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ECB: "Roots of Bitcoin Can Be Found In The Austrian School Of Economics"

The ECB (European Central Bank) has produced the first official central bank study of the decentralized cryptographic money known as bitcoin, Virtual Currency Schemes. Ignoring for a moment the ECB’s condescending and derogatory use of the virtual currency phrase and scheme phrase, the study produced at least one landmark achievement.

In claiming that “The theoretical roots of Bitcoin can be found in the Austrian school of economics,” the ECB forever linked Bitcoin to the proud economic heritage of Menger, Mises, and Hayek as well as to Austrian business cycle theory. This recognition is also a direct testament to the monetary theory work of Friedrich von Hayek who inspired many with his 1976 landmark publication of Denationalisation of Money.

Bitcoin fully embodies the spirit of denationalized money as it seeks no authority for its continued existence and it recognizes no political borders for its circulation. Indeed according to the report, proponents see Bitcoin as “a good starting point to end the monopoly central banks have in the issuance of money” and “inspired by the former gold standard.”

DOWNLOAD: http://www.ecb.europa.eu/pub/pdf/other/virtualcurrencyscheme...

http://www.forbes.com/sites/jonmatonis/2012/11/03/ecb-roots-...

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Bitcoin does not pass the sound money test

At least from what I undertand, isn't its supply is controlled by the creator of bitcoin? Gold's supply cannot be manipulated. You have to mine it to get more

Bitcoin supply is FOREVER set at 21M

Yes, the total supply of Bitcoin has been forever set in (digital) stone at 21,000,000 bitcoins by its creator.

The allocation of those bitcoins is taking place right now. So far 50% of all those bitcoins has been "allocated" to individuals using the protocol to access the network of computers who are all working together to secure the whole system.

In short. It is like "God" placing gold on the planet, and miners now are going around "allocating" some of those bits of gold to themselves by doing a bit of work to get it out of the ground, and securing their find in their strong hands.

Just plain 'Happy'about the direction the world is taking! Especially if we live to reach LEV [Longevity Escape Velocity]

There are 7 billion people on this planet.

7 bil. People > 21 mil. BitCoins

And humans should not try playing God. That part usually turns out quite badly.

I believe in the freedom to be what we choose to be.

21,000,000.00000000 bitcoins

Note that the individual smallest "unit" comes to 21 quadrillion

Each bitcoin can be divided to 8 decimal places.

So with Bitcoin being $12.67 each

That means that $1 = 0.07886435 BTC (exactly to 8 decimal places)

Just plain 'Happy'about the direction the world is taking! Especially if we live to reach LEV [Longevity Escape Velocity]

This is the first time

I've ever heard of bitcoin. To me it seems like it would be a great way to hold onto money without it losing value and a way to make transactions without paying sales taxes. Sure, it's no gold standard. But, we're a long way from returning to the gold standard.

I too first heard about Bitcoin on the DailyPaul!

I am taking a few days off "life" and seeing if I can help people "hear" about Bitcoin.

I TRULLY THINK IT IS THE MOST REVOLUTIONARY TOOL to come along the side of LIBERTY since well... since the US Constitution (?)

Welcome Dixie-Paleocon! Enjoy the ride!

Just plain 'Happy'about the direction the world is taking! Especially if we live to reach LEV [Longevity Escape Velocity]

ECB Report response ROUNDUP

This is a collection of people/sites that have responded to this report

http://www.bitcoinmoney.com/post/35010292565/ecb-response-ro...

Just plain 'Happy'about the direction the world is taking! Especially if we live to reach LEV [Longevity Escape Velocity]

LITMUS TEST

http://www.dailypaul.com/264392/why-bitcoin-acceptance-shoul...

Just plain 'Happy'about the direction the world is taking! Especially if we live to reach LEV [Longevity Escape Velocity]

It's Getting Ridiculous

How everyone on DP seems to want to argue and name call like a bunch of school kids these days. What happened to the intelligent conversations everyone used to have? No one can even discuss bitcoin without it turning into a Jerry Springer show anymore. GEEZ!

skippy

I agree!

