Re: <nettime> The Monetary Future: How Bitcoin Is Being Destroyed

[Eugen Leitl <eugen@leitl.org>]

On Fri, Oct 26, 2012 at 07:22:15PM +0200, John Haltiwanger wrote:
> On Fri, Oct 26, 2012 at 1:40 PM, Nick <nettime@njw.me.uk> wrote:
> 
> > Interesting read.  That said, I would love to read more about the
> > interplay of traditional capitalist power structures and bitcoin.
> 
> Bitcoin is fundamentally flawed as an emancipatory currency due to it's
> reliance on processing cycles. When I first heard about it, I eagerly

It doesn't rely on processing cycles for maintaining the log of
transactions. It needs some processing for the distributed mint,
but adaptively so (difficulty goes down if mining rate goes down)
and processing cycles are fundamentally egalitarian.

> downloaded the client to begin mining. With my (relatively, at the time)
> powerful desktop, it was something like 2 years until I had my first coin.

You were late to the party, and by that time you probably needed 
GPU clients (which will be soon useless, since ASIC miner rigs
are ante portas) participation in a mining pool. 

> There are also a limited total number of bitcoins, which from my point of
> view can only lead to the exact same zero-sum situation we have with
> state-coerced currencies: if I am going to be rich, it is at the expense of
> others having the same opportunity.

This is a currency based on scarcity, just like gold or cowry shells.
If you intended to become rich by mining, you should have been a year
or two sooner to the party.

The value of bitcoin is ability to do P2P transactions in real time without
requiring a third party, using a naturally deflationary monetary system
which however is highly frangible.

That by itself is of obvious enough utility.




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