Bitcoin Mining

[nouveau sereph]

29582351c3

If you count Linden Dollars as digital currency, lets count neo points and gaia gold too. It's only fair. In fact almost every game company in the world has their own currency.

The difference is only a select few allow you to withdraw that currency from the system and converted it back into USD. WoW and Gaia gold can be bought and sold with real money, but there's no official exchange rate or mechanism to do so - bitcoins and Linden dollars cannot just do that, they're designed to do that.

[29582351c3]

nouveau sereph

29582351c3

If you count Linden Dollars as digital currency, lets count neo points and gaia gold too. It's only fair. In fact almost every game company in the world has their own currency.

The difference is only a select few allow you to withdraw that currency from the system and converted it back into USD. WoW and Gaia gold can be bought and sold with real money, but there's no official exchange rate or mechanism to do so - bitcoins and Linden dollars cannot just do that, they're designed to do that.

I see neopets and gaia gold cards at every convenience store I pass.

[nouveau sereph]

29582351c3

nouveau sereph

29582351c3

If you count Linden Dollars as digital currency, lets count neo points and gaia gold too. It's only fair. In fact almost every game company in the world has their own currency.

The difference is only a select few allow you to withdraw that currency from the system and converted it back into USD. WoW and Gaia gold can be bought and sold with real money, but there's no official exchange rate or mechanism to do so - bitcoins and Linden dollars cannot just do that, they're designed to do that.

I see neopets and gaia gold cards at every convenience store I pass.

That's USD entering the system. The difference is a legal, officially-sanctioned way for USD to exit the system. With Gaia and Neopets currency flows one way - in only - with Linden Dollars and Bitcoins it flows both ways - in and out. Do you have trouble reading?

[29582351c3]

nouveau sereph

29582351c3

nouveau sereph

29582351c3

If you count Linden Dollars as digital currency, lets count neo points and gaia gold too. It's only fair. In fact almost every game company in the world has their own currency.

The difference is only a select few allow you to withdraw that currency from the system and converted it back into USD. WoW and Gaia gold can be bought and sold with real money, but there's no official exchange rate or mechanism to do so - bitcoins and Linden dollars cannot just do that, they're designed to do that.

I see neopets and gaia gold cards at every convenience store I pass.

That's USD entering the system. The difference is a legal, officially-sanctioned way for USD to exit the system. With Gaia and Neopets currency flows one way - in only - with Linden Dollars and Bitcoins it flows both ways - in and out. Do you have trouble reading?

So, as far as I can tell, your difference is, Linden is acting like a really shitty bank and broker, whereas Gaia gold has a set buy in and a floating exit price?

[nouveau sereph]

29582351c3

nouveau sereph

29582351c3

nouveau sereph

29582351c3

If you count Linden Dollars as digital currency, lets count neo points and gaia gold too. It's only fair. In fact almost every game company in the world has their own currency.

The difference is only a select few allow you to withdraw that currency from the system and converted it back into USD. WoW and Gaia gold can be bought and sold with real money, but there's no official exchange rate or mechanism to do so - bitcoins and Linden dollars cannot just do that, they're designed to do that.

I see neopets and gaia gold cards at every convenience store I pass.

That's USD entering the system. The difference is a legal, officially-sanctioned way for USD to exit the system. With Gaia and Neopets currency flows one way - in only - with Linden Dollars and Bitcoins it flows both ways - in and out. Do you have trouble reading?

So, as far as I can tell, your difference is, Linden is acting like a really shitty bank and broker, whereas Gaia gold has a set buy in and a floating exit price?

What? No, the difference is really ******** simple. Bitcoins and Linden dollars are designed to be converted to other currencies, and it's in the TOS of those systems that that is an option. Gaia gold, WoW gold, etc, only exist virtually. They can be traded with outside currency, but they can never become outside currency. I can't have a bad day at the casino and say "******** it, gonna convert my 3 million Gaia gold into cash, it's the only way I'm paying the rent". That's not possible, not legally, and if I pursued illegal methodolgy to do so anyway I risk being banned. I could however, say "Gotta cash out my Lindens to buy food" and have Linden Labs not just do that for LD I'd bought off of them directly, but LD I'd earned in the game. It's a true currency.

