It's so tedious. I would have literally no idea that Bitcoins existed if it weren't for the flood of articles on HN. I don't understand - who are all the people who find this interesting or relevant?
Lawyering over the site guidelines here isn't productive, since nobody (that I've seen) is arguing that bitcoin contravenes them directly.
I for one find bitcoin far more "intellectually gratifying" than the hiring thread, which, with great respect to our host, has no interest for me.
There are good, solid reasons to believe that today's monetary and fiscal policy is dangerous and wrong-headed (I say that as a liberal closer to Paul Krugman than Ron Paul but sympathetic to some points made by each).
The trouble is that those seeing the current problems look for pig-in-poke solutions rather than getting a solid understanding of what's happening.
I would strongly recommend a critical reading of Doug Noland's Credit Bubble Bulletin, Paul Krugman's blog and at least a university level text on Money and Banking. Also Charles Mackay's classic Extraordinary Popular Delusions and the Madness of Crowds also merits a look.
Many people have an emotional reaction to money. This emotional reaction is part of what can make something "money-like" but if one wishes to understand what's going on, one needs to get beyond one's immediate reaction.
And what I would say about recent US government policy is that it has been bad when measured by either Keynesian OR monetarist yardsticks.
This is essentially because the massive growth of US financial obligations has gone ultimately to bailing out the large financial institutions rather than to any Keynesian job creation scheme. So essentially you have a situation where neither the free market nor government do anything to create jobs.
Krugman can legitimately say the Federal budget deficit as such is not high. What massively inflating is the "other obligations" - Fannie Mae bonds, student loan bonds, etc. Here we have massive "inflationism" (as Doug Noland would term it).
Krugman is a partisan so he's glossed over the unneeded spending of the bailout in later commentary but he did say "The longer we live with zombie banks, the harder it will be to end the economic crisis."
IE, the bank bailout is a massive money-hole where banks have become "zombie" entities that are neither "private" in the sense of being disciplined by the market nor "public" in the sense of having any obligation to the public. The present situation is one where the money that could go to either a stimulus or a tax-cut is shoveled to these "zombies" instead.
The Fed printing money and giving it to the bank adds to effective over-all spending and so effective deficit spending is going to the banks.
You might idly slice the size of the official Federal deficit any way you wish - high by comparison to earlier GDP ratios, low in comparison to the GDP ratios of other countries (Japan has a public debt of ~100% of GDP - funny how they have the world's highest ratio here despite their huge trade surpluses).
But this slicing doesn't mean much with the Fed and Fannie Mae's activity involving massive shoveling of money into the housing and other sectors.
And it should be clear it doesn't matter if this happens "primarily because the few borrowers who are qualified are not enamored with leverage at the moment". Indeed, the whole point is using money to prop up failing sectors makes it more likely that fewer in the private sector will want to borrow for actual productive investment.
I would agree that Krugman's pushing for larger deficit misses the elephant in the living room that is the bailout. But hey, he complained once and that's more than many did.
Like I said, this is neither Keynesianism nor Monetarism as such but a state "captured" by the various industries which suckle off it (especially defense, financial services, education, health care but also others).
I don't think it's fair to compare the public debt of one country to the annual deficit of another. It is akin to saying "It's alright that I put $8000 on my CC last month because Bob down the street owes $70,000." While Bob may be in dire straits, he probably didn't accumulate all that debt in the last 8 months.
Trifles aside, It's refreshing to see someone with a very different perspective from my own who realizes what is going on.
Public debt to Public debt, the US is not notably high on relative to other industrialized nations.
What evidence would you accept? How does one falsify Keynesianism? High inflation? A bearish currency? High unemployment?
Regardless if this implementation succeeds or not, the idea, the theory, the economics and the politics behind bitcoin are highly interesting.
Bitcoin is perfect hacker news in my view.
If the thread can't compete, why is the solution penalizing Bitcoin stories?
(Disclaimer: I do not own bitcoins)
HN is growing. As much as it might be nice if it strictly followed the interests of the original visitors/contributors, it's not a reasonable expectation.
Meanwhile, I downvoted all posts in this meta-discussion (if you don't like a posting, just flag it and move on -- like the site guidelines tell you to do)... and yet here I am, participating. Sigh.
(For the record, my interest in Bitcoin-related articles has waned, but I could see how it'd still be notable to others.)
I'm not sure if Bitcoin will become a new currency or if something better will come along and blow it out of the water, but I do know that it is highly likely that some crypto currency will be in use in the near future, Bitcoin or not. The reaction central banks and governments have towards Bitcoin will be interesting to watch. I'm going to sit back with a bowl of popcorn and watch the disruption.
Early adopters have a huge incentive to convince more people to use Bitcoin. If Bitcoin is successful the value of Bitcoins is guaranteed to increase because there's a finite number of them. Because of this, naturally people will hoard their Bitcoins rather than spend them. At some point people will realize the price of Bitcoins was driven up by speculation, and it will collapse.
