Topic: Bitcoin's Dystopian Future - page 6. (Read 28248 times)

Internal Devaluation is functionally the same thing as inflation. I.e. opposite of deflation.


In case of investment, banks can manage inestments, including looking for good places to invest, and making sure what is owed is paid back to them, much better than individuals. Regarding security, having all your welath at home. if you have a lot of it, is not very safe, since it opens you up to robbery and torture to try to get you to reveal your password. Banks in the future may use a multi-signature system, where they only keep one of the signatures required to spend your bitcoin, and block any transactions that are over the daily limit or that they deem suspicious, without your consent. It's a lot harder to steal money from you when it requires taking you into a secured building with armed guards, just to get the second half of your password.



The specific reason we are in this mess is because investment manbs and savings banks were one and the same. People were putting money into savings, thinking their money was safe and will not be used for extremely risky investments, but banks used it for that, anyway. This meant that people essentially gambled their money on high risk investments without being told about it, and had to be bailed out, otherwise they would have lost all their savings. With bitcoin we can decouple savings and investments, where investment banks and hedge funds will be specifically that, and anyone putting money into those will know that there are risks.


Possibly. I admit I don't have much experience in those businesses...


What about them? They are goods that have a very strong demand, so you can ask for higher price when they have actually finished growing. (remember, if deflation is fairly constant, everyone can plan for it and adjust prices accordingly)


It means you keep as little inventory as possible, and thus as less debt as possible. You only spend (or borrow) for the couple of items you were asked to produce, and pay back the loan in full almost right away, since you don't have anything sitting around.


Yes they do? What's your point? You don't take out loans on products that don't exist because you are not producing them.


Why not? You can borrow, you just have to make sure whatever you are adding to the economy has greater value than the money deflation.


Why not?


Your competitors don't have to go to you, they can use other producers. If you produce for WalMart, they have a contract with you, and they decide to sit and do nothing, Target and Amazon won't care about your contract, and will get products from their own producers, screwing both WalMart and you. It would be stupid to sign a contract that lets your business customer sit around and do nothing while preventing you from selling to someone else.


Contracts for delivery? Basically internal barter exchange, I give you so much steel, you give me so much coal. Besides, there will still be lending in a deflationary economy. It will just be shorter term, and for products that produce good economic value. So there will still be a buffer, but it will just be smaller.


Sure. The big difference in the disagreement is that you seem to be saying that deflation is causing the economic woes, and I am saying that economic woes, which were due to government failures and debt, caused deflation.
If there was no deflation, if Greece was free to print their own money as much as they wanted to stave off their economic problems, you wouldn't have a better economy. You would, in fact, have the exact same issues that Argentina and Venezuela are having now, with severe inflation, wages becoming nearly worthless, and a more authoritarian government implementing severe capital controls that prevent you from taking out too much money, moving money across borders, and likely 25% import taxes on anything you buy online.



Deflation (price deflation) is economic growth being higher than the money supply. Less money to go around in a growing economy, more deflation. So if everyone was beng lazy and postponing the future, there would be no deflation, because there would be no growing economy to cause it. Deflation, or rather fixed money supply, at most pots a damper on economy, making it grow at a normal pace, instead of debt-inflated artificial pace.


That's no different from how things are now. You don't hire people to sit around and do nothing, regardless of whethere there's inflation or deflation. So you hire someone now, if someone else needs your product now.


Why would the poor mine bitcoin? The poor don't own cash printing presses, either. I think you misunderstood. I only implied that the poor will be able to save for the future, and actually have their savings add up to something. Inflation means the poor net worth will be continuously going negative, as they are incentivised to continue borrowing to live (especially if inflationary wages keep loosing value and they don't get raises), while deflation means the poor net worth will be continuously going positive, since they'll be incentivized to save before spending. Did you know that if your net worth is $1, you are richer than most people in 1st world?

Also, FYI, favelas aren't the result of a free market or a deflationary economy. On the contrary, Brazil has both regulatory and corruption issues, AND money issues.

Goverment tried to deflate  the economy, the technical term they used was "Internal devaluation", and got burned.
I recall the advice that if you dont have your bitcoins in your wallet, they are not your own. Why would anyone want to keep his bitcoins in a Bank?I thought the whole point of Bitcoin hype was to get rid of banks anyway.
So what we are only left is Investment Brokers : Investment Banks, Hedge Funds : The reason we are in this mess.