This isn't very difficult.

[29582351c3]

nouveau sereph

29582351c3

nouveau sereph

29582351c3

nouveau sereph

29582351c3

If you count Linden Dollars as digital currency, lets count neo points and gaia gold too. It's only fair. In fact almost every game company in the world has their own currency.

The difference is only a select few allow you to withdraw that currency from the system and converted it back into USD. WoW and Gaia gold can be bought and sold with real money, but there's no official exchange rate or mechanism to do so - bitcoins and Linden dollars cannot just do that, they're designed to do that.

I see neopets and gaia gold cards at every convenience store I pass.

That's USD entering the system. The difference is a legal, officially-sanctioned way for USD to exit the system. With Gaia and Neopets currency flows one way - in only - with Linden Dollars and Bitcoins it flows both ways - in and out. Do you have trouble reading?

So, as far as I can tell, your difference is, Linden is acting like a really shitty bank and broker, whereas Gaia gold has a set buy in and a floating exit price?

What? No, the difference is really ******** simple. Bitcoins and Linden dollars are designed to be converted to other currencies, and it's in the TOS of those systems that that is an option. Gaia gold, WoW gold, etc, only exist virtually. They can be traded with outside currency, but they can never become outside currency. I can't have a bad day at the casino and say "******** it, gonna convert my 3 million Gaia gold into cash, it's the only way I'm paying the rent". That's not possible, not legally, and if I pursued illegal methodolgy to do so anyway I risk being banned. I could however, say "Gotta cash out my Lindens to buy food" and have Linden Labs not just do that for LD I'd bought off of them directly, but LD I'd earned in the game. It's a true currency.

This isn't very difficult.

So your arguement is because something is designed vs something not designed but being used that way anyways? Doesn't really seem to be a difference to the argument.

[digitalchopsticks]

29582351c3

nouveau sereph

29582351c3

nouveau sereph

29582351c3

I see neopets and gaia gold cards at every convenience store I pass.

That's USD entering the system. The difference is a legal, officially-sanctioned way for USD to exit the system. With Gaia and Neopets currency flows one way - in only - with Linden Dollars and Bitcoins it flows both ways - in and out. Do you have trouble reading?

So, as far as I can tell, your difference is, Linden is acting like a really shitty bank and broker, whereas Gaia gold has a set buy in and a floating exit price?

What? No, the difference is really ******** simple. Bitcoins and Linden dollars are designed to be converted to other currencies, and it's in the TOS of those systems that that is an option. Gaia gold, WoW gold, etc, only exist virtually. They can be traded with outside currency, but they can never become outside currency. I can't have a bad day at the casino and say "******** it, gonna convert my 3 million Gaia gold into cash, it's the only way I'm paying the rent". That's not possible, not legally, and if I pursued illegal methodolgy to do so anyway I risk being banned. I could however, say "Gotta cash out my Lindens to buy food" and have Linden Labs not just do that for LD I'd bought off of them directly, but LD I'd earned in the game. It's a true currency.

This isn't very difficult.

So your arguement is because something is designed vs something not designed but being used that way anyways? Doesn't really seem to be a difference to the argument.

wat. Her "argument" is simply pointing out that Lindens and Bitcoins are an actual currency, which has an exchange rate in to and out of physical currency (USD, for example). Gaia gold and neopoints aren't legally exchangeable for physical currency. Bitcoins aren't designed to be "game money", they're meant to be a real, digital, decentralised currency, which, like any other world currency (i.e. HKD <-> USD), can be exchanged at a fluctuating rate into or from another form of currency.

[Sitwon]

29582351c3

What you are saying contradicts yourself. To prevent inflation of the currency, instead of dumping 21 million BTCs they dump a few million a year . . .

It doesn't contradict itself at all. The total volume of the currency has to be introduced slowly and at a predictable rate while the currency is developing, otherwise the exchange rate will not settle properly as early adopters would disproportionately control the vast majority of the currency. The current scheme ensures that Bitcoins will be rewarded more or less evenly throughout the community of users over time to prevent a situation of a small group of early adopters gaining a monopoly.

