rpietila Calling the Bottom - page 14.

flipperfish

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Dolphie Selfie

Quote from: An amorous cow-herder on September 04, 2014, 03:15:49 PM

Quote from: rpietila on September 04, 2014, 01:11:53 PM

And I am still at a loss to understand how this all relates to the thread... Tongue

Well, then lets get back to your original points. You assume the next bubble will bring us to 10k.
At 3.6k+ fresh BTC every day it would take $36M+ per day just to sustain price. Or $1B+ per month, or $12B+ per year.
Miners arent (at least mostly) basement miners. Big companies with running expenses. And i dont think those with the "big wall street money" are too dumb to ignore that fact.

Edit: Nearly forgot the oblig. extrapolating image.

You should consider, that it's only $12B+ per year for the next 2 years. This get's us to $24B+ over the next 2 years. From then on it's $24B+ over the next 4 years. And then it's $24B+ over the next 8 years. There's an exponential trend in this, too!

Odalv

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Quote from: An amorous cow-herder on September 04, 2014, 04:07:58 PM

I dont buy into this "store of value" concept as a driving force for bitcoin. Simply because that concept has a limited life span.

1. ASICS consumes 0,6 W / GHash - so I can sacrifice few watts and run miner in my USB.
2. I can also heat my water with bitcoin miner (and keep my money safe). I'm sure that this products will be available in next decade.
... and so on

Dusty

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Libertas a calumnia

Quote from: An amorous cow-herder on September 04, 2014, 04:07:58 PM

Quote from: Odalv on September 04, 2014, 03:55:48 PM

The rationale is to save your money from inflation. But now it is still experiment and you are inovator/early adopter.

I dont buy into this "store of value" concept as a driving force for bitcoin. Simply because that concept has a limited life span.

At the rate the Fed is pumping out dollars, I think we'll all see which currency will have a limited life span, if dollar or bitcoin...

Odalv

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Quote from: An amorous cow-herder on September 04, 2014, 04:07:58 PM

Quote from: Odalv on September 04, 2014, 03:55:48 PM

The rationale is to save your money from inflation. But now it is still experiment and you are inovator/early adopter.

I dont buy into this "store of value" concept as a driving force for bitcoin. Simply because that concept has a limited life span.
Bitcoin has to become an actually currency sooner or later. As the block rewards dwindle transaction fees have to take over, otherwise the hashing power "protecting" the network will dwindle as well.
And what good is "stored value" if you cant move it because someone decided to block all transactions just for giggles because its cheap fun?

https://www.bitstamp.net/help/what-is-bitcoin/

Quote

Credit card companies charge gas stations a 2% transaction fee. The US consumes 65 billion gallons of gasoline per year. At $3.60 per gallon, this could be a $234 billion dollars.

Big numbers and hard to imagine. :-) How much cost breakfast for 7B people every day ?

An amorous cow-herder

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Quote from: Odalv on September 04, 2014, 03:55:48 PM

The rationale is to save your money from inflation. But now it is still experiment and you are inovator/early adopter.

I dont buy into this "store of value" concept as a driving force for bitcoin. Simply because that concept has a limited life span.
Bitcoin has to become an actually currency sooner or later. As the block rewards dwindle transaction fees have to take over, otherwise the hashing power "protecting" the network will dwindle as well.
And what good is "stored value" if you cant move it because someone decided to block all transactions just for giggles because its cheap fun?

Odalv

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Quote from: An amorous cow-herder on September 04, 2014, 03:46:20 PM

Quote from: Odalv on September 04, 2014, 03:26:41 PM

if there are 36,000 new adopters every day then they have to invest only $1,000 each

36,000 / day = 13,140,000 / year

13M/7B * 100% = 0,18% not event 1%

And, what exactly is the rationale to invest $1000?
The hope that it goes to $100k?
I mean, only 1.8% of the population would need to invest another $1000 to keep that price afloot every year..
And those? Oh right, cause its gonna be worth $1M soon after.
Well, by that time we should have another block halving, so we only gonna need like 9% of the world population joining every year.

