[p2p-hackers] Bitcoin incentive on Kademlia networks

Changaco changaco at changaco.net
Mon Nov 5 13:38:38 PST 2012


On Mon, 05 Nov 2012 09:46:40 +1100 ianG wrote:
> These sound rather like political statements, not economic statements.

How money works is a political matter. If one can get a bigger
share of monetary creation than other people, one gets power.

It's also an "economic" matter, because badly designed systems cause
crises.

> It's fine to have these opinions such as X is fair and Y is unfair, but 
> it's not a particularly good basis for building a money system.

People eventually figure out when a system isn't fair, and it falls,
because money is nothing without a community to use it. So yes, being
fair is an important quality for the long term.

> Sure it can!  Don't get swayed by central bankers who prefer inflation 
> over deflation, and scare the bejeezus out of the population with 
> stories of economic collapse in order to keep their little money machine 
> ticking over.

Sure, anybody who doesn't agree with you has to be influenced by the
evil central bankers, rightb/?

> Whenever we build a new money system, typically we have to seed the base 
> in some sense or other - what you might refer to as unfair.
> 
> E.g, The temporal asymmetry for Bitcoin certainly worked in its favour. 
>   IOW, because it was to be worth more in the future, early people did 
> invest in it, on that risky expectation.  And got rewarded.  Which 
> created the virtuous circle of bringing new investors/money users in.
> 
> I wonder if there is a 'law' here?  Someone or some many have to make 
> out like bandits to bootstrap a new money?
> 
> So, if it isn't an effect of appreciation, making early holders the 
> winners, what is it?

As the name suggests, temporal symmetry is about the long term. Of
course asymmetry gives a short term boost, the first users are getting
money almost for free and can use it later to gain wealth.

In addition, Bitcoin benefits from the fact that making a symmetrical
currency is much harder and therefore hasn't been done yet. Spatial
symmetry requires a Web of Trust while anyone can start using Bitcoin
immediately.
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