Re: [cryptography] Digital cash in the news...

On Sun, Jun 12, 2011 at 11:06 PM, Nathan Loofbourrow <njloof@gmail.com> wrote:
Yes, exactly. If you want stable money then you need either a natural resource with naturally limited growth (e.g., gold) (and some other features), or an artificially limited resource (e.g., paper money). The latter is always susceptible to politically caused inflation. Any cryptographic coin based on proof of work is a disaster because of Moore's law and because the "work" is wasted energy -- and energy, you'll note, is a very precious resource. Ergo, a cryptographic coin needs to be based on trusted issuers (or something else I've not seen before nor thought of), and that means, effectively, a fiat currency. Crypto is NOT a solution to political problems; never has been, never will be.
Here's a thought experiment: if the present value of all actual, tangible property, things, capital (production and service capacity), as well as less tangible things such as people, and institutions -altogether, basically, a nation's patrimony- were far, far exceeded by nominal value stored in money in banks and mattresses, would that money really be worth all that much? I suspect that the answer is "no". I suspect that the most valuable feature of money is not to store value in the long-term, but to lubricate commerce, that is, to enable transactions on a basis better than barter.
It's always possible to get some people to do things that are not in their interest. See various cults. (Note: I'm not saying bitcoin is a cult.) Nico -- _______________________________________________ cryptography mailing list cryptography@randombit.net http://lists.randombit.net/mailman/listinfo/cryptography ----- End forwarded message ----- -- Eugen* Leitl <a href="http://leitl.org">leitl</a> http://leitl.org ______________________________________________________________ ICBM: 48.07100, 11.36820 http://www.ativel.com http://postbiota.org 8B29F6BE: 099D 78BA 2FD3 B014 B08A 7779 75B0 2443 8B29 F6BE
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Nico Williams