Request for input on Bitcoin suggestion for LPSF website

Bit coin along with Pay pal, not instead of. San Francisco leads in this revolutionary application of the internet. We should lead.

If Phil is willing, I wish to place on next month's agenda a q&a with him on the subject of Bitcoins (20 min.).

Warm regards, Michael

Bit coin along with Pay pal, not instead of. San Francisco leads in this revolutionary application of the internet. We should lead.

Hi Michael and Phil,

I would love to learn more about Bitcoin. However, the couple of questions which I have posed already were pretty straight forward, and I fear they might never be answered as we once again get lost in rhetoric.

Not that I am opposed to the subject being on next month's agenda. I just want to make sure I get the following two questions answered; and also, ensure that if the person(s) volunteering to perform these two tasks does not do them, Bitcoin will be discontinued.

1. Who will take the responsibility of hunting for hard cash to send California LP's share should someone pay their dues in Bitcoin? I have no time for that.

2. Who will guarantee retention of value with money out of their own pocket should the value of Bitcoin fall? I am not willing to play with LPSF money.

Marcy

Hi Marcy,

To add to your excellent qs, I have these:
1. What are bitcoins?
2. How does one use them?
3. What are the +'s and -'s?
4. Can they disappear by an act of the State?
5. Can they be inflated?
6. Who ultimately controls the bitcoins website?
7. What are their implications for liberty?

I believe with your qs, mine, and others, it merits 20 min. as an agenda item.

Warm regards, Michael

Hi Michael and Phil,

I would love to learn more about Bitcoin. However, the couple of questions which I have posed already were pretty straight forward, and I fear they might never be answered as we once again get lost in rhetoric.

Not that I am opposed to the subject being on next month's agenda. I just want to make sure I get the following two questions answered; and also, ensure that if the person(s) volunteering to perform these two tasks does not do them, Bitcoin will be discontinued.

1. Who will take the responsibility of hunting for hard cash to send California LP's share should someone pay their dues in Bitcoin? I have no time for that.

2. Who will guarantee retention of value with money out of their own pocket should the value of Bitcoin fall? I am not willing to play with LPSF money.

Marcy

The best way to start any topic is a little history.

The New Yorker decided to figure out who was the anonymous creator of bit coin.

They narrowed the list down to eight people who would be expert enough in Austrian economics and also in the highest levels of cryptography.

they interviewd all eight, and they claim it's a twenty five year old scottish graduate from Trinity College in Edinborough, if memory serves. me. He had a PhD in Mathmatics and economics, and went on to a big Scottish Bank where he worked in securing the banks crytography.

Sorry for the misspells, My checker does not work with my voice utility for the blind.

When the New Yorker confronted him, he denied being the creator, but said he would check it out, and get back to them. when He did, he told them words to the effect, This bitcoin program is amazing/ It can survive a nuclear war.

First ,He probably had his inspiration from Hyak, who wrote a paper in the seventies on alternative currencies. It was a rough draft, because he was busy with other stuff, but it was an inspirational piece that laid out the benefits of wresting control of the currency from the State. As an interesting aside, he predicted then the inevitability that the powers would create a European central bank, and the inevitability that it would be a disaster for the people of Europe.
It took thousands of years for people to evolve knowledge of what is good money, and that knowledge ultimately converged on gold. Only the power of the state can overcome the natural forces that make gold money. It's indestructable, divisible to tiny pieces, Scarce, and itis very difficult to budge it's scarcity because all the mines in the world working full blast can only add a tiny fraction to the stash that has been accumulated by humanity over the last five thousand years.

As we know, the clock of change is speeding up in all fields of human endevour.

So bit coin was designed to mimic the way gold was adopted.

The creator knew that no one would adopt bit coins as a token of value, if it was seen as a benefit to him.

The bit coin protocal he posted on the internet afew years back, I forget, was 36 thousand lines of code. It's completely open source. that means that anybody can read the whole thing.
My knowledge is alittle fuzzy here, but the people who can change the program have to be trusted by the whole group folks already trusted. The open source phenom is clearly working all over the internet and other places.

The protocol by now has been copied perhaps millions of times and resides on and off the internet in hard drives , thum drives, cds dc roms, cloud servers. there may be more copies than ther are roaches.

The protocal provided for bit coins to come into existence by solving a very difficult math problem that can only be accomplished by what they call brute force, that is keep guessing until you luck into the answer.

