Crazy-person level of attention to detail. Not good. Not adequate. It asks for perfection, or lunacy: both of which are abusive to ask for. [1]

They run conventions. Obviously they want their IT guy around to help set everything up. [...] How do you mitigate that?

Try hiring four people to do the job of four people. If they fucked up the wifi because their intern-slave is busy updating the site's CSS, managing the databases, backing up the file server, fixing the wifi, carrying down the booths, making coffee, cleaning the toilets, and has to catch a plane for Kuala Lumpur tomorrow at 6 a. m., guess who's failing at his job. And it's not the guy making the coffee.

'on-call 24/7' - Again, this is normal.

Maybe it's normal, but that doesn't mean those who accept it for a pittance are not suckers.

[1] "Oh, but they're joking, it's hyperbole". I presume the salary is a joke too?

Inflation has never been a problem since Paul Volcker in 1982. In fact, the moniker Great Moderation should be more properly called Great Moderation of Inflation -- since not much was moderate apart from that, as exemplified by the crashes of 1987 and 2008, and the bubbles; but I digress.

We had about 10, 20 years of the lowest level of inflation in history across the board, maybe 2% per annum or so. Everyone nowadays is obsessed with Zimbabwe, or the ex-Soviet Unions, or the Diocletian Roman Empire, but those are red herrings, minor blips in a sea of (excessive) financial restraint. Inflation is not a problem today.

In fact, deflation is a problem today. Large part of the German restructuring, so lauded everywhere, was helped by inflation in Spain and Italy. (Granted, it wasn't much, maybe 4% per year, but even so.) Now the ECB refuses to return the favor: the ECB won't let inflation go above 2%, twisting the knife in Southern Europe's rib-cage and pissing everyone off. Meanwhile, the US, as most of the West and Japan, remains eyeballs deep in a liquidity trap: you could print the equivalent of the Michigan Lake in one dollar bills, and the Consumer Price Index wouldn't register a blip.

If your start-up were a big bank, you could tomorrow borrow money from the government at a real negative rate. You could borrow a billion dollars, store it in a bank account, pay in 10 years the principal and profit handsomely with the interest. For nothing. That's how low inflation is, today. The Fed is (used to be) desperately trying to increase it, as we speak, with not much effect.

In economic terms, a moderate (actually very low, in historical terms) 4% rate across the board would in fact benefit the system. If you can profit decently by storing money, nobody wants to get their lazy asses from the couch and invest. And the guys who have money don't want to spend it, either -- they're winning money, why spend? Thus a crisis. You have to whip their asses with the printing press, so that they don't get cozy.

I take the position that economic output driven my market manipulation (money printing, fixing the interest rate, driving inflation, etc) is undesirable because it sends signals to people about profits or losses or the amount of real resources available via the interest rate that aren't necessarily representative of reality. An example:

In magic-land there is no Fed and the interest rate is a number that clears the market between lenders and borrowers. As people save money they increase the amount of cash that banks have on hand. While they're saving money, they're not spending it and thus some amount of resources are piling up in the real world too, in unison with the amount of savings in the bank. As the banks' cash on hand goes up and nobody is borrowing, they will tend to reduce the rate of interest charged to induce more people to borrow, and reduce the rate of interest paid to reduce people's predilection to save. This causes the money to go to work, and at the same time, those resources which were piled up unused in the real world (in parallel with the money) were also put to work. To me this is a good thing, that stockpiles of money in the bank mirror stockpiles of raw materials in the real world as a result of people's reduced consumption and increased savings.

Now introduce the Fed which by virtue of it's ability to print money can cause bank deposits to increase while the raw materials don't pile up similarly. This causes all kinds of incorrect signals to propagate through socioeconomic life and induces people to make "bad" decisions. In my view this is unfortunate to have people making decisions thinking that the world is one way when in fact it is not, and perhaps going bankrupt as a result.

I imagine there might be disagreement about the relative importance of signalling vs. just making sure that money circulates, no matter what to keep the economy going. But would you disagree that the interest rate -- in the absence of a body which fixes the interest rate -- could tend to serve as a signal for the amount of under/over consumption that's happening in society? If so, why? And if you agree that it could, why is it not harmful to change that signal artificially?

