Thinkers July 05 2011: Bitcoin Bites The Dust

Extropia DaSilva: Welcome to Thinkers!
[2011/07/05 15:32]  Arisia Vita: ty
[2011/07/05 15:32]  Julie Bluebird (lolli.bluebird): Ari can sit by me 🙂
[2011/07/05 15:32]  Extropia DaSilva: Today it is guest chaired by Ivy Sunkiller, who chose the topic..
[2011/07/05 15:32]  TommyJW Ninetails: I’ve got a huge fan in the kitchen window because of the oven heat.
[2011/07/05 15:32]  Julie Bluebird (lolli.bluebird): …or not lol!!
[2011/07/05 15:32]  Extropia DaSilva: BITCOIN BITES THE DUST: Just a few days after reports of 500,000 bitcoins being stolen, the largest USD bitcoin exchange – Mt.Gox – get its user database leaked due to compromised PC of a person doing security audit. Whole case resulting in flash crash of that market, going from $17.5 USD per bitcoin to one cent in 50 minutes, freezing the market and forcing it to rollback. Are those signs of the end of the new p2p currency, or will it, after all, strengthen it?
[2011/07/05 15:32]  Violet (ataraxia.azemus): Hi Gwyn 🙂
[2011/07/05 15:33]  Ivy Sunkiller: wouldn’t say it has bitten anything yet 🙂
[2011/07/05 15:33]  Hiro Pendragon: /me smiles at Gwyn
[2011/07/05 15:33]  Ivy Sunkiller: hello Gwyn
[2011/07/05 15:33]  Gwyneth Llewelyn: Hiya 😀
[2011/07/05 15:33]  Ivy Sunkiller: so, since I guess not everyone is an IT nerd (like me)
[2011/07/05 15:33]  Extropia DaSilva: So, over to Ivy…
[2011/07/05 15:33]  Zobeid Zuma: Gwyn probably is. 🙂
[2011/07/05 15:33]  Kimiko Yiyuan: Yeah, but hopefully your answer would not contain anything about those “corrupt” centralized institutions that create the current money and Bitcoin is created randomly by freedom loving hacker revolutionaries who just want to be free of state control, or something like that.
[2011/07/05 15:33]  Ivy Sunkiller: Gwyn probably is 🙂
[2011/07/05 15:33]  Gwyneth Llewelyn: That’s a rumour… 😉
[2011/07/05 15:34]  Ivy Sunkiller: Kimiko: not really randomly 🙂
[2011/07/05 15:34]  Ivy Sunkiller: but in order
[2011/07/05 15:34]  Seren (serendipity.seraph): I like alt currencies a lot. A trouble with bitcoin though is that it has nothing backing it to keep value in place. Totally at the mercy of trading action of the moment. and thus unstable for pricing goods and services.
[2011/07/05 15:34]  Extropia DaSilva: is it me or is Gwyn a brunette now?
[2011/07/05 15:34]  TommyJW Ninetails: I can imagine (once the bugs are worked out) that this could be a world currency. Because of the independence it could be more stable then our regular currecy
[2011/07/05 15:34]  Gwyneth Llewelyn: I’m not supposed to be, Extie…
[2011/07/05 15:35]  Ivy Sunkiller: Bitcoin is, or at least is called (it doesn’t really have a specific, legal at least, definition) a currency, or cryptocurrency
[2011/07/05 15:35]  Zobeid Zuma: Bitcoin is an experiment. There’s bound to be . . . learning episodes.
[2011/07/05 15:35]  Gwyneth Llewelyn: I prefer “cryptocurrency” 🙂
[2011/07/05 15:35]  Seren (serendipity.seraph): I don’t think you can get that kind of stability without some backing for a currency. Say in tiny fractions of a gram of gold.
[2011/07/05 15:35]  Kimiko Yiyuan: Exactly seren. Alt currencies are an interesting option. But it probably should not be something someone can come up with, declare a currency without any real value backing it and throw it on the market.
[2011/07/05 15:36]  Gwyneth Llewelyn: Seren: the gold standard has been abandoned world-wide since at least the early 1970s…
[2011/07/05 15:36]  Seren (serendipity.seraph): of course all mainstream currencies have nothing backing them either
[2011/07/05 15:36]  Ivy Sunkiller: the idea is to use a model of “proof of work” mechanism that was developed to prevent email spam (but was eventually thrown away as it would also kill legit mass mailing services) to solve the problem of issuing money, kind of
[2011/07/05 15:36]  Gwyneth Llewelyn: What is “real value”?
[2011/07/05 15:36]  Ivy Sunkiller: Seren: I beg to differ
[2011/07/05 15:36]  Gwyneth Llewelyn: Exactly, Seren — except “a Government’s good name”
[2011/07/05 15:36]  Gwyneth Llewelyn: Which, in turn, is tied to its economy.
[2011/07/05 15:37]  Seren (serendipity.seraph): Ivy begging. You have made my day! 🙂
[2011/07/05 15:37]  Gwyneth Llewelyn: So it’s a circular definition: money is used in an economy because that economy backs it up.
[2011/07/05 15:37]  Gwyneth Llewelyn: (haha Seren!!)
[2011/07/05 15:37]  Seren (serendipity.seraph): nope. not that circular.
[2011/07/05 15:37]  Seren (serendipity.seraph): or doesn’t have to be
[2011/07/05 15:37]  Gwyneth Llewelyn: Well, 250+ countries have adopted that as a definition 🙂
[2011/07/05 15:37]  Gwyneth Llewelyn: And so did Second Life.
[2011/07/05 15:37]  TommyJW Ninetails: I would like to see a common payment based on time value. That way we can give elementry teachers the same pay as doctors.
[2011/07/05 15:38]  Seren (serendipity.seraph): too bad for them, gwyn.
[2011/07/05 15:38]  Seren (serendipity.seraph): 🙂
[2011/07/05 15:38]  Gwyneth Llewelyn: heh 😀
[2011/07/05 15:38]  Hiro Pendragon: Tanks. Bombs. Same thing with virtual worlds.
[2011/07/05 15:38]  Ivy Sunkiller: for those who aren’t aware, the mechanism of generating, or mining, bitcoins is done by finding a fitting hash to a block (look up wiki if you wish, a proper description would take half hour+) and there can never be more than 6mil bitcoins created
[2011/07/05 15:38]  Gwyneth Llewelyn: Well, it *does* work, doesn’t it?
[2011/07/05 15:38]  Hiro Pendragon: State of Play 3, 2005.
[2011/07/05 15:38]  Hiro Pendragon: The great debate
[2011/07/05 15:38]  Extropia DaSilva: what do you mean, Hiro?
[2011/07/05 15:38]  Hiro Pendragon: Who really controls virtual worlds?
[2011/07/05 15:38]  Gwyneth Llewelyn: (oh hi Hiro!)
[2011/07/05 15:38]  Gwyneth Llewelyn: Ahhh
[2011/07/05 15:38]  Hiro Pendragon: Ultimately, whomever has the tanks and bombs to back up the law is king.
[2011/07/05 15:38]  Ivy Sunkiller: Hiro: is there a need for control to begin with?
[2011/07/05 15:39]  Seren (serendipity.seraph): sorry but value is not fugible. Some people’s time and skills are of more value than others. you know, little things like supply and demand come into play.
[2011/07/05 15:39]  Zobeid Zuma: Governments also have the power to levy taxes.
[2011/07/05 15:39]  Extropia DaSilva: The feted inner core really control virtual worlds, Hiro. I have that on good authority.
[2011/07/05 15:39]  Gwyneth Llewelyn: /me *snickers*
[2011/07/05 15:39]  Ivy Sunkiller: now, Seren, if you seek some “real” value in bitcoins, it actually is there
[2011/07/05 15:39]  Seren (serendipity.seraph): what inner core?
[2011/07/05 15:39]  Zobeid Zuma: Wait, who’s fetid?
[2011/07/05 15:39]  Extropia DaSilva: You can snicker Gwyn. You are one of them.
[2011/07/05 15:39]  Ivy Sunkiller: it’s the electricity bill that y ou have to pay to generate them 🙂
[2011/07/05 15:39]  Violet (ataraxia.azemus): Hi Adur 🙂
[2011/07/05 15:39]  Hiro Pendragon: As is written on the old British cannons – the King’s Final Argument
[2011/07/05 15:39]  Gwyneth Llewelyn: Oh, not me. Rod doesn’t even know I exist.
[2011/07/05 15:40]  Gwyneth Llewelyn: Heh Hiro 😀
[2011/07/05 15:40]  Adur Gaelyth: Hi ツ
[2011/07/05 15:40]  Hiro Pendragon: Ivy: Need has nothing to do with it. Ultimately, control is.
[2011/07/05 15:40]  Seren (serendipity.seraph): how so? If I accepted bitcoing just before the crash I lost over 99% of my pay.