Second. This influx of new currency has to eventually come to a halt or the value of the currency would continuously decline. A currency with no concept of scarcity is worthless, much like Gaia Gold.

Which brings us to...

29582351c3

If you count Linden Dollars as digital currency, lets count neo points and gaia gold too. It's only fair. In fact almost every game company in the world has their own currency.

Here's the thing, neo points and gaia gold are fictitious currencies much like monopoly money. They have value only within the context of the game. The total volume of Gaia Gold or Neopoints in existence is dynamic an constantly growing.

LD and PED, on the other hand are operated as if they were real currencies. Indeed, they are even backed by real-world currencies which fix their exchange rate. The only way to create new LD or PED is by exchanging a real currency for them. Similarly, you are able to exchange them back into a real currency, thus removing them from the in-game economy. (In the case of PED you can actually get a Visa Debit card to spend your PED in the real world.) There is actual scarcity with these currencies.

The concept of scarcity and the fact that they are backed by real-world currencies, and thus regulated, makes them fundamentally different from game currencies such as monopoly dollars, gaia gold, neopoints, or WoW gold.

And frankly, of those four game currencies, only WoW gold has achieved anywhere near sufficient volume to act as a proxy currency for laundering any significant amount of money.

[29582351c3]

digitalchopsticks

29582351c3

nouveau sereph

29582351c3

nouveau sereph

29582351c3

I see neopets and gaia gold cards at every convenience store I pass.

That's USD entering the system. The difference is a legal, officially-sanctioned way for USD to exit the system. With Gaia and Neopets currency flows one way - in only - with Linden Dollars and Bitcoins it flows both ways - in and out. Do you have trouble reading?

So, as far as I can tell, your difference is, Linden is acting like a really shitty bank and broker, whereas Gaia gold has a set buy in and a floating exit price?

What? No, the difference is really ******** simple. Bitcoins and Linden dollars are designed to be converted to other currencies, and it's in the TOS of those systems that that is an option. Gaia gold, WoW gold, etc, only exist virtually. They can be traded with outside currency, but they can never become outside currency. I can't have a bad day at the casino and say "******** it, gonna convert my 3 million Gaia gold into cash, it's the only way I'm paying the rent". That's not possible, not legally, and if I pursued illegal methodolgy to do so anyway I risk being banned. I could however, say "Gotta cash out my Lindens to buy food" and have Linden Labs not just do that for LD I'd bought off of them directly, but LD I'd earned in the game. It's a true currency.

This isn't very difficult.

So your arguement is because something is designed vs something not designed but being used that way anyways? Doesn't really seem to be a difference to the argument.

wat. Her "argument" is simply pointing out that Lindens and Bitcoins are an actual currency, which has an exchange rate in to and out of physical currency (USD, for example). Gaia gold and neopoints aren't legally exchangeable for physical currency. Bitcoins aren't designed to be "game money", they're meant to be a real, digital, decentralised currency, which, like any other world currency (i.e. HKD <-> USD), can be exchanged at a fluctuating rate into or from another form of currency.

They aren't currency is the problem. None of them are. Legally speaking there is nothing stopping someone from buying and selling gaia gold except the possibility of having it yanked by gaia, which is the same risk as linden dollars has.

[29582351c3]

Sitwon

29582351c3

What you are saying contradicts yourself. To prevent inflation of the currency, instead of dumping 21 million BTCs they dump a few million a year . . .

It doesn't contradict itself at all. The total volume of the currency has to be introduced slowly and at a predictable rate while the currency is developing, otherwise the exchange rate will not settle properly as early adopters would disproportionately control the vast majority of the currency. The current scheme ensures that Bitcoins will be rewarded more or less evenly throughout the community of users over time to prevent a situation of a small group of early adopters gaining a monopoly.

Second. This influx of new currency has to eventually come to a halt or the value of the currency would continuously decline. A currency with no concept of scarcity is worthless, much like Gaia Gold.

Which brings us to...

29582351c3

If you count Linden Dollars as digital currency, lets count neo points and gaia gold too. It's only fair. In fact almost every game company in the world has their own currency.

Here's the thing, neo points and gaia gold are fictitious currencies much like monopoly money. They have value only within the context of the game. The total volume of Gaia Gold or Neopoints in existence is dynamic an constantly growing.