EDIT: Even though I don't think we'll agree, thanks for explaining. Much appreciated.

The world should still move towards full legalization: use and trade.

This is important for this discussion, because exchange rates ultimately won't matter that much. By "ultimately", I mean that phase of development when (if) BitCoin becomes a full currency, that is, when there's somebody, some corporation, operating and trading significantly in the currency. I won't lend the status of currency to any commodity which is not used this way.

And what's clear is that both BitCoin and gold are shit currencies. Even conceding the exchange rate could stabilize enough for a modern day Rockefeller[2] to pull it to a success, you still would have to contend with the deflation inherent in this "currency".

There's a reason why gold is traded in commodities markets -- and not as a currency. There's a reason why banks and states trade and store USD, instead of gold. You simply can't grow an economy like it's the 20th century with gold, or BitCoin. In fact, BitCoin is even more ruthless than gold. 19th century economies could at least pray for the discovery of a gold vein, to alleviate their deflationary comedowns. BitCoin denies even this possibility with the cold, germanic efficiency of a mathematical proof.

[0] The exchange rate we run against our future selves, if you will.

[1] Which doesn't count anyhow, since you would agree there's a risk markup on them for their illegal status, which makes dubious extrapolating any analysis from them.

[2] An improbably apt group of entrepreneurs, who even more improbably would decide to bet their future fortunes on a currency designed by computer geeks with a penchant for goldbuggering.

Well, the past 4 years have proven you wrong.

Explain how the Bitcoin economy has been able to grow so much since 2009? Why is it that 10,000+ merchants decided to use Bitcoin through Bitpay alone? Why is it that Bitcoin gains more and more users every day?

The answer is that, even if deflation was a problem, which is itself debated [1], Bitcoin's advantages such as being censorship-resistant are unparalleled by any other currency, and that alone gives Bitcoin the ability to succeed where no other currency could.

[1] http://www.forbes.com/sites/jonmatonis/2012/12/23/fear-not-d...

He was talking about whether Bitcoin will ever become a currency not backed by USD (or whatever) and postulating why that will never be the case.

Bitcoin is currently surviving off its liquidity, not its value as a currency.

Think of it this way: The abundance of money should somehow correlate with the abundance of real resources. When this correlation breaks down, bad things happen to the economy.

In modern fiat currencies, the supply adapts automatically, without government intervention to the development of the economy, via the mechanism of bank loans. When a bank makes a loan, the money supply grows. When a loan is paid back, the money supply shrinks.

Bitcoin cannot work that way by design, which makes it a bad choice for a common-use currency - at least from the perspective of macro-economic behavior.

It occurred to me that bank notes today are the ancestors of a receipt that promised you a certain quantity of gold. Cash is just a promise - an abstraction from the underlying thing of value.

Whilst bitcoins are limited, you can create as many promises as you like - you just need an extra layer on top of bitcoin. Does this solve the loaning problem?

You would still have bitcoin as the base, like the gold standard but with none of the physical limitations of actual gold and with people still being able to easily transact in bitcoins.

I'm not sure whether having two things that you can pay with - bitcoin / promise of bitcoin - would be implementable. Would it require another crypto layer on top of bitcoin, with some parallel blockchain?

Gold standard: http://en.wikipedia.org/wiki/Gold_standard

This is an interesting read about bank notes: http://www.bankofengland.co.uk/banknotes/pages/about/history...

In the end, though, the same problems would crop up again after a while: bank runs, the attempt to deal with bank runs via a central bank, the tendency for downward spirals in countries with a trade deficit, and so on. Eventually, countries would have the same incentives to get out of a "Bitcoin standard" as they had with the gold standard.

citation please. The abundance of real resources in the cpu, memory, and storage markets have been outgrowing the dollar supply for several decades (evidence by the steady drop in prices even with a much larger dollar + credit supply). Nothing bad has happened to those markets. The growth of real resources varies wildly from resource to resource. If your first statement was true, shouldn't we see see resources that are not correlated with the dollar supply have 'bad things happen'?

Also its almost impossible to measure 'abundance of real resources', so any fiat currency pegged to that metric will not be aligned.

