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Topic: Does bitcoin foster economic growth or stagnation? - page 2. (Read 2999 times)

full member
Activity: 140
Merit: 100

When talking about economic growth or stagnation, money is a measure like a meter or a scale.
You add the total number of meters or kilos and you have the total size of the economy.
Problem is, if your print money, you all of a sudden are able to say that my economy amounts to more
money, so, TADAAAAA, my economy got bigger.
What is never taken into account though is the buying power of that money, which nowadays is getting smaller and smaller.
In the end, we fool ourselves that we have economic growth.

Now, imagine the world using 21 mil bitcoins as its sole currency. If you tried to measure the economy in money,
there would apparently never ever exist economic growth.
BUT, if this year the economy consisted of 2 cars, 2 buses, 2 trucks and 1 spaceship and the next year it consisted
of double that, wouldn't that be growth? Wouldn't that growth be shared by all bitcoin holders?

CONCLUSION: the amount of money DOESN'T reflect value.


PS: I'm not an economist. Just thinking out loud. Flame me all you want.  Smiley

At least you are not a Hodling Parrot

What if economy is like a coastline, trying to grow into a fractal dimension, keeping a constant measure would make it look as nothing changed, only by adding more resolution to your metric you would be able to measure the true size, and growth.

That's why bitcoin has divisibility, to show us all the fine granularity.
sr. member
Activity: 370
Merit: 250
Could someone explain to me how bitcoin, a deflationary currency, is supposed to be successful when it rewards those who hang on it it? A currency like that would inherently lead me to believe that no inroads would be made in the future in regards to it's development because who wants to build bitcoin ATMs when not enough people are spending btc or accept bitcoin as a payment if there aren't enough spenders? While fiat currency has many many flaws, it spurs spending. You wouldn't want to keep your fiat in cold storage somewhere under that mattress of yours when you know it would be worth less next year!

You'd go out and spend it on something hoping to retain that value! By my understanding, this is the opposite for bitcoin. We've all heard the phrase "BUY AND HOLD"--is this literally what people will constantly do in the future with bitcoin? How will anything develop if there's no demand to spend in the short term?

When talking about economic growth or stagnation, money is a measure like a meter or a scale.
You add the total number of meters or kilos and you have the total size of the economy.
Problem is, if your print money, you all of a sudden are able to say that my economy amounts to more
money, so, TADAAAAA, my economy got bigger.
What is never taken into account though is the buying power of that money, which nowadays is getting smaller and smaller.
In the end, we fool ourselves that we have economic growth.

Now, imagine the world using 21 mil bitcoins as its sole currency. If you tried to measure the economy in money,
there would apparently never ever exist economic growth.
BUT, if this year the economy consisted of 2 cars, 2 buses, 2 trucks and 1 spaceship and the next year it consisted
of double that, wouldn't that be growth? Wouldn't that growth be shared by all bitcoin holders?

CONCLUSION: the amount of money DOESN'T reflect value.


PS: I'm not an economist. Just thinking out loud. Flame me all you want.  Smiley

At least you are not a Hodling Parrot

What if economy is like a coastline, trying to grow into a fractal dimension, keeping a constant measure would make it look as nothing changed, only by adding more resolution to your metric you would be able to measure the true size, and growth.
full member
Activity: 140
Merit: 100
People must remember that money has LIQUIDITY and that has value independent of the underlying change in value.  Everyone who holds money is enjoying liquidity and inflation is what you pay for that.  Expecting liquidity for free is expecting to be subsidized by the rest of society.

Bitcoin has liquidity. Yet it doesn't have inflation. So your logic does not hold. Liquidity can be provided via divisibility.

Expecting inflation for free is expecting subsidisation. I.e. rich people enjoy ever inflating asset prices is pure subsidisation from society. Such a sick system.
sr. member
Activity: 826
Merit: 250
CryptoTalk.Org - Get Paid for every Post!
People must remember that money has LIQUIDITY and that has value independent of the underlying change in value.  Everyone who holds money is enjoying liquidity and inflation is what you pay for that.  Expecting liquidity for free is expecting to be subsidized by the rest of society.
legendary
Activity: 854
Merit: 1000
Could someone explain to me how bitcoin, a deflationary currency, is supposed to be successful when it rewards those who hang on it it? A currency like that would inherently lead me to believe that no inroads would be made in the future in regards to it's development because who wants to build bitcoin ATMs when not enough people are spending btc or accept bitcoin as a payment if there aren't enough spenders? While fiat currency has many many flaws, it spurs spending. You wouldn't want to keep your fiat in cold storage somewhere under that mattress of yours when you know it would be worth less next year!

