One thing you have to worry about with a FIXED monetary supply is to compare with England. Most of the wealth in the country is controlled by a very few powerful families who were able to amass sums of land early on. Land is an asset and the way bitcoin is structured is an asset.
This is similar to early bitcoin adopters. While its worthwhile for early adopters to benefit, many people would argue that the British system of 'old money' is not desirable in a robust economy. To grow the bitcoin economy you have to allow late adopters to get on-board and participate, without becoming serfs.
If you want just a store of wealth, like gold, and not a growing economy, thats fine. But remember that gold had a very poor return for decades. And very few people can participate with gold.
Topic: Would you support moving to a system with controled inflation? (Read 13187 times)
... Don't get me wrong, I like gold and silver, I even like it because it's shiny. I think there should be a healthy, robust trade between Bitcoin and gold. My criticism is focused on the view of gold (or Bitcoin for that matter) as a panacea, and the idea of a global currency in general.
While there is a longing for a flatter, fairer, and simpler economic landscape, this longing is tempered by a desire to protect and enhance wealth. Because of these competing motivations a certain level of complexity will always arise in economic systems... CHAOS is the father of life. And because of this there will always be a cost for safety. If there were such a thing as a singular store of value it would be continually under siege, and if perfectly safe, would be perfectly inaccessible, and therefore valueless, and so on...
While there is a longing for a flatter, fairer, and simpler economic landscape, this longing is tempered by a desire to protect and enhance wealth. Because of these competing motivations a certain level of complexity will always arise in economic systems... CHAOS is the father of life. And because of this there will always be a cost for safety. If there were such a thing as a singular store of value it would be continually under siege, and if perfectly safe, would be perfectly inaccessible, and therefore valueless, and so on...
Yep. As you said.
I stated it many times on this board that bitcoin is a new asset class see http://www.investopedia.com/terms/a/assetclasses.asp and it has it's place in any decent investment portfolio. Inflatocoin on the other hand would not be a principally new asset class at all.
So far this was completely ignored.
I can see it being a viable investment in a decently managed Portfolio, but so are many Penny Stocks exchanged OTC. The possibility for growth is there, just as the possibility for loss. So sure, one can choose to invest in it.
I would state that buying a 100 BitCoin has the possibility to gain 20% or slightly more within a reasonable amount of time, weight against the possibility of a 100% loss. Unlike stocks, there are no assets to sell to get some wealth back to the stock holders. As a purely ForEx investment, there is no guarantee against a 100% loss.
I wish I owned a lot of Gold. No, I don't hold any substantial value in Gold. But if I could, I would. I tend to think, others would too. Yea, we work with in established monetary systems but "WE" like gold.
I guess the test would be this, if you have the option to receive a $1000 Dollars in Paper or Gold, which option would you take. I would be willing to state that at least >80% would take the gold as change.
I guess the test would be this, if you have the option to receive a $1000 Dollars in Paper or Gold, which option would you take. I would be willing to state that at least >80% would take the gold as change.
This kind of thought experiment is handy for metals brokers that want to make a sale, but it only really represents a snapshot of a transaction in a micro-economy... It doesn't scale. It breaks down when you go to try and spend $1000 of gold bullion at Walmart, or when Walmart tries to use it to pay for the electric power they use. In one sense Bitcoin presently suffers a similar problem, the economy it can actually be used in is limited without the ability to exchange it for another currency. And, the exchange process itself serves to reduce the velocity of the currency going to-and-from the larger economy vs. the rate at which it can move within a purer Bitcoin economy.
Gold also suffers from the velocity dampening effect of exchanges, limiting it's global economic impact. Some 'serious' economic pundits have proposed ways to overcome this velocity limitation, as mentioned here: https://bitcointalksearch.org/topic/m.75669. But this brings it's own problems including a de facto debasement of gold through fractionalization...
I see your point, but not withstanding the extra step in redeeming the Gold, it tends to be safer, although currently slower.
I like: http://www.apmex.com/ for Xchange in precious metals. Suisse Gold is serialized and tracked in sealed containers.
Divisibility is not really a problem, I.E. 24K, 22K, 18K, 10K, etc... on and on.
I wish I owned a lot of Gold. No, I don't hold any substantial value in Gold. But if I could, I would. I tend to think, others would too. Yea, we work with in established monetary systems but "WE" like gold.
I guess the test would be this, if you have the option to receive a $1000 Dollars in Paper or Gold, which option would you take. I would be willing to state that at least >80% would take the gold as change.
I guess the test would be this, if you have the option to receive a $1000 Dollars in Paper or Gold, which option would you take. I would be willing to state that at least >80% would take the gold as change.
I'd prefer $1000 in silver or copper myself.
I wish I owned a lot of Gold. No, I don't hold any substantial value in Gold. But if I could, I would. I tend to think, others would too. Yea, we work with in established monetary systems but "WE" like gold.
