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Topic: Bitcoin. In no way deflationary. - page 3. (Read 4687 times)

hero member
Activity: 756
Merit: 522
May 04, 2013, 06:02:36 PM
#24
And going down this road, we can in fact generate entire strata of dialects full of innuendo, jokes and insults which people right in the conversation do not understand, Cockney slang for example.

While the subtleties, complexities and general mystique of the forum quotation syntax being apparently outside your zone of comfort might suggest this isn't exactly your cup of tea, it's nevertheless what Bitcoin is all about: entire strata of dialects etc.

That aside, your "thousands of years" and other references are both weak and the hallmark of ignorance. I don't think we can be friends, and I don't think you have any sort of future here.
hero member
Activity: 532
Merit: 500
FIAT LIBERTAS RVAT CAELVM
May 04, 2013, 05:51:12 PM
#23
Yes, something like that, except that GOLD 2.0 would probably continue to be the focus of the larger bitcoin community for many years to come... Until the community finally succeeds at creating yet another MMORPG economy, which will eventually become a ghost town when someone invents a much better MMORPG economy, offering bitcoin miners the opportunity to explore new technological advances in a GOLD 3.0 era.

That Bitcoin is the functional equivalent of WoW gold is a long established point of fact.

I've often wondered what an MMO with a non-inflationary currency would look like.

Now I know?
hero member
Activity: 756
Merit: 522
May 04, 2013, 05:46:30 PM
#22
Yes, something like that, except that GOLD 2.0 would probably continue to be the focus of the larger bitcoin community for many years to come... Until the community finally succeeds at creating yet another MMORPG economy, which will eventually become a ghost town when someone invents a much better MMORPG economy, offering bitcoin miners the opportunity to explore new technological advances in a GOLD 3.0 era.

That Bitcoin is the functional equivalent of WoW gold is a long established point of fact.
legendary
Activity: 2898
Merit: 1386
May 04, 2013, 05:39:46 PM
#21
Atm Bitcoin is inflationary due to the new coins mined.
But in the long run Bitcoin is deflationary by the amount of coins lost.

The article uses, as do you, a meaning of inflationary based on percent new coins added, but that isn't correct.  Inflation could also occur with fewer coins, with higher monetary velocity, or it could NOT OCCUR, with more coins, but with usage increasing at a similar rate as new coins.

There is also the "latent inflation", which is existent but yet to be realized in price levels on the street, and this is typically seen when governments start printing money like crazy.  I suppose there could be some similar thing with bitcoins.

This is a sizable quantity of words which do not seem to carry any sort of meaning. If you'd be kind enough to proceed systematically from some sort of commonly known point it'd probably help.

Well, the commonly known points consist of the thousands of year old abstractions understood from observations ....  here's a first cut.

http://en.wikipedia.org/wiki/Quantity_theory_of_money

Secondly, we can observe these phenomena and comment on them vis a vis Weiner Republic, US 1970s inflation, Spain 1950s, more recently, Argentina.

The simple generalizations I noted are all reasonable.

Oh, regarding "good analogy"...I guess what I was trying to say is that a "good analogy" might be one that was understandable by a stupid person, or something like that...not something highly refined and subtle.  There's an opposite argument, of the following type (which I sort of like):

"Did you hear the joke about the airplane?"

"Nope."

"Oh...I guess it flew right over your head."

And going down this road, we can in fact generate entire strata of dialects full of innuendo, jokes and insults which people right in the conversation do not understand, Cockney slang for example.
full member
Activity: 126
Merit: 100
May 04, 2013, 04:45:29 PM
#20

You're basing your assumptions about what will happen in a stable, mature marketplace on what is currently happening in a new, unstable one?


Yes, something like that, except that GOLD 2.0 would probably continue to be the focus of the larger bitcoin community for many years to come... Until the community finally succeeds at creating yet another MMORPG economy, which will eventually become a ghost town when someone invents a much better MMORPG economy, offering bitcoin miners the opportunity to explore new technological advances in a GOLD 3.0 era.

hero member
Activity: 532
Merit: 500
FIAT LIBERTAS RVAT CAELVM
May 04, 2013, 03:45:36 PM
#19
Miners will still be able to gain money with transaction fees, but it's not new money.
And how exactly do you see this happening when hoarding seems to be everyone's favorite pastime?
Let me just make sure I understand how you're constructing your model, here.

You're basing your assumptions about what will happen in a stable, mature marketplace on what is currently happening in a new, unstable one?
full member
Activity: 126
Merit: 100
May 04, 2013, 03:42:02 PM
#18

Miners will still be able to gain money with transaction fees, but it's not new money.


And how exactly do you see this happening when hoarding seems to be everyone's favorite pastime? As you can see, lost coins don't drive BTC's deflation... No spending = no deflation.

sr. member
Activity: 364
Merit: 250
May 04, 2013, 03:33:33 PM
#17

Once the mining doesn't produce a lot of coins anymore that is quite a bit of growth for all other coins.