The rationale is to save your money from inflation. But now it is still experiment and you are inovator/early adopter.

An amorous cow-herder

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Quote from: Odalv on September 04, 2014, 03:26:41 PM

if there are 36,000 new adopters every day then they have to invest only $1,000 each

36,000 / day = 13,140,000 / year

13M/7B * 100% = 0,18% not event 1%

And, what exactly is the rationale to invest $1000?
The hope that it goes to $100k?
I mean, only 1.8% of the population would need to invest another $1000 to keep that price afloot every year..
And those? Oh right, cause its gonna be worth $1M soon after.
Well, by that time we should have another block halving, so we only gonna need like 9% of the world population joining every year.

Odalv

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Quote from: An amorous cow-herder on September 04, 2014, 03:15:49 PM

Quote from: rpietila on September 04, 2014, 01:11:53 PM

And I am still at a loss to understand how this all relates to the thread... Tongue

Well, then lets get back to your original points. You assume the next bubble will bring us to 10k.
At 3.6k+ fresh BTC every day it would take $36M+ per day just to sustain price. Or $1B+ per month, or $12B+ per year.
Miners arent (at least mostly) basement miners. Big companies with running expenses. And i dont think those with the "big wall street money" are too dumb to ignore that fact.

Edit: Nearly forgot the oblig. extrapolating image.

if there are 36,000 new adopters every day then they have to invest only $1,000 each

36,000 / day = 13,140,000 / year

13M/7B * 100% = 0,18% not event 1%

An amorous cow-herder

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Quote from: rpietila on September 04, 2014, 01:11:53 PM

And I am still at a loss to understand how this all relates to the thread... Tongue

Well, then lets get back to your original points. You assume the next bubble will bring us to 10k.
At 3.6k+ fresh BTC every day it would take $36M+ per day just to sustain price. Or $1B+ per month, or $12B+ per year.
Miners arent (at least mostly) basement miners. Big companies with running expenses. And i dont think those with the "big wall street money" are too dumb to ignore that fact.

Edit: Nearly forgot the oblig. extrapolating image.

oda.krell

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Quote from: An amorous cow-herder on September 04, 2014, 01:31:15 PM

Quote from: oda.krell on September 03, 2014, 04:53:11 PM

Quote from: An amorous cow-herder on September 03, 2014, 04:03:59 PM

Dont get me wront. Bitcoin would have been a really cool thing. Well, if it had come *before* Paypal etc.. We already have an online payment system.

Costing a whole lot more (3% of the sale plus ~30 cent fixed vs. ~5 cent),

Actually i would argue it costs PayPal less, but they charge more.
Bitpay basicly has the same expenses as Paypal. While the transactions cost less with BTC all the other expenses need to be covered as well, just like Paypal that includes servers, staff etc..
Paypal is highly profitable, Bitpay, who knows. Maybe they are still burning though venture capital.
And thats excluding the other costs, fees to aquire BTC, miners not actually getting payed for signing the transaction instead getting the lions share from block rewards. Sure, its still a long while to go until block rewards are so low that the hashing power securing the network gets so low a 51% attack is almost trivial. My guess would be that miners will revolt and demand higher transaction fees long before than.

Quote from: oda.krell on September 03, 2014, 04:53:11 PM

and being a nightmare for merchants because of conflict resolution by default going in favor of the customer.

And thats excactly the reason why customers arent adopting BTC on a large scale. Why would you want to give up customer protection?

I answered that in the posts afterwards: because merchants have a strong incentive to convince customers to pay in BTC. So most likely: they will give rebates / other benefits to BTC paying customers to encourage a payment vector that increases their margin by ~3% (or maybe closer to 2% after the rebates).

EDIT: Up to OP to decide if the off-topicness should end here. I enjoy the tangentials, but understand also the desire to keep the discussion centered around the original post.

zimmah

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Quote from: NotLambchop on September 04, 2014, 12:07:26 PM

Quote from: rpietila on September 04, 2014, 11:55:20 AM

The reason why deflationary money has not been used is that there is no such thing.