LD and PED, on the other hand are operated as if they were real currencies. Indeed, they are even backed by real-world currencies which fix their exchange rate. The only way to create new LD or PED is by exchanging a real currency for them. Similarly, you are able to exchange them back into a real currency, thus removing them from the in-game economy. (In the case of PED you can actually get a Visa Debit card to spend your PED in the real world.) There is actual scarcity with these currencies.

The concept of scarcity and the fact that they are backed by real-world currencies, and thus regulated, makes them fundamentally different from game currencies such as monopoly dollars, gaia gold, neopoints, or WoW gold.

And frankly, of those four game currencies, only WoW gold has achieved anywhere near sufficient volume to act as a proxy currency for laundering any significant amount of money.

So what you are saying is to prevent early adopters from having a monopoly they will introduce the vast majority of the currency early in the life of bitcoins. Let us nevermind the fact the goal is for the value of bitcoins to go up overtime.

I don't think scaricity has anything to do at all with a currency. Currency is just a generally accepted medium of exchange. The total volume of united state dollars, for example, can change, and does change, by trillions a year. The biggest difference is gaia gold is a generally accepted medium of exchange on gaia while dollars is everywhere else.

[29582351c3]

I also just realized, the hazard of having your fake currency yanked like linden dollars and gaia gold also applies to bitcoins. See Liberty Dollars or through an act of congress banning them Here is a good wiki spot http://en.wikipedia.org/wiki/Bitcoin#Reception_and_concerns

"The Electronic Frontier Foundation did so for a while but has since stopped, citing concerns about a lack of legal precedent about new currency systems,"

[Sitwon]

29582351c3

So what you are saying is to prevent early adopters from having a monopoly they will introduce the vast majority of the currency early in the life of bitcoins.

To prevent early adopters from having a monopoly they used a system that rewards a random distribution of the currently active users. So you might think the early adopters are getting a bigger share, EXCEPT that the volume of payouts started very low and has increased at logarithmic rate over time, as the number of active users increased. Furthermore, this payout, which is equally and randomly distributed among active users, is going to continue for more than a decade since the initial launch of the currency. So unless you define "early adopter" as anyone that jumps on board within the first decade (of which we're still only 3 years in) then no, it's not benefiting the early adopters any more than anyone else.

29582351c3

Let us nevermind the fact the goal is for the value of bitcoins to go up overtime.

Not really, no. The goal is for the currency on a realistic value such as to be viable and useful for real-world transactions. As the number of merchants and consumers who use it increases the demand for the currency will subsequently increase causing the value to rise, but that's not a "goal", it's just how economics works.

29582351c3

I don't think scaricity has anything to do at all with a currency. Currency is just a generally accepted medium of exchange. The total volume of united state dollars, for example, can change, and does change, by trillions a year.

Well maybe you need to take an introductory class on Economics and Government. It is well understood in economics that scarcity directly affects the value of currency. Managing the scarcity of the USD is the primary job of the Federal Reserve. They decide when to increase or reduce the amount of USD in circulation. They control the scarcity of the currency. There isn't an unlimited amount of USD and it doesn't appear out of nothing (like it does on Gaia or in WoW).

29582351c3

The biggest difference is gaia gold is a generally accepted medium of exchange on gaia while dollars is everywhere else.

No, the biggest difference is that Gaia Gold is nothing but Monopoly money. It has no inherent value outside the context of the game.

If we were playing a game of Monopoly I could use USD to buy some of your Monopoly money from you (if I recall correctly, the rules of Monopoly don't forbid it). However, just because you exchanged those colored pieces of paper for USD does NOT mean that it is a real currency. Outside of the context of the game they are still just colored pieces of paper.

29582351c3

I also just realized, the hazard of having your fake currency yanked like linden dollars and gaia gold also applies to bitcoins. See Liberty Dollars or through an act of congress banning them Here is a good wiki spot http://en.wikipedia.org/wiki/Bitcoin#Reception_and_concerns

Liberty Services was shutdown for fraud and counterfeiting, not simply for being an alternative currency. There are plenty of other alternative currencies in the US which are tolerated by the Fed. Furthermore, by it's very design, the Bitcoin network is extremely resilient to fraud and counterfeiting. That's whole point behind mining, those machines are constantly validating transactions to ensure that counterfeiting and double-spending can't occur.