You'd go out and spend it on something hoping to retain that value! By my understanding, this is the opposite for bitcoin. We've all heard the phrase "BUY AND HOLD"--is this literally what people will constantly do in the future with bitcoin? How will anything develop if there's no demand to spend in the short term?

When talking about economic growth or stagnation, money is a measure like a meter or a scale.
You add the total number of meters or kilos and you have the total size of the economy.
Problem is, if your print money, you all of a sudden are able to say that my economy amounts to more
money, so, TADAAAAA, my economy got bigger.
What is never taken into account though is the buying power of that money, which nowadays is getting smaller and smaller.
In the end, we fool ourselves that we have economic growth.

Now, imagine the world using 21 mil bitcoins as its sole currency. If you tried to measure the economy in money,
there would apparently never ever exist economic growth.
BUT, if this year the economy consisted of 2 cars, 2 buses, 2 trucks and 1 spaceship and the next year it consisted
of double that, wouldn't that be growth? Wouldn't that growth be shared by all bitcoin holders?

CONCLUSION: the amount of money DOESN'T reflect value.


PS: I'm not an economist. Just thinking out loud. Flame me all you want.  Smiley
sr. member
Activity: 370
Merit: 250
I'm not convinced a grade school teacher should be talking about space colonization and dimensional travel.

you are not looking... there are other dimensions than space.
legendary
Activity: 2268
Merit: 1278
I'm not convinced a grade school teacher should be talking about space colonization and dimensional travel.
sr. member
Activity: 370
Merit: 250
Fact: The world's population is growing.

Fact: The Earth's resources are finite.
Oh but the universe is vast...

Fact: The worlds central banks were on the cusp of solving this problem once and for all through brilliant monetary policy when some jerk invented Bitcoin and obliterated this dearest hope.  Now were all doomed; thanks a lot Satoshi.  Angry


I will tell you a secret now...

When you reach all known boundaries, what do you do to continue growing?
... You break into a new dimension ....

need proof? you are looking at it.
legendary
Activity: 1246
Merit: 1011
Fact: The world's population is growing.

Fact: The Earth's resources are finite.

Fact: The worlds central banks were on the cusp of solving this problem once and for all through brilliant monetary policy when some jerk invented Bitcoin and obliterated this dearest hope.  Now were all doomed; thanks a lot Satoshi.  Angry
sr. member
Activity: 370
Merit: 250
The main assumption about inflationary currency is that the economy must grow, that is wrong. Like any living things, once reached certain level of maturity, it can't grow forever, especially when the available resources on the planet are limited, growth without boundary is suicide

BTW, in an inflationary model, the growth resulted in more and more wealth concentrated to a few people, because the new money is issued by a centralized organization, and all the organizations around this organization will get the majority of the money. So it seems the economy is growing, but in reality the majority of people's economy condition is worsening due to inflation eating up their wealth day by day

Actually growth with boundary is suicide, in nature you start dying when you stop growing. That's what make people to allways look for new markets, new frontiers, new scapes
legendary
Activity: 1246
Merit: 1011
Could someone explain to me how bitcoin, a deflationary currency, is supposed to be successful when it rewards those who hang on it it?

Could someone explain to me how the USD, an inflationary currency, is supposed to be successful when it punishes those who hang onto it?
legendary
Activity: 1988
Merit: 1012
Beyond Imagination
The main assumption about inflationary currency is that the economy must grow, that is wrong. Like any living things, once reached certain level of maturity, it can't grow forever, especially when the available resources on the planet are limited, growth without boundary is suicide

BTW, in an inflationary model, the growth resulted in more and more wealth concentrated to a few people, because the new money is issued by a centralized organization, and all the organizations around this organization will get the majority of the money. So it seems the economy is growing, but in reality the majority of people's economy condition is worsening due to inflation eating up their wealth day by day
sr. member
Activity: 370
Merit: 250
Unemployment rose After the crisis while greece was traped in a deflationary spiral, much like Bitcoin is bound to induce

"A deflationary spiral?" Really? Aren't you confusing rising prices with deflation here?

Edit: BTW I don't think it is fruitful to deny facts, of which this is just one example:
http://abehnisch.com/wp-content/uploads/2011/04/eu-public-debt-gdp-2010.png

Its not about prices, they rise mainly because of increasing Taxation,

BTW Tried to find an aggregate but here it is
http://rwer.files.wordpress.com/2012/10/private-debt-x-countries-linear5.png
And I place the The crisis start at 2008

Maybe some day you will understand that it takes time for the financial world to unravel very complex worthless financial products. Furthermore, I consider the continuation of this discussion as pointless, because you keep throwing in all kinds of historic financial situations, which have nothing to do with the deflationary nature of Bitcoin.