Ok you are obviously detached from the food industry...
Trees, Vines, Livestock. you know waiting things to grow... Unless your plan is to only eat bread and noodles...
Not to talk about efficiency even, JIT means that you constanly flush the pipelines, I guess you know what that means...
If not ask a fabric manufacturer this question "Do you shut down machines for repairs if your product has faults?" take a wild guess at the answer.
a lot of unbased Ifs in this statement,
You cant borrow money
You will not have already produced/stocked/procured/preordered/repayed the said components
You have a contract/advance they cant go to competitors
Your assumption is that goods flow from A -> B accross a chain right? so you can hedge amortize or whatever the risk, deflation etc
the problem with chains is you know "the strength of the chain ...."
What happens if nodes accross that chain start to fail on deliveries, how can that happen?

Lets just say that a Coal provider needs a constant supply of steel machinery, A Steel Provider needs a constant supply of coal, without stocking up resources, not mentioning workforce here, they will quickly be deadlocked waiting for some external energy (money) to kickstart them. So In order to get a just a single steel pin, you have everytime to pay upfront the cost of kickstarting the whole coal-steel industry.
In simple words economies of scale rely on full Buffers, which you have just made uneconomic to maintain.
What is left ? want to have a pin?, make it yourself. Self-Production aka Disconnected.
Debt related, Deflation inducing.
To sum up we agree that Greece is in Deflation ok?
We agree yes. So inflating would be a better option as at least Debtors would be alleviated, because savers are screwed anyway right?
No in greece they use more indirect ways Taxation (you see we opted for the slow Blues instead of Doom Metal, we are more romantic people)
I just pulled that number out off my rear, at this point I am entitled to some magic, At least I am not stating that BTC will end up worthing millions...
With deflation everyone gets lazy and postpones to the future, ventures, investments, cunsumption. Do you find that healthy for the labour market?
Why hire personel NOW, when you can hire personel when you get an order even a preorder/advance, why consume now but when you get a job? shy even spend? just Hodl!
The poor... Ah the poor will start to mine bitcoins! oh wait they dont have asics bummer. They cant even afford power as power is now *based* on bitcoin's value, there is not enough anyway... BTC miners eat it all up....
So they will stay poor but now without credit, working by the minute, paid only after the customer had the good (regardless of advances), without welfare, power, sure maybe they can at least sleep warmly enough on  faveles near the Miners's Heat Vents. Dreaming Red Dreams.

So your government tried to do excessive lending in a deflationary economy, and got burned. Why is anyone surprised?


Banks can provide extra security, or can provide investment services. People will just have to specifically state their intent to invest money in a possibly risky venture, as opposed to being told that they are putting money into safe savings accounts, while banks gamble with them without telling anyone.


Food is even more of a JIT thing that IT. IT takes years to develop (build new manufacturing plants), and takes months to become obsolete, while food takes months to grow, and spoils within weeks. With food, you also constantly have to adjust between growing too much, and letting it go to waste, or growing too little, and not having enough. Luckily, we've mostly had problems with the former.
What time constraints are you talking about exactly?



A few. If you borrowed money to produce, your loan is getting more expensive to pay back. If you already produced the components that go into the final product, you don't want them sitting around losing value. And finally, if you don't produce now, your competitors will.


Sorry, no idea what you are walking about. What cycles? (annual, buy/sell, borrow/repay?) What negative loops? Caused by what? Disconnected from what?



Why are people taking their savings out of the country? Are they expecting that Greece will try to pay off government debt by seizing savings? If that's the case, I think bitcoin would be a HUGE benefit, since even though it's deflationary, it will keep the money in Greece


Math says your problem is 100% governmentdebt related, not deflation or inflation related. From what you describe, deflation is just a symptom of fear of future government policy. Get the government and the gov debt out, and outside investment will have no reason to stay out, and neither will savers have a reason to get their money out.



Inflating the economy (printing more money and making it worth less) DOES alleviate debtors (who's nominal loans are now worth less than before) at the expense of savers (who's nominal cash savings are nor worth less than before). That did not happen in Cyprus, as they didn't inflate. They simply took money from savers, and used it to pay their government debt's, not everyone's. I am sure if Greek government took money from savers, and used it to pay your debt instead of it's own, you are a debtor would feel alleviated, at the expense of the savers they took it from.



Why would there be 80% unemployment? If you can hire people at any wage you want, you will hire them. Everyone always needs something done. As for middle class, the opposite will happen. Right now poor class stays poor, because they can't save or do anything to get out. All they can do is work 8+ hours a day and buy everything on credit, and that's it. With deflation, their savings will start to actually add up to something, and they will be able to move to middle class much easier. When has economy collapsed from just deflation alone? (Great Depression was a debt spiral spurned on by deflation, just as your situation is a debt spiral spurned on by somewhat of a deflation).

So your counsel is Bystander apathy? because of strong Groupthink incited by a Cash cow that will eventually lead to Escalation of commitment?

