Topic: How did Satoshi Program for Incentive to Spend? (Read 2361 times)

So then, what do you call the principle of people-desiring-to-change-what-you-perceive-as-bad-money-for-better-money when it happens outside your historical definition?   If you are not going to allow it to be spoken in your presence without the recitation of history, we need something to help us move on to the application, yes?

Merchants are free to choose.  They still accept the "bad" money, they also may accept better money if they can get it.  So long as they aren't caught holding the bag of bad money, they still come out ok.

Gersham observed that when people are forced to accept devalued coins (i.e. soldiers will drag them away and throw them in prison if they don't) at the same exchange rate as non-devalued coins they adapt by spending the devalued (bad) coins as quickly as possible and saving the good coins.

This has been summarized as "bad money drives out the good".

Many people who use this phrase use the shorthand version as if it's some inherent fact of nature without any reference to the situation it's summarizing.

There's no basis for taking an observation based on how people adapt to coercion to assume that "bad money drives out the good" is a generally true principle.

If the merchants in question were free to choose they wouldn't accept the "bad" money at all, or else they'd accept it at its true exchange rate.

What I was talking about with regards to self-serving misinterpretations is when people assert that when people have a choice of free market currencies they'll hoard the stronger one and preferentially spend the weaker one (as opposed to just not dealing with the weak currency at all) based on the linguistic meaning of "bad money drives out the good" without any reference to the context in which it was derived. It's a non sequitur.

This post was sort of funny because it starts by defending the "narrow" interpretation.
The second sentence rephrases it to a "broader" interpretation"
And the third vilifies the generalization of the second.
It left me confused so I have to ask...

Your notion of what is "improper" here is curious, but I will bite your cookie to learn its taste.  Please tell us what term you use to describe the general notion of "bad money drives out good" if you are going to constrain your personal definition of the phrase to "bad government money drives out good government money within a bi-metallic system"?
http://www.britannica.com/EBchecked/topic/245850/Greshams-law
What is the proper generalization, please?

I am happy to change my mind, so long as the change makes things better.  But being pedantic for its own sake is a bit bothersome.

"Money functions in ways other than as a domestic medium of exchange; it also may be used for foreign exchange, as a commodity, or as a store of value. If a particular kind of money is worth more in one of these other functions, it will be used in foreign exchange or will be hoarded rather than used for domestic transactions."

To me this parses as:

1) If money (such as Bitcoin) is worth more as Foreign Exchange than a medium of exchange, it will be used in foreign exchange or hoarded rather than used for domestic transactions.  (your proper definition)
and
2) If money (such as Bitcoin) is worth more as a store of value than a medium of exchange, it will be hoarded (used as a store of value) rather than used for domestic transactions.
and
3) If money (such as Bitcoin) is worth more as a commodity than a medium of exchange, it will be used as the commodity or hoarded rather than used for domestic transactions.

For example of the narrow, if you look at the legal tender denominations on American Eagle coins (Silver ounce US$1, Gold ounce US$50, Platinum ounce US$100) these are hoarded rather than used for domestic transactions due to the perceived value being greater than the legal tender value.

For example of the broad, every trade made where you have a choice of payment method.

I am also curious about the assertion of appearance of Self-Serving reasons.  Would you care to expound on that or are you satisfied to simply cast aspersions on those people who improperly generalize (are we both guilty, both innocent, or neither)?

The only problem is those other interpretations do not have the empirical verification the "narrow" interpretation has.

Gresham's law observes how people behave when some entity tries to force them to act as if two non-equal items have equal value. It's an expression of how the individual preferences which make up a market express themselves even in a situation of coercion.

Some of people like to improperly generalize this into something entirely different, for reasons which tend to appear self-serving.

He created people with desires and drives and filled the world with uncountable wonders and pleasures. All can be yours if you release your grip on your bitcoins.

check this out : http://news.yahoo.com/mont-fund-aid-victims-ponzi-204147109.html

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

i'd say lets make fees dust etc to only go to the crypto darkweb victims fund similiar to this article NYC;)

I disagree.  As the mining incentive drops, the fees will increase.

what the fuck you have been peaking for 12 hours straight now

I bet this guy is terrorist sending encrypted messages with these posts.

you took too much man, too much

There is only one simple answer for this.

Its so easy to spend them, that you will sooner or later. The moment most people stop looking at the price constantly because they want to convert it into dollar / euro or whatever, the amount of spending goes up a lot.

Even today already, I wish more people/companies would accept BTC purely because I don't have to give them all my credit card data anymore... which I have to fill out every single time because I don't trust them storing it safely for me.

He solved it by mimicking gold.  Gold cannot be printed out of thin air, and neither can bitcoins.  By mimicking bitcoin mining after gold mining, he created a virtual currency that, as you stated, solves the major problems with fiat currencies, namely their centralized authority and ability to be printed/created at will.

