re: Will Bitcoin be built under rather than on top of?

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.00001???

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Yea

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I mean, damn dude, if you are then you likely aren't that smart. Are you really not familiar with the concept of disintermediation? This is not something that is unique to the world of cryptocurrencies and decentralized technology. Disintermediation is the goal any industry with intermediaries.

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This isn't necessarily true. In markets, primary dealers (large banks) are supposed to be intermediaries of risk and providers of liquidity. By that I mean when people wanted to buy or sell securities, they would go to primary dealers as they were the liquidity providers. Operationally, say they bought a treasury bond from a seller, they could either hold that position or swap out the duration risk until a buyer came along. If they bought a credit bond, they could hold that or buy CDS to hedge out the credit risk until a buyer came, etc..

However, regulation via Basel III, Dodd-Frank, etc. has changed the risk ratio calculations and increased capital requirements to the point where primary dealers are no longer providing the liquidity they once did. This is actually the biggest risk in the entire economy in my personal view, liquidity risk is structurally much higher now. Dealers will either only buy/sell if they have another buyer/seller (essentially becoming brokers) or they will look for another counterparty rather than simply just waiting for "normal" market conditions to take over. We saw the effects of this play out last year during May and June, where a normal 60 basis point sell-off turned into an 100 basis point sell-off because there were very few players on the opposite side of the trade. Long term credit essentially didn't trade. Liquidity was sucked out of the market and bid/ask spreads widened out tremendously.

This is what I try to keep hammering when we have these discussions. There is a very distinct difference between theory and application. In theory, it would make sense that there would be lower costs for disintermediation. However, in this this real world example, disintermediation actually INCREASED costs. Nothing is in a vacuum, there are trade offs between economies of scale and disintermediation.

If you want to track primary dealer positions yourself here is the link. The data is bulky to go through at first but once you get the legend down its easy.

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Poodlebrain

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From your link this is under their summary of their 3 primary objectives. Doesn't this worry anyone? It seems the "code" of bitcoin is assumed to be perfect. Nothing is perfect.

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As a non-political online money, Bitcoin is backed exclusively by code. This means that—ultimately—it is only as good as its software design.

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Someone has to.

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The users decide if they want to download an update or not.

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Otherwise it would be possible to manipulate the value of Bitcoins for personal gain by implementing software changes that delay or prevent certain transactions from being accepted/verified. Even if the "damage" can be repaired to the block chain, the value of the opportunities lost, or stolen from others, could be substantial.

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In the last fork the value that was lost was regained in a matter of hours.

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But what system devised by man has ever been perfect?

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This has nothing to do with what we are talking about. Nobody has claimed bitcoin was perfect. Implicitly I deny that when I started this thread. If Bitcoin were perfect there would be no reason to build on top or under it.

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Bitcoin Foundation This outfit's website just screams "We deem ourselves to be in control of Bitcoin."

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Good, you see why I, and many other, don't support them.

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How was the value of lost opportunities regained?

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What lost opportunities are you talking about?

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So you have to fully understand the code before "you" would be able to make any judgement.

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No, if you aren't comfortable in assessing the new update you can simply not update and run the older version of the client.

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How is this better for the average user?

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They don't have to do anything and they don't have to worry about a central authority inflating the supply of their currency into oblivion.

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How does it prevent malicious code?

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The code is meaningless if it isn't run by nodes in the system.

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And how are you assured malicious code is not on any nodes?

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It doesn't matter if its on "any nodes".

Plus, the code is open sourced and why people download it from the core Bitcoin devs. They can see everything. They can see the changes. They can see the original version, et cetra.

Do you understand what open source means?

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If it doesn't matter, then why did you say this?

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Right, but if you dont know how to read code, what does that matter?

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It matters because there are a lot of people that CAN and do read the code. If there are things in there that shouldn't be, its open for the entire dev community to identify.

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I do, but if everyone downloads it from the "Bitcoin devs" how are they not the controlling authority?

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1. They can't force you to download a new client
2. Anyone is free to copy the source code and release it themselves.
3. If you were so inclined you could open up Eclipse and edit and publish your version of Android. Since it is open source it is not considered a proprietary OS of Google's and it's not considered "centralized".