Price deflation arises from economy at function. When economy is doing bad, prices rise. If economy is doing good, prices fall.

Wrong and wrong.
By "deflationary money" I, and the people I am talking with, mean "supply-side deflation." http://en.wikipedia.org/wiki/Deflation#Money_supply_side_deflation
Bitcoin will be such a currency once the last coin is mined and the first paper wallet is lost.

Price deflation (and inflation) arises from many factors, see http://en.wikipedia.org/wiki/Deflation . If the economy is doing well, prices can rise if more money is introduced. If yesterday you were able to buy one pig, and today you're able to buy two, you're doing better regardless of how many tokens the pigs cost you.
This is basic and shouldn't need to be explained.

TL;DR: Rising prices != failing economy; falling prices != thriving economy.

indeed, what i meant is that inflation (of the money supply), in other words more money entering circulation will ensure that every dollar (or other currency) will lose value unless the economy itself grows at the same rate.

Since the money supply is increasing exponentially, the value of the dollar will go down because the economy can not keep up, simply because the earth can only produce so much.

On the other hand when the number of dollars in circulation decrease, each dollar would be worth more assuming the output is the same.

An amorous cow-herder

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Quote from: oda.krell on September 03, 2014, 04:53:11 PM

Quote from: An amorous cow-herder on September 03, 2014, 04:03:59 PM

Dont get me wront. Bitcoin would have been a really cool thing. Well, if it had come *before* Paypal etc.. We already have an online payment system.

Costing a whole lot more (3% of the sale plus ~30 cent fixed vs. ~5 cent),

Actually i would argue it costs PayPal less, but they charge more.
Bitpay basicly has the same expenses as Paypal. While the transactions cost less with BTC all the other expenses need to be covered as well, just like Paypal that includes servers, staff etc..
Paypal is highly profitable, Bitpay, who knows. Maybe they are still burning though venture capital.
And thats excluding the other costs, fees to aquire BTC, miners not actually getting payed for signing the transaction instead getting the lions share from block rewards. Sure, its still a long while to go until block rewards are so low that the hashing power securing the network gets so low a 51% attack is almost trivial. My guess would be that miners will revolt and demand higher transaction fees long before than.

Quote from: oda.krell on September 03, 2014, 04:53:11 PM

and being a nightmare for merchants because of conflict resolution by default going in favor of the customer.

And thats excactly the reason why customers arent adopting BTC on a large scale. Why would you want to give up customer protection?

rpietila

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The fact that I don't care to argue about economics with almost anyone, does not magically mean that notlambchop was right, nor that I agreed with him.

And I am still at a loss to understand how this all relates to the thread... Tongue

oda.krell

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^ this was a strangely satisfying (and educating, for me at least) discussion, I'm surprised. That happens rather rarely on here Cheesy

NotLambchop

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^Then we pretty much agree on everything, but it was fun thinking that we didn't

*had too many tabs open, bitcoinwisdom somehow switched to Huobi (usually never do). Noticed "30" next to the favicon and almost... Gah!

oda.krell

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Quote from: NotLambchop on September 04, 2014, 11:31:07 AM

I agree that most economists consider inflationary currency optimal. I suppose, in a sense, that makes them the orthodoxy. "Orthodoxy" sounds a bit odd to me. In my mind the word is linked with religious orthodoxy--inflexibility, unwillingness to adapt, resistance to new ideas--"crusty."
Your usage makes Evolutionary biology today's orthodoxy, and Creationism ...what? More of a feelsy peeve than an objection.

If economics ("economics" here being the field that guides - some of - a state's decisions on how to optimize its economic output) is ever pursued with the same rigor as biology, I will share that feelsy peeve :D (sorry, potshot, I know.)

Quote from: NotLambchop on September 04, 2014, 11:31:07 AM

Bitcoin is already an amazing experiment. No way to overstate this.
Re. "[is] economical development ... impossible with a deflationary currency": It's not a binary thing (just stressing this, I doubt you meant to say it was).
Better questions:
Is deflationary currency optimal for economic growth?
Is the type of economic growth likely to happen with deflationary currency optimal for society?
Is economic growth a prerequisite or even a measure of society's worth/wellbeing?