Why there is a very easy way to unravel them: Bankrupcy? and start over?
I agree the conversation is derailed but people cherry pick my arguments instead of answering the real question:
Is there any experience of an actually deflatory economy, that prospered? other that hypothetical estimations of how it would work?
Xav
member
Activity: 78
Merit: 10
Unemployment rose After the crisis while greece was traped in a deflationary spiral, much like Bitcoin is bound to induce

"A deflationary spiral?" Really? Aren't you confusing rising prices with deflation here?

Edit: BTW I don't think it is fruitful to deny facts, of which this is just one example:
http://abehnisch.com/wp-content/uploads/2011/04/eu-public-debt-gdp-2010.png

Its not about prices, they rise mainly because of increasing Taxation,

BTW Tried to find an aggregate but here it is
http://rwer.files.wordpress.com/2012/10/private-debt-x-countries-linear5.png
And I place the The crisis start at 2008

Maybe some day you will understand that it takes time for the financial world to unravel very complex worthless financial products. Furthermore, I consider the continuation of this discussion as pointless, because you keep throwing in all kinds of historic financial situations, which have nothing to do with the deflationary nature of Bitcoin.
sr. member
Activity: 370
Merit: 250
Unemployment rose After the crisis while greece was traped in a deflationary spiral, much like Bitcoin is bound to induce

"A deflationary spiral?" Really? Aren't you confusing rising prices with deflation here?

Edit: BTW I don't think it is fruitful to deny facts, of which this is just one example:
http://abehnisch.com/wp-content/uploads/2011/04/eu-public-debt-gdp-2010.png

Its not about prices, they rise mainly because of increasing Taxation,

BTW Tried to find an aggregate but here it is
http://rwer.files.wordpress.com/2012/10/private-debt-x-countries-linear5.png
And I place the The crisis start at 2008
Xav
member
Activity: 78
Merit: 10
Unemployment rose After the crisis while greece was traped in a deflationary spiral, much like Bitcoin is bound to induce

"A deflationary spiral?" Really? Aren't you confusing rising prices with deflation here?

Edit: BTW I don't think it is fruitful to deny facts, of which this is just one example:
http://abehnisch.com/wp-content/uploads/2011/04/eu-public-debt-gdp-2010.png
sr. member
Activity: 370
Merit: 250
Inflation (resulting in higher prices) encourages debt, for they will be 'less of a burden' in the future. Deflation does the opposite, which is a great thing; the sooner you pay your debts the better. See how that works?
Yes I see it every day in GREECE, youth unemployment over 50% *great* system!

Facts:
1. Greece uses the Euro, which is (almost by definition) an inflationary currency, just like the Dollar.
*On Average*, local variations apply
2. Greece made more debts than any other country in the EU.
untrue, had just the weakest economy, and got in the crosshair of speculators, sure kill by the way.
3. Greece financial tragedy got worse because of the world wide financial crisis, which started in the USA.
"The avalanche has begun, it's to late for the pebbles to vote" - Kosh
4. Greece's bankruptcy was caused by governmental corruption in combination with 2 and 3.
Greece doesnot hold the excellence in corruption as most would like to believe, and sleep well at night.
If so what's the problem in Spain,Italy,Ireland and Cyprus?
IOW your claim that Greece suffered from a deflationary currency causing over 50% youth unemployment, is ridiculous.
Unemployment rose After the crisis while greece was traped in a deflationary spiral, much like Bitcoin is bound to induce
sr. member
Activity: 370
Merit: 250
Essentially yes. We are the 0.1%. It's our reward for getting in early and helping to spread bitcoin to the rest of the world.
And you lash at the current economic status? So all the plebs got to do is switch masters, I don't see why they should, for the Promise of a Deflationary economy?
And, again, why does the economy need to grow? For how long? At what point is it enough?
Because population grows, maybe if we drop a few nukes here and there, there will not be a need for growth for a while...
Xav
member
Activity: 78
Merit: 10
Inflation (resulting in higher prices) encourages debt, for they will be 'less of a burden' in the future. Deflation does the opposite, which is a great thing; the sooner you pay your debts the better. See how that works?
Yes I see it every day in GREECE, youth unemployment over 50% *great* system!

Facts:
1. Greece uses the Euro, which is (almost by definition) an inflationary currency, just like the Dollar.
2. Greece made more debts than any other country in the EU.
3. Greece financial tragedy got worse because of the world wide financial crisis, which started in the USA.
4. Greece's bankruptcy was caused by governmental corruption in combination with 2 and 3.

IOW your claim that Greece suffered from a deflationary currency causing over 50% youth unemployment, is ridiculous.
member
Activity: 98
Merit: 10
BTC has no impact whatsoever on economic growth or stagnation at the current stage it is in. The market just isn't large enough.

In a few years? Maybe, we'll see
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