Topic: What happens if someone starts another blockchain or cryptocurrency? - page 2. (Read 16613 times)

As a matter of fact, deflationary expectations kill trade in electronics too. When a company announces a revolutionary product just around the corner, customers cease buying it's current inventory and hold out for the latest and greatest. Sometimes the revenue hit is so strong that the company folds before the revolutionary next version has a chance to become reality, as was the case for the Osbourne Computer Corporation. The phenomenon is called The Osborne effect, has been observed since in many cases, and is a textbook case study in technology marketing.

That being said, this sort of thing does not usually happen for electronics, although customers know and expect constant advances and lower prices. That's because the electronic device provides an utility to it's buyer since day one, which might very well be above the present value of money for that person. If I want to make pictures in my vacation, I will buy a digital camera today; although I might get it 20% cheaper a year later, I would have no pictures from my vacation and that loss is not compensated by the 20% cheaper camera. In the long run we're all dead.

Since a speculative asset like Bitcoin derives no utility for it's owner, this - often repeated - analogy is flawed.

Iron was more valuable than gold, rather.

You know what else is deflationary?  Electronics.  Why buy an iPad now when it's going to be 30% cheaper next year?  The money used to buy electronics is extraordinarily deflationary -- yet people buy electronics all the time!  They should be hoarding that money, wait a year, then they can get 30% more electronics with the same cash!  I don't know why anyone would buy electronics, then.  Oh, except they do.  And somehow that market is freakin' enormous, contrary to the economic theories.


As for switching chains, I'm sure it's been mentioned before, but the new chain could distribute its units purely from un-redeemable outputs from the main blockchain.  The only way to get Bit2coins would be to send Bitcoins to your Bit2coin address but using a special script that is impossible to evaluate true on the main bitcoin network.  Therefore, they are destroyed on the main chain, and redeemable within one confirmation on the Bit2coin chain.   Merged mining would keep them both running, and miners could start having their generation transaction go right to the unredeemable-on-the-main-chain Bit2coin addresses.

If the alternate chain has an alternate philosophy on generation, it won't work... but if you plan to keep the same generation scheme, you could change just about everything else and people could decide if or when to switch, as there's an exact 1-1 correspondence between BTC and BT2C (or whatever the hell we call it).  If this has been mentioned before...anyone have a link?

Key way to identify libertarian asshat #1.

They call things they don't like central planning. Whether whatever they are criticizing bears any relationship to central planning or not is not relevant. They don't like it and don't know exactly why. So it suffices to label it central planning.


Key way to identify libertarian asshat #2.

They post self-contradictory statements such as the following:


Note that R&D, business strategy, and marketing would require some sort of centralized planning. There is a manager of a firm. She is the central authority.

(Use of female pronoun intended to piss off libertarian fundamentalist nutjob. Ignore button now in use.)

Would you please not post this asshat garbage? It makes me physically sick. Could we please stick with references that are accepted by mainstream economics?

People might think that Mises is a noteworthy economist or that his followers perform legitimate academic research that is accepted by modern economists. Neither of these is true. Mises has no influence on modern economics and his theories are not accepted by mainstream economists. He retains a small lay following among libertarian asshats like yourself.

For those unfamiliar with economics, the best analogy might be to those lay physicists who insist on expounding on their method for cold fusion, but are not familiar with basic mathematics.

There is no point in debating anything with you people because you explicitly reject the use of rigorous, logical arguments which have become the standard toolset of economics. You also are averse to the use of mathematical theory and statistical evidence. Instead you prefer a faith-based approach.

There is a controversy over the effects of deflation, but Mises is not referenced in this modern debate at all. He was a nutjob. He is now completely unimportant to economics. Rightly so.

Lay audience, please don't get confused by any of the bullshit he posted. To learn about economics, read a mainstream economics textbook published within the last three decades instead. This Mises stuff is just anti-communist propoganda which became popular due to the cold war. Cold War is over folks. Let it die.

Is the talk about deflation and hoarding a call to start another cryptocurrency that doesn't have the deflationary feature?

How would that work and would people move from Bitcoin to it, killing Bitcoin, or would people just give up on the whole
decentralized crypocurrency experiment and keep using the existing centralized banking systems? 

 

The way to persuade people to use Bitcoin is to provide them a with a package better than fiat/gold. This is a question for R&D, business strategy and marketing, not for central planning.

Hoarding is a necessary condition for sustainability. Not a sufficient though, it's also necessary that the prospective money decreases transaction costs (which Bitcoin does) and overcomes the network effect of encumbents (which is iffy, but since it's a widely dispersed open source project, there's no time or budget constraint here).