With Bitcoin there's no controlling authority to "yank" your currency, but since you bring that up it's no different from the real world where the government can "yank" your USD. The IRS does it to millions of Americans every year.

29582351c3

"The Electronic Frontier Foundation did so for a while but has since stopped, citing concerns about a lack of legal precedent about new currency systems,"

It's important to note that they did this under public pressure during the height of concerns about possible links between Bitcoins and criminal activity, much of which was fabricated for news articles.

[29582351c3]

Sitwon

29582351c3

So what you are saying is to prevent early adopters from having a monopoly they will introduce the vast majority of the currency early in the life of bitcoins.

To prevent early adopters from having a monopoly they used a system that rewards a random distribution of the currently active users. So you might think the early adopters are getting a bigger share, EXCEPT that the volume of payouts started very low and has increased at logarithmic rate over time, as the number of active users increased. Furthermore, this payout, which is equally and randomly distributed among active users, is going to continue for more than a decade since the initial launch of the currency. So unless you define "early adopter" as anyone that jumps on board within the first decade (of which we're still only 3 years in) then no, it's not benefiting the early adopters any more than anyone else.

29582351c3

Let us nevermind the fact the goal is for the value of bitcoins to go up overtime.

Not really, no. The goal is for the currency on a realistic value such as to be viable and useful for real-world transactions. As the number of merchants and consumers who use it increases the demand for the currency will subsequently increase causing the value to rise, but that's not a "goal", it's just how economics works.

29582351c3

I don't think scaricity has anything to do at all with a currency. Currency is just a generally accepted medium of exchange. The total volume of united state dollars, for example, can change, and does change, by trillions a year.

Well maybe you need to take an introductory class on Economics and Government. It is well understood in economics that scarcity directly affects the value of currency. Managing the scarcity of the USD is the primary job of the Federal Reserve. They decide when to increase or reduce the amount of USD in circulation. They control the scarcity of the currency. There isn't an unlimited amount of USD and it doesn't appear out of nothing (like it does on Gaia or in WoW).

29582351c3

The biggest difference is gaia gold is a generally accepted medium of exchange on gaia while dollars is everywhere else.

No, the biggest difference is that Gaia Gold is nothing but Monopoly money. It has no inherent value outside the context of the game.

If we were playing a game of Monopoly I could use USD to buy some of your Monopoly money from you (if I recall correctly, the rules of Monopoly don't forbid it). However, just because you exchanged those colored pieces of paper for USD does NOT mean that it is a real currency. Outside of the context of the game they are still just colored pieces of paper.

29582351c3

I also just realized, the hazard of having your fake currency yanked like linden dollars and gaia gold also applies to bitcoins. See Liberty Dollars or through an act of congress banning them Here is a good wiki spot http://en.wikipedia.org/wiki/Bitcoin#Reception_and_concerns

Liberty Services was shutdown for fraud and counterfeiting, not simply for being an alternative currency. There are plenty of other alternative currencies in the US which are tolerated by the Fed. Furthermore, by it's very design, the Bitcoin network is extremely resilient to fraud and counterfeiting. That's whole point behind mining, those machines are constantly validating transactions to ensure that counterfeiting and double-spending can't occur.

With Bitcoin there's no controlling authority to "yank" your currency, but since you bring that up it's no different from the real world where the government can "yank" your USD. The IRS does it to millions of Americans every year.

29582351c3

"The Electronic Frontier Foundation did so for a while but has since stopped, citing concerns about a lack of legal precedent about new currency systems,"

It's important to note that they did this under public pressure during the height of concerns about possible links between Bitcoins and criminal activity, much of which was fabricated for news articles.

My understanding of how bitcoin mining was this. Your computer processes a bunch of chunks of work, and whoever finishes just after the time for a bitcoin to be distributed gets it. So if your pool of miners is 1, he will get all the bitcoins. When your pool is 2 it will get split based on who finishes closest to distributing time. So the more you finish the higher the chance to get more. However this does translate into a huge advantage for early adopters. By early adopters you also much understand I am using it subjectively. Early adopter right now is people who adopted it a year or 2 ago. 10 years from now it will be people about this time and earlier, if that makes sense.