I guess the test would be this, if you have the option to receive a $1000 Dollars in Paper or Gold, which option would you take. I would be willing to state that at least >80% would take the gold as change.
I guess the test would be this, if you have the option to receive a $1000 Dollars in Paper or Gold, which option would you take. I would be willing to state that at least >80% would take the gold as change.
IRL Money is divisible, just not in the ways people think of it.
The amount of money in circulation must be proportional to the resources it can purchase. But it get more complex based on the number of people using it. In other words, as population grows money grows, as population dwindles money dwindles, but in relation to inflation of resources.
How ever, it might not be feasible to divide a troy oz of gold, one can switch the unit based on available need. If the divisibility required is more than the amount of gold necessary, switch to the sea shell, bird feathers, sand (we're in trouble then).
But Gold has shown its ability to withhold the pressures of population growth and inflation, it should not be discounted so lightly.
Divisibility is proportional to population, that won't be a problem for long.
The amount of money in circulation must be proportional to the resources it can purchase. But it get more complex based on the number of people using it. In other words, as population grows money grows, as population dwindles money dwindles, but in relation to inflation of resources.
How ever, it might not be feasible to divide a troy oz of gold, one can switch the unit based on available need. If the divisibility required is more than the amount of gold necessary, switch to the sea shell, bird feathers, sand (we're in trouble then).
But Gold has shown its ability to withhold the pressures of population growth and inflation, it should not be discounted so lightly.
Divisibility is proportional to population, that won't be a problem for long.
As a store of value "Gold has shown its ability to withhold the pressures of population growth and inflation", but it has not been able to compete as a currency for the reasons mentioned.
Granted there are problems with supply of Gold, but when/and if it hits the fan. There will be two classes of people. Those with Gold, those without. Whom do you think will have an easier time until a new system gets set up.
IRL Money is divisible, just not in the ways people think of it.
The amount of money in circulation must be proportional to the resources it can purchase. But it get more complex based on the number of people using it. In other words, as population grows money grows, as population dwindles money dwindles, but in relation to inflation of resources.
How ever, it might not be feasible to divide a troy oz of gold, one can switch the unit based on available need. If the divisibility required is more than the amount of gold necessary, switch to the sea shell, bird feathers, sand (we're in trouble then).
But Gold has shown its ability to withhold the pressures of population growth and inflation, it should not be discounted so lightly.
Divisibility is proportional to population, that won't be a problem for long.
The amount of money in circulation must be proportional to the resources it can purchase. But it get more complex based on the number of people using it. In other words, as population grows money grows, as population dwindles money dwindles, but in relation to inflation of resources.
How ever, it might not be feasible to divide a troy oz of gold, one can switch the unit based on available need. If the divisibility required is more than the amount of gold necessary, switch to the sea shell, bird feathers, sand (we're in trouble then).
But Gold has shown its ability to withhold the pressures of population growth and inflation, it should not be discounted so lightly.
Divisibility is proportional to population, that won't be a problem for long.
Correct, there is an energy content in attaining the divisibility of gold, which can btw be beaten into wafers that are on order of angstroms thick.
Bitcoin has very little energy content (work done) required for divisibility, so yes better in that sense.
I like to think that long term the value of BTC and gold will be closely correlated, but not sure just yet.
A Gold-BTC global hawala would have good prospects, transmitter puts gold into merchant at one end, they bitcoin it across to other side of globe to another merchant and receiving guy on other side gets gold out.
EDIT: Actually hawalla merchants may be a very receptive target market for bitcoin, has anybody approached them? Ready made exchanges, right around the world.
Bitcoin has very little energy content (work done) required for divisibility, so yes better in that sense.
I like to think that long term the value of BTC and gold will be closely correlated, but not sure just yet.
A Gold-BTC global hawala would have good prospects, transmitter puts gold into merchant at one end, they bitcoin it across to other side of globe to another merchant and receiving guy on other side gets gold out.
EDIT: Actually hawalla merchants may be a very receptive target market for bitcoin, has anybody approached them? Ready made exchanges, right around the world.
The problem with gold, silver, copper, or thorium coins/bullion is still divisibility, which would result in a relatively inelastic money supply. The problem with representing them with certificates to get around this problem is that it makes them just as easy to fractionalize, which has probably already happened with many gold/silver accounts. Physical representations of currency, like metals, will always have this problem. As such they are best suited as a store of value, not as a currency. This is fine and dandy, this long term store of value can still function as a component of the overall money supply, but there are better things to use for currency.