You are right, modern fiat currencies can adapt and that is the main thing bitcoin lacks. My understanding was that happened mainly as a result of central banks who can adjust all kinds of parameters. This is antithetical to Bitcoin's entire design principles, let alone the underlying technology (which could me modified to accept some parameters modifications from a board of governors).

Normal banks can't do that. To the extent that they do cause things to happen, can't they do that with Bitcoins. I.e. issue loans and collect payments with them.

The next-most plausible (though I think much less likely) future is that the hype will die down, there will be widespread disappointment, and it will turn into a kind of ghost town.

One big problem of Bitcoin is that in terms of efficiency, pretty much any centralized service can beat the shit out of it. If you think of Bitcoin as a ledger, and then look at the amount of resources spent on maintaining that ledger, and compare it to the amount of resources required to run a simple centralized ledger... well, Bitcoin loses big time.

This means that whenever Bitcoin comes close to having a large mindshare for everyday internet transaction, there is a serious window of opportunity for non-Bitcoin startups to take its place.

The only market where this logic doesn't apply is the Silkroad-type market and the stuff that caters to gold-bug/libertarian ideologists.

People pay a lot for security, and the problem with centralized systems is that they grant the organization running them both the means and incentives all the rents it can get away with, not only directly with added fees, but by using abusive tactics to pass the costs of fraud onto the user (see PayPal's infamous freezing policy) and by skimping security as much as it can.

Of course, you can reduce the likelihood of such events by adding external auditing, insurance, regulation, etc, but all of that adds friction which will inevitability result in increased transaction costs (TANSTAAFL).

If risk was irrelevant, nobody would invest in treasury bonds.

If you try the same with BTC, it's not possible. You give me 10BTC to hold, I loan out 8 BTC, you can't spend from your 10 anymore (well, 8 of it). The total currency in the system is unchanged, just who can use it has changed.

They have access to their money because the bank keeps a reserve that is enough for covering regular activity, but if the depositors as a whole tried to withdraw more than that, the bank can't simply invent USD with which to pay its depositors. That's why banks default when there's a run.

And of course, Bitcoin banks could also keep a reserve of BTC, so I really don't see why you can't have fractional reserve banking with Bitcoin.

With bitcoin, unless you're using bitcoin as the backing for another system, you don't have excess floating about. If there are 100BTC in the world, the system doesn't allow the ledger for all bitcoin addresses to sum up to anything over 100BTC. This breaks, for better or worse, the lending model that fractional reserve banking depends on. Now, if BTC is treated like a commodity and is the backing of some other currency (like gold used to be), then that other currency could be used in an economic system that uses fractional reserve banking.

The sum of balances they report to depositors is much greater than the currency they actually have.

Interesting to think of the reverse of "when I was a kid, a Snickers bar only cost 5 cents," e.g. "what I just paid for my new Macbook only bought me a pair of shoes ten years ago."

Basically, the problem with deflation is that everybody who has only one (or very few) income stream, but at the same time many expenditure streams (especially fixed contract expenditure streams) is going to fight very hard against reduction in that income stream.

And empirical data suggests that that fight tends to be fairly successful, too. This is why deflation is poison for economic activity.

I suspect that demanding constantly increasing income would be rather less successful if the system weren't rigged to make expenses never decrease.

That doesn't mean there's no use for it though. There may well be purposes and segments of the economy that find it very useful, and it may even be possible at some point for people in some niche markets/occupations to exist entirely in a Bitcoin economy. It'll just never be very big compared to any first-world national currency.

Even if BTC is better to transact with in every conceivable way, businesses will still need hard currency to pay their taxes, which makes exchange rate and liquidity risk a very real concern if you're trading real assets for BTC.

That's a strange comment, considering that seems to have been one of the fundamental deliberate choices made in the design of the currency, and is one reason why a lot of Bitcoin enthusiasts are attracted to the currency.

I am interested if you have seen any documented evidence of the former?

Also, in the US under the gold standard (1776-1910), we saw history's greatest increase in individual wealth ever recorded (measured by per capita GDP). Yes it was more volatile than under a fiat currency, but it's hard to argue that a constant or slow growing currency dampens economic growth with that data point.