[2011/07/05 15:40]  Extropia DaSilva: hello Adur
[2011/07/05 15:40]  Ivy Sunkiller: generating bitcoins take a lot of computing power at this moment, people use multiple rigs with 2-3 GPU each to do it
[2011/07/05 15:40]  Gwyneth Llewelyn: But the notion of “crashing” means exactly that: everybody suddenly losing confidence in a currency.
[2011/07/05 15:40]  Ivy Sunkiller: Seren: you didn’t
[2011/07/05 15:40]  Seren (serendipity.seraph): ok, that is a plus. they can’t be printed so easily.
[2011/07/05 15:40]  Ivy Sunkiller: or wouldn’t
[2011/07/05 15:40]  Gwyneth Llewelyn: Agreed, Seren
[2011/07/05 15:41]  Seren (serendipity.seraph): however, the government has a lot of very fast computers so wouldn’t the supply be inflatable within limits at will?
[2011/07/05 15:41]  Ivy Sunkiller: no
[2011/07/05 15:41]  Gwyneth Llewelyn: My own maxim is that economies are worth what people blieve them to be worth; there is nothing else to “value” really.
[2011/07/05 15:41]  Ivy Sunkiller: the system is basically bulletproof in that regard
[2011/07/05 15:41]  Extropia DaSilva: makes sense, Gwyn.
[2011/07/05 15:41]  Gwyneth Llewelyn: Not my own thought btw
[2011/07/05 15:41]  Hiro Pendragon: The problem isn’t with the exchanging, it’s the banking of them.
[2011/07/05 15:42]  Ivy Sunkiller: and if you are concerned about losing money after accepting in bitcoins, the mtgox is:
[2011/07/05 15:42]  Ivy Sunkiller: a) not the only exchange out there
[2011/07/05 15:42]  Hiro Pendragon: Anything can be a currency as long as it’s agreed. Once banking is involved, there needs to be tight oversight.
[2011/07/05 15:42]  Seren (serendipity.seraph): and thus entry and exit from the coinage as well
[2011/07/05 15:42]  Ivy Sunkiller: b) even if it crashes rates, it doesn’t take much time for them to get up
[2011/07/05 15:42]  Gwyneth Llewelyn: /me *nods* @ Ivy — I’d love to see a BitCoin-to-L$ gateway for instance.
[2011/07/05 15:42]  Gwyneth Llewelyn: Pegging the value of BitCoin to a stable currency 😉
[2011/07/05 15:42]  Ivy Sunkiller: when mtgox crashed 2 weeks ago it took 3 (THREE) minutes for the rates to get back to $15 per BTC
[2011/07/05 15:42]  Seren (serendipity.seraph): laughs. I like it.
[2011/07/05 15:43]  Ivy Sunkiller: Gwyn: VirVoX does that
[2011/07/05 15:43]  Gwyneth Llewelyn: They do!!
[2011/07/05 15:43]  Gwyneth Llewelyn: /me *slaps her forehead*
[2011/07/05 15:43]  Ivy Sunkiller: yup
[2011/07/05 15:43]  Gwyneth Llewelyn: /me *shakes head*
[2011/07/05 15:43]  Zobeid Zuma: Artcrash, hii! We’re considering blaming you for the sky here, by the way.
[2011/07/05 15:43]  Gwyneth Llewelyn: … and I’m supposed to be a ‘beta tester’ for VirVoX
[2011/07/05 15:43]  ArtCrash Exonar: uh oh
[2011/07/05 15:43]  Violet (ataraxia.azemus): Hi Art, Larry 🙂
[2011/07/05 15:43]  Extropia DaSilva: *An awed silence descends as the owner of pennyroyal TPs in*
[2011/07/05 15:43]  Gwyneth Llewelyn: hiya Art!
[2011/07/05 15:43]  ArtCrash Exonar: Hiya peeps!
[2011/07/05 15:43]  Seren (serendipity.seraph): trippy sky
[2011/07/05 15:43]  Ivy Sunkiller: also, there is one thing about Bitcoin that has to be taken into consideration that makes it vastly superior to any alternative
[2011/07/05 15:43]  Extropia DaSilva: Hello Art:)
[2011/07/05 15:44]  ArtCrash Exonar: ha ha Extie
[2011/07/05 15:44]  Ivy Sunkiller: that is – the ease of exchange
[2011/07/05 15:44]  Seren (serendipity.seraph): superior to gold or silver?
[2011/07/05 15:44]  Gwyneth Llewelyn: I thought that the “one thing” was — “nobody can control it”?
[2011/07/05 15:44]  Ivy Sunkiller: yes
[2011/07/05 15:44]  Ivy Sunkiller: superior to gold and silver
[2011/07/05 15:44]  Seren (serendipity.seraph): and e-gold, goldmoney, etc?
[2011/07/05 15:44]  Multi Gadget v1.58.0: /me by Timeless Prototype
[2011/07/05 15:44]  Gwyneth Llewelyn: Gold or silver are valueless except for those who place any value in it. I don’t — I can’t eat gold 😛
[2011/07/05 15:44]  Ivy Sunkiller: e-gold was centralized 🙂
[2011/07/05 15:44]  Extropia DaSilva: You look great Art. That is what I love about you. You have such style:)
[2011/07/05 15:44]  Hiro Pendragon: ouch. back
[2011/07/05 15:44]  Ivy Sunkiller: the thing is
[2011/07/05 15:44]  Gwyneth Llewelyn: Most of those systems are all centralised…
[2011/07/05 15:44]  Gwyneth Llewelyn: and wb Hiro
[2011/07/05 15:44]  Violet (ataraxia.azemus): wb Hiro
[2011/07/05 15:44]  Ivy Sunkiller: I can send Bitcoins
[2011/07/05 15:45]  Ivy Sunkiller: to someone on the other side of the globe
[2011/07/05 15:45]  ArtCrash Exonar: Thanks! I’m a shopaholic!
[2011/07/05 15:45]  Kimiko Yiyuan: You cannot eat Bitcoins either. You would not even able to try? haha
[2011/07/05 15:45]  Seren (serendipity.seraph): gold and silver hold value for thousands of years better than currencies to date.
[2011/07/05 15:45]  Ivy Sunkiller: transaction takes 15 minutes or so
[2011/07/05 15:45]  Zobeid Zuma: Papa once told me not to buy gold because “you can’t eat gold”. I sometimes wondered how his T-bills tasted.
[2011/07/05 15:45]  Extropia DaSilva: YOu crashed? SL does not crash. It is like, the most stable software platform known to humankind.
[2011/07/05 15:45]  Gwyneth Llewelyn: Kimiko: thus gold is as valuable as BitCoins.
[2011/07/05 15:45]  Ivy Sunkiller: and there are no fees
[2011/07/05 15:45]  Hiro Pendragon: /me grins at Extie.
[2011/07/05 15:45]  Gwyneth Llewelyn: Oh, nice point, Ivy — another benefit of no centralisation: no fees
[2011/07/05 15:45]  Seren (serendipity.seraph): gold is much more valuable and much more useable right now than bitcoin
[2011/07/05 15:45]  Kimiko Yiyuan: Maybe in your perception Gwy, but i do not agree.
[2011/07/05 15:45]  Ivy Sunkiller: so, essentially, Bitcoins are scarce, very easy to exchange, tokens 🙂
[2011/07/05 15:46]  Gwyneth Llewelyn: hehe Seren — goodie, starting with that you can peg a value to BitCoin 😉
[2011/07/05 15:46]  Extropia DaSilva: Gold will always be valuable. Right?
[2011/07/05 15:46]  Gwyneth Llewelyn: Yes, for jewelry!
[2011/07/05 15:46]  Zobeid Zuma: Gold is subject to swings in value when the supply changes. Re: California gold rush, or South African mining, or potentially asteroid mining, etc.
[2011/07/05 15:46]  Seren (serendipity.seraph): until we have so much of it that it isn’t.
[2011/07/05 15:46]  Ivy Sunkiller: Seren: try sending me some gold, I bet I can send you some bitcoins faster and cheaper 🙂
[2011/07/05 15:46]  ArtCrash Exonar: Gold, just like anything depends on faith to be valuable.
[2011/07/05 15:46]  Gwyneth Llewelyn: That was my point, Art.
[2011/07/05 15:46]  Seren (serendipity.seraph): I can pay you in e-gold or goldmoney just as fast and as securely.
[2011/07/05 15:46]  ArtCrash Exonar: Money is about trust and faith.
[2011/07/05 15:47]  Ivy Sunkiller: Seren: I won’t actually *have* that gold then though, will I?
[2011/07/05 15:47]  Ivy Sunkiller: like, physically?
[2011/07/05 15:47]  Seren (serendipity.seraph): yes you will in your account with e-gold or goldmoney.
[2011/07/05 15:47]  Gwyneth Llewelyn: I think that’s what Seren is pointing at: she trusts the centralised system of e-Gold but not the uncentralised system of BitCoin. Seren, I get that!
[2011/07/05 15:47]  Seren (serendipity.seraph): verifiably
[2011/07/05 15:47]  Ivy Sunkiller: and they don’t take any fees?