The grinding out of these calculations is called mining. when the problem is solved, bit coin is created. The protocal, now running on a whole lot of miners computers checks itself and if the coins are being made too fast, it increases the difficulty of the problem.
So far about 11million coins have been mined, and thae rate of mining will be controlled slowing down to acrawl in about 10 years or so if my memory serves and an absolute max of about 20 million coins.

the heart of a bit coin is a key wrapped in three levels of the highest level bank type cryptography.

It's called public key cryptography, and you use it everyday if you use a credit card.
There is a public key and a private key. You make your private key when you buy a bit coin, and as long as you don't reveal that key, nobody can steal your coin.

You can make as many copies of your ccoin as you want to and store them anywhere in plain sight, or in a secret place if you like. all the copies are worthless without the password. and the bit coin network is designed to allow any one of those copies to work once the password is entered. All the other copies become worthless, once any one is spent.

the network which is by now distributed all over the world, solves a complicated math problem to verify that each bit coin tranasaction is legit. The record of every transaction ever completedup to that point in time is carried by every bit coin. there is no central place that ensures that each coin is legit. The checking is done by the giant computer power of thousands or millions of computers competing to do the math of verifying the transaction, and getting paid a tiny percentage for ding so. The lowest bidders set the rate.
So thats the basics.
Ittt's open source.
It's all over the world.
There is no place for the 101st to drop in on and stop it.
It's better than gold, in that it cannot be seized,and can get accross bbborders in an email, or even on a piece of paper with two numbers on it.
It cannot be inflated beyond 21 million coins and the inflation rate until then is completely set in code for all to see.
People a whole smarter than me think it's bulletproof, or at least as bulletproof as anything created by man can be.
Certainly more bulletproof than the US dollar that is on a one trip to it's intrinsic value, which is zero, as every currency backed by guns and fiat has reached it's intrinisic value.
Bit coin could do to centrally controlled fiat what google did to the YYellow Pages.
I hope this helps.
for now one can conveniently buy bit coins through coinbase.com that provides a portal to your bank.

You can buy anathing on Amazon by a site that converts the amazon prices to bit coin.

the first known bit coin transaction was ten thousand coins for a piece of pizza. Now one coin will get you 43 dollars. up from 23 in February.

Hi Phil,

The suggestion is being floated involving you doing a q&a on bitcoins at our April meeting. Would you be willing to do so?

Thank you.

Warm regards, Michael

I can guarantee you that the dollar value of bit coin will have volatility through the roof, both due to natural human emotions of fear and greed as something new comes into being, and probably also due to the government banksers fighting it by buying and selling large quantities to keep the volatility up and scare away the public. But like golds march from 263 to 1500 , fundamentals will prevail.

That is why I only suggest that we allow donations in bit coin for now. We may attract donations that we otherwise would not have gotten.

However, maybe someday we consider diversifying our tiny cash horde with a few percent of it stored inn assets that are long term appreciating as to the inevitability that value stored in dollars is racing to the abyss. Methinks that diversifying assets that one wishes to hold ove the long term is the better part of prudence.

But that is a discussion for another day. I just could not resist giving Marcy a little nudge. It's in my DNA.

Love Phil

Ha! Great read. As a gimmick that might attract some donors with a sense of humor and adventure, Bitcoins are an idea. Expecting them to go mainstream without losing their current unfettered characteristics is totally unrealistic. Comparing their fundamentals to those of gold, well, premature at best. So we are talking about spare money LPSF does not mind losing which might act as a promotional tool for LPSF.

Ish! Nonetheless, I would love to hear a presentation on this topic at the LPSF. Would you be available, Phil, should Aubrey agree to place it on the agenda?

Marcy

It may go mainstream in those countries where the leadership wishes to speed the inevitable demise of the dollar as the world's reserve currency. Don't forget , we already have lived few a few close calls as the Bretton woods system has been shaken to it's core a few times since it's inception in 44.
It will also is likely to go mainstream in countries with high inflation rates and large black market economies.
seeing as hyperinflation is built into the federal deficit and the political system that can't manage it, bit coins will likely be the mainstream way to store value as the dollar can no longer be trusted to do so, and gold is much harder to hide. As of now the total vlaue of bit coins is one twenty thousandth that of gold in market capitalization. It can go up a thousand times from here and still only have 5 percent of gold's value. and gold is waay below it's historic norm relative to all the paper and electrons out there.
So, methinks that a twenty five dollar donation becoming 25000 dollars is not really out of the question.