Well, bitcoins will have a near static money supply in the end, while real government currencies intentionally devalue themselves constantly. So in dollar amounts bitcoins should go up in price. Especially so if bitcoins become an actual general use currency which will spike demand for them. Seriously, I don't know anyone who uses bitcoins right now. Not a single store I've been to or any of my friends or family. If everyone were to use it, even with the amount of coins still left to be distributed, you are looking at an increase from maybe a few ten thousand people at most using them to a few hundred million, that is a much larger increase in demand than an increase in supply from a few million to a few ten million.

If you are talking physical dollars to go around, yeah there is a physical limit on that, however the government at any time can ******** it, let's go mine a googolplex dollar bill" and there goes your argument. There is also HUGE amounts of currency which are on books but never actually printed. Here is an example. http://research.stlouisfed.org/fred2/graph/?id=BASE In the last 3 years the amount of currency in our system has changed by more than 3x, by trillions in single years. The way the US system works is different from many other countries like Greece, Spain or Portugal. It is also vastly different than how businesses run as well. It is why there is a whole other economics theory to describe it (Neo-chartalism or MMA) different from others people are used to and it is counter-intuitive despite being very good at describing the system and what to expect from it.

As for inherent value of money, our currency has no inherent value either. We went off the gold standard twice because of the problems with it. To this end, out money has no value outside the context of the united states or our current market systems. When you play Monopoly the generally accepted medium of exchange is monopoly money, and while I suppose you could use USD for a poker type effect I doubt most would. Further, if the money had inherent value, the government could not manipulate it as it does. Another good reason to stay clear of gold as that would give large multinational corporations or other countries with big wallets the ability to directly influence the currency. To wit: Fiat currency is called fiat currency and only has value because as the name suggests, the government has declared it so. That is, demand for said currency is stimulated because they make you pay your taxes in it, so you have to have it.

Liberty was shut down for minting their own money using gold and silver which is illegal. TO quote the wiki,"Von NotHaus was convicted of "making, possessing and selling his own coins" on March 18, 2011, in Statesville, North Carolina, after a jury deliberated for less than two hours.[28] ". This puts bitcoins under some scrutiny since, from my understanding, these statutes have not been tested for digital currencies.

[29582351c3]

Woops, missed a bit.

Sitwon

Liberty Services was shutdown for fraud and counterfeiting, not simply for being an alternative currency. There are plenty of other alternative currencies in the US which are tolerated by the Fed. Furthermore, by it's very design, the Bitcoin network is extremely resilient to fraud and counterfeiting. That's whole point behind mining, those machines are constantly validating transactions to ensure that counterfeiting and double-spending can't occur.

With Bitcoin there's no controlling authority to "yank" your currency, but since you bring that up it's no different from the real world where the government can "yank" your USD. The IRS does it to millions of Americans every year.

29582351c3

"The Electronic Frontier Foundation did so for a while but has since stopped, citing concerns about a lack of legal precedent about new currency systems,"

It's important to note that they did this under public pressure during the height of concerns about possible links between Bitcoins and criminal activity, much of which was fabricated for news articles.

The currencies in question are considered illegal but they are tolerated. It is also not the Fed that tolerates them but the Justice department. They simply do not consider them worth their time. There is also state and local currencies which are outright recognized as legal.

Simply enough, it is enough to make bitcoins illegal, or take people's wallet files, or whatever it is called. The wiki article also states problems with bitcoin fraud due to it's online nature. Mainly stealing wallet files.

Your note about the EFF might be true, but that wasn't the only reason they did it.

[Sitwon]

29582351c3

The currencies in question are considered illegal but they are tolerated. It is also not the Fed that tolerates them but the Justice department. They simply do not consider them worth their time. There is also state and local currencies which are outright recognized as legal.

Prove it. If you're so sure that these currencies are "illegal" then quote me the law they are in violation of. Go ahead.

29582351c3

The wiki article also states problems with bitcoin fraud due to it's online nature. Mainly stealing wallet files.

Simple theft is not the same thing a fraud.