[2011/07/05 15:48]  Seren (serendipity.seraph): centralization has less to do with it than known professionalism
[2011/07/05 15:48]  Gwyneth Llewelyn: I’m sure they do, or how would they provide their services? 😉
[2011/07/05 15:48]  Seren (serendipity.seraph): I haven’t seen a lot of that with bitcoins yet
[2011/07/05 15:48]  Hiro Pendragon: It’s not that it’s decentralized that’s the problem, as we had banking systems before the central bank
[2011/07/05 15:48]  Zobeid Zuma: Taking physical possession of gold only makes sense if you expect a Mad Max/Somalia type of future.
[2011/07/05 15:48]  Gwyneth Llewelyn: Seren, in a sense, both go together, at least from the perspective of most people: companies are strangely more “trustable” than individuals.
[2011/07/05 15:48]  Hiro Pendragon: In fact, some historians point that America’s Founding Fathers included getting away from England’s Central Bank as one reason for revolution.
[2011/07/05 15:48]  Ivy Sunkiller: Seren: what you have seen is lack of professionalism with bitcoin EXCHANGE POINTS, not Bitcoin
[2011/07/05 15:48]  Seren (serendipity.seraph): not at all. I like physically possessing some gold and silver. comforting in scary times.
[2011/07/05 15:49]  Hiro Pendragon: It’s that there’s no oversight behind any of bitcoin.
[2011/07/05 15:49]  Gwyneth Llewelyn: (not even that, Zo; gold requires governments to be valuable)
[2011/07/05 15:49]  Ivy Sunkiller: yes, Bitcoins can be stolen, so can be gold, so can be any currency
[2011/07/05 15:49]  Hiro Pendragon: If there was some standard and oversight that could also be distributed, it may be feasible.
[2011/07/05 15:49]  Seren (serendipity.seraph): no it doesn’t gwyn
[2011/07/05 15:49]  Gwyneth Llewelyn: If times get TOO scary, nobody will exchange gold for food.
[2011/07/05 15:49]  Hiro Pendragon: And that oversight requires guns and tanks, so to speak.
[2011/07/05 15:49]  Zobeid Zuma: Well, gold requires some kind of at least semi-stable society to be valuable. Not necessarily government as such.
[2011/07/05 15:49]  Gwyneth Llewelyn: I tend to agree, Hiro, at least that’s pretty much the same point Seren is doing.
[2011/07/05 15:49]  Seren (serendipity.seraph): if bitcoins are encrypted with current owner key they could be harder to steal and use.
[2011/07/05 15:49]  Kimiko Yiyuan: Besides, and that might sound a little oldfashioned, gold silver and also usual money have, despite the trading happens online mostly, still are pysical or do have at least a physical representation aka. coins or paper. Now one can certainly argue what paper is really worth, considering how money is “produced”, but I think that to be a rather important thing. If only having a psycholöogical effect in that you have something you can hold and physically stash.
[2011/07/05 15:49]  Gwyneth Llewelyn: Zo: agreed
[2011/07/05 15:50]  Ivy Sunkiller: Seren: they are
[2011/07/05 15:50]  Gwyneth Llewelyn: Kimiko: again, the idea is that “someone” backs them.
[2011/07/05 15:50]  Gwyneth Llewelyn: And “someone” trustable.
[2011/07/05 15:50]  Gwyneth Llewelyn: A company, a government, a well-known association.
[2011/07/05 15:50]  Ivy Sunkiller: bitcoins in your wallet (wallet.dat) are encrypted with private-public key pair
[2011/07/05 15:50]  Gwyneth Llewelyn: But… that’s really just arguments to try to convince people that “somehow” some things are magically worth something intrinsically 🙂
[2011/07/05 15:50]  Seren (serendipity.seraph): re gold? I don’t need anyone to back it for it to be considered valuable most anywhere in the world.
[2011/07/05 15:51]  Seren (serendipity.seraph): i.e., I can trade it for other things freely.
[2011/07/05 15:51]  Gwyneth Llewelyn: Seren: in THIS world, yes. Not on a post.apocalypse world where people will be struggling to eat 😀
[2011/07/05 15:51]  Zobeid Zuma: I remember when survivalists were all going nuts to stockpile gold. And then I saw a magazine ad selling jars of food pills.
[2011/07/05 15:51]  Gwyneth Llewelyn: But that’s just because THIS world has governments 🙂
[2011/07/05 15:51]  Ivy Sunkiller: Seren: freely, but not practically though, you are not going to walk into a store, do groceries and pay with some gold dust
[2011/07/05 15:51]  Seren (serendipity.seraph): I disagree, gwyn. I can buy food or seeds with gold.
[2011/07/05 15:51]  Gwyneth Llewelyn: Tanks and guns, as Hiro so well puts it.
[2011/07/05 15:51]  Hiro Pendragon: ecryption is only as good as the human security. If a safe is burglar-proof but the desk clerk leaves the combination in his/her desk, then poof. Same thing with bitcoins.
[2011/07/05 15:51]  Hiro Pendragon: encryption*
[2011/07/05 15:51]  Gwyneth Llewelyn: Seren, that will only work if someone recognises that gold is valuable.
[2011/07/05 15:51]  Violet (ataraxia.azemus): Hi Luisa 🙂
[2011/07/05 15:52]  Zobeid Zuma: “If you’re trapped in a fallout shelter, and you have gold, and the other guy has cans of beans, he’ll demand two or three ounces of gold per can! Can you afford that?”
[2011/07/05 15:52]  Seren (serendipity.seraph): once the dollar and euro crash I am sure my grocer would be delighted to take some gold or silver.
[2011/07/05 15:52]  Zobeid Zuma: I thought that was hilarious in so many ways. 😀
[2011/07/05 15:52]  Ivy Sunkiller: Hiro: yes, then again, money on your bank account is only as secure as the bank, isn’t it?
[2011/07/05 15:52]  Gwyneth Llewelyn: For a while, yes, Seren.
[2011/07/05 15:52]  Seren (serendipity.seraph): depends on how hungry I am. my life is worth a few ounces. 🙂
[2011/07/05 15:52]  Hiro Pendragon: Zo: Interesting idea. Depends on the futures market: do we believe there’s a future after the fallout shelter?
[2011/07/05 15:52]  Gwyneth Llewelyn: Ivy: sort of, banks are insured too
[2011/07/05 15:52]  Hiro Pendragon: Banks are b.s. nowadays.
[2011/07/05 15:52]  Gwyneth Llewelyn: Hiro: sure, given enough time 😀
[2011/07/05 15:52]  Hiro Pendragon: With deregulation and mixing of personal and speculative banking.
[2011/07/05 15:53]  Violet (ataraxia.azemus): Hi JeanPierre 🙂
[2011/07/05 15:53]  Extropia DaSilva: If banks are BS so is money, right?
[2011/07/05 15:53]  Zobeid Zuma: I’m not sure fallout shelter scenarios should be our basis for planning the future.
[2011/07/05 15:53]  ArtCrash Exonar: Zobeid, if you are trapped in a fallout shelter, gold is worthless.
[2011/07/05 15:53]  Seren (serendipity.seraph): way underinsured. the FDIC only has about 2 cents on the dollar of deposits tops iirc
[2011/07/05 15:53]  Hiro Pendragon: Banks are as secure as the lawyers available to sue them if you lose your money.
[2011/07/05 15:53]  Gwyneth Llewelyn: I think that the point is that BitCoins are valuable because people like Ivy trust cryptography. Gold is valuable because every government says so. L$ is valuable because 20 million SL residents say so. There is always “something” or “someone” that backs up the “worth” of currency.
[2011/07/05 15:53]  Ivy Sunkiller: that doesn’t really have to be true Hiro 🙂
[2011/07/05 15:53]  ArtCrash Exonar: We found out with the big crash, that banks are only safe if governments say they will back them up.
[2011/07/05 15:54]  Gwyneth Llewelyn: Art: precisely!
[2011/07/05 15:54]  Seren (serendipity.seraph): the real scenario is what can we use for an underground economy pronto as the topside one is about to crash and burn
[2011/07/05 15:54]  Ivy Sunkiller: no Gwyn, Bitcoin is valuable because it’s decentralized and free to exchange
[2011/07/05 15:54]  Extropia DaSilva: So basically if I think this pot beside me is valuable, and you agree, it is.
[2011/07/05 15:54]  Seren (serendipity.seraph): government is tapped out
[2011/07/05 15:54]  Ivy Sunkiller: especially the latter
[2011/07/05 15:54]  Extropia DaSilva: Aw Zo did you crash?
