Why I think the Bitcoin wealth pyramid hinders economic development - page 2.

ElectricMucus

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Quote from: BitterTea on October 24, 2011, 09:45:24 AM

Quote from: ElectricMucus on October 24, 2011, 09:39:00 AM

Yes it is but real growth can only occur when profits are made and reinvested. That's the way it always worked. While short-term loans might be desirable for a startup or during a period of unexpected rapid development they are not the main engine for growth.

Speaking of straw...

I said nothing about loans, only saving/hoarding which is reducing consumption in order to divert scarce resources toward building capital

So the upper 0.1% which own 50% of issued coins are about to come up with their own businesses? But hey we never know, wake me up when they do. Roll Eyes

(I think they don't they want to retire, big time which will not happen imo)

The statement about loans was dedicated to asdf who said growth is dependent upon loans.

BitterTea

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Quote from: ElectricMucus on October 24, 2011, 09:39:00 AM

Yes it is but real growth can only occur when profits are made and reinvested. That's the way it always worked. While short-term loans might be desirable for a startup or during a period of unexpected rapid development they are not the main engine for growth.

Speaking of straw...

I said nothing about loans, only saving/hoarding which is reducing consumption in order to divert scarce resources toward building capital

ElectricMucus

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Yes it is but real growth can only occur when profits are made and reinvested. That's the way it always worked. While short-term loans might be desirable for a startup or during a period of unexpected rapid development they are not the main engine for growth.

BitterTea

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Quote from: ElectricMucus on October 24, 2011, 09:27:10 AM

But to give you something of why I am not attempting to refute his claims:
Stating that increase in business volume and economic growth are not correlated is just and simple false.

Correlation != causation

An increase in business volume can only come after the necessary capital is in place. Individuals must forego consumption now (save/hoard) in order for those resources to be devoted to creating that necessary capital. It's an iterative process.

ElectricMucus

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Quote from: BitterTea on October 24, 2011, 09:21:02 AM

Quote from: ElectricMucus on October 24, 2011, 08:10:52 AM

You are repeating yourself. Cheesy

Absolute bullshit btw.

This is the noise made by people without arguments.

Well I could repeat my own argument but that won't do any good. As I said asdf made a strawman argument and there is nothing to refute.

But to give you something of why I am not attempting to refute his claims:
Stating that increase in business volume and economic growth are not correlated is just and simple false.

BitterTea

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Quote from: ElectricMucus on October 24, 2011, 08:10:52 AM

You are repeating yourself. Cheesy

Absolute bullshit btw.

This is the noise made by people without arguments.

If growth does not require savings of capital, why don't you go spend yourself into prosperity?

ElectricMucus

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You are repeating yourself. Cheesy

Absolute bullshit btw.

asdf

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Quote from: ElectricMucus on October 22, 2011, 06:21:48 PM

The only way the economy will grow at a healthy rate is by an increase in business volume.

No. the economy grows from savings and loans, not by consumption. Growth means the economy produces more goods and services than it did before. It can't do that unless it increases it's efficiency, that is: more output for the same input (labor). To increase efficiency a business must invest in new equipment, RND, etc.

If a bunch of hoarders suddenly start spending their money, business will experience a temporary spike in sales and the value of money will drop. Afterwards, the economy is no bigger than it was before and businesses will have low stock.

To sustain an increased volume a business must improve it's infrastructure. This requires capital.

This is a direct argument against your core assumption.

asdf

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Quote from: cbeast on October 24, 2011, 06:35:38 AM

Quote from: asdf on October 22, 2011, 05:54:40 PM

Hoarders spending money into the economy doesn't grow it. That's just consumption: taking real wealth out and putting currency in, bidding up prices.

To grow the economy, hoarders would need to invest their coins. investment creates or grows new businesses, which is precisely economic growth. The thing is, you can't really loan out bitcoins at the moment, but this is a problem of a lack of infrastructure, which will come with time.

Just holding coins forever doesn't impact the economy, except by lowering prices due to reduced supply of coins in the active economy.

You contradict yourself.

Why would hoarders invest their coins and create businesses? It is far more profitable to just sit on their coins and let the economy suffer deflation while sitting pretty on that pile of money. If the price of goods is reduced, I can buy more stuff with my hoard.

You are right though, hoarding is bad for society in general. Tax the rich.

Your forgetting that investment, if done right, will bring nominal returns. Why sit on money when it can earn interest.

If you "buy more stuff with your hoard" then you're no longer hoarding.

cbeast

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Let's talk governance, lipstick, and pigs.

Quote from: asdf on October 22, 2011, 05:54:40 PM

Hoarders spending money into the economy doesn't grow it. That's just consumption: taking real wealth out and putting currency in, bidding up prices.