Are you accounting for the fact that most of the miners would eventually move onto the next best thing (some alternative and profitable implementation of crypto-currency? Wouldn't all your bitcoins be lost then? Look, contrary to a popular believe in the GOLD 2.0 era, the pump and dump schemes (the drivers of USD/BTC exchange rates today) don't create deflation in BTC... The deflation in a BTC-based economy can only be created through increases in BTC spending, not through BTC trading. How many miners do you know who are spending their bitcoins like there's no tomorrow? Hoarding still seems to be the popular choice today.

Miners will still be able to gain money with transaction fees, but it's not new money.
But yes, it's possible that a better crypto-currency takes Bitcoins place and all BTC will be worthless then (it's not the miners who decide this though).
full member
Activity: 126
Merit: 100
May 04, 2013, 03:28:41 PM
#16

Once the mining doesn't produce a lot of coins anymore that is quite a bit of growth for all other coins.


Are you accounting for the fact that most of the miners would eventually move onto the next best thing (some alternative and profitable implementation of crypto-currency? Wouldn't all your bitcoins be lost then? Look, contrary to a popular believe in the GOLD 2.0 era, the pump and dump schemes (the drivers of USD/BTC exchange rates today) don't create deflation in BTC... The deflation in a BTC-based economy can only be created through increases in BTC spending, not through BTC trading. How many miners do you know who are spending their bitcoins like there's no tomorrow? Hoarding still seems to be the popular choice today.

sr. member
Activity: 364
Merit: 250
May 04, 2013, 03:25:55 PM
#15

I agree completely. I count myself amongst those "Austrian types." Wink Eventually, Bitcoin will switch to being properly deflationary, but given that a) it will be a very gradual slope, or at the very least very long plateaus between deflationary events (lost or destroyed private keys) and b) lost and hoarded coins are functionally identical, and unless a private key is known to be lost, it's unwise to treat it as actually gone, I don't see it being a problem. When/if it does become a problem, Bitcoin2 is a simple code fork away.
I can agree with you on this, it's not a problem.
hero member
Activity: 532
Merit: 500
FIAT LIBERTAS RVAT CAELVM
May 04, 2013, 03:13:28 PM
#14
It's common, especially amongst the Austrian types on this forum, to use inflation in it's original (monetary only) meaning, while others (typically the Keynesians and monetarists) use it in it's more modern price inflation meaning. If we're using the modern meanings of inflation and deflation, then Bitcoin is very strongly deflationary at the moment. If we use the original terms, then it's strongly inflationary, but demand is increasing even faster than supply.

It happens that any non-monetary "definiton" of inflation fails to be a definition and practically works as either a red herring or strawman in any discussion of economics. Should somebody finally be able to construct a non-monetary definition that actually works as such it may be taken into account (at some point, by someone). As it is, the keynesian pseudo-inflation is pretty much only interesting to politicos.

I agree completely. I count myself amongst those "Austrian types." Wink Eventually, Bitcoin will switch to being properly deflationary, but given that a) it will be a very gradual slope, or at the very least very long plateaus between deflationary events (lost or destroyed private keys) and b) lost and hoarded coins are functionally identical, and unless a private key is known to be lost, it's unwise to treat it as actually gone, I don't see it being a problem. When/if it does become a problem, Bitcoin2 is a simple code fork away.
sr. member
Activity: 364
Merit: 250
May 04, 2013, 03:05:22 PM
#13

But in the long run Bitcoin is deflationary by the amount of coins lost.


Has it really come to this?... So far, the "coins lost" argument is out to be the best of all GOLD 2.0 arguments that have ever been brought up on this forum.


I think about 1 million coins is already lost, when they were worth like nothing.
It's difficult to tell a number, but I believe that about 0.5-1% of coins are lost every year due to forgotten passwords, burned machines, unspendable small amounts that are forgotten and so on.
Once the mining doesn't produce a lot of coins anymore that is quite a bit of growth for all other coins.
hero member
Activity: 756
Merit: 522
May 04, 2013, 03:04:16 PM
#12
It's common, especially amongst the Austrian types on this forum, to use inflation in it's original (monetary only) meaning, while others (typically the Keynesians and monetarists) use it in it's more modern price inflation meaning. If we're using the modern meanings of inflation and deflation, then Bitcoin is very strongly deflationary at the moment. If we use the original terms, then it's strongly inflationary, but demand is increasing even faster than supply.

It happens that any non-monetary "definiton" of inflation fails to be a definition and practically works as either a red herring or strawman in any discussion of economics. Should somebody finally be able to construct a non-monetary definition that actually works as such it may be taken into account (at some point, by someone). As it is, the keynesian pseudo-inflation is pretty much only interesting to politicos.
full member
Activity: 126
Merit: 100
May 04, 2013, 02:56:26 PM
#11

But in the long run Bitcoin is deflationary by the amount of coins lost.


