Why bitcoin is doomed: I can't couterfeit them - page 3.

Come-from-Beyond

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Quote from: hazek on September 14, 2012, 03:35:23 PM

Quote from: Come-from-Beyond on September 14, 2012, 03:01:56 PM

"There are reasons why the money supply needs to be something that can enlarge. Creation of new value, new products, new capabilities that never existed before is one of them. When new value appears it must be accounted for somehow. If you cannot enlarge the money supply to account for new value then when ever something new appears, the price of everything must go down to account for it."

This sounds sane.

It does and here's how that happens in Bitcoin: move the decimal point one to the right and BAM you just increased the supply of bitcoins by 10 times!

I disagree. The same happens with stock split. If u had 100 shares after 10x split u would have 1000 of them. Moving decimal point in Bitcoin helps only to use amounts less than 1 satoshi, it doesn't increase Bitcoin's supply.

JoelKatz

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Democracy is vulnerable to a 51% attack.

Quote from: Fjordbit on September 14, 2012, 03:48:18 PM

If future dollars are worth more, then it reduces motivation to lend and invest.

Not all lending and investing are good. We recently had a global economic collapse due to overly-incentivized lending and investing.

Quote

At the same time, it also makes it harder for debtors to repay their debts as their income streams are reducing. The net effect is that economic growth is hampered.

Their income streams aren't reducing. They are reducing when denominated in the deflating currency, but their real value is not reducing.

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However, this just begs the question that constant growth is a good paradigm. I submit that it is not and instead what we need is an economy at equilibrium. Constant expansion has lead to us using up the resources of the planet and possibly already has us on a trajectory that will result in wide spread famine and loss. Part of the problem is the expansionary money system that makes it appear that we can just add new aspects to the economy without negative effects. An economy at equilibrium that readjusts when new real innovations are introduced is better equipped to handle the issues of a world with a finite limit of power input, finite water supply, and other resource limitations.

I don't agree. Resource limitations are fictional. If you don't see why, ask yourself this question -- was Uranium a resource in 1790? If not, then resources are not fixed and constant expansion includes resource expansion. If so, then the entire universe is a resource.

firefop

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Quote from: DublinBrian on September 14, 2012, 03:24:05 PM

The Fed is the biggest employer of economists in the world. 22,000 employees, mostly economists and statisticians. Anyone who does not support the inflation doctrine is not eligible to work there.

Moreover, any school that doesnt teach the "Inflation is good, deflation is bad" doctrine will not have any of their graduates gain employment at the Fed. So as a result, no schools or universities are willing to teach the truth.

The "deflation is bad" doctrine is a religion. A church that has power over its congregants minds. The blog author is a member of this church. His religion is about to be swept away by a reformation.

Deflation is bad only in a fractional reserve (debt based system). The concept that all goods must have monetary backing to hold value is stupid in the extreme. Really the amount of the money supply only matters up to a point because it circulates. That's the purpose of it. As bitcoin deflates (and it should as it slowly begins to replace less reliable currencies) we'll see exactly the opposite of what the 'economists' fear. This is less hoarding. As the value of a bitcoin increases, the markets will show more stability over the long term and this will lead to people needed to hold less btc to meet their personal financial goals - freeing that coin up for riskier investments (the excess will become wealth and be treated accordingly).

Then we'll see trickle down economics really working on a large scale.

Fjordbit

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Quote from: DublinBrian on September 14, 2012, 03:24:05 PM

The Fed is the biggest employer of economists in the world. 22,000 employees, mostly economists and statisticians. Anyone who does not support the inflation doctrine is not eligible to work there.

Moreover, any school that doesnt teach the "Inflation is good, deflation is bad" doctrine will not have any of their graduates gain employment at the Fed. So as a result, no schools or universities are willing to teach the truth.

The "deflation is bad" doctrine is a religion. A church that has power over its congregants minds. The blog author is a member of this church. His religion is about to be swept away by a reformation.

Deflation is generally bad for a constant growth paradigm. If future dollars are worth more, then it reduces motivation to lend and invest. At the same time, it also makes it harder for debtors to repay their debts as their income streams are reducing. The net effect is that economic growth is hampered.

