Is gold still a currency? lols
It would be if you could send a milligram over the net instantaneously.
Topic: Will deflation be the fatal weakness of bitcoin? - page 3. (Read 10623 times)
It would be if you could send a milligram over the net instantaneously.
Is gold still a currency? lols
Gold is deflationary
Did gold fail so far? No.
Did gold fail so far? No.
There is one weakness of it, which I hope someone can invalidate. Suppose I'm a car-dealer and I buy 1 car for 100 BTC from my supplier. By the time I can sell it to a customer, I can only ask 95 BTC for it, because of deflation. Now everyone argues that isn't a problem, because the prices at my supplier also have dropped with the same amount, so I can buy a new one there for 95 BTC, and again have 1 car in stock, and don't suffer any losses. But if I did absolutely nothing I would still have 100 BTC, so why should I work hard as a car-dealer instead of hoarding?
I can't see why this would be good for Bitcoin. People said that it's good because it forces merchants to keep their stocks low, or produce goods only on-demand. But then you're asking merchants to change the way they have been doing business for decades, which seems unlikely to happen.
So how can Bitcoin solve this problem for merchants?
I can't see why this would be good for Bitcoin. People said that it's good because it forces merchants to keep their stocks low, or produce goods only on-demand. But then you're asking merchants to change the way they have been doing business for decades, which seems unlikely to happen.
So how can Bitcoin solve this problem for merchants?
As a car-dealer you add value to the products you sell, like people don't have to travel all the way to the factory to buy a car. You need to sum the costs of doing your business and calculate it into the prices you ask. If the car itself costs you 100 BTC, plus you incur other costs like rent and salaries worth maybe 20 BTC per car, then you will ask 120 BTC per car. Something like this happens to every car-dealer. People can choose either to pay 120 BTC to a car-dealer, or to travel to the factory and buy for 95 BTC. I think it is fair.
EDIT: Also to protect from deflation, the car-dealer can slide the price like this: Now - 125 BTC, in 3 months - 120 BTC, in 6 months - 115 BTC. If he sells his cars in 3 months in average, then his profit is not affected.
You can buy 100,000 devcoins right now for a mere 12 bitcents at vircurex.com. Now *that's* inflation!
The only way to solve this problem is to get rid of 21.000.000 cap.
The best way to solve it is leave Bitcoin alone and go make a different coin with whatever properties you think are superior, and then let them compete.
Already beta-testing and tuning new coin. But I need Bitcoin stay alive to keep cryptocoin ecosystem healthy.Great, I've been waiting for over a year now for Inflatacoin so I know where to direct people who think the 21,000,000 limit is bad.
Both GRouPcoin and DeVCoin keep on minting the same number of coins per block forever. So "inflatacoin" already exists, in two denominations, one producing 1000 times as many coins as the other per block.
-MarkM-
I wonder if there are any failed deflationary currencies. Actually I guess no.
There is a simple reason. Inflation hurts the productive and helps the debtors.
Collectively around the world who are the largest debtors? Governments of course.
Who sets monetary policy? Governments of course.
Who benefits the most from an inflaitonary policy? Governments of course.
Any government that adopted a deflationary policy would face their unsustainable debt growing in value rather then robbing their creditors with inflation. The US national debt can grow to any amount it wants. The only true metric if debt/GDP and guess what happens when you inflate your currency 20%. Nominal GDP goes up 20% while the amount of debt is fixed (assumming no new debt). The "real" (adjusted for inflation) carrying cost of the debt is reduced. Using the same "trick" governments can deficit spend forever. Just rack up debt to less than the rate of inflation and in real terms you debt will decline towards zero.
Free money!!!!!
There is one weakness of it, which I hope someone can invalidate. Suppose I'm a car-dealer and I buy 1 car for 100 BTC from my supplier. By the time I can sell it to a customer, I can only ask 95 BTC for it, because of deflation. Now everyone argues that isn't a problem, because the prices at my supplier also have dropped with the same amount, so I can buy a new one there for 95 BTC, and again have 1 car in stock, and don't suffer any losses. But if I did absolutely nothing I would still have 100 BTC, so why should I work hard as a car-dealer instead of hoarding?
I can't see why this would be good for Bitcoin. People said that it's good because it forces merchants to keep their stocks low, or produce goods only on-demand. But then you're asking merchants to change the way they have been doing business for decades, which seems unlikely to happen.
So how can Bitcoin solve this problem for merchants?
I can't see why this would be good for Bitcoin. People said that it's good because it forces merchants to keep their stocks low, or produce goods only on-demand. But then you're asking merchants to change the way they have been doing business for decades, which seems unlikely to happen.