Bitcoin Is Utopioan 

beeing Greek I have it easy...
here you are http://www.medilexicon.com/medicaldictionary.php?t=27323

you forgot the T i think unless your making up a new word  

and just to reiterate my point the OP makes no sense at all~!

We have just that, if you think Bitcoin solves problems, vote for it, you can also buy votes, in this P2P system.  He who has the majority vote can have influence.

Don’t like the idea of Bitcoin, abstain from supporting the system. Let it shrivel and die on its own.

Fabricating and supporting stories of doom and gloom to stop people contributing the Bitcoin system is a political move, fortunately it carries no weight in the Bitcoin meme.

Great piece.  I feel that your predictions will play out regardless of bitcoin, as these drowning-in-debt sovereigns will eventually implode. I agree that wealth will run to something, whether that's bitcoin, some other virtual currency, or precious metals, etc.  I wonder more about what future will exist for my children as opposed to the elderly.  These are truly the very best of times (the best that have ever existed IMO) - and that is due to living on borrowed money.  When the debt bubble implodes, and the chickens come home to roost as eventually they must, and there is now no one left to do the bailing out, the future will probably be very ugly, and nothing like we have it now. 

SPAM? no
TROLL? maybe
OP DYSTOPIAN? maybe
YOU SIR DYSOPIAN? Definetly

Maybe instead of trying to fix the economic mess, it's better to start with the political? Maybe  Instead of the Bitcoin revolution the world need the BitVote revolution... just saying

SPAM THREAD THE ONLY THING DYSTOPIAN IS THE OP

It may be a cultural gap, but in Greece most households are invested in their own house first and in cash second, and believe me they had a hard time aquiring that asset especially in the Euro bubble. Our experience even before the crisis was that Euro was expensive and questioned the sustainability, but we trusted the powers that be especially EU that they had it under control and gave little attention, we used to call it EU-Autopilot. So when the crisis came if we inflated the economy "sticking plaster" we would have all assets and debts equally loosing value and a balance would be kept while diverting value to promote growth. Intead we tried to deflate the economy and the result is that while assets lost value (and in the cypriot case even the savings), while the debts are not only stable but mounting as goverment increased taxation. So if we now magicaly switch to bitcoin even at a constant rate, situation will not revert only accelarate.
BTW Banks dont have reason/opportunity to exist in an deflationary economy anyway.
Nope forget about it can<>will, Banks are non entities in the Bitcoin economy.
Christ you cant fucking JIT FOOD, OIL, get out of IT Industry mindset, there are TIME contrains that work against you in that model, that will get populations freezing,starving waiting for philanthropy by the OT devs.
What Incentive is there to JIT produce now rather than wait a day and screw the customers over? multiply that risk against the supply chain nodes and your product price shoots up. Add now a production Cycle into the model and watch it shrink away.
The economy is not a planar graph to distribute the risk evenly accross the chain, It contains cycles, in that model all those cycles will be negative loops and phased out one by one until everyone is disconnected and becoming a single node of Producer-Consumer or a Planar graph with one way flow of capital : Mercantilism, expect peace to ensue

we have shrinking amount of Euros within greece as we have
1. Savings flights (especialy after what happend in Cyprus)
2. Investment flight (none is willing to invest with a negative outlook)
3. Increasing Taxation to cover external loans.
4. No new internal loans by the banks as they are now zombies: no fractional reserve induced inflation (No savings, To many loans)

All those bailout money simply went to debt restructuring, nothing ended up inside Greek economy. Do the math
No he was saying that inflating the economy alleviates the Debtors at the expense of the Savers, which is not what happened in Cyprus
as they got deflated and both were screwed
Sure if you can withstand 80% UNEMPLOYMENT, Total collapse of the Middle class, Urban centers, Industry, and Return of the Feudal Landlords.
The Feud is a perfect economic system lets go back to it.

Viva la BTC Revolution - Aristocrats no dead

Democracy will always devolve into ochlocracy (actually it's the same thing) and I believe philanthropic attitudes is one of the reason why that happens. All politicians have philanthropic attitudes especially when it's with taxpayer money, they love giving money to the poor in exchange for their votes.

A major aspect of inflationary policies is the ability of politicians to tax fake asset appreciations. Consider a house that goes up in value from 100 to 200 due to inflation. The government coyld chose to tax the profit of 200-100 upon a sale while nothing of value was created.

