Bridge GPU article onlineArcadian2011/08/10 01:38 PM
      Sandy Bridge GPU article onlineGroo2011/08/10 07:32 PM
        Sandy Bridge GPU article onlineIntelUser20002011/08/11 02:17 AM
          Sandy Bridge GPU article onlinePoindexter2011/08/11 03:51 AM
            Sandy Bridge GPU article onlineIntelUser20002011/08/11 07:32 AM
              Sandy Bridge GPU article onlineGroo2011/08/11 11:58 AM
                Sandy Bridge GPU article onlineDavid Kanter2011/08/12 02:16 PM
                  Sandy Bridge GPU article onlineGroo2011/08/15 07:09 PM
                    Sandy Bridge GPU article onlineDavid Kanter2011/08/16 12:00 AM
        Sandy Bridge GPU article onlineLinus Torvalds2011/08/11 10:20 AM
          Sandy Bridge GPU article onlineGroo2011/08/11 11:51 AM
        AMD could be worse.Jouni Osmala2011/08/11 10:50 PM
          AMD could be worse.bakaneko2011/08/12 12:53 AM
  OpenCL, Compute Shader 4.x Support, and OpenGL 3.1 Supportltcommander.data2011/08/10 02:02 PM
    OpenCL, Compute Shader 4.x Support, and OpenGL 3.1 SupportDavid Kanter2011/08/10 05:01 PM
      OpenCL should be able to run on x86 ... but probably not fastMark Roulo2011/08/15 02:30 PM
        OpenCL should be able to run on x86 ... but probably not fastRohit2011/08/15 05:52 PM
        OpenCL should be able to run on x86 ... but probably not fastDavid Kanter2011/08/15 06:24 PM
          OpenCL should be able to run on x86 ... but probably not fastMark Roulo2011/08/16 05:47 AM
            OpenCL should be able to run on x86 ... but probably not fastDavid Kanter2011/08/16 06:49 AM
        OpenCL should be able to run on x86 ... but probably not fastSylvain Collange2011/08/16 02:04 AM
    OpenCL, Compute Shader 4.x Support, and OpenGL 3.1 SupportSylvain Collange2011/08/13 06:54 AM
  How much raw computer resources?Robert Davide Graham2011/08/12 11:02 AM
    How much raw computer resources?David Kanter2011/08/12 11:25 AM
      How much raw computer resources?Robert David Graham2011/08/12 06:44 PM
        How much raw computer resources?Nicolas Capens2011/08/14 10:51 PM
          How much raw computer resources?Robert David Graham2011/08/15 10:54 AM
            How much raw computer resources?Michael S2011/08/15 02:08 PM
            How much raw computer resources?David Kanter2011/08/15 06:28 PM
              Bitcoin miner: a benchmarkRobert Daivid Graham2011/08/16 03:03 PM
                Bitcoin miner: a benchmark?David Kanter2011/08/16 03:31 PM
                  Buying with bitcoinsRohit2011/08/16 06:11 PM
                    Buying with bitcoinsDavid Kanter2011/08/16 07:34 PM
                      Buying with bitcoinsRobert David Graham2011/08/17 05:47 PM
                  aside: bitcoinhobold2011/08/17 02:47 AM
                  Bitcoin miner: a benchmark?Max2011/08/18 02:54 AM
                  Bitcoin miner: a benchmark?etzel2011/08/18 06:52 AM
    How much raw computer resources?Nicolas Capens2011/08/14 11:04 AM
  I hate to be the text critic...A Hobbit2011/08/18 11:59 PM
    You're rightDavid Kanter2011/08/19 08:16 PM
      Fixed (NT)David Kanter2011/08/19 08:30 PM
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