If by deflation you mean a falling price level, then I humbly disagree. References:
http://www.mises.cz/clanky/fungovani-ekonomiky-v-podminkach-poklesu-cenove-hladiny-254.aspx
http://mises.org/document/3726/Deflation-and-Liberty
http://mises.org/document/2745/
http://ideas.repec.org/p/fip/fedmsr/331.html

Most importantly though, even if a decrease in the price level was a problem, it's irrelevant for Bitcoin unless Bitcoin is a dominant currency (e.g. it outcompetes fiat and gold, and/or is made legal tender). In other words, the scaremongering against "deflation" is based on the assumption of a monopoly money. Which Bitcoin is not at the moment.

If by "deflation" you mean a decreasing quantity of money, that's not representative of Bitcoin as long as the mining exceeds lost Bitcoins. A type of a decrease in the quantity of money known as credit contraction, however, is a phenomenon accompanying the current monetary system. Now that one is a problem.

I think these threads are very useful. Every time I see one I think "*@&$!% not this thread again >:{ ", and them I'm always pleasantly surprised when it turns out to be directed to resolving that very problem.

Nice work.

Correct in part. However, the money does not need to be transferred to millions of people. Bitcoin is relatively easy for consumers to acquire should they want it. The problem is that there is no reason for a consumer to want bitcoin (notable exception of silk road).

To fix this, money needs to be channeled into businesses to convince them to accept bitcoin. The mining system could be designed to perform this function by passing out coins to people the community judges to have performed socially useful functions. Instead, mining distributes coins to people who engage in a waste and destruction of resources. It is sad, unfortunate, and fundamentally unnecessary.

Finally, I don't have any problem with deflationary currency or speculation/investment as a motive. The problem is not that hoarding is bad. The problem is that hoarding is not sustainable if the currency remains nearly useless for any other purpose.

Jeez, give it time. Gold was less valuable than iron at one time.

Bitcoin isn't really working because deflation destroys trade. There, I've said it.

Bitcoin's spread is a self-defeating prophecy: bitcoins are valuable only in as much as they can be widely used as an exchange medium, yet all those who acquire or have them treat them as a long term investment, preventing their very spread which would enable bitcoins to fulfill their promise. Therefore the promise is a lie.

The early adopter crowd has already priced-in the chance that they will sometime be a widely used for exchange; so in order for Bitcoin to achieve it's potential as an exchange medium, an implausibly massive transfer of wealth must occur from the millions of people that would use it to the hundreds of people that currently hold the bulk of the monetary mass.

I used to think that this is an important indicator, but now I don't. Gold is also hoarded rather than spent (indeed, payment system based on gold are probably even less used than payment systems based on Bitcoin), but that does not mean it's not working. In other words, you have it backwards: the primary economic indicator is the hoarding, not the spending. If it wasn't hoarded, that would be failure.

There's no reason to set a specific timeframe for the spread of Bitcoin payment systems. Open source projects take their time and are not dependant on a particular company's business plan working out. I've been using linux for about 15 years now, so I remember how it was when it was less widely deployed. There were assorted pundits blabbering nonsense about how it has no future, because they did not comprehend the paradigm shift occurring around them. Most of them wisened up eventually (or at least shut up), but some continue even now, oblivious to reality. Rob Enderle and Bob Metcalfe are some of the loudest ones.

From functional point of view, the core features of Bitcoin, low transaction costs and decentralisation, are still present. Obviously, there are all kinds of other issues (some of which you have pointed out yourself), but they can be addressed in the future, and are not judged relevant by the current users. Also, competitors, even if they manage to publish working code, do not provide a compelling alternative (again, judged by the users).

So, pundits can just relax and let the innovators do their job.

Even disregarding the 'who', why would someone stake anything in the second copy of the same thing? Obviously a third is coming along to screw you. Obviously baring large improvements.

This is the conundrum. Bitcoin has been around for three years and is improving. One day it will be pretty cool and ready for adoption by the world. The world says, "hey no fair you already own all the Bitcoins and we don't want to give you all our wealth to buy them, so we'll start a new blockchain with the same core." They then release a Worldcoin. Now rich people have been screwed in the past when money is re-issued and wealth is redistributed. They don't want this to happen again, so they will do everything they can to make sure they hold their money. The rich people buy BIG mining rigs so they can keep much of their wealth. So what happens? Who would trust Worldcoin run by banksters over Bitcoin that was built by grass roots efforts?

Bitcoin wins every scenario I can think of.

Well, then you're the kind of person who might be targeted with free mining proceeds to persuade you to adopt the new currency. No individual would be willing to do this on a substantial scale. Taxation is required.

Yes I can, that's what I'm doing now. Er, I assume they think it is in their individual interest.

Can you convince a large number of people that sending you money is in their collective interest? If yes, then fine you get money. If no, then you get no money.


That is called a bubble. It pops and the speculators get liquidated. Just wait for it. It can take a long time.

Great idea thanks   This would be a good way to bootstrap a test coin with no inflation to see how mining for fees only will pan out.