To grow the economy, hoarders would need to invest their coins. investment creates or grows new businesses, which is precisely economic growth. The thing is, you can't really loan out bitcoins at the moment, but this is a problem of a lack of infrastructure, which will come with time.

Just holding coins forever doesn't impact the economy, except by lowering prices due to reduced supply of coins in the active economy.

You contradict yourself.

Why would hoarders invest their coins and create businesses? It is far more profitable to just sit on their coins and let the economy suffer deflation while sitting pretty on that pile of money. If the price of goods is reduced, I can buy more stuff with my hoard.

You are right though, hoarding is bad for society in general. Tax the rich.

ElectricMucus

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Quote from: asdf on October 24, 2011, 06:24:40 AM

Quote from: ElectricMucus on October 23, 2011, 03:55:39 AM

Strawman

Are you made of straw?

If there is a flaw in my logic, please do me the honor of deconstructing it. I think I made a reasonable case for hoarders not hindering development.

No you made a strawman argument, there is no point in deconstructing it since it doesn't apply to my statement.

asdf

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Quote from: ElectricMucus on October 23, 2011, 03:55:39 AM

Strawman

Are you made of straw?

If there is a flaw in my logic, please do me the honor of deconstructing it. I think I made a reasonable case for hoarders not hindering development.

ElectricMucus

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Strawman

asdf

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Quote from: ElectricMucus on October 22, 2011, 06:21:48 PM

Right, lending...

LOL
That is fiat economy talk where that actually means something. What would a merchant do with a BTC loan? Sell the coins and buy more product stock/resources? Then he'd sit on it.

Why are you talking about merchants? Businesses take loans to improve their infrastructure/efficiency/capacity with the intention of paying if of using the increased productivity that follows. If successful, the economy is more productive than it was before; there is more output for the same input. This is growth.

Quote from: ElectricMucus on October 22, 2011, 06:21:48 PM

The only way the economy will grow at a healthy rate is by an increase in business volume.

Selling more goods doesn't make the economy any more productive. The input output ratio is still the same. Unless that business saves the extra profit due to increased volume to later invest in equipment upgrades to make their process more efficient. ie. they hoard money then invest it; their input output ratio improves.

Just consuming resources doesn't create economic growth.

ElectricMucus

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Right, lending...

LOL
That is fiat economy talk where that actually means something. What would a merchant do with a BTC loan? Sell the coins and buy more product stock/resources? Then he'd sit on it.
The only way the economy will grow at a healthy rate is by an increase in business volume.

Most people just don't know how to play the prisoners dilemma that's the only reason for the current situation but don't you worry silkroad will be around and the next selloff is coming. Roll Eyes

asdf

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Hoarders spending money into the economy doesn't grow it. That's just consumption: taking real wealth out and putting currency in, bidding up prices.

To grow the economy, hoarders would need to invest their coins. investment creates or grows new businesses, which is precisely economic growth. The thing is, you can't really loan out bitcoins at the moment, but this is a problem of a lack of infrastructure, which will come with time.

Just holding coins forever doesn't impact the economy, except by lowering prices due to reduced supply of coins in the active economy.

ElectricMucus

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Did I say anything about early adopters? No I said large bitcoin holders that includes early adopters and everybody else who belongs to the group holding the upper 50% of currently issued coins.

And the fact that the early coins aren't moving confirms exactly my point.
If people would care they would order their groceries with BTC, host their projects on one of the many companies accepting it, I'm sure lots of these people don't even have the keychain... you know what I mean. Roll Eyes

And that a two figure percentage of issued coins are already lost?

NFW, how naive would you be to believe that?

Littleshop

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Quote from: ElectricMucus on October 22, 2011, 01:17:15 PM

Quote from: error on October 22, 2011, 12:54:46 PM

This thread again? I thought I unsubscribed from your newsletter.

So then why are you bumping the thread?

Again my core point is: Big btc holders who are hoping that the masses will use all of their half only for circulation are livin in illusion.

You know the great part about bitcoin? We can see just by looking at the blockchain if your idea that the big btc holders are just waiting (or already) dumping BTC. Guess what. They are not. The coins that move and that are bought and sold are mostly newer coins. Not early adopters. Most of those coins just sit, and a huge chunk of them may not even be spendable anymore.

ElectricMucus

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Quote from: error on October 22, 2011, 12:54:46 PM

This thread again? I thought I unsubscribed from your newsletter.

So then why are you bumping the thread?

Again my core point is: Big btc holders who are hoping that the masses will use all of their half only for circulation are livin in illusion.

error

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This thread again? I thought I unsubscribed from your newsletter.

You said "hoarding." Virtually every use of this word I've ever seen has been from someone horribly misusing it. Your use of the word is no exception.

Topic: Why I think the Bitcoin wealth pyramid hinders economic development - page 2. (Read 3584 times)