Topic: The Big Question: 21 Million Coins (yes, I know its been asked before) - page 4. (Read 9041 times)

And you make that point by telling me to "tread lightly"?

What did you expect this thread to be? It's either gonna be filled with bitmiseslibtards who think a fixed supply is the cat's meow and will extol all its many virtues, or you'll have one of the rare non-groupthinkers around here like me who will actually argue against it. And what do I get for my arguments? "lol 2+2 equals potato" as a counter-argument. You've got two libtards in this thread using themselves as sources for crying out loud.

And you make that point by telling me to "tread lightly"?

What did you expect this thread to be? It's either gonna be filled with bitmiseslibtards who think a fixed supply is the cat's meow and will extol all its many virtues, or you'll have one of the rare non-groupthinkers around here like me who will actually argue against it. And what do I get for my arguments? "lol 2+2 equals potato" as a counter-argument. You've got two libtards in this thread using themselves as sources for crying out loud.

oh man I just shat myself. internet threats from evoorhees's business partner

Tread lightly my friend, tread lightly.

ohhh hey look evoorhees is a complete assclown!!! can't actually counter any argument I have with actual logic, so must resort to strawmen!

So basically, you selectively used information to counter my claim, then lampoon me for "selectively using information"...  

Hehehe... you are so enamored with inflationary money that you forgot in a free market people (at least before Bitcoin) would use metals as a currency, not fiat. Metals require storage, and thus it is possible for interest to be negative, and for you to still lend. You don't want $1m in gold in your house, I assure you.

But, if talking about Bitcoin with no storage cost, indeed there may never be a negative interest rate in a free market.

When money is scarce, the price of money (interest rate) rises. This brings incentive for savers to deposit their money with those interest-bearing accounts and through this mechanism the supply and demand for money is brought into balance.

I've never "equated" monetary base with monetary supply. Base is a portion of supply. They are not equivalent. We agree on that point, right?

Money supply should tend toward constancy. A rate of 0% inflation/deflation means money is unchanging

The issue of "money being less available" is only a problem if you assume prices do not adjust to money supply. Why do you assume this?

But wages are not falling which would be the case in a deflationary economy.

Uh, the hell it does. "2.  A principle, rule, or law designed to control or govern conduct." There is no "state" in there. You just decided to, once again, exclude information that does not suit your view. Bitcoin has the most strict rules possible when it comes to money. It cannot change in supply and the supply cannot expand to meet demand. These are rules that are laid down and enforced by the protocol. That is regulation. The supply is highly regulated.

reg·u·la·tion  (rgy-lshn)
n.
1. The act of regulating or the state of being regulated.
2. A principle, rule, or law designed to control or govern conduct.
3. A governmental order having the force of law. Also called executive order.

What is odd that anyone would lend if they would make more profit by not lending. And the act of not lending actually helps this. How does this not compute for you?

Let's see, equating monetary base with monetary supply whenever it suits your view, blaming government regulation for all ills whenever it suits you, basically using any pseudo-facts to help your view and ignoring the rest. Basically a typical bitmiseslibtard.

If you believe you can honestly answer this question: "Is Bitcoin a form of currency that prevents the underlying unfairness of wealth transfer through monetary manipulation?" with a "yes", then there is obviously no hope for you. If you cannot see that wealth transfer via money manipulation is at the root of all recession, then I don't know what to tell you. It isn't that there are less productive people or less products/services available during recession, it is that money is less available per person. What causes this? Or, what does bitcoin do to fix it? Nothing. It even brandishes it in your face.

For just as I won't wait forever to eat food (even if prices are falling), neither will I wait forever for other things. I need a car, and a house, and clothes, and a million goods that I enjoy. If prices are falling, I'll make a judgement - should I buy now, or later? The argument of the Scary Deflationists is that people will continually make the judgement "later" and will halt their purchases indefinitely, sending the economy into Paul Krugman's favorite terrifying term, a "deflationary spiral". Yikes!  But upon just a bit of consideration, we know people will not halt their purchases forever. They will buy things ..

Excellent points. And, just in case a real, working example might help someone, this is *already* happening with computers and other electronic items. That is, consumers know that the PC or the hard disk they are  buying for $1k today will be much cheaper (say, $500) in a year, yet the PC market hasn't come to a standstill.

Secondly, compared to deflationary-currency scenario where /all/ prices tend to fall over time, the effect is more pronounced for today's PC market - because their price is falling /while/ others largely remain the same.  And, yet the PC market hasn't come to a standstill.

Here you go again. Blind to the reality. The overall issue is the retraction of market liquidity; it always is when there is a recession. And then again moving on to issues with the Fed which are irrelevant. The Fed didn't exist in 1907 broseph. Stop going off on tangents.



lol wtf now I know you're just a troll. the fkin link talked about fractional reserve banking. Which did exist during the 1800s. Oh and by the way, most European countries already had a central bank by that point and experienced the same growth.


Meaning that free market banking is a subset of capitalism, not capitalism. Capitalism is not the issue at hand, so you again try to conflate instead of making any real point.


Uh, the hell it does. "2.  A principle, rule, or law designed to control or govern conduct." There is no "state" in there. You just decided to, once again, exclude information that does not suit your view. Bitcoin has the most strict rules possible when it comes to money. It cannot change in supply and the supply cannot expand to meet demand. These are rules that are laid down and enforced by the protocol. That is regulation. The supply is highly regulated.