This site is RIPE to become the 2nd most popular for Bitcoin news and info... and we are so far behind the times here!

Okay, not so far... but still BEHIND! :)

GO RON PAUL! GO BITCOIN!

Just plain 'Happy'about the direction the world is taking! Especially if we live to reach LEV [Longevity Escape Velocity]

jrd3820's picture

I agree, this is really

I agree, this is really beginning to feel like any other political forum where we all insist we are right because we read such and such article and that the other person simply must be an idiot. We are also calling new potential voters names and being rude there. I got my younger sister interested in the libertarian message and she came here to the site and said the people seemed too rude and overbearing. This does not mean she will turn away from the libertarian movement, but I am afraid we are going to push people away and each other away.

Now I know people will read this and tell me if I do not like here not to come, but I do love some aspects of the DP so I will remain here.

+1

I've also noticed a sizable amount of people (not just on here), most of them well-intended, who turn hostile at the drop of a hat. It's gotten to the point where half the "rebuttals" I see/hear are little more than childish name-calling and/or accusing others of being infiltrators/government agents/reptoids/whatever else is hip this week.

Every political movement turns into some variation of the above-- much of the establishment of today was once the "revolution" crowd back when, after all. Even now I see "libertarians" who seem to be developing an increasingly narrow view of what's acceptable (what political parties to join/not join, don't protest/BUT THOU MUST PROTEST, et cetera.)

Also, I swear that some people here go out of their way to argue with others, even when they're in agreement.

A signature used to be here!

The trolls are still at work (?)

I think a lot of the paid trolls may still be at work, while active FREE members have now moved along, and are living their life being with their families, working, travelling... so giving less of their mind to the happenings here.

So, for now, until the trolls all get fired, or stop being funded... there will be an imbalance here: C'est la vie! :)

Just plain 'Happy'about the direction the world is taking! Especially if we live to reach LEV [Longevity Escape Velocity]

Can someone explain this statement?

I don't understand "contribute computing power".

"As new coins are released on the set schedule, they are given at random to those who contribute computing power to securing the network."

Bitcoin Computing Power is like SETI's project

Do you know the SETI or FOLDINGatHOME projects?

They allow you to access a network of computers that help solve huge matrices that are generated during analysis of data generated from SPACE NOISE (in the case of SETI) and PROTEIN FOLDING for the FoldingatHome

For Bitcoin, the Computing Power of individual PC's is used to advance the cryptographic security level of the network to protect it from being attacked.

Basically, it is everyone's ability who participates to make Bitcoin very GOOD and SAFE!

Just plain 'Happy'about the direction the world is taking! Especially if we live to reach LEV [Longevity Escape Velocity]

Lot's of really good background info....

can be found here

http://www.udacity.com/view#Course/cs387/CourseRev/apr2012/U....

They are not really given at random, but rather who ever solves the next block. Each block is currently worth 50 bitcoins. The more computing power you contribute then the higher probability you have of finding the solution to the next block.

Mining has created something called block chain technology which is the first ever widely distributed database that everyone can access and at the same time is extremely secure against any modification. It's practically impossible! This is very innovative and few realize what other possibilities will come available because of this.

“I’m fully diversified. I’ve got some under the mattress, some under the floor boards, some in the backyard.”

The mark of decent software

Is a history of security issued addressed.

https://en.bitcoin.it/wiki/Incidents

There will be more. But we can't know if any will be fatal to bitcoin.

...and the Mark of a GREAT IDEA...

...is that the people who deal with these incidents are rewarded for their efforts by making a system better which sustains them in the process.

The early adopters had huge amounts of (worthless at the time) bitcoins. But with all the work they have put into developing tool and 'fixes' they have increased the total value of the project, and have given themselves the ability to trade that value back into the real world for things that support their own existance.