[2011/07/05 15:55]  Ivy Sunkiller: if I am to send Khani some money using my local currency, even via Paypal, the fees are harsh
[2011/07/05 15:55]  Gwyneth Llewelyn: Not really because of that, Ivy; I don’t agree completely. Although my view might be biased by some friends of mine who back their claims always on the cryptography…
[2011/07/05 15:55]  Violet (ataraxia.azemus): wb Zo 🙂
[2011/07/05 15:55]  Ivy Sunkiller: with normal bank transfers it’s even worse and takes a long time, doesn’t even work on weekends
[2011/07/05 15:55]  Luh (luisa.bourgoin): gold is worthless, especially if they had extracted all the latinum inside
[2011/07/05 15:55]  Kimiko Yiyuan: Yes, but can you tell me who is trustable when it comes to Bitcoin? Computers? Those that have contsntly have their machines activated to create those codelines? The three or four websties that exchange them? Gold is indeed something that is pretty much independent from anyone backing it up because although there are exchange rates, Gold and similiar metal have a history of a few thousand years as something valuable in all of humanity, long before current governments exitsed. And it is rather unlikely that humanity will suddenly come to the conclusion to collectivly declare it worthless.
[2011/07/05 15:55]  Gwyneth Llewelyn: I see those as *advantages* of BitCoin; not as its *worth*
[2011/07/05 15:55]  Zobeid Zuma: BTW, SL is the only major app I have on my computer that still spontaneously crashes like that. Even Safari is stable now.
[2011/07/05 15:55]  Ivy Sunkiller: Gwyn: cryptography is the backbone of Bitcoin, obviously, but it’s not what makes it good, it’s just what makes it *work* 🙂
[2011/07/05 15:56]  Luh (luisa.bourgoin): the advantages .. but about the drawbacks? recording of ALL bitcoin transfers piling up on a giant hill
[2011/07/05 15:56]  Kimiko Yiyuan: Not to mention that it is a valuable resource in industry as well.
[2011/07/05 15:56]  Gwyneth Llewelyn: I’d claim it’s what makes it *worth* (besides, obviously, what makes it *work*)
[2011/07/05 15:56]  Seren (serendipity.seraph): there is no central recording in bitcoin is there?
[2011/07/05 15:56]  Gwyneth Llewelyn: Kimiko: sadly, the flaw of your argument is that we have been away from the gold standard for many decades… 😉
[2011/07/05 15:57]  Seren (serendipity.seraph): yes and nearly crashed all currencies because of it
[2011/07/05 15:57]  Ivy Sunkiller: Luh: that’s not a problem at all, the compression of transfers is quite effective and, given exponential progress in computing/transfers, we will easily outrun the “giant” hill
[2011/07/05 15:57]  Luh (luisa.bourgoin): a distributed database, not a central database. none the less, a database of all transfers going on
[2011/07/05 15:57]  Gwyneth Llewelyn: Seren: we did survive, didn’t we? We just pushed the value away from gold into the much more abstract concept of “economy”
[2011/07/05 15:57]  Seren (serendipity.seraph): but there are no hard identities needed to transfer coins
[2011/07/05 15:57]  Seren (serendipity.seraph): anonymity
[2011/07/05 15:57]  Luh (luisa.bourgoin): moved from gold to bubbles
[2011/07/05 15:57]  Gwyneth Llewelyn: Exactly, Luh 🙂
[2011/07/05 15:57]  Ivy Sunkiller: Seren: there are addresses
[2011/07/05 15:57]  Violet (ataraxia.azemus): One shiny thing to another :p
[2011/07/05 15:57]  Seren (serendipity.seraph): and why would a coin keep a tail of all hands it passed through? That is a reason to distrust it if true
[2011/07/05 15:58]  Ivy Sunkiller: it’s more pseudonymous than anonymous
[2011/07/05 15:58]  Ivy Sunkiller: it’s as anonymous as prepaid cellphones
[2011/07/05 15:58]  Gwyneth Llewelyn: It would be fun if suddenly went back to the gold standard, and found out that there is thousands and thousands of more currency than gold… 😉
[2011/07/05 15:58]  Ivy Sunkiller: read: perfectly trackable if you put enough effort into it
[2011/07/05 15:58]  Seren (serendipity.seraph): so gold price would go through the rough relative to currency.
[2011/07/05 15:58]  Luh (luisa.bourgoin): seems in future we get many many more casually used currencies. L$, BT, PayPal, you choose — not just the king’s coin
[2011/07/05 15:58]  Seren (serendipity.seraph): no problem
[2011/07/05 15:58]  Gwyneth Llewelyn: Hopefully so, Luh
[2011/07/05 15:59]  Gwyneth Llewelyn: I actually expect that in 20 years, things like BitCoin become pretty much the standard.
[2011/07/05 15:59]  Ivy Sunkiller: Luh: quite possible, Bitcoin just opened a can full of worms 🙂
[2011/07/05 15:59]  Gwyneth Llewelyn: (perhaps even BitCoin itself)
[2011/07/05 15:59]  ArtCrash Exonar: In order for an economy to grow, you need to create money out of nothing. That is done in banks at the moment of lending. This whole house of cards is based on everyone agreeing that they will abide by this fiction. That is how money works.
[2011/07/05 15:59]  Seren (serendipity.seraph): trackable? whose bright idea was that?
[2011/07/05 15:59]  Gwyneth Llewelyn: /me *nods* @ Art
[2011/07/05 16:00]  Extropia DaSilva: You seen Zeitgeist addendum, I assume, Art?
[2011/07/05 16:00]  ArtCrash Exonar: what?
[2011/07/05 16:00]  Luh (luisa.bourgoin): the currency of the future could be energy. energy backupped currency
[2011/07/05 16:00]  Seren (serendipity.seraph): creating money out of nothing means that you are at the mercy of the printing presses. No thank you. And know, growth does not require more and more monetary units.
[2011/07/05 16:00]  Ivy Sunkiller: Seren: it has to be trackable in order to determine who has bitcoins and who doesn’t. But what you track is only the address of the wallet (random string pretty much), doesn’t tell you anything about the user
[2011/07/05 16:00]  Kimiko Yiyuan: I know and I am not asking for it to come back either, like others might do. I just think that the physical exsitence of something should not be underestimated, both psychologically and economically. Bitcoin is in that sense something pretty nebulous too, something that might appeal to computer geeks but might not really get the trust of anyone else. especially maybe BECAUSE there is no centralized institutions that creates it. Sure there remains always the question if or how much they can be trusted…but I guess you know what I mean.
[2011/07/05 16:00]  Zobeid Zuma: I do blame a lot of the US’s problems on currency, by the way. . . Putting so many functions under the federal government which has so much power to print, borrow and tax, and where there’s so little compulsion to any kind of fiscal reality.
[2011/07/05 16:00]  Violet (ataraxia.azemus): There’s an idea, Luisa 🙂
[2011/07/05 16:00]  Gwyneth Llewelyn: Luh: I agree, unless energy becomes as abundant as air 🙂
[2011/07/05 16:00]  Seren (serendipity.seraph): if the coin is encrypted with current owner then it is its own proof, yes?
[2011/07/05 16:00]  Seren (serendipity.seraph): why does it need past owners as well?
[2011/07/05 16:00]  Zobeid Zuma: That’s as compared with the state governments, which can’t print money and are much more limited in their ability to borrow.
[2011/07/05 16:01]  Luh (luisa.bourgoin): I would trade a stack of mignon cells against a barrel of light gasoline .. how’s exchange rate?
[2011/07/05 16:01]  Ivy Sunkiller: Luh: Bitcoin is energy backed up currency technically, again, you need energy to power up those Bitcoin mining GPUs 🙂
[2011/07/05 16:01]  ArtCrash Exonar: Money is NOT created by printing presses, it is created by banks lending money to corporations and linking the value of money to the value of the corporations assets.
[2011/07/05 16:01]  Gwyneth Llewelyn: I know what you mean, Kimiko. Do you know that a huge proportion of the whole population in the Western world actually still believe that we’re on the gold standard, and that’s why they trust their currency? 🙂
[2011/07/05 16:01]  Hiro Pendragon: Question: Why does anyone need a BitCoin?
[2011/07/05 16:01]  Seren (serendipity.seraph): no art. you are mistaken.
[2011/07/05 16:01]  Seren (serendipity.seraph): you missed the first step before the banks get the money
[2011/07/05 16:02]  Luh (luisa.bourgoin): ivy, indeed proportionally relating. energy == calculation cycles
[2011/07/05 16:02]  Gwyneth Llewelyn: I like that, Ivy 🙂
[2011/07/05 16:02]  Gwyneth Llewelyn: What first step, Seren?
[2011/07/05 16:02]  Ivy Sunkiller: Hiro: to be able to make purcherases fast and without a man in the middle.
[2011/07/05 16:02]  Extropia DaSilva: Gwyn you do not need gold in the federal reserve: You only need to *believe* there is gold in the federal reserve;)
[2011/07/05 16:02]  ArtCrash Exonar: Seren, the banks are only required to have assets of 10 percent of the loan amounts.
[2011/07/05 16:02]  Gwyneth Llewelyn: Extie: that’s it!