So how can Bitcoin solve this problem for merchants?
While the value of Bitcoin is unstable, it can only succeed as an intermediary currency (ie, you exchange fiat for btc, transact, and reverse the exchange quickly). When value is reasonably stable, Bitcoin can be used like fiat.
I wonder if there are any failed deflationary currencies. Actually I guess no.
The difference between deflationary and inflationary money is that deflationary money are valued more than inflationary. It means that under deflation people buy just what they need. Subsequently, deflation induces lower prices, lower production of goods, people spend less time creating useless stuff at work, and with their overstuffed bitcoin wallets they go fishing.
The difference between deflationary and inflationary money is that deflationary money are valued more than inflationary. It means that under deflation people buy just what they need. Subsequently, deflation induces lower prices, lower production of goods, people spend less time creating useless stuff at work, and with their overstuffed bitcoin wallets they go fishing.
It's truly astonishing to me how well the public education brainwashing takes hold of people's minds and makes them believe crazy stuff that no rational person would ever consider as logically valid and part of our reality.
This is basically what the OP claims:
W T F?
Well, obviously you can't. I mean, if money worked that way we'd just need to make everyone's money worth more and then everyone would be able to afford a palatial estate with solid gold fixtures and fittings and an army of servants waiting on their every word. Except that there's not enough land for palatial estates for everyone, or enough gold, and where are you going to get servants from if everyone's retired to their own palatial estate? Where are you going to get maintenance staff from too, for that matter? This is basically what the OP claims:
Quote
So yea, umm hey guys, you can't have money that gets worth more over time making you richer! You know, because that will cause problems for the economy! You must have money that gets worth less and makes you poorer and it must get worth less by allowing this small gang of psychopaths to counterfeit and steal the productivity of the entire economy, it's only this way that you'll ever have a viable and healthy economy!!!11
W T F?
Money is just a kind of token we use to divide up resources, and if deflation means that people with lots of money are getting wealthier then unless there's some kind of massive underlying improvement to the productivity of society - which you can have just as easily with inflation - every increase in their wealth as a result of deflation has to correspond to correspond to a decrease in the wealth of someone else.
I bet you that, if given a long enough term, Bitcoin will be less volatile than any government fiat currency. On one hand, we have a currency with a fixed (non-volatile) supply, and on the other hand, we have currencies with very volatile supplies. To disagree with me, you have to make the absurd claim that a currency with a highly volatile supply will tend to be less volatile than one with a perfectly predictable supply in the long run.
Supply doesn't matter, velocity does. It is possible, and hell probably likely, that hyperinflation will happen with some of the world's biggest currencies, but it hasn't happened yet. So far, as far as absolute, economic catastrophes go, the limited supply currency loses. And really, fiat currencies are only so bad today because of central banks and all of the ills that come along with that and debt-based money.
Quote
Bitcoin's price volatility will roughly resemble the asymptotic curve shape of its inflation schedule. Volatility is already far lower than a year ago, and a year from now will be lower than today, and so on.
Whoa you mean volatility is lower from when someone pumped $3 million into a ~$50k market?? Bitcoin's "market cap" is still insanely tiny compared to the world economy. It has to go through one of these volatility periods for every market expansion. Every new market will be at the mercy of the previous markets. "Hey switch over to bitcoin, you only have to give up 20-30% of your revenue to us for the first couple years to get in!" Pumps, dumps, manipulations, bankruptcies--it is all quite accessible in this format. "Bit Street" arguably already exists and will only get smarter.
Why do you think the value will increase rapidly? If it were such a certainty, the current price would already reflect that.
Because there will be not enough coins compared to the people living on this planet. So either Bitcoin will become hugely deflationary, and prices will rise rapidly each week. Or it will fail to attract an large userbase, and demand will be low enough that prices can stay stable. Both are not positive outcomes.
I don't get the maths behind it. If everyone already had Bitcoins, then it would rise only according to the overall wealth increase, which the wages should match anyway, so you wouldn't have to change a damn thing. If everyone doesn't use Bitcoin and there are tens of competing currencies, investment vehicles and whatnot, why does everyone want to hold Bitcoin all of a sudden? Didn't they know Bitcoin's supply is limited before it hit the limit?
I'd rather PAY in an inflationary currency. Be it my employees or my groceries.
If you are not willing to PAY with them, then you're hoarding them, so deflation is a problem.
I don't get this either. When you decide to pay or have to pay, value transfer isn't affected by in which form you make the transfer. It only matters in which form you keep it until payment. That's not hoarding either.
