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Topic: Why Bitcoin is ultimately doomed to fail (not today or tomorrow) - page 4. (Read 40867 times)

legendary
Activity: 3514
Merit: 1280
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Noone thinks that bitcoin will fail.
The only ones that do so is those that are thinking bitcoins as something that opposes the dollar and that's wrong anyway.

Why is it wrong to think that bitcoins oppose dollars? Can you substantiate your claim besides just saying so?
legendary
Activity: 3514
Merit: 1280
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Northern Rock got into trouble because of its subprime mortgage business, and the bank run was a consequence of its problems thereof (surely not the other way round as you would want it). So again you are wrong here

First of all, I'm glad you were finally able to research what Northern Rock was about.

You say they got into trouble because of their subprime mortgage business. Yes. You understand that their subprime mortgage business involved loaning out demand deposits, right?

No, it is not given (at least to a degree making it significant and worthy of consideration). It is not common for individuals to hold large amounts in demand deposits. Usually, they would want to keep their money at some interest which demand deposits don't provide in comparison to term (time) deposits...
legendary
Activity: 3514
Merit: 1280
English ⬄ Russian Translation Services
Gresham's law only applies when free market currencies are not allowed to compete with fiat (by decree) currency.

Otherwise, Thier's law applies, and works in reverse.

from http://en.wikipedia.org/wiki/Gresham%27s_law#Reverse_of_Gresham.27s_Law_.28Thiers.27_Law.29
Quote
These examples show that, in the absence of effective legal tender laws, Gresham's Law works in reverse. If given the choice of what money to accept, people will transact with money they believe to be of highest long-term value. However, if not given the choice, and required to accept all money, good and bad, they will tend to keep the money of greater perceived value in their possession, and pass on the bad money to someone else. In short, in the absence of legal tender laws, the seller will not accept anything but money of certain value (good money), while the existence of legal tender laws will cause the buyer to offer only money with the lowest commodity value (bad money) as the creditor must accept such money at face value.

Thiers' Law refers to a situation where the bad money becomes virtually worthless and practically useless (i.e. ceases to be money), which is obviously not the case with Bitcoin vs. Bitcoin derivatives (the law fully applicable) vs. Dollar (partly applicable). So we still have room for Gresham's Law (or its extension) in the case discussed...
full member
Activity: 196
Merit: 100
So, you actually made a fool of yourself. And I warned you of that, lol...

And now you are trying to play the old trick, double lol...

At least I was able to amuse you.

I thought you wanted to be taken seriously, not as being amusing...

I would prefer that.
legendary
Activity: 3514
Merit: 1280
English ⬄ Russian Translation Services
So, you actually made a fool of yourself. And I warned you of that, lol...

And now you are trying to play the old trick, double lol...

At least I was able to amuse you.

I thought you wanted to be taken seriously, not as being amusing...
sr. member
Activity: 321
Merit: 250
Gresham's law only applies when free market currencies are not allowed to compete with fiat (by decree) currency.

Otherwise, Thier's law applies, and works in reverse.

from http://en.wikipedia.org/wiki/Gresham%27s_law#Reverse_of_Gresham.27s_Law_.28Thiers.27_Law.29

So, this time instead of gold, we will have Bitcoin (which will be hoarded as per Gresham's law), and all kinds of "paper" derivatives inevitably entering the circulation as a means of exchange. These "papers" allegedly backed up by Bitcoin will in fact leave behind them only inflation, even despite Bitcoin intrinsic deflationary nature...

And welcome back to fiat!
full member
Activity: 196
Merit: 100
So, you actually made a fool of yourself. And I warned you of that, lol...

And now you are trying to play the old trick, double lol...

At least I was able to amuse you.
legendary
Activity: 3514
Merit: 1280
English ⬄ Russian Translation Services
If so, my apologies. I should try to be less sarcastic when dealing with people who aren't very good at using the English language.

And now you are trying to play the old trick, double lol...
legendary
Activity: 3514
Merit: 1280
English ⬄ Russian Translation Services
For starters, I don't see it as a type of fractional reserve banking.

I remember you saying quite the opposite...

I might have once made fun of you and said something about full reserve banking being where the fraction is 1/1. Is that what you're thinking of?

So, you actually made a fool of yourself. And I warned you of that, lol...
full member
Activity: 196
Merit: 100
Northern Rock got into trouble because of its subprime mortgage business, and the bank run was a consequence of its problems thereof (surely not the other way round as you would want it). So again you are wrong here

First of all, I'm glad you were finally able to research what Northern Rock was about.

You say they got into trouble because of their subprime mortgage business. Yes. You understand that their subprime mortgage business involved loaning out demand deposits, right?

You say I "would want" it to be "the other way round". It's not a matter of what I want. Usually bank problems are caused by bank runs, and not the other way around. The case of Northern Rock was an exception from the norm. If you're not convinced of that, you should probably do a little more research. Given that you didn't even know what Northern Rock was a few hours ago, it's not surprising that you don't yet understand how the Northern Rock bank run differed from the norm.
legendary
Activity: 3514
Merit: 1280
English ⬄ Russian Translation Services
For starters, I don't see it as a type of fractional reserve banking.

I remember you saying quite the opposite...
legendary
Activity: 3514
Merit: 1280
English ⬄ Russian Translation Services
I'd say "see, I didn't claim that fractional reserve banking would somehow prevent bank runs; to the contrary I claimed that fractional reserve banking causes bank runs."