However, this just begs the question that constant growth is a good paradigm. I submit that it is not and instead what we need is an economy at equilibrium. Constant expansion has lead to us using up the resources of the planet and possibly already has us on a trajectory that will result in wide spread famine and loss. Part of the problem is the expansionary money system that makes it appear that we can just add new aspects to the economy without negative effects. An economy at equilibrium that readjusts when new real innovations are introduced is better equipped to handle the issues of a world with a finite limit of power input, finite water supply, and other resource limitations.

hazek

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Quote from: Come-from-Beyond on September 14, 2012, 03:01:56 PM

"There are reasons why the money supply needs to be something that can enlarge. Creation of new value, new products, new capabilities that never existed before is one of them. When new value appears it must be accounted for somehow. If you cannot enlarge the money supply to account for new value then when ever something new appears, the price of everything must go down to account for it."

This sounds sane.

It does and here's how that happens in Bitcoin: move the decimal point one to the right and BAM you just increased the supply of bitcoins by 10 times!

JoelKatz

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Democracy is vulnerable to a 51% attack.

Quote from: hashman on September 14, 2012, 12:49:13 PM

https://quantiger.wordpress.com/2012/06/29/why-bitcoin-is-doomed/

tl;dr :
Suppose I have 10 bitcoins. If I want to loan you money, I have to actually give these coins to you!
Where's the profit in that? Ridiculous.

But that's not true. I can equally well just note in my own ledger that you have 10 bitcoins in a demand account without giving you any actual bitcoins. If the scenarios envisioned in that article ever happened (and I don't think they will, but let's assume it) then people would just do exactly that, using demand notes denominated in bitcoins to inflate the money supply.

DublinBrian

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The Fed is the biggest employer of economists in the world. 22,000 employees, mostly economists and statisticians. Anyone who does not support the inflation doctrine is not eligible to work there.

Moreover, any school that doesnt teach the "Inflation is good, deflation is bad" doctrine will not have any of their graduates gain employment at the Fed. So as a result, no schools or universities are willing to teach the truth.

The "deflation is bad" doctrine is a religion. A church that has power over its congregants minds. The blog author is a member of this church. His religion is about to be swept away by a reformation.

Come-from-Beyond

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"There are reasons why the money supply needs to be something that can enlarge. Creation of new value, new products, new capabilities that never existed before is one of them. When new value appears it must be accounted for somehow. If you cannot enlarge the money supply to account for new value then when ever something new appears, the price of everything must go down to account for it."

This sounds sane.

Evolvex

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Quote from: herzmeister on September 14, 2012, 02:04:08 PM

I still believe though that Bitcoin won't be the only currency in the future, there'll be many different systems for different purposes in parallel (precious metals, local currencies, LETS, Ripple, privately issued ones, business-to-business clearance etc), and this will make such discussions obsolete.

I'm with you on that dude, even if bitcoin fails, I think the concept that it has brought to the table will carry on, I think its basically going to turn what everyone things about money on its head - about time these "symbols" of wealth had a new shake up, its been a while.

justusranvier

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Nobody remembers what capital formation means any more - they are so accustomed to central planning via credit allocation that the idea that business expansion can be funded by allowing producers to retain their profits is completely alien to most economists.

herzmeister

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It's true that in a perfect monetary system the money supply is linked 1:1 to the GDP.

But this concept is incompatible with an incorruptible Cryptocurrency.

I still believe though that Bitcoin won't be the only currency in the future, there'll be many different systems for different purposes in parallel (precious metals, local currencies, LETS, Ripple, privately issued ones, business-to-business clearance etc), and this will make such discussions obsolete.

hazek

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Quote from: firefop on September 14, 2012, 01:09:38 PM

Isn't it sad that how 'experts' don't understand basic economics?

You can't blame them really, they were never taught how to think logically and rationally.

firefop

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Quote from: hashman on September 14, 2012, 12:49:13 PM

https://quantiger.wordpress.com/2012/06/29/why-bitcoin-is-doomed/

tl;dr :
Suppose I have 10 bitcoins. If I want to loan you money, I have to actually give these coins to you!
Where's the profit in that? Ridiculous.

Note to quantiger: you can still defraud investors. Happy now?

haha! [/captain haddock]
reposted here for the lulz

Isn't it sad that how 'experts' don't understand basic economics?

hashman

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Activity: 1264

Merit: 1008

https://quantiger.wordpress.com/2012/06/29/why-bitcoin-is-doomed/

tl;dr :
Suppose I have 10 bitcoins. If I want to loan you money, I have to actually give these coins to you!
Where's the profit in that? Ridiculous.

Note to quantiger: you can still defraud investors. Happy now?

haha! [/captain haddock]
reposted here for the lulz

Topic: Why bitcoin is doomed: I can't couterfeit them - page 3. (Read 5791 times)