Just plain 'Happy'about the direction the world is taking! Especially if we live to reach LEV [Longevity Escape Velocity]

Bitcon is a Con and they are targeting libertarians

Bitcon is constantly marketted to libertarians. The radio shows, FSP, free press, and now this ECP press release costs a lot of money. Who is funding this marketing? Is it really organic grassroots? Who wrote Bitcoin? Was it an anonymous Japanese programmer like they tell you? Who was behind the hacking/looting of a Bitcoin bank several months ago? Does open source mean peer reviewed? Who has the credentials and qualifications to peer review the code? Can you know if a vulnerability was coded by accident or coded with malice? Who are these people who spend their entire days vehemently defending Bitcoin? What are they getting out of it? Is it fair to brand it as an Austrian school of thinking? Do these people even have a clue about sound money to begin with? What exactly is Bitcoin backed by?

A scratch beneath the surface and you discover this program comes from an unknown/untrusted source, has not been peer reviewed by anyone remotely qualified to do so, has already been hacked, is not secure, is not backed by anything, and there is a hidden hand of support funding this endevor.

But don't rock the boat because there will be 3 self proclaimed experts on here telling you otherwise until they are blue in the face.

Please find the answers !

They are all right here in these posts!

Bitcoin is not a con... the same as email is not a con, an neither are the rules that define basketball or any other thing defined by transparent "rules" of some sort.

Just plain 'Happy'about the direction the world is taking! Especially if we live to reach LEV [Longevity Escape Velocity]

Bitcoin and Troy will they every meet?

Troy, please let me know if you have understood the posted answers to your questions, if you still have some left... I would be more than happy to answer them.

Perhaps limit each comment to only 2,3 previously unanswered question.

Why am I proposing this? Why not, I love a good challenge, and having you "meet" Bitcoin would simply make me HAPPY!!!

I will be happy also to send you your first bitcoin... okay it will only be $1's worth but it will let you see how it works... perhaps you will then pass it forward to others...when you are ready! Right now that would be about 0.08 bitcoin (BTC).

Does this put me in the category of those who put their "money" where their mouth is? :)

Just plain 'Happy'about the direction the world is taking! Especially if we live to reach LEV [Longevity Escape Velocity]

Lot's of good questions there....

but are you really interested in the answers?

I for one market bitcoin as much as I can and as far as I can, but in no way do I tell anyone to sink their saving into it. It's worth understanding and participating to a minimum level in this new experiment called Bitcoin.

The coolest part about it is this new technology has huge implication other than currency. Ideas that were never possible before are now available and I've been actively working in related open source projects built on top of Bitcoin.

This is the classic "I don't fully understand it. It scares me, better attack it."

BTW, the ECB wasn't marketing Bitcoin. That article is full of bias against it. They are genuinely trying to understand it and set a game plan on what to do.

“I’m fully diversified. I’ve got some under the mattress, some under the floor boards, some in the backyard.”

> Is it really organic

> Is it really organic grassroots?

There is a lot of desire out there for untraceable digital transactions. That's causing some buzz.

> Who wrote Bitcoin?

The developers are listed at bitcoin.org. The anonymous Japanese developer may be one or more of those people.

> Does open source mean peer reviewed?

No, open source doesn't guarantee any review. And even reviewed software cannot be proven to be 100% secure. And would you trust the reviewer? This is a problem for all crypto.

> Who has the credentials and qualifications to peer review the code?

There are many people who do, and I look forward to reading their findings.

> Can you know if a vulnerability was coded by accident or coded with malice?

Sometimes, but those kinds of vulnerabilities are very obvious.

> Who are these people who spend their entire days vehemently defending Bitcoin? What are they getting out of it?

One can ask the same question of those who endorse the use of gold. I think it's better to focus on the technical: Are there weaknesses in the protocol? Are there weaknesses in the implementation?

No doubt the original creators of Bitcoin have a lot of them and they would stand to gain the most from increased acceptance of it, just as a lot of people who own gold stand to gain the most from increased acceptance of that.