Suppose you accumulate a lot of debt in a currency backed by gold. Further suppose that you control that currency, and have the power to change or remove the gold backing. It becomes very tempting to, say, issue some new currency with lower or zero gold backing to wipe out your debt.

That's not an argument for HFT. If HFT is useless, then it has divested a great amount of research into technologies that no one really wanted otherwise, i. e., that the social cost of HFT is greater. Standard microeconomics.

The question is, what's HFT good for? Do its benefits outweigh its costs? I believe they don't. Low-quality liquidity under the 1s frame is not only useless for traders, it has a great social cost, in the form of research diverted to this inane game. The only plausible arguments I've found for HFT claim that HF traders wouldn't profit if it wasn't useful -- which is really just begging the question; a circular argument.

Now, the resources that were going to traditional specialists and a subset of the professional traders, are going to HFT's, with some of that returning to investors in form of lower trading costs (if we buy the argument that liquidity has indeed improved, of course. Most of what I've seen indicates that it has.) As a side effect, we have technology improvement, useful for other things.

Now, there can be an argument made against HFT's, and in favor of more traditional traders, related to a potential decline in market depth. So far, I have not seen any convincing proof of this being the case, but I am open to it.

However, I think a lot of people arguing against HFT's do not quite understand that their position is literally that we need to enact legislation in order to protect Wall Street from competition :)

(a) Games of tomorrow will be made to host creative communities, which almost mandate those games to be for desktops. It's just too awkward to do serious modding work in a tablet.

(b) What is really worrying about the PC is not the format being outdated -- Minecraft, LoL, TF2 and WoW attest to its potential. What's wrong is Microsoft awkwardly replicating mobile ecosystems. Creating videogames now is all about novelty, taking ideas to market fast, and growing cool communities around these games. This just can't happen, when your platform maker is Big Brother's whiny, lazy cousin.

All in all, I just don't get why the Droid Brigade is so enthused about mobile gaming. It's probably an USian localism. The cons: Android smartphones are slow and jerky and shit; the iPhone is like Manhattan if it were a North Korean gulag; fat-fingering your way around is the shittiest of input methods; and most of the games are preheated gimmicks, tastelessly exploited before the camera until boredom strikes.

Anyway, that sports and education are so tangled is purely a national oddity of the US, maybe stemming from its tradition of great, and expensive, private universities. During the 19th century, if I recall correctly, it was a sign of distinction and wealth to practice sports; I conjecture that's what got it started in the universities, and then it spread in the early 20th century, when those colleges started courting new talent, intellectual or otherwise, from the up and coming middle classes, helped by the New Deal and the GI Bill.

That could also be why Oxford and Cambridge are relatively so keen on sports, i.e. rowing, as compared to other European universities. Sports were quite the posh thing back then. But, of course, I'm just guessing.

I think I already posted here about this, some eons ago. To recap: this strategy is bad. It's let's take Nintendo from a powerful stance as both platform maker and virtuoso first party developer, to Oversized Third Party Developer in a market notorious for:

(a) Low quality and extremely low fidelity demand, which prizes being cheap and having a gimmick over everything.

(b) Notoriously capricious primma donnas such as Apple and Samsung as platform makers, which take insane cuts from developers.

(c) Being an extremely fragmented market, with thousands of devices with very different characteristics and software which Nintendo would have to support.

Selling Nintendo to Apple is the business equivalent of folding a royal flush. Yeah, so the iPad sold 100 million units. The DS sold 154 million. For a single purpose device. The 3DS might be 20% behind its predecessor's curve -- a ridiculously successful curve, if I might say -- but that's still a cold 124 million units. The Wii was a fad, true... and it redefined the meaning of fad itself, selling 100 million units; a one model, single-purpose device. When factored into this that Nintendo profits from third party software -- unlike Rovio, which has to pay its dutiful tides to petulant lovers by excellance Apple and Samsung -- one starts clearly seeing how Nintendo is pulling ass like Brad Pitt at a wet t-shirt contest. Absolutely insane. Not even Steve Jobs could dream of selling a gadget so well as the 3DS does.

Not to mention that, again, in this business if you're a third party developer, either your name is Activision, or you're into masochism. Lose power, lose the platform, and you lose everything that makes you strong.

Edit: and I don't even like the Wii U.