Has it really come to this?... So far, the "coins lost" argument is out to be the best of all GOLD 2.0 arguments that have ever been brought up on this forum.
hero member
Activity: 756
Merit: 522
May 04, 2013, 02:55:29 PM
#10
Atm Bitcoin is inflationary due to the new coins mined.
But in the long run Bitcoin is deflationary by the amount of coins lost.

The article uses, as do you, a meaning of inflationary based on percent new coins added, but that isn't correct.  Inflation could also occur with fewer coins, with higher monetary velocity, or it could NOT OCCUR, with more coins, but with usage increasing at a similar rate as new coins.

There is also the "latent inflation", which is existent but yet to be realized in price levels on the street, and this is typically seen when governments start printing money like crazy.  I suppose there could be some similar thing with bitcoins.

This is a sizable quantity of words which do not seem to carry any sort of meaning. If you'd be kind enough to proceed systematically from some sort of commonly known point it'd probably help.

I also did not see the analogy.

Let's illustrate the illustrative analogy by the help of an illustrative analogous table:

Thesis. In the general discussion of currency (A) at issue is the problem of inflation (B). The fact is that Bitcoin allows creation of new currency (C) through market-controlled mechanisms (D) but not through fiat, or if you prefer political, mechanisms (F).

Analogy. In the general discussion of human life (A') at issue is the problem of procreation (B'). The fact is that marriage allows the creation of new people (C') through intra-marriage mechanisms (D') but not through public, or if you prefer orgiastic, anonymous, polyamorous, loser-gets-some-action-too mechanisms (F').

Therefore bitcoins are the analogue of married women, Bitcoin (as a protocol) the analogue of marriage, politics the analogue of irresponsible, venereal-disease ridden, slovenly, high-risk sexual behaviors. Finally Bitcoin finance is the analogue of wholesome family relations.

A pregnant analogy, perhaps. And a pretty clever one at that.
sr. member
Activity: 364
Merit: 250
May 04, 2013, 02:54:04 PM
#9
Atm Bitcoin is inflationary due to the new coins mined.
But in the long run Bitcoin is deflationary by the amount of coins lost.

The article uses, as do you, a meaning of inflationary based on percent new coins added, but that isn't correct.  Inflation could also occur with fewer coins, with higher monetary velocity, or it could NOT OCCUR, with more coins, but with usage increasing at a similar rate as new coins.

There is also the "latent inflation", which is existent but yet to be realized in price levels on the street, and this is typically seen when governments start printing money like crazy.  I suppose there could be some similar thing with bitcoins.

I know I'm only talking about the supply side, not the demand one.
It's the build in deflation/inflation of Bitcoin, of course this doesn't translate to the one on the market (we all can see how volatile it is right now).
hero member
Activity: 532
Merit: 500
FIAT LIBERTAS RVAT CAELVM
May 04, 2013, 02:40:19 PM
#8
Atm Bitcoin is inflationary due to the new coins mined.
But in the long run Bitcoin is deflationary by the amount of coins lost.

The article uses, as do you, a meaning of inflationary based on percent new coins added, but that isn't correct.  Inflation could also occur with fewer coins, with higher monetary velocity, or it could NOT OCCUR, with more coins, but with usage increasing at a similar rate as new coins.
It's common, especially amongst the Austrian types on this forum, to use inflation in it's original (monetary only) meaning, while others (typically the Keynesians and monetarists) use it in it's more modern price inflation meaning. If we're using the modern meanings of inflation and deflation, then Bitcoin is very strongly deflationary at the moment. If we use the original terms, then it's strongly inflationary, but demand is increasing even faster than supply.
legendary
Activity: 2898
Merit: 1386
May 04, 2013, 02:30:38 PM
#7
"To say Bitcoin is deflationary is akin to saying a married woman is sterile. No, she’s not, the balance of new life is created by married women."

Not the best written analogy i've read, lol..

What's wrong with it?
There may not be anything wrong with an analogy that is not clear except that it isn't clear, and that's important, since an analogy should clarify the cause and effect relationships, not further confuse them.

I also did not see the analogy.
legendary
Activity: 2898
Merit: 1386
May 04, 2013, 02:27:54 PM
#6
Atm Bitcoin is inflationary due to the new coins mined.
But in the long run Bitcoin is deflationary by the amount of coins lost.

The article uses, as do you, a meaning of inflationary based on percent new coins added, but that isn't correct.  Inflation could also occur with fewer coins, with higher monetary velocity, or it could NOT OCCUR, with more coins, but with usage increasing at a similar rate as new coins.

There is also the "latent inflation", which is existent but yet to be realized in price levels on the street, and this is typically seen when governments start printing money like crazy.  I suppose there could be some similar thing with bitcoins.
full member
Activity: 196
Merit: 100
May 04, 2013, 01:30:36 PM
#5
oh.. umm..  nothing at all  Roll Eyes

 LOL
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