> Is it fair to brand it as an Austrian school of thinking?

While we don't know if the designers heard of Austrian economics, in my opinion it's fair to brand it that way. Both believe that money should exist outside of state control. Both say it's better that money cannot be arbitrarily inflated. On the other hand I'm not sure it's possible to design a decentralized non-double spendable digital currency that supports unlimited inflation.

> Do these people even have a clue about sound money to begin with?

Who? The ECB obviously has a clue and is very opposed to the idea. The designers of bitcoin may or may not have set out to design a system with the limit. They may have only cared that it's decentralized, not double spendable, and can be anonymized. The limit on the number of bitcoins, which makes it Austrian, may a technical artifact which they retroactively promoted as a feature.

> What exactly is Bitcoin backed by?

Nothing but the markets willingness to buy it. Anti-money laundering laws and restrictive banking rules certainly contribute to that demand.

> A scratch beneath the surface and you discover this program comes from an unknown/untrusted source

It's important to distinguish between the protocol and the implementation (the program).

If there were any obvious problems in either one we would have heard about it already. It's not the first crypto currency. It's only notable because there *haven't* been any problems. The hacking of the bitcoin exchange has nothing to do with the security of bitcoin. You could have a computer system with records of gold on it, and that computer could be hacked. Records could be changed, changing the ownership of the gold.

Even a bug in the bitcoin.org software itself is not enough, because bugs happen and they can be patched. Bugs can be mitigated by storing the bitcoins offline or using different software.

To say it isn't secure, you have to come up with a way to double spend or to reliably tie bitcoin transactions to real world transactions. If someone comes up with a double spend attack then we'll know about it very quickly. And bitcoin would be instantly worthless. If someone comes up with a way to trace it, we won't necessarily find out about it for a long time.

Of course, it's perfectly sane to decline to use bitcoin because you don't understand it in detail, and because you do understand that more often than not protocols and software are found to be vulnerable to attack after they gain widespread acceptance. That said, one day you may find the risk of holding bitcoin for a very short time in order to facilitate a transaction to be worth the risk.

After all, TCP/IP itself and all of its implementations have had enormous problems and yet here we are.

Bitcoin

is far too advanced for you to grasp immediately. If you're scared of it than don't use it. Some of us realize the value of what is taking place with bitcoin. It is the way of the future. Eventually the conventional wisdom will catch up and perhaps many people will wish they purchased some at today's prices. You, my friend, are probably wasting your anti-bitcoin energy as you don't have a clear understanding of what it is yet.

Here in lies the scam.

"Bit Coin is far too advanced for you to grasp immediately." (poor me and my little brain)

"Eventually the conventional wisdom will catch up and perhaps many people will wish they purchased some at today's prices." (CHA CHING!)

There's nothing easier to understand than a fiat money fraud, and we know you think you're due a windfall from the pyramid scam.

I'm sorry

that you choose to interpret my words in that particular manner. Don't confuse your spin for my intent.

Fiat money fraud? Pyramid scam? You claim to know that I think I am due a windfall? Your logic is a complete mess. Do you even have anything to constructively contribute?

Do you?

.

Your

mother.

If you honestly

want answers I recommend signing up at bitcointalk.org forums.

I'm not going to spend another day replying/defending bitcoin here.

The last thing I'll say is the following:

Bitcoin is currently an experiment, just like using HTTP for the Internet was an experiment. Using HTTP happened to work fine.

However, because Bitcoin is an experiment nobody can guarantee what its future will be, either way.

The reason Bitcoin is mentioned often along with libertarian ideas is because it supports them by being based on the free market and being decentralized out of any government's reach.

The best place to get a good foundational understanding of Bitcoin is probably here:

http://evoorhees.blogspot.nl/2012/04/bitcoin-libertarian-int...

The best place to get questions answered is at the bitcointalk.org forums.

I've looked into it

If you honestly want nswers I recommend you visit http://mises.org