  I think it depends on the market. The early adopters probably lost all their original wallets, and if they do have them, they will spend them as the  goods and services become available; They will slowly spread the BTC to worthy individuals and businesses.
  The essence of Bitcoin is to be absolutely neutral, it will not force you to spend or hoard, that is up to the market to decide; Currently the market is being valuated by the exchanges, but anyone who trades directly at the exchanges knows the cost... they will tank the price devalueing their holding, this is a consequence of the design of the exchange and not of Bitcoin itself.
  The true value of Bitcoin depends on the size of the market, the true price will emerge eventually through the broader economy. The true price is determined by buying power, in a fully working ecosystem prices must fall naturally to increase sales. If the wealth is being concentrated too much the buying power of each BTC will increase to incentivise purchases, if it is too spread out it will decrease buying power, prices will increase naturally. I believe this aspect is controlled by market concensus created by the merchants, but we are a long way from a fully functioning economy. Once the price of BTC stabilizes in its true economy, out of the exchanges, it will be self stabilizing by world wide consensus. The only thing the exchanges will provide is a gateway for new entrants into the BTC market; It will only tell us the eagerness of the public to trust in bitcoin or the number of fiat to btc to fiat transfers that are occuring in the world.
  Right now the incentive for Bitcoin is to convert it to Fiat that is the main business currently in power, MtGox, with more advertisement that business will lose market share.

Edit: think of it at a higher level, what is the flow of money? Where is it going? Right now it is only going to the best known places;MtGox, it is made by the miners who can't get it easily by buying it, the only place they can go is the exchange to make their money worth something. The Bitcoin ecosystem is not complex enough right now to create a decentralized economy... don't forget the economy.

This guy is either nuts or HIGH AS FUCK. All his posts are batshit insane. He also keeps editing them like 10 times after posting.

" I am in Calif.  Not sure why that matters here on the interwebs. "


" They alleged in the case that it could confuse people into thinking that they were looking at a US quarter or other current money of the US. "




got pics ? ok last time i checked California was still connected to The United States of America are those coins you are selling produced here. Would that not make them a form of money of the U.S. NYC;)




http://www.youtube.com/watch?v=AUNe_023rPg

To get back on topic: No!

The opposite is true, the deflationary nature of bitcoin stimulates saving, just like gold and silver it rewards people for creating a certain degree of scarcity.

Bitcoin is the same as fiat when it comes to wealth distribution, people that have to little will have to spend/consume everything they get to survive and the happy few that have to match will keep on hoarding to inflate there holdings. This results in increasing scarcity and it will keep pushing the gap until the divide is so large that people no longer want to use fiat/bitcoin, at that point there true value will be known. It happened before, it is happening now and it will happen again ...

That said, bitcoin was not designed to solve the growing gap between wealthy and poor people. It was designed to create freedom in a very closed aspect of our society (money), it was designed to protect the freedom of people to take there money and do what ever they want and where ever they want to do it. Even more important is that it was designed to stop banks and/or governments from taking your money just because they believe that’s the best way to solve the crisis we are in!

We are drifting off topic so I'll be brief.
US$50 is the MSRP, we sell wholesale based on spot+premium, not retail. Still, you would be surprised how many collectors buy them for US$50 or more.  The limited run from last year was recently selling on eBay for US$280/oz.
The original LD said "TRUST IN GOD" Apparently, the Treasury god is a jealous god, and doesn't want such words to be inscribed on anything unless they do it.  They alleged in the case that it could confuse people into thinking that they were looking at a US quarter or other current money of the US.  So we dropped that and put in the "RIGHT TO CONTRACT" motto instead, referencing the first article of the US constitution which also enshrines gold and silver as the money of the US, forbidding states to make money of anything else.

as price goes up, you can affor to spend a few fractions of a BTC

eg, say I buy 1000 btc, if I brought it for 10c each, now they are worth $100 each, of my available purchasing power reserves, spending 1 BTC to now buy something is going to probably effect me much less than spending FIAT, and even if it goes up to $10000 ok, so I have lost $10000, but I still have 999x 10,000

see how that works, so the more people hoard and push the price up the more likely one of them will spend a fraction of holdings to buy something

don't get me wrong i have rolex spoons i'd trade for bitcoins all day , i just see from your site your coins say: 50 "NEW DOLLARS" spot price for silver is nowhare near $50 and whats wrong with the old dollars what happened to: In God WE Trust? NYC;)

At the moment, I am in Calif.  Not sure why that matters here on the interwebs.

Some New Yorkers have heard of it.  David Ganz, Richard Timberlake, Nathan Lewis, Steve Forbes are New Yorkers who have all written about LD and are aware of NLD.  Though admittedly we keep a much lower profile than the original.

If you never heard of Liberty Dollar, it was one of Satoshi's inspirations.  "New" Liberty Dollar is the successor due to the fact that the Liberty Dollar founder is currently fighting off the US Government's false accusations in their attempt to maintain a monopoly on money.  He may spend the rest of his life in court as a professional defendant, but I hope he outlives their onslaught.  NLD kept as much of the original as legally possible, dropped all the politics, and set up shop.  Consequently "New Liberty Dollars" are OK to sell on eBay, and original "Liberty Dollars" aren't (yet).