Say you have Euros. You can convert them to Bitcoin and "hoard" them, or you can buy a camcorder with your Euros. Why do you buy the camcorder instead of buying Bitcoin if hoarding is so appealing? It doesn't make any sense. How is it different than having bitcoins in the first place? How is it not rational to buy the camcorder when I have Bitcoin but rational when I have the same value in Euros?
I work for BitInstant LLC, a fully legal and licensed NY company, registered with FinCEN. I'm paid in BTC. I could also be paid in gold, silver, carts of ammo, or seashells. The US Gov doesn't need to "sanction" something for it to be used in the marketplace. Unless the US Gov explicitly declares BTC to be illegal for use (THAT would be quite crazy), there is no reason a company can't pay in Bitcoin. Of course, whenver anyone receives value it is supposed to be declared for taxes, but this is true of all assets from USD to BTC to gold to garage sale collections.
Interesting. Are you an employee or a contractor?
Unless the US Gov explicitly declares BTC to be illegal for use (THAT would be quite crazy), ...
Not surprising, though. The US govt is waging war on many things, why not Bitcoin, English lawn or the number PI?
When was the last time the US govt won a war it waged? I mean based on actual facts and not reports from
FOX news...
It's truly astonishing to me how well the public education brainwashing takes hold of people's minds and makes them believe crazy stuff that no rational person would ever consider as logically valid and part of our reality.
This is basically what the OP claims:
W T F?
This is basically what the OP claims:
Quote
So yea, umm hey guys, you can't have money that gets worth more over time making you richer rewarding savers and the prudent! You know, because that will cause problems for the economy financial elite/banksters! You must have money that gets worth less and makes you poorer and it must get worth less by allowing this small gang of psychopaths to counterfeit and steal the productivity of the entire real economy, it's only this way that you'll ever have a viable and healthy economy!!!11
W T F?
cleaned that up for ya, altho overall it was pretty darn close. +1!
Unless the US Gov explicitly declares BTC to be illegal for use (THAT would be quite crazy), ...
Not surprising, though. The US govt is waging war on many things, why not Bitcoin, English lawn or the number PI?
No government will ever allow a legitimate business to pay its employees in an unregulated and untraceable currency. Bitcoin is the currency of the black market.
The US government is currently allowing it today. Your point is demonstrably false.
Bitcoin is the currency of the market, because it is mankind's most efficient means of exchange (or perhaps I should say, this is its potential at least). Whether the market is black or white or anything in between, we'll see increased adoption of Bitcoin throughout. Dismissing Bitcoin because some smart criminals have caught on earlier than the average gas station owner is silly.
Can you offer an example of a US business that legally pays its employees without bank involvement?
Governments issue currency and regulate commerce. They will not sanction a currency that they cannot regulate. It's not a matter of efficiency. It's a matter of control.
I work for BitInstant LLC, a fully legal and licensed NY company, registered with FinCEN. I'm paid in BTC. I could also be paid in gold, silver, carts of ammo, or seashells. The US Gov doesn't need to "sanction" something for it to be used in the marketplace. Unless the US Gov explicitly declares BTC to be illegal for use (THAT would be quite crazy), there is no reason a company can't pay in Bitcoin. Of course, whenver anyone receives value it is supposed to be declared for taxes, but this is true of all assets from USD to BTC to gold to garage sale collections.
No government will ever allow a legitimate business to pay its employees in an unregulated and untraceable currency. Bitcoin is the currency of the black market.
The US government is currently allowing it today. Your point is demonstrably false.
Bitcoin is the currency of the market, because it is mankind's most efficient means of exchange (or perhaps I should say, this is its potential at least). Whether the market is black or white or anything in between, we'll see increased adoption of Bitcoin throughout. Dismissing Bitcoin because some smart criminals have caught on earlier than the average gas station owner is silly.
Can you offer an example of a US business that legally pays its employees without bank involvement?
Governments issue currency and regulate commerce. They will not sanction a currency that they cannot regulate. It's not a matter of efficiency. It's a matter of control.
To all who wanna bitcoin be inflanatory: you can always send periodically small amount of your bitcoins to 1waSPoZabGQw9a2MeWmJYaqaUyDJBcGmj. There, problem solved.
LOL brilliant
As far as deflation itself being a weakness, I don't think it will cause the end of the currency or anything, but I think it will hinder its widespread adoption. Volatility may be fun to play, but it's not fun to run a business around.
I bet you that, if given a long enough term, Bitcoin will be less volatile than any government fiat currency.
+1
But nobody would take that bet. Last november, buying a car would move the market by 20% or more. Nowadays, this deal would go unnoticed.
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