You're asking exactly the questions that I want to see answered as well. No disagreement here. Just that I'm happy to have them empirically answered, even if there's a risk that the outcome will be negative.

Quote from: NotLambchop on September 04, 2014, 11:31:07 AM

The point is for many companies, initial savings of going with *nix (initial cost being nothing) are countered by higher overheads of using it.
If I'm paying my guy $70/hr to do X, and it takes him a few minutes less to do it on a winbox, I recoup the licence cost in a day. This does not mean that my company won't be using Linux, but it won't replace Windows. I'd love to maximize profit, but going with freeware/shareware to the exclusion of rapeware isn't the way to do it.*

True. Which is why I consider it a completely plausible scenario that Bitcoin will never reach the "end user" in scale (like Linux in the OS market), but will be the/a backbone of our entire financial infrastructure (like Linux is for servers).

NotLambchop

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Quote from: rpietila on September 04, 2014, 11:55:20 AM

The reason why deflationary money has not been used is that there is no such thing.

Price deflation arises from economy at function. When economy is doing bad, prices rise. If economy is doing good, prices fall.

Wrong and wrong.
By "deflationary money" I, and the people I am talking with, mean "supply-side deflation." http://en.wikipedia.org/wiki/Deflation#Money_supply_side_deflation
Bitcoin will be such a currency once the last coin is mined and the first paper wallet is lost.

Price deflation (and inflation) arises from many factors, see http://en.wikipedia.org/wiki/Deflation . If the economy is doing well, prices can rise if more money is introduced. If yesterday you were able to buy one pig, and today you're able to buy two, you're doing better regardless of how many tokens the pigs cost you.
This is basic and shouldn't need to be explained.

TL;DR: Rising prices != failing economy; falling prices != thriving economy.

rpietila

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The reason why deflationary money has not been used is that there is no such thing.

Price deflation arises from economy at function. When economy is doing bad, prices rise. If economy is doing good, prices fall.

NotLambchop

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Quote from: zimmah on September 04, 2014, 10:39:27 AM

it's pretty funny how many people talk about the hypothetical problem of deflationary currency, even though we have never really used deflationary currency.
While at the same time you never hear anyone complain about the problems of an economy based on exponential inflation. Like the earth can sustain exponential growth.

We never used deflationary money for the same reason we didn't colonize Mars in hot air balloons: It doesn't work.
And yes, many do complain about inflationary money. Heck, you are are doing it now

NotLambchop

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Quote from: oda.krell on September 04, 2014, 10:03:47 AM

...
re: deflationary currency. Don't be mistaken, I'm not brushing aside the complexities of the issue. I do however claim that, current economical orthodoxy considers central bank guided inflationary currencies the de facto optimum. Agreed with that statement? Not that they're optimal, but that the vast majority of economists seem to consider fixed supply currencies broken beyond repair.

I agree that most economists consider inflationary currency optimal. I suppose, in a sense, that makes them the orthodoxy. "Orthodoxy" sounds a bit odd to me. In my mind the word is linked with religious orthodoxy--inflexibility, unwillingness to adapt, resistance to new ideas--"crusty."
Your usage makes Evolutionary biology today's orthodoxy, and Creationism ...what? More of a feelsy peeve than an objection.

Quote from: mmortal03 on September 04, 2014, 10:20:08 AM

...
Not to mention that, in terms of divisibility, until digital currencies came along, with decimal places that could be extended out, a deflationary currency wasn't practically implementable past a certain point. Physical currencies can only be split so much into smaller units, printed, and distributed, to maintain liquidity.

You know that old money is destroyed, and new printed/coined regularly, right?
Here's how we deal with divisibility in fiat:
For every dollar bill we destroy, we print 10 decidollars. For every penny we destroy, we mint 10 decicents(I know, but it sounds right:)). And sneak in a few extras because baker's dozen and inflation.
Problem solved!

Topic: rpietila Calling the Bottom - page 14. (Read 45360 times)