I'm not saying Bitcoin was intentionally devised as a pyramid scheme, but that's kind of what it looks like it's turning into.
But I don't see how you could call it a pyramid scheme.
I guess where Bitcoin diverges from a pyramid is that there's no chain reaction of recruiting. Once a user spends a Bitcoin, it's done; he doesn't stand to continually gain further from what the Bitcoin recipient continues to do or from anyone else the recipient brings into the system.
The problem is that these analogies neglect all context and substance. Just because some schemes that benefit early adopters aren't scams doesn't mean that all such schemes aren't scams. Just because not everything called a "currency" isn't dishonest doesn't mean that this one isn't being marketed dishonestly and without regard to the people who will lose money as a result.
What's different between Bitcoin and gold? Bitcoin has very limited history, whereas gold has a much deeper history. Gold doesn't face existential security problems; Bitcoin has faced security compromises (such as an integer overflow in the block chain) even in its short history, and these compromises have had to be corrected using out-of-band mechanisms. The Bitcoin market is tiny, subject to market manipulation, and operates through unregulated and probably illegitimate exchanges. Finally, people buy gold without most people who own it spending a good chunk of their time promoting it dishonestly to others.
A pyramid scheme is a non-sustainable business model that involves promising participants payment, services or ideals, primarily for enrolling other people into the scheme or training them to take part, rather than supplying any real investment or sale of products or services to the public. Pyramid schemes are a form of fraud. (Wikipedia)
promising participants payment, services or ideals
There's an implicit promise that if Bitcoin gains popularity the value of Bitcoins will increase.
primarily for enrolling other people into the scheme or training them to take part
If you take part by purchasing Bitcoin there's a huge incentive to get other people involved in Bitcoin.
rather than supplying any real investment or sale of products or services to the public
There are very few services/products you can actually buy with Bitcoin.
Hence I would argue that it can be argued that Bitcoin is a bubble (i.e. equivilent to investing in a startup that is sure to fail) but not a pyramid scheme.
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It's not a traditional pyramid scheme, but I see a lot of similarities between that description and the current state of buying/selling stocks.
promising participants payment, services or ideals
There's an implicit promise that if a stock gains popularity the value of the stock will increase.
primarily for enrolling other people into the scheme or training them to take part
If you take part by purchasing stocks there's a huge incentive to get other people involved in the stock market.
rather than supplying any real investment or sale of products or services to the public
There are very few services/products you can actually buy with a stock certificate.
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Bitcoin is a bubble, but not necessarily a scam.
Even if no market exists to resell a stock, if the company is operating it still has fundamental value, whereas something like bitcoin has no value if nobody else is willing to trade you something.
Given that, I don't think your comparison holds. Yes, a speculative market exists in stocks (and generally, anything else of value.) But the value of a stock is not based purely upon the speculative market that might exist around it - at its root, it has an underlying fundamental value that is not driven by market demand.
Similarly, lots of folks speculate in commodities, but at the end of the day, if you can't sell oil or steel, you can use them to produce other things you can sell.
You can argue that currency is a kind of stock in the "enterprise" of the sovereign printing that currency. But is there a qualitative difference between that and bitcoin?
It is in fact the opposite of a claim on the printing operation of the issuer, given that the more currency is printed, the less valuable the currency you hold becomes.
If nobody will accept a currency, it does not continue to have value, because its value is based upon what someone is willing to trade you for it.
Market demand for the instrument, that is, right? :)
I don't know -- I see a difference here, but it looks only nominal.
If I purchase shares in a privately-held small business that hits tough times, my claim on the output of that company can essentially evaporate -- they won't be paying dividends as no profit exists, I might not be able to sell the stock because no market exists for it, and once the company goes belly-up they pay the bank and lenders before shareholders get anything.
I'm sure a difference exists; I'm no serious investor, so it's easy for me to not see it.
I do too, for the same reason that the tulip mania in the Dutch Golden Age
http://www.businessweek.com/2000/00_17/b3678084.htm
or the South Sea Bubble
http://www.investopedia.com/features/crashes/crashes3.asp
are still fascinating. I've known about those failed investment strategies since childhood, but I still see fully grown human beings falling for strategies that are no more reasonable.
looks like supposedly "green" technologies like ethanol from corn are back again 300 years later.
I don't believe bitcoin is an evil planned-out scheme like this, but human nature may trigger this bubble effect.
It also doesn't hurt that lots of people stand to gain financially from bitcoin hype.
http://www.modernlibrary.com/top-100/100-best-novels/
in which the top ten contains four books by Ayn Rand and three by L. Ron Hubbard.
In particular, the use of proof-of-work chains to create an eventually-consistent global view of a distributed database is quite interesting, and I think there's applications outside of currency.