[2011/07/05 16:02]  Luh (luisa.bourgoin): money today got backed up in trust. you need to trust it
[2011/07/05 16:02]  Gwyneth Llewelyn: /me *nods* @ Luh
[2011/07/05 16:03]  Ivy Sunkiller: Bitcoin is the government’s nightmare, or anarchist’s dream if you wish 🙂
[2011/07/05 16:03]  Seren (serendipity.seraph): today? gov goes into debt (writes IOUs) to justify printing some money which is given to the banks which loan out 10 times more. sick but true.
[2011/07/05 16:03]  Gwyneth Llewelyn: /me waits for Seren’s explanation of the “first step”
[2011/07/05 16:03]  Zobeid Zuma: Ron Paul wants to audit Fort Knox. 🙂
[2011/07/05 16:03]  Violet (ataraxia.azemus): Well, someone needed to trust it….once a currency is established, you don’t really have much choice
[2011/07/05 16:03]  Hiro Pendragon: Ivy: There’s always a”man in the middle”
[2011/07/05 16:03]  Hiro Pendragon: Commerce, by definition, is about an ecosystem of trade.
[2011/07/05 16:03]  Ivy Sunkiller: Hiro: not in bitcoin.
[2011/07/05 16:03]  Seren (serendipity.seraph): yes hiro
[2011/07/05 16:03]  Hiro Pendragon: Ivy: indeed.
[2011/07/05 16:03]  Gwyneth Llewelyn: 10 times, hah… in my country, the nearest estimate is that the virtual economy (based on non-transactionable items, i.e. not atom.based goods) is about 70x the amount of the transactionable one…. 10 times was in the 19890s
[2011/07/05 16:03]  Gwyneth Llewelyn: *1990s
[2011/07/05 16:04]  Hiro Pendragon: 1: In encryption and verification
[2011/07/05 16:04]  Ivy Sunkiller: or at least, the man in the middle is replaced with network of nodes
[2011/07/05 16:04]  Hiro Pendragon: 2: In the ecosystem itself. A bitcoin without a bitcoin community is worthless.
[2011/07/05 16:04]  Ivy Sunkiller: USD without US is worthless 🙂
[2011/07/05 16:04]  Hiro Pendragon: My point being – currency is created to fill a need.
[2011/07/05 16:04]  Gwyneth Llewelyn: Exactly … like a L$ without SL’s economy to back it up is worthless
[2011/07/05 16:04]  Gwyneth Llewelyn: Yes, Ivy!
[2011/07/05 16:04]  Hiro Pendragon: What need would BitCoin fill better than existing currencies?
[2011/07/05 16:04]  Seren (serendipity.seraph): I am talking about actual currency gwyn, not the huge derivative pile and other mad shell games
[2011/07/05 16:04]  Gwyneth Llewelyn: Hiro: I think Ivy pretty well explained it: no transaction fees, ever
[2011/07/05 16:05]  Ivy Sunkiller: Hiro: again, ease of exchange
[2011/07/05 16:05]  Hiro Pendragon: Ivy: Yes, but the moment the US goes away, we have some huge frigging pressing issues.
[2011/07/05 16:05]  Hiro Pendragon: Ivy, it’s really easy for me to exchange cash.
[2011/07/05 16:05]  Ivy Sunkiller: Gwyn: that’s not true actually 🙂
[2011/07/05 16:05]  Hiro Pendragon: I hand someone a dollar bill.
[2011/07/05 16:05]  Seren (serendipity.seraph): although the 10x assumes the econmy will boom enough to pay it off before it is due.
[2011/07/05 16:05]  Gwyneth Llewelyn: Seren: what is the difference!!
[2011/07/05 16:05]  ArtCrash Exonar: US Dollar without ‘faith’ in the US dollar is worthless. Faith is measured by monetary exchange rates. Relative faith in various currencies that is.
[2011/07/05 16:05]  Ivy Sunkiller: Hiro: send me $5 then
[2011/07/05 16:05]  Kimiko Yiyuan: I agree though. As long as there is no general trust in it, bitcoin, as alternative, is not more than some fun for a few.
[2011/07/05 16:05]  Ivy Sunkiller: I’ll send you them back
[2011/07/05 16:05]  Extropia DaSilva: OK so in SL what came first? The linden dollar or the economy?
[2011/07/05 16:05]  Hiro Pendragon: Ivy: What’s your Paypal?
[2011/07/05 16:05]  Ivy Sunkiller: IRL on my bank account
[2011/07/05 16:05]  Violet (ataraxia.azemus): Bitcoin is supposed to be kind of like digital cash, I think.
[2011/07/05 16:05]  Ivy Sunkiller:
[2011/07/05 16:05]  Ivy Sunkiller: 🙂
[2011/07/05 16:05]  Gwyneth Llewelyn: KImiko: just like the L$ is only worth for SL residents 😀
[2011/07/05 16:05]  Hiro Pendragon: Okay, then, I can easily send you $5, Ivy.
[2011/07/05 16:06]  Seren (serendipity.seraph): huge. $300 trillion in all nominal value of financial instruments and only $50 trillion or so of all curencies in existence.
[2011/07/05 16:06]  Kimiko Yiyuan: Exactly.
[2011/07/05 16:06]  Hiro Pendragon: Or I can give you L$ in that value and you can cash it yourself.
[2011/07/05 16:06]  Ivy Sunkiller: Hiro: sure you can, but:
[2011/07/05 16:06]  Gwyneth Llewelyn: Extie: both appeared simultaneously; but the L$ just became “worth” when people started believing it was worth something. And that required GOM to exist first
[2011/07/05 16:06]  Ivy Sunkiller: 1) paypal is centralized and known for closing accounts (as they did with Khani’s)
[2011/07/05 16:06]  ArtCrash Exonar: BTW, the Terms and Conditions tell us that the Linden dollar has no actual value….. heh
[2011/07/05 16:06]  Extropia DaSilva: kk thanks Gwynie.
[2011/07/05 16:06]  Seren (serendipity.seraph): Well the L$ is pegged more or less to so many $$$ in recent memory.
[2011/07/05 16:07]  Ivy Sunkiller: 2) you will pay a fee, and I’ll pay a fee if I’m to send it back
[2011/07/05 16:07]  Gwyneth Llewelyn: Seren: and that’s just currency in circulation; I wonder how much more circulates in bits. As said, in my country, the ratio is more than 70:1
[2011/07/05 16:07]  Gwyneth Llewelyn: (Ivy: I got lots of accounts deleted by PayPal too hehe)
[2011/07/05 16:07]  ArtCrash Exonar: IN order to be legal, the Linden dollar cannot claim to be a ‘real’ currency, even though in practice is actually is.
[2011/07/05 16:07]  Ivy Sunkiller: Phoenix Viewer folks where gathering money for Japan via paypal, got 2k USD and their account got frozen
[2011/07/05 16:07]  Ivy Sunkiller: sounds like fun 🙂
[2011/07/05 16:07]  Seren (serendipity.seraph): I wanted at one time to start an opensim grid whose currency was convertible to 1/1000th gram of gold. The place would heat up like mad due to gold hedge. 🙂
[2011/07/05 16:07]  Gwyneth Llewelyn: ARt: that’s the most hilarious thing that we’ll all be laughing at in 2030 😀
[2011/07/05 16:08]  Kimiko Yiyuan: Only that Linden dollars do not claim to be a real alternative that would solve any global problems. For now it is a hype only and that it is only that one can see by the things that just had happened and led us to discuss that topic in the first place.
[2011/07/05 16:08]  Extropia DaSilva: BUt even if it were not redeemable for US dollars, the linden dollar INWORLD would still have value. IT is what enables me to buy stuff people make that I cannot make (that well) myself.
[2011/07/05 16:08]  Ivy Sunkiller: Seren: and then you would get government on your neck 🙂
[2011/07/05 16:08]  Seren (serendipity.seraph): yep. have to put it offshore..
[2011/07/05 16:08]  Gwyneth Llewelyn: I agree, Extie!
[2011/07/05 16:09]  Gwyneth Llewelyn: It’s the economy that gives the Linden dollar worth. GOM and later the LindeX just helped to peg the value to something concrete.
[2011/07/05 16:09]  ArtCrash Exonar: Extie, the Linden dollar lika ALL currency depends on our faith that it works. We have all agreed to believe in it.
[2011/07/05 16:09]  Seren (serendipity.seraph): although technically I don’t think it is illegal in US just way too much red tape to be any fun.
[2011/07/05 16:09]  Gwyneth Llewelyn: Seren: let’s buy a server on the Cayman Islands 😀
[2011/07/05 16:09]  Violet (ataraxia.azemus): Currencies become valuable when they’re necessary to do something, more than when anyone consciously decides to believe in them, I think.
[2011/07/05 16:09]  Gwyneth Llewelyn: Art: oh yes. But we actually have very good reasons to “believe” in the L$!
[2011/07/05 16:09]  Seren (serendipity.seraph): sure. and that faith had best not be arbitrary unless you wish to lose everything
[2011/07/05 16:09]  Kimiko Yiyuan: Good thing by the way that 1 linden does not equal 1 dollar. Although I stopped checking on that a while ago.