In our current system, citizens don't have hard earned assets. They have tons of debt. So they won't care. And those who do have hard earned assets in the form of cash will likely keep converting them to dollars. The only ones who will be SEVERELY hurt by this are the lenders holding the debts of the citizens, since fiat losing value against bitcoins and eventually inflating like crazy means citizen's debt is shrinking into nothing. Citizens will support this, wealthy asset holders who know what they are doing will support it, and banks who lend money to citizens will get screwed, if not wiped out.



1) There can still be banks. Loans will just have to be short-term, and for things that are actually worth something, as opposed to for anything at all just to beat inflation. Less garbage for sale, more durable high-quality products, and less impact on environment from resource use and garbage. 2) Just In Time production is already almost a gospel in our economy. Inventory depreciates way faster than money inflates already, so it won't be that much of a difference if that inflation changes to deflation. 3) Once deflation is stable, preorders, or sale prices, can be set to account for that deflation. Also, if you preorder, aka invest, in someone doing something for you now with inflationary money, the money they receive will keep losing value, and they will be working for less and less as time goes on. If you invest in someone using a deflationary currency, such as giving 20BTC to OpenTransaction developers, as time goes on, that 20BTC ($2,000 at the time) will keep going up in value, giving them more and more to work with if they only use small amounts of it at a time.


Deflation is a shrinking amount of currency, or the economy expanding faster than the money supply (depending on whom you ask). Euro is not shrinking in supply, and Greece's economy is not expanding at all, from what I know. So your problem is that Greece took on too many loans, became way too risky, and now no one wants to lend anyone any more. The problem is entirely from debt and it's risk, not from any money supply issues (deflation).


That's what thoughtfan was saying. Taking money from savings to pay for government's debt mistakes doesn't help anyone, especially not the savers.



Actually, it was inflationary currency and easy credit that enabled those things.
You were asking for anyone to say it, so I will: Deflation is good, inflation is bad:

In an inflationary economy, it is cheaper to borrow than to save. It's better to buy something now with a loan, and pay the loan off over time, since even though you are maying more in numbers, you are paying less in actual value. A $600 a month mortgage on a new house now will feel like a $250 a month mortgage 30 years from now. As a result, we now have an economy where 3/4th of people who reach age of 65 have less than $100,000 in their savings and retirement (making them dependent on government), average credit card debt is around $15,000 per person, almost no one has a positive net worth (they owe more than they have), and governments are to the point where most of their tax income is going to pay off debt instead of to pay for infrastructure and actual government services. I would even propose that much of the enormous economic growth over the last 50 years is fake, sustained by borrowiing that will have to be repaid later, and if it can't be, will result in the economies of the governments with massive borrowing dropping right back down to where they would be if no one ever borrowed (i.e. to the level of the country's net worth).
On the other hand, in a deflationary economy, people are incentivised to save and become self-sufficient, instead of relying on government. People would likely be more picky in what they spend their money on, and won't be buying as much. Yes, that will slow our economy considerably compared to what it is in our inflationary system, but as I mentioned above, our current booming inflationary economy many not be "real" to begin with, and may be a giant cycle of global-sized boom and bust. We're just now getting to the bust. In a deflationary economy, there will be booms and busts as well, but more frequent, and much more shallow. Plus less coonsumerism will be much better for the environment. Oh, and don't forget that poor people don't have access to the stock market. Cash is their only means of saving and "investing" for the future. Right now, our inflationary system is robbing their wealth, and giving it to the banks that "print" the new money. A deflationary system will actually allow many poor people to save, invest, and get themselves out of poverty.

No. Are you telling me that a bitcoin economy is going to remedy that?

Well, what I imply is that philantropic attitudes could help to prevent democracy devolving into ochlocracy. With regards to ethics behind my statement, i am not that skilled in philosophy to answer this yet, apologies.

I had to cross post after reading this : 

To the OP:

This thing about children being kidnapped. You're way paranoid. Bitcoin enters the fray. It does not replace everything in existence. Internet exists, yet people still buy books. Chat rooms exist, yet people still meet afk.

Your argument could be made by someone seeing the worlds first webcam and microphone thinking "no one will ever have a real person to person meeting again! Humans will forget what eachother feel/smell like! This will lead to the rise of robot looking machines who become intelligent and (the Matrix for the rest of this analogy).

You should (or maybe have) watch Adam Curtis' "The power of nightmares." In today's world, he who has the darkest imagination wins, or more specifically, gets government contracts.

You have nothing to worry about, or more accurately, nothing WORTH worrying about.

(Also, you say it's un-taxable, this is not true, every legit business would make its addresses known, and this would make it much HARDER for them to avoid tax (given that BTC is a public ledger.))

tl;dr you may not be wrong (although a little inaccurate), but you are a person who sees a glass that contains 50% air, 50% water, have decided that it's half full, and that someone will definitely drown as a result of its existence.