Divisibility isn't really an issue, because these days we can encapsulate metals down to grains. So you could use thorium coins struck down to dimes, and anything smaller coudld be sealed into clear Pyrex glass. Sure, one would have to destroy the glass case in order to audit the mint, but that would still be a workable solution. On some level, metal coins still require some level of trust that the mint that produced it is honest, and isn't trying to pull a fast one by wrapping a depeleted uranium coin i na 2 mm layer in gold; and the only way to know is to occasionally cut such a coin in half. Granted, Bitcoins are much more divisable and much easier to audit, which is why bitcoins make such a great currency. But bitcoins are not a money, and probably make a poor store of value in the long run.
It does not help the argument for jingly currency by saying that divisibility isn't really an issue... And then to proceed with a description of how divisibility is an issue.
It does not matter how small an accountable unit a metal is divided into. To do so adds to the overhead for minting, counting, transporting, storing, and verifying such a currency... Beyond a certain scale it becomes infeasible. This problem of divisibility is one that digital money systems such as Bitcoin seek to solve. And it is a problem which commodity currencies will always have.
Perhaps I should have said that it wasn't an insurmountable issue.
...Plutonium, Uranium...
Some people might find these commodities unacceptable as stores of value as they have built-in inflation imposed by nature due to their half-life.
You mean deflation, right?
Some people are easily confused.
No, I mean that your value is slowly being eroded and dwindles to zero, which is more like inflation than deflation.
Now I'm confused.
If/When a true thorium fuel cycle is established in India, thorium coins become a viable alternative because thorium isn't very dangerous and the energy content provides for the most basic of use values. Honestly, I'd be kind of surprised if someone like the Hunt or Koch brothers don't already have thorium bullion waiting for the shift. Thorium is radioactive, but it's half-life is so long it was only theoretical for 100+ years until it could be observed. 99% would still be here when the Sun overtook the Earth as a red giant.
The problem with gold, silver, copper, or thorium coins/bullion is still divisibility, which would result in a relatively inelastic money supply. The problem with representing them with certificates to get around this problem is that it makes them just as easy to fractionalize, which has probably already happened with many gold/silver accounts. Physical representations of currency, like metals, will always have this problem. As such they are best suited as a store of value, not as a currency. This is fine and dandy, this long term store of value can still function as a component of the overall money supply, but there are better things to use for currency.
Divisibility isn't really an issue, because these days we can encapsulate metals down to grains. So you could use thorium coins struck down to dimes, and anything smaller coudld be sealed into clear Pyrex glass. Sure, one would have to destroy the glass case in order to audit the mint, but that would still be a workable solution. On some level, metal coins still require some level of trust that the mint that produced it is honest, and isn't trying to pull a fast one by wrapping a depeleted uranium coin i na 2 mm layer in gold; and the only way to know is to occasionally cut such a coin in half. Granted, Bitcoins are much more divisable and much easier to audit, which is why bitcoins make such a great currency. But bitcoins are not a money, and probably make a poor store of value in the long run.
...Plutonium, Uranium...
Some people might find these commodities unacceptable as stores of value as they have built-in inflation imposed by nature due to their half-life.
You mean deflation, right?
Some people are easily confused.
No, I mean that your value is slowly being eroded and dwindles to zero, which is more like inflation than deflation.
Now I'm confused.
If/When a true thorium fuel cycle is established in India, thorium coins become a viable alternative because thorium isn't very dangerous and the energy content provides for the most basic of use values. Honestly, I'd be kind of surprised if someone like the Hunt or Koch brothers don't already have thorium bullion waiting for the shift. Thorium is radioactive, but it's half-life is so long it was only theoretical for 100+ years until it could be observed. 99% would still be here when the Sun overtook the Earth as a red giant.
...Plutonium, Uranium...
Some people might find these commodities unacceptable as stores of value as they have built-in inflation imposed by nature due to their half-life.
You mean deflation, right?
Some people are easily confused.
No, I mean that your value is slowly being eroded and dwindles to zero, which is more like inflation than deflation.
...Plutonium, Uranium...
Some people might find these commodities unacceptable as stores of value as they have built-in inflation imposed by nature due to their half-life.
You mean deflation, right?
Some people are easily confused.
For physical money there is nothing but gold.
Silver, copper?
Try to put a significative amount of wealth with copper or even silver in your pocket.
Okay....
Done.
Now what?
...Plutonium, Uranium...
Some people might find these commodities unacceptable as stores of value as they have built-in inflation imposed by nature due to their half-life.
I personnally prefer not to store any radioactive element.
There is an article here where a chemist explains why gold beats other elements as a form of money.
...Plutonium, Uranium...
Some people might find these commodities unacceptable as stores of value as they have built-in inflation imposed by nature due to their half-life.
You mean deflation, right?
...Plutonium, Uranium...
Some people might find these commodities unacceptable as stores of value as they have built-in inflation imposed by nature due to their half-life.
For physical money there is nothing but gold.
Silver, copper?
Try to put a significative amount of wealth with copper or even silver in your pocket.
Paladium, Titanium, Molybdenum, Plutonium, Uranium, etc
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