[2011/07/05 16:10]  ArtCrash Exonar: Violet, we all believe in them by default. Until we have a reason not to.
[2011/07/05 16:10]  Extropia DaSilva: something like 100 lindens to the dollar on average I think.
[2011/07/05 16:10]  Violet (ataraxia.azemus): No, not really; belief and necessity aren’t really the same thing.
[2011/07/05 16:10]  Seren (serendipity.seraph): no, around 200 – 250 per dollar on average
[2011/07/05 16:10]  Ivy Sunkiller: I’ve quite limited faith in money in general, though I was able to get 50% of my invenstment into Bitcoin back after a week of speculating
[2011/07/05 16:10]  Extropia DaSilva: Oh, thanks darling.
[2011/07/05 16:11]  Zobeid Zuma: But you can buy stuff in the marketplace with actual dollars, apparently.
[2011/07/05 16:11]  Ivy Sunkiller: I’m quite priviledged though since I’m polish and exchange point we have (, unlike mtgox, actually works well and is completely free from fees *grins*
[2011/07/05 16:11]  Gwyneth Llewelyn: Elsewhere on some blog I proposed that people are still too stuck to the gold standard to believe in a “cryptographic standard”; a mixed model, like the L$ offers — an economy based on virtual goods, like at least 90% of all Western economies out there — is a good first step to get people used to consider digital currency a valid alternative. But ultimately we’ll all have use digital, self-made currencies, because they’re so convenient… 🙂
[2011/07/05 16:11]  Luh (luisa.bourgoin): if european union crashes, and the greenback suffers from the blast, would you quickly transfer all remains into L$ ? … how far oes trust
[2011/07/05 16:12]  Ivy Sunkiller: Luh: not if, *when*
[2011/07/05 16:12]  Ivy Sunkiller: /me grins
[2011/07/05 16:12]  Hiro Pendragon: Too many invested parties.
[2011/07/05 16:12]  Hiro Pendragon: Realize again how we’ve defined currency.
[2011/07/05 16:12]  Ivy Sunkiller: and I’d rather transfer all remains into Bitcoin
[2011/07/05 16:12]  Gwyneth Llewelyn: What would be the alternative, Luh? Yens? Swiss francs? 🙂 If the Euro and the US$ crash, everything will crash 😉
[2011/07/05 16:12]  Hiro Pendragon: As an agreement of faith of society.
[2011/07/05 16:12]  Ivy Sunkiller: because I can keep my bitcoins on my HDD
[2011/07/05 16:12]  Violet (ataraxia.azemus): Yes, Luisa. Utility is more important than trust or faith :p
[2011/07/05 16:12]  Ivy Sunkiller: can’t do same with L$, if SL closes one day, all my L$ are gone
[2011/07/05 16:13]  Extropia DaSilva: But what does it mean ‘not trusting the linden $’? Like, I will not be able to purchase anything with it? Why not? that is like worrying a gun in an FPS will not fire. I mean, it is fundamental. Of course it will do what it is supposed to.
[2011/07/05 16:13]  Gwyneth Llewelyn: That’s a very very good point, Ivy
[2011/07/05 16:13]  Hiro Pendragon: If there are too many interested parties, it would take a huge collapse for the currency to bust. At that point, why are you worried about money? You should be growing a garden, raising pigs, and keeping your shotgun loaded until things stabilize.
[2011/07/05 16:13]  Gwyneth Llewelyn: Hmm
[2011/07/05 16:13]  ArtCrash Exonar: Monopoly money is a good view of currency, It has value in the game because the players agree it has value in the game. The only difference is the definition of ‘assets’. We BELIEVE RL money to be tied to value of RL assets. But it is only a belief. However it fully functions as long as all others believe it to be true.
[2011/07/05 16:13]  Seren (serendipity.seraph): SL can simply take all your lindens and goods at will
[2011/07/05 16:13]  Gwyneth Llewelyn: Hear, hear, Art
[2011/07/05 16:13]  Extropia DaSilva: Oh it does, Seren. It does.
[2011/07/05 16:13]  Hiro Pendragon: Disagree art.
[2011/07/05 16:13]  Ivy Sunkiller: what Art said 🙂
[2011/07/05 16:13]  Gwyneth Llewelyn: I wonder, have any of you used CubePoints?
[2011/07/05 16:13]  Zobeid Zuma: The key concept of bitcoin seems to be. . . putting currency outside the control of any body that could manipulate it. Such as the US govt, or Linden Labs, etc.
[2011/07/05 16:13]  Violet (ataraxia.azemus): But we can’t stop playing the RL economic games :\
[2011/07/05 16:13]  Extropia DaSilva: I have not, Gwyn.
[2011/07/05 16:13]  Gwyneth Llewelyn: Indeed, Zo
[2011/07/05 16:14]  Zobeid Zuma: Now if they can just do something about the hackers. . .
[2011/07/05 16:14]  Seren (serendipity.seraph): the US dollar will crash and within the next five years. I will bet an ounce of gold on it. 🙂
[2011/07/05 16:14]  Hiro Pendragon: Art, let’s play Monopoly. During the game, I’d like to pay you in Monopoly money for a job. Would you?
[2011/07/05 16:14]  Ivy Sunkiller: Zobeid: “they” don’t have to do anything about hackers because *BITCOIN IS NOT BEING HACKED*
[2011/07/05 16:14]  Seren (serendipity.seraph): yes,
[2011/07/05 16:14]  Luh (luisa.bourgoin): Hiro, no gun (amunition supply) use swords. and raise goats … ways more fluffy than pigs
[2011/07/05 16:14]  Zobeid Zuma: OK, did I miss something? I thought bitcoin being hacked was where we started this conversation.
[2011/07/05 16:14]  Gwyneth Llewelyn: Well, it was a novel concept to me too, Extie. It’s sort of an inter-site way of “accounting” “accomplishments” (i.e. doing things like, sending messages, adding friends, liking posts, etc.) and these can also be exchanged by money in some places…
[2011/07/05 16:14]  Kimiko Yiyuan: There is no real need in to have trust into a Linden. It is more or less game money and a means to buy things here. And since it is the only means one has to use it and is using it. But it does not matter if you trust in it or not.
[2011/07/05 16:15]  Seren (serendipity.seraph): swords, hacked? EEEK
[2011/07/05 16:15]  ArtCrash Exonar: Hiro, of course not, because all the players don’t agree on the value of the money or the definition of assets.
[2011/07/05 16:15]  Ivy Sunkiller: what got hacked is *ONE EXCHANGE POINT*, it’s like announcing death of USD after one bank somewhere got hacked 🙂
[2011/07/05 16:15]  Gwyneth Llewelyn: BitCOin was not hacked; a BitCOin exchange was. And just one.
[2011/07/05 16:15]  Violet (ataraxia.azemus): Exactly, Kimiko.
[2011/07/05 16:15]  Zobeid Zuma: But it did cause a fair bit of chaos, did it not?
[2011/07/05 16:15]  Seren (serendipity.seraph): not for people making their living here getting paid in lindens or paying tier it isn’t just in game currency.
[2011/07/05 16:15]  Gwyneth Llewelyn: Right… it would be like hearing that, say, VirWoX was hacked (who also exchange L$) and saying that the L$ is now “unsafe”
[2011/07/05 16:15]  Luh (luisa.bourgoin): Zob, 1st timer occurence, naturally
[2011/07/05 16:15]  Ivy Sunkiller: and about mtgox being hacked – there is another side of the, pun intended, coin there
[2011/07/05 16:16]  Hiro Pendragon: Luh – I’ll keep a shotgun and swords, thankyouverymuch
[2011/07/05 16:16]  Gwyneth Llewelyn: In the media, Zo, sure — you know, journalists…
[2011/07/05 16:16]  Seren (serendipity.seraph): there are only three main ones. One got hacked, another was shut down due to the crash in value. The last had such a crappy website I didn’t trust them at all.
[2011/07/05 16:16]  Ivy Sunkiller: before the first falsh crash two weeks ago people, at least in US, pretty much identified Bitcoin with mtgox
[2011/07/05 16:16]  Gwyneth Llewelyn: /me *nods*
[2011/07/05 16:16]  Ivy Sunkiller: after the crash, other markets got more attention
[2011/07/05 16:16]  Gwyneth Llewelyn: Remind me to buy shares of VirWoX, Ivy 🙂
[2011/07/05 16:17]  Hiro Pendragon: It’s like I said before
[2011/07/05 16:17]  Hiro Pendragon: encryption doesn’t mean squat if other areas of security are weaker.
[2011/07/05 16:17]  Hiro Pendragon: Security is about the weakest link.
[2011/07/05 16:17]  Zobeid Zuma: So it’s just growing pains. Probably.
[2011/07/05 16:17]  Gwyneth Llewelyn: Actually, I wonder… what if LL just got rid of the L$ and used BitCoins instead? They would NOT lose money: they would still get their precious exchange rates on the LindeX.
