Topic: This banker tricks us to do away with deflationary nature of bitcoin! (Read 3138 times)

agreed. is pretty pathetic of ING. i don't bank there but if i did i would dump them.

Bitcoin is inflating at a decreasing rate as specified by the protocol, agreed to by everyone using the service, and, as many others point out this is one of the core properties which draws people to its use.

modify the bitcoin protocol and get nobel prize

You mean like a Mt. Gox bailout? Not sure how 700 billion or 16 trillion BTC is possible.

i think a lot of people in this thread seem to wrongly interpret what the banker really wants in the bitcoin protocol..

He does not demand something like a categorical change in bitcoin protocol like INFLATION/DEFLATION,in other words be bitcoin or become like dogecoin..


But what the banker really puts forward is to make the protocol easily adaptable so that tomorrow if people wanted a 700 billion btc bailout, there should be a possibility to do so..

If a nation wanted a raise to  16 trillion btc debt ceiling, there should be a mechanism to do so..

In short destroy bitcoin for what it stands for...

It could be good to have Bitcoin very stable when it becomes used primarily for shopping etc. That's easy to do. Simply determine the base price of Bitcoin with an algorithm that takes a weighted average of a basket of ordinary fiat currencies. And then let Bitcoin be traded with that base price as a foundation. The competition would then be to offer bitcoins for a price lower than the base price and as high as possible. A too low price and the trader would lose money. A too high price and some competitor would outcompete the trader. That would keep the price of Bitcoin very stable. Where is my Nobel Prize?

The supply of bitcoins can perhaps be made to grow with a linear ramp up function instead of the deflationary curve of today. People who own a lot of bitcoins would become angry (no longer expected deflation) while people who want to use Bitcoin for buying and selling would become happy (endless future supply of bitcoins at a stable rate and valuation).

Deflation is surely what any sane person would want: work hard for a short amount of time, save a lot and then your money just increases in value all the time and you then don't have to do anything - oh but then if everyone thought the same there would be no productive members of society left 

Inflation related to increase in money supply is new term for me( I'm ignorant in formal economics).

But bitcoin don't have monetary deflation, because the number of coins avaliable is growing every day, and only by 2140 will stop to increase, long enough for most of us be dead. So for us bitcoin is a inflationary currency at the moment.

Bitcoin don't have by itself inflationay price nature, since its determined by the demand, not by the numbers of coins.

Who invented the bitcoin = deflationary currency nonsense?

Let them keep trying to destroy the bitcoin network.
They will accomplish nothing in the end.

Inflationary an deflationary only apply to the bitcoin price, not about if there will be more or less coins in the future, or if it will be finite or not.

What determines if it will be deflarionary or not is the demand, and the numbers of coins have nothing to do with the demand.

People (the MSM) say that bitcoin is deflationary because holders of bitcoin generally think that the value of their coins will increase in the future, preventing them from wanting to spend their bitcoin. This is similar to how the masses act with their fiat when their fiat currency is expected to gain value in the future (putting off purchases)

It certainly won't grind to a halt, but expenses would potentially be postponed as long as possible. I'm also not claiming to be an expert on that field, there'll be far more people who can give you very good arguments how deflation is a bad thing, as well. The same applies to debts/credit. Yeah, debts can be a very serious thing, but they also allow people to gain access to things they couldn't afford otherwise. They now can use these resources to effectively bootstrap themselves out of their financial powerlessness.

I'm of the same opinion I just like it when people cut threw the bull and tell it how it is.  I'm just wondering what the plans for BTC are at this time with all the high expectations and wild accusations.  I likely read to much into it but I think the general assessment is fair.

I agree that it's not a takeover, and I don't mind if the banks want to get involved this way either.  In fact, it would increase demand to hold bitcoins.  

The beauty (that you alluded to) is that they will reap exactly what they sow with this model.  If their stimulus efforts are truly positive, then their operations should be self-financing.  If they decide instead to bailout too-big-too-fail institutions--and if those bailout funds get eaten up in banker bonuses--then they will eventually run of money (this time permanently).  

Is that Ribéry's  uglier brother?

OK, here is some psychology. From the standpoint of the consumer, they each have a vested interest in staying alive. As such, they require food, clothing, shelter, transportation, and energy. Every day. These are non- negotiable non-deferable expenses.

The economy will not grind to a halt just because the money in use is deflationary.

Don't make me trot out the cell phone counter-example...

Well, it's not exactly only good stuff that comes from a deflationary currency. In fact, it may just be as bad as a highly inflationary currency. Just think about how people won't want to spend money when their money was worth more the next day! (Yes I know, people are spending their bitcoin - but they're enthusiasts. We have to remain on the level of a nation's economy and use the psychology that applies to the regular person using a currency)

Really guys...and gals....why all the hatred? Who, with half brain, would listen to a banker?! Really...give BTC devs little bit more credit. They are smart bunch. But even if banksters managed t get under lead dev's skin, changing BTC in way that bankster wants, would require hard fork. There and than we would show them (banksters, devs, whoever would be at that time on "that" side of the fence) that we are not getting behind it and fork would fail. You, BTC users have last word on in anyway, and THAT is real strength of BTC.

That is interesting. I would not call that a takeover, (nor did you) in that scenario they are simply participating. Personally I don't mind if banks want to play with us. But they get no advantage other than they have money to leverage.

It's interesting to note that if a central bank wanted to be able to adjust the bitcoin money supply in an attempt to smooth the economic cycles, they would already be able to do this.  They would first need to procure a large sum of bitcoins and hold them as reserves.  Then, when they feel the economy is depressed, they would lend out these reserves at low interest rates to expand the money supply.  When they feel the economy has recovered, they would raise the interest rates on these reserves to reduce the money supply.  The difference between this mechanism, and the current central banking system, is that the one I just described enforces discipline.  

It is also interesting to note that the central banking system would get one final kick at the "fiat can" even if we moved to a bitcoin monetary system.  Historically, a central bank holds government bonds on the "assets" side of its balance sheet, and an equal amount of fiat on the "liabilities" side.  One method the Fed uses to increase the money supply is to purchase treasury bonds with newly-created fiat.  The Fed could use this same process of money creation (with an act of Congress), but instead of purchasing treasury bonds, they could procure bitcoins.  The asset side of their balance sheet would start to fill up with real bitcoins while the liability side would fill up with dollars.  This would drive up the USD/BTC exchange rate and result in the Fed owning a huge sum of bitcoins for essentially zero cost.  But in actuality, the cost would be huge: they would be "selling out" the legitimacy of their fiat system.

We would be witnessing the final act of fiat.