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Re: <nettime> two-bitcoin?! The full text in chat-format
Douglas La Rocca on Tue, 14 Jan 2014 02:24:04 +0100 (CET)


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Re: <nettime> two-bitcoin?! The full text in chat-format


This is mostly nonsense. It is however refreshing to see bitcoin talked
about from a perspective other than goldbug "neo-classical"
"libertarianism," but there are major misconceptions both about bitcoin and
about Marx's analysis of money here.

First, there are no "posited" coins in bitcoin. You never actually own a
coin, strictly speaking. They are instead negatively determined: they're
the result of a ledger balance which sums inputs and outputs. This may seem
a meaningless distinction but it was the major innovation that made bitcoin
the first viable e-currency because it makes it possible to prevent
counterfeiting. The work of "confirming" a transaction, performed by miners
after the transaction takes place, checks that inputs and outputs match and
are one-to-one.

See e.g. here:
http://www.coindesk.com/information/how-do-bitcoin-transactions-work/

This means "physical" bitcoins are not necessarily stored on your computer.
They are stored in a public ledger which is copied by each miner and anyone
running a wallet independently. What makes for ownership is knowledge of a
private key stored wherever (a so-called "brainwallet" consists only in a
random but memorable passphrase, such as
"storms-avoir-bucket-run-gobble-stuck-ludere", and is prefferred by some to
writing down a passphrase).

There is furthermore nothing mysterious about mining. In essence it
transforms electricity ($$) into newly created coins.

The stuff in the post below about the lag-time between credit and debit due
to the difference between means of purchase and means of payment makes no
sense at all. In fact, one of the major problems with bitcoin--but also why
the "libertarian" crowd likes it so much--is that it will resist the
development of a second-level credit system on top of it, precisely because
there is no need for banks to discount bills. (Read on this issue Marx's
chapter on money in the Grundrisse, how the "Scots hate gold" and all that.)

With bitcoin now starting to make its way into commercial capital
(Overstock), we may see some sort of credit system develop. Right now the
volume of circulation is too low.

-dl


On Mon, Jan 13, 2014 at 2:44 PM, Matze Schmidt <matze.schmidt {AT} n0name.de>wrote:

> two-bitcoin?!
> TextJam
> as
> A tour in the orbit of bitcoins'[s] circulation, revolution and
> condition of flowing concerning the measure of value based on
> human labour
> December 20, 2013
> (17:08) 20:00 - open end (in English)
> The full text in chat-format
 <...>

-- 
Douglas La Rocca


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