[2011/07/05 16:17]  Ivy Sunkiller: people actually learned not to trust one exchange, creating a decentralized currency only to bottleneck it with exchange points is not the way it’s supposed to work, and it’s not the way it will work
[2011/07/05 16:17]  Hiro Pendragon: Bottom line, I can go find out who runs a major Bitcoin exchange, put a gun to his/her head, and get Bitcoins.
[2011/07/05 16:17]  Hiro Pendragon: Without bombs and tanks to stop me from doing that, it’s not a legit currency.
[2011/07/05 16:17]  Gwyneth Llewelyn: True, Hiro. Good point.
[2011/07/05 16:17]  Extropia DaSilva: which is usually your own pc, Hiro. That is the weakest link in the chain.
[2011/07/05 16:17]  Gwyneth Llewelyn: MM hmm
[2011/07/05 16:18]  Hiro Pendragon: right
[2011/07/05 16:18]  Seren (serendipity.seraph): anyone that would give a financial database copy to an auditor and let it out of the building does not deserve to remain in business.
[2011/07/05 16:18]  Ivy Sunkiller: Hiro: you can also do the same with anyone owning a large amount of USD 🙂
[2011/07/05 16:18]  Hiro Pendragon: The US gov won’t do squat if BitCoin is defrauded.
[2011/07/05 16:18]  Zobeid Zuma: BTW, you *can* take physical possesson of bitcoins, can’t you? Put it on a flash drive and lock it up in your safe. . . alongside the gold coins, right? 🙂
[2011/07/05 16:18]  Hiro Pendragon: Maybe throw someone in jail for a few years. So what?
[2011/07/05 16:18]  Hiro Pendragon: What’s that to the collapse of a micro-economy?
[2011/07/05 16:18]  Luh (luisa.bourgoin): exchange points aren’t needed, you could trade wares versus BT
[2011/07/05 16:18]  Gwyneth Llewelyn: Unfortunately, Hiro, you’re so right.
[2011/07/05 16:18]  Ivy Sunkiller: Hiro: and while I did speculate on local market here, I didn’t keep my bitcoins on the exchange, I did my transactions and transfered Bitcoin/PLN back to my wallet.dat/bank
[2011/07/05 16:19]  Extropia DaSilva: when you read in the paper about hacking something like bitcoin, 9 times out of ten what they mean is they hacked people’s computers, and stole their passwords or something like that.
[2011/07/05 16:19]  Hiro Pendragon: Okay, but it doesn’t matter, Ivy, because other people *do*.
[2011/07/05 16:19]  Gwyneth Llewelyn: /me *nods* @ Extie
[2011/07/05 16:19]  Ivy Sunkiller: quite Extie
[2011/07/05 16:19]  ArtCrash Exonar: Reading up on Bitcoin. Interesting reading……..
[2011/07/05 16:19]  Hiro Pendragon: @Extie: does it matter?
[2011/07/05 16:19]  Extropia DaSilva: Well, no.
[2011/07/05 16:19]  Seren (serendipity.seraph): if you are paranoid then you know that even your keyboard can rat you out.
[2011/07/05 16:19]  Ivy Sunkiller: Hiro: it does matter because people need to learn how to protect themselves
[2011/07/05 16:19]  Zobeid Zuma: What is wallet.dat, I wonder?
[2011/07/05 16:19]  Gwyneth Llewelyn: No, what matters is what journalists say — that is what affects the value of things 😀
[2011/07/05 16:19]  Extropia DaSilva: I guess you cxan say it is accademic.
[2011/07/05 16:20]  Ivy Sunkiller: Zobeid: wallet.dat is the file that stores your bitcoin ballance and your private and public key
[2011/07/05 16:20]  Luh (luisa.bourgoin): hacking desktops will get way more popular on a pure bitcoins economy
[2011/07/05 16:20]  Gwyneth Llewelyn: 😀
[2011/07/05 16:20]  Zobeid Zuma: Oh, that reminds me of something. . . .
[2011/07/05 16:20]  Seren (serendipity.seraph): so should we all be on linux if we are paranoid?
[2011/07/05 16:20]  Ivy Sunkiller: if someone gets access to that file, they have your money 🙂
[2011/07/05 16:20]  Gwyneth Llewelyn: OpenBSD, if you’re really paranoid, Seren 😉
[2011/07/05 16:20]  Seren (serendipity.seraph): not really as it is encrypted with owner
[2011/07/05 16:20]  Zobeid Zuma: Bitcoin is all based on public key encryption, right? Which in turn is based on the difficulty of factoring large numbers, AFAIK. . . .
[2011/07/05 16:20]  Gwyneth Llewelyn: mm hmm
[2011/07/05 16:20]  Luh (luisa.bourgoin): on linux, and doublechecking hash sums on every source tree download
[2011/07/05 16:21]  Zobeid Zuma: So if somebody comes up with a practical quantum computer, the whole system could fall apart overnight.
[2011/07/05 16:21]  ArtCrash Exonar: The opening Thinkers Statement says Bitcoin bites the dust, but I find operating exchanges as of today…..
[2011/07/05 16:21]  Gwyneth Llewelyn: haha !
[2011/07/05 16:21]  Gwyneth Llewelyn: Good one, Zo!
[2011/07/05 16:21]  Ivy Sunkiller: Zo: yes
[2011/07/05 16:21]  Extropia DaSilva: But saying, for instance, ‘google was hacked’ when it is really people’s pc is not quite truthful. Google have security coming out of the wazoo and it would be an incredible job to take down their security. But people, in general, have pretty poor securiity.
[2011/07/05 16:21]  Gwyneth Llewelyn: Art: you know how Extie is so sensationalist in her blurbs 😀
[2011/07/05 16:21]  Seren (serendipity.seraph): so would all banking transactions until people switch to quantum encryption
[2011/07/05 16:21]  Luh (luisa.bourgoin): some open sourced ftp server software got compromised with a backdoor addition recently: the sourcetree maintainers got furious!
[2011/07/05 16:21]  Zobeid Zuma: That’s not comforting, Seren.
[2011/07/05 16:22]  Seren (serendipity.seraph): the biggest weakness in any system is the people involved.
[2011/07/05 16:22]  ArtCrash Exonar:
[2011/07/05 16:22]  Extropia DaSilva: Singularitarians are not sensationalist. They just sound that way to you folks with your linear thinking;)
[2011/07/05 16:22]  ArtCrash Exonar: heh
[2011/07/05 16:22]  Gwyneth Llewelyn: Definetly not me, Extie; I have hyperspatial thinking 😀
[2011/07/05 16:23]  Ivy Sunkiller: Art: yup, already going back up, good time to invest now if you want 🙂
[2011/07/05 16:23]  Hiro Pendragon: There’s so many things wrong with bitcoin. what in particular are we *really* interested in answering? Is it viable?
[2011/07/05 16:23]  Luh (luisa.bourgoin): /me seldom thinks at all
[2011/07/05 16:23]  Ivy Sunkiller: Hiro: yes
[2011/07/05 16:23]  Ivy Sunkiller: and what are those many things that are wrong with it?
[2011/07/05 16:23]  Hiro Pendragon: I mean, trump card: BitCoin is off 99.9% of the public’s radar and it was target of a major huge hack. when it gets more popular, it’ll be targeted more often.
[2011/07/05 16:23]  Seren (serendipity.seraph): thoughts randomized by quantum flux
[2011/07/05 16:23]  Gwyneth Llewelyn: oooh virwox is even listed on that link, Art! How cool!
[2011/07/05 16:24]  Ivy Sunkiller: Hiro: again, Bitcoin was *NOT* target of any hack yet, at least no successful one 🙂
[2011/07/05 16:24]  Hiro Pendragon: To me, I see Bitcoin at best as an interesting experiment that too many people take seriously, and at worst as some juvenile fanboi attempt to recreate Neil Stephenson’s Kongbucks.
[2011/07/05 16:24]  Seren (serendipity.seraph): so how much compute power in dollars to generate bitcoins now?
[2011/07/05 16:24]  Ivy Sunkiller: and it won’t be until we get some breakthrough in computing power like Zo’s quantum computers, it’s bulletproof otherwise
[2011/07/05 16:25]  Luh (luisa.bourgoin): I announce the future of currency will include virtual ones. trust based, prim allowance backupped, RL energy economy … just several different to choose from at your leisure
[2011/07/05 16:25]  Hiro Pendragon: Ivy: There is no difference, de facto, between a hack and a theft of bitcoin.
[2011/07/05 16:25]  Gwyneth Llewelyn: Energy economy will work well while we’re mostly on a petroleum-based economy.
[2011/07/05 16:25]  Hiro Pendragon: And Macs can’t get viruses.
[2011/07/05 16:25]  Extropia DaSilva: Surely our inworld currency should have been called kongbucks?
[2011/07/05 16:25]  Ivy Sunkiller: Hiro: there is a huge difference, hacking would be like printing money in your basement
[2011/07/05 16:25]  Hiro Pendragon: And the Titanic is unsinkable.