No, actually, I don't.

The supply can deflate and inflate even against a fixed monetary base.

Someone recommended this book, when I showed him this thread

http://www.amazon.com/This-Time-Different-Centuries-Financial/dp/0691152640/ref=tmm_pap_title_0


Overnighting this one!

When did I praise the FRB (I assume this stands for Federal Reserve Board?)? The Fed was created in 1913... and I was referring to the 19th century, which is the 1800's, as a time of massive economic growth that occurred without the Fed.

A true deflationary currency would be one in which the money supply contracts, so it would have to start at an arbitrary amount and then basically self-destruct (inflation self-destructs by dilution/overabundance). As an example, food would fit this definition because it perishes over time.

Yes, gold is inflationary, as is Bitcoin. The distinction is that Bitcoin approaches an absolute limit whereas discovery of a large supply or mining gold on the moon could continue expansion of its unit base indefinitely.

I think I see what you're trying to get at: gold and Bitcoin inflate less than overall economic expansion grows. So it isn't the currency deflating, there is simply a divergence between the growth rates. In effect, that simulates a deflationary environment - the presentation is the same, but the reasons are different.

This chart illustrates that sequence of events:


A significant change occurs when market forces shift the Bitcoin decimal. Let's take another look:

Annual Potato Yield	>Total Bitcoins	>Value in Bitcoins	>Decimal Shift	Value of 1 Bitcoin
100	1,000	10.000	none to hold 10.0	1.0
1,000	1,000	1.0000	>1 to hold 10.0	1.0
10,000,000	1,000	0.0001	>5 to hold 10.0	1.0

The end result is that anyone holding 1 Bitcoin at the beginning would still have 1 Bitcoin, only now smaller fractions of a Bitcoin are needed to conduct everyday transactions. The currency remains functional in regard to price stability while existing units are not devalued, meaning that savers neither harm the system nor are harmed by it.

In a fiat system, savers are actually the enemy because stockpiling puts strain on price stability and if the stored fiat is ever disbursed in size, it can cause sizeable price disruption. For an example, imagine that a major foreign holder of US debt (bonds and the like) decided to sell; several billion dollars flooding back into the system without an immediate, commensurate balance of trade reaction would be the same as printing that money into existence. Prices of goods and services would be affected within a year, potentially causing further chain reactions that could destabilize the entire system.

What is the universal response to an inflatable money supply that is experiencing excessive demand (i.e. a liquidity crisis)? Inflation is the only answer in the end. By inflating, the decimal point is moved to the left instead of the right. We've seen this with numerous national currencies which introduce a 'new' X fiat currency, just like the old one only several zeros have been lopped off. A 100.00 denomination becomes 1.00 for a left shift of 2 places. That dilutes existing units (savings) in order to maintain price stability.

Using a money supply that is essentially fixed, and is indefinitely divisible, completely negates that problem. Gold is the same, but can only do well to certain point because it is physical, offering practical usage down to about a gram denomination. While it is theoretically possible to use gold held in custodianship to lower the limits on practical usage, that returns to issues of trust regarding financial institutions.

Bitcoin also virtually eliminates the management concerns involved with trust (there will still be weak points, notably the developers, hashing power concentration and cryptographic security). The only real questions that remain (aside from those mentioned) are of eventual widespread adoption and whether the decimal expansion will be sufficiently smoothed by market forces. Therefore, a complementary inflationary currency might not be necessary.

It's hard for those with minimal understanding of their own financial system to grasp these distinctions, and even harder for those that have made it their livelihood and gospel in understanding the existing paradigm. All economic arguments against Bitcoin so far have been bunk. The shift in recognition will be a gradually accelerating process, much like this excellent analysis.

Again, 1907 still had those issues I mentioned. Fractional reserve banking, and laws which prevented banks from branching. Even regardless of this, let's assume such panics can happen in a free banking environment. So what? If you don't like banks that are prone to runs, don't bank with fractional reserve banks! In a free market, vulnerable institutions go away, because people don't like risk when they bear it themselves. Today instead, the Federal Government bails out banks meaning everyone has to pay for their failures. If a bank is so vulnerable that a panic/run ensues, then that bank shouldn't exist and the market will get rid of it in due time.

When did I praise the FRB (I assume this stands for Federal Reserve Board?)? The Fed was created in 1913... and I was referring to the 19th century, which is the 1800's, as a time of massive economic growth that occurred without the Fed.

Free market banking = capitalism. Capitalism refers to the absence of state coercion in the marketplace, meaning a free market in everything.

Bitcoin is not "the most extreme form of banking regulation." Bitcoin is not regulation... regulation means mandates which come from the State.

You need to work on your terminology I think.

I don't see what you mean by a "negative interest problem." Who cares if interest rates go negative? Is it that odd that under a world of falling prices, a rate of -2% might still be a good deal? If prices fall at a rate of -3% per year, then one should be happy with a -2% interest rate. It is not the nominal rate which is important for enabling an economy to function, but the real rate.  I see no reason to think interest rates can't or shouldn't go negative in a world of falling prices.

Sorry, what am I being unclear about?

I think price stickiness refers to certain types of prices on (usually) short timescales. When there are strong economic incentives one way or the other prices will adjust. So I don't think it can be invoked as a serious factor when talking about whole economy destruction.