I'd also say that you still don't seem to understand what I mean by the term "fractional reserve banking".

What about full reserve banking?

You probably don't understand what I mean by that term either.

I have already found out from your previous post. You meant not loaning demand deposits, which as you claimed (see the quote of your post above) would prevent bank runs. Sorry, this won't...

Northern Rock got into trouble because of its subprime mortgage business, and the bank run was a consequence of its problems thereof (surely not the other way round as you would want it). So again you are wrong here, lol...

You failed miserably
full member
Activity: 196
Merit: 100
I'd say "see, I didn't claim that fractional reserve banking would somehow prevent bank runs; to the contrary I claimed that fractional reserve banking causes bank runs."

I'd also say that you still don't seem to understand what I mean by the term "fractional reserve banking".

What about full reserve banking?

You probably don't understand what I mean by that term either. For starters, I don't see it as a type of fractional reserve banking.
legendary
Activity: 3514
Merit: 1280
English ⬄ Russian Translation Services
From your posts I got the idea that fractional reserve banking (full reserve banking being an ideal) would somehow prevent bank runs. Do you confirm that?

Absolutely not.

Okay, now I think I should quote your post here

Quote
The proper way to eliminate bank runs is to move to 100% reserve banking. All the other solutions cause terrible negative side-effects, and don't even work in the long run

What would you say now?

I'd say "see, I didn't claim that fractional reserve banking would somehow prevent bank runs; to the contrary I claimed that fractional reserve banking causes bank runs."

I'd also say that you still don't seem to understand what I mean by the term "fractional reserve banking".

What about full reserve banking? Do you confirm your words that it prevents bank runs?
full member
Activity: 196
Merit: 100
From your posts I got the idea that fractional reserve banking (full reserve banking being an ideal) would somehow prevent bank runs. Do you confirm that?

Absolutely not.

Okay, now I think I should quote your post here

Quote
The proper way to eliminate bank runs is to move to 100% reserve banking. All the other solutions cause terrible negative side-effects, and don't even work in the long run

What would you say now?

I'd say "see, I didn't claim that fractional reserve banking would somehow prevent bank runs; to the contrary I claimed that fractional reserve banking causes bank runs."

I'd also say that you still don't seem to understand what I mean by the term "fractional reserve banking".
legendary
Activity: 3514
Merit: 1280
English ⬄ Russian Translation Services
From your posts I got the idea that fractional reserve banking (full reserve banking being an ideal) would somehow prevent bank runs. Do you confirm that?

Absolutely not.

Okay, now I think I should quote your post here

Quote
The proper way to eliminate bank runs is to move to 100% reserve banking. All the other solutions cause terrible negative side-effects, and don't even work in the long run

What would you say now?
full member
Activity: 196
Merit: 100
From your posts I got the idea that fractional reserve banking (full reserve banking being an ideal) would somehow prevent bank runs. Do you confirm that?

Absolutely not.
legendary
Activity: 3514
Merit: 1280
English ⬄ Russian Translation Services
If the bank goes belly-up, they are lost unless they (as well as demand deposits) are covered by deposit insurance. If they are not, neither fractional, nor full reserve requirements will help here, right?

Right.

And then you say that I don't know what bank runs are and what fractional reserve banking is (for that matter), lol...

Correct.

How come?

Lots of reasons, including that you are confusing bank runs with "going belly-up", but the biggest reason is probably that I explained it to you and you said I was wrong, and then refused to explain why I was wrong.

If you remember, I told there are many reasons for a bank run. Going belly-up is a good reason for a bank run, isn't it?

Usually it's the other way around, but the fact that one can cause the other doesn't negate the fact that you're confusing the two.

I don't think so. But it doesn't matter since it is not relevant. From your posts I got the idea that fractional reserve banking (full reserve banking being an ideal) would somehow prevent bank runs (a sample of which you showed). Do you confirm that?
full member
Activity: 196
Merit: 100
If the bank goes belly-up, they are lost unless they (as well as demand deposits) are covered by deposit insurance. If they are not, neither fractional, nor full reserve requirements will help here, right?

Right.

And then you say that I don't know what bank runs are and what fractional reserve banking is (for that matter), lol...

Correct.

How come?

Lots of reasons, including that you are confusing bank runs with "going belly-up", but the biggest reason is probably that I explained it to you and you said I was wrong, and then refused to explain why I was wrong.

If you remember, I told there are many reasons for a bank run. Going belly-up is a good reason for a bank run, isn't it?

Usually it's the other way around, but the fact that one can cause the other doesn't negate the fact that you're confusing the two.
legendary
Activity: 3514
Merit: 1280
English ⬄ Russian Translation Services
If the bank goes belly-up, they are lost unless they (as well as demand deposits) are covered by deposit insurance. If they are not, neither fractional, nor full reserve requirements will help here, right?

Right.

And then you say that I don't know what bank runs are and what fractional reserve banking is (for that matter), lol...

Correct.

How come?

Lots of reasons, including that you are confusing bank runs with "going belly-up", but the biggest reason is probably that I explained it to you and you said I was wrong, and then refused to explain why I was wrong.

If you remember, I told there are many reasons for a bank run. Going belly-up is a good reason for a bank run, isn't it?
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