[2011/07/05 16:25]  Seren (serendipity.seraph): yeah, right Hiro. 🙂
[2011/07/05 16:25]  Hiro Pendragon: That kind of science-technology worship is illogical.
[2011/07/05 16:25]  Gwyneth Llewelyn: 😉
[2011/07/05 16:25]  Luh (luisa.bourgoin): oh don’t diss the Titanic! wounderfull ship .. it had been
[2011/07/05 16:26]  Seren (serendipity.seraph): you can print money on your computer in case of bitcoin, it just gets harder and harder over time.
[2011/07/05 16:26]  Ivy Sunkiller: Hiro: there is no worship, I actually spen’t a lot of time to learn about it, it is bulletproof
[2011/07/05 16:26]  Extropia DaSilva: No the Titanic could stay afloat if four of its water tight compartments were flooded. But if 5 were flooded, it would sink. And that is what happened.
[2011/07/05 16:26]  Ivy Sunkiller: I don’t trust that my wallet is secure, I know it is
[2011/07/05 16:26]  Zobeid Zuma: Kopins, Zorkmids and Gil, oh my!
[2011/07/05 16:27]  Hiro Pendragon: Ivy, your wallet is only as secure as the ecosystem, and the ecosystem’s been proven frail and broken.
[2011/07/05 16:27]  Extropia DaSilva: Gil. that is final fantasy currency.
[2011/07/05 16:27]  Seren (serendipity.seraph): *giggles*
[2011/07/05 16:27]  Ivy Sunkiller: Hiro: no it’s not
[2011/07/05 16:27]  Hiro Pendragon: Ivy: There IS no bulletproof.
[2011/07/05 16:27]  Zobeid Zuma: In One Piece they have ‘Berries’. 🙂
[2011/07/05 16:27]  Hiro Pendragon: Any statement of absolutism with science is science-worship.
[2011/07/05 16:27]  Seren (serendipity.seraph): yes. secure enough is the goal
[2011/07/05 16:27]  Ivy Sunkiller: my wallet is secure on the HDD of my netbook 🙂
[2011/07/05 16:27]  Extropia DaSilva: If the ecosystem were broken my primary would be dead or dying, no?
[2011/07/05 16:28]  Seren (serendipity.seraph): you are making absolute statemenst, hiro, not ivy
[2011/07/05 16:28]  Hiro Pendragon: My absolute statements are about logic, not science 😉
[2011/07/05 16:28]  Gwyneth Llewelyn: Well, Ivy can claim that her wallet is “as secure” as the HDD on her netbook.
[2011/07/05 16:28]  Kimiko Yiyuan: That was the theory Extropia. How could the sea dare to flood all five though, eh? Scandal!!
[2011/07/05 16:28]  Extropia DaSilva: And then ve would be in a world of trouble. Because my primary is not allowed to die without my permission!
[2011/07/05 16:28]  Ivy Sunkiller: Gwyn: precisely 🙂
[2011/07/05 16:28]  Luh (luisa.bourgoin): security is .. trust. or an illusion. it exists as long as it suddenly brakes
[2011/07/05 16:28]  Hiro Pendragon: Extie: from your mouth to Moore’s ears.
[2011/07/05 16:29]  Gwyneth Llewelyn: That’s pretty safe to me. For instance, anyone can get access to my bank account, they just need to steal my laptop.
[2011/07/05 16:29]  Ivy Sunkiller: or to be even more precise: as secure as the hdd on my netbook until someone figures out how to get way higher computing power than what we have now 🙂
[2011/07/05 16:29]  Hiro Pendragon: Gwyn – but here’s a case where someone else got robbed 500,000 BC, and it screwed with the value of everyone’s BC
[2011/07/05 16:29]  Gwyneth Llewelyn: Right. And I’m sure that BitCoin will cope with that too
[2011/07/05 16:29]  Ivy Sunkiller: read: non silicon based computing 🙂
[2011/07/05 16:29]  Extropia DaSilva: and Markram, Hiro. Moore provides the hardware, but Markram provides my future brainlike software.
[2011/07/05 16:29]  Seren (serendipity.seraph): yes. if it is not crackable in the time the info would be useful then it is secure enough
[2011/07/05 16:29]  Gwyneth Llewelyn: Hiro: I agree. It’s the weakest link issue
[2011/07/05 16:29]  Ivy Sunkiller: Hiro: it did for 3 minutes
[2011/07/05 16:29]  Ivy Sunkiller: 3 MINUTES
[2011/07/05 16:29]  Gwyneth Llewelyn: 😀
[2011/07/05 16:29]  Ivy Sunkiller: that’s how long the crash lasted
[2011/07/05 16:29]  Hiro Pendragon: Phreaking and Cracking are the same thing.
[2011/07/05 16:30]  Seren (serendipity.seraph): if it is not crackable to obtain value greater than what was needed to crack it then it is secure enough
[2011/07/05 16:30]  Ivy Sunkiller: and it only was ONE EXCHANGE
[2011/07/05 16:30]  Hiro Pendragon: Crackers use whatever works.
[2011/07/05 16:30]  Ivy Sunkiller: didn’t crash
[2011/07/05 16:30]  Ivy Sunkiller: Britcoin didn’t crash
[2011/07/05 16:30]  Ivy Sunkiller: no exchange aside from mtgox crashed
[2011/07/05 16:30]  Hiro Pendragon: “Can I call someone up and dupe them into giving me their password? Okay. No? Can I use a trojan… etc”
[2011/07/05 16:30]  Extropia DaSilva: Well, normally I wrap things up here. But I guess if Ivy wants to continue and Art is OK with that, this can go on indefinitely.
[2011/07/05 16:30]  Ivy Sunkiller: so no, the value didn’t go down
[2011/07/05 16:30]  Gwyneth Llewelyn: Oh, I wonder, did they stop trading during those 3 minutes? 🙂
[2011/07/05 16:30]  Ivy Sunkiller: it actually went UP few days after 🙂
[2011/07/05 16:30]  Gwyneth Llewelyn: That’s what LL does with the LindeX
[2011/07/05 16:30]  Seren (serendipity.seraph): duping someone is easier. 🙂
[2011/07/05 16:30]  Ivy Sunkiller: and made me some money 🙂
[2011/07/05 16:30]  Hiro Pendragon: Once one hacker breaks in, in 3 minutes, then others will follow.
[2011/07/05 16:30]  Hiro Pendragon: How long til this hacker brags?
[2011/07/05 16:30]  Hiro Pendragon: And we get script kiddies doing the same?
[2011/07/05 16:30]  Extropia DaSilva: NEXT WEEK: NUMBER 6 THE IDORU
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2 Responses to Thinkers July 05 2011: Bitcoin Bites The Dust

  1. Arch says:

    Remember the 60’s – to give death is not to give life… doesn’t work to give death to give life….only giving life and accepting that oneself may die gives life

  2. Arch says:

    “Seren (serendipity.seraph): of course all mainstream currencies have nothing backing them either”

    This comment is inaccurate from a theoritical standpoint…….For example, gold was considered a way to back currency because it was fairly universally desired by humans for it’s scarcity, it’s usefulness in making desireable decorations (jewelry) and the general agreement amoung humans that it had value….Just as certain seashells could be used as currency in some native american cultures.

    Thus, gold as a currency, or a currency backed by gold, was viewed as having value. And since either could be held or traded, by common human consent, for other goods and/or services, gold or gold backed currency could be used in lieu of direct barter.

    The movement away from the gold standard was facilitated by the spread of the idea that a bank, a business, or a government could issue a currency that was backed by that some of those institution’s had the ability to create and store value.

    The USA’s dollar denominated currency is considered to be backed by the “full faith and credit of the US government”. Of course, the inability of the majority of individuals in Congress and the general population to understand this concept, combined with the political willingness to manipulate it to political advantage, is why we find ourselves in the current financial crisis…..That and the willingness of financial institutions to manipulate the currency for short term “paper” gains.

    That said, the only reason any virtual currency would have value is that it provides a stable market, and the currency provider is able to back it’s value with some variation of the “full faith and credit” meme.


    [2011/07/05 15:37] Gwyneth Llewelyn: So it’s a circular definition: money is used in an economy because that economy backs it up.
    [2011/07/05 15:37] Gwyneth Llewelyn: (haha Seren!!)
    [2011/07/05 15:37] Seren (serendipity.seraph): nope. not that circular.
    [2011/07/05 15:37] Seren (serendipity.seraph): or doesn’t have to be
    [2011/07/05 15:37] Gwyneth Llewelyn: Well, 250+ countries have adopted that as a definition 🙂
    [2011/07/05 15:37] Gwyneth Llewelyn: And so did Second Life.

    Gwyn is quite accurate in her explanation. ….. As far as bitcoins are concerned, there is rarity (the hash to block ratio)….there is a market (the exchange)…..but there is no commonly accepted underlying value other than the “good name”,ie, “full faith and credit” of the company creating and administering bitcoin…….Thus the disastrous impact of any data hack!

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