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Bitcoin is fiat money, too

economist.com

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Re: Bitcoin is fiat money, too

#251

Post by smallnamespace »

meric wrote: post #219
ryan_j_naughton wrote: post #216

Earlier quoted context omitted.

Knowing that there will be better hard drives in the future for less money has some effect on your willingness to purchase. Expectations of the future matter. The US Treasury is getting considerably less revenue right now from capital gains than usual because tons of financial entities are holding off on realizing returns from their investments now and are holding them until possible tax reform in the hopes of paying…

You can make a positive return in terms of hard disk space. Refrain from swapping USD for hard disk space, and you can get more hard disk space in the future. This applies to all sorts of goods, like TV's, music players, etc. The value of USD is increasing against these goods, yet people still make the trade of USD for goods. I suppose if we increase the inflation of USD such that the price of hard disk space increas…

If you believe that we should have UBI (and it seems like many here do), deflation is the exact opposite of it -- it slowly concentrates wealth with those who already have it, and all they have to do is hold the currency.

Whereas inflation at least basically forces the wealthy to invest in real assets or else slowly transfer the value of the cash towards debtors.

Re: Bitcoin is fiat money, too

#252

Post by smallnamespace »

nostrademons wrote: post #247
a_imho wrote: post #243

Earlier quoted context omitted.

Even just minor deflation is disastrous for economies because if there is 3% deflation, you could get 100% of what was generally typical GDP growth for developed countries without spending any money to produce anything. This encourages everyone to be risk averse towards spending money on anything at all. What are some real world examples of this?

Japan's the classic one - they've been stuck in a deflationary trap since 1990: https://en.wikipedia.org/wiki/Lost_Decade_(Japan) The Great Depression in the U.S. as well. There's a possible counterexample with the Long Depression in the U.S: https://en.wikipedia.org/wiki/Long_Depression Here, prices fell slowly : 1-2%/year, caused by sharply rising productivity. The period was also called the Gilded Age, and it was…

The late Roman republic also fell into a deflationary spiral, as the currency was repeatedly debased by successive governments desperate to fund the military.

This triggered massive hoarding of currency, despite harsh legal measures that tried to outlaw it. Everyone had an incentive to hoard the old, higher silver coins while shunning the new debased coins being issued [1]. 'Bad money drives out good' [2].

Eventually, the majority of the Roman economy became demonetized, and people had to resort to barter again. Welcome to the feudal ages.

[1] http://money.visualcapitalist.com/currency-and-the-collapse-...

[2] https://en.wikipedia.org/wiki/Gresham%27s_law

* Note that there is a confusion of terminology here -- things look inflationary if you are counting the number of coins it takes to buy something, but highly deflationary if you measure the amount of silver to buy the same item, as silver was sucked out of the economy and then hoarded.

From a certain perspective, both factors actually came together to destroy the late Roman monetary system -- the real 'store of value', silver, was removed from the system and hoarded because it was deflationary. And hyper-inflation in the fiat currency simultaneously made the coins totally worthless and therefore unsuitable for doing transactions.

Re: Bitcoin is fiat money, too

#253

Post by musage »

AlexCoventry wrote: post #231
labster wrote: post #183

Earlier quoted context omitted.

So you're telling me that government money, where everyone gets a say in policy through republican institutions, is worse than a system where the most wealthy users get more control of the currency. Um, okay. I guess the oligarchy is more explicit in the cryptocurrency.

If you really think you have a say in monetary policy, I suggest you read Barofsky's Bailout .

You have a say in it in principle. In contrast, you have in principle no say what others do with their private property. That's the difference, and it's an important one.

Re: Bitcoin is fiat money, too

#254

Post by mseebach »

labster wrote: post #183
mirimir wrote: post #180

Earlier quoted context omitted.

Yes, that's the distinction. With Bitcoin, a codebase prevails if it attracts enough miners, merchants and users. Those parties in aggregate have "fiat power". It's arguable that fiat power for each state similarly reflects preferences of banks, merchants and users. However, some of us doubt that money policy typically favors users. With government fiat, forking isn't really possible, without a revolution, no matter…

So you're telling me that government money, where everyone gets a say in policy through republican institutions, is worse than a system where the most wealthy users get more control of the currency. Um, okay. I guess the oligarchy is more explicit in the cryptocurrency.

Just download a mining program and run it on your computer. Voilà, you now have "a say" that is exactly equivalent to your say in the policy of republican institutions.

Re: Bitcoin is fiat money, too

#255

Post by akvadrako »

girishso wrote: post #249
sonink wrote: post #190

Fundamentally, Bitcoin is software eating the Fed-Bank-Retail ecosystem. The Fed governance is replaced by code. The banking utility is replaced by miners. I think the march of bitcoin is actually a better example of how AI is taking over the world. People in AI are fascinated by AGI - but the bitcoin ecosystem is actually a real world example of how AI will take over the world. Specifically, the march of AI won't ha…

> making it more amenable to machines and 'hostile' to most humans. Why AI takeover is always considered against humans? Why can't it co-exist with humans?

I think it can, just like how we "co-exist" with wild cats. If they don't bother us too much we let them live, but humans always have priority.

Re: Bitcoin is fiat money, too

#256

Post by glenneroo »

kijin wrote: post #233
rtpg wrote: post #221

Earlier quoted context omitted.

if you are rich enough you can also just pay taxes and keep a passport that allows visafree travel mostly anywhere and not have to force people to fly to a different country to see you. Its a fun thought experiment for sure but ultimately if you're at the level of wealth that running from the taxman gets you huge gains, either you have other problems (like being some sort of druglord) or you have enough money to also…

Sure, if I had to choose between maintaining a complicated tax avoidance scheme for the rest of my life and just paying taxes, I would probably just pay my taxes and sleep easy. But it seems that a lot of people disagree. Either you and I are massively underestimating the benefits of tax avoidance, or these people have some sort of knee-jerk reaction to the very concept of taxation that makes them try to avoid taxes…

If you have enough money to pay a tax-hiding-specialist, then it's no longer a hassle, it's just another person you pay to take care of your stuff - perhaps analogous to a nanny or butler.

Re: Bitcoin is fiat money, too

#257

Post by sonink »

8973417983461 wrote: post #241
sonink wrote: post #190

Fundamentally, Bitcoin is software eating the Fed-Bank-Retail ecosystem. The Fed governance is replaced by code. The banking utility is replaced by miners. I think the march of bitcoin is actually a better example of how AI is taking over the world. People in AI are fascinated by AGI - but the bitcoin ecosystem is actually a real world example of how AI will take over the world. Specifically, the march of AI won't ha…

> But there are countries in Africa who can already do better by simply leapfrogging to bitcoin and ditching their national currencies. I doubt this would do any good for them. * Their currency would be totally exposed to 3rd parties. * They would loose the control over the rates, which are an important tool to attract investments, if are stable and controlled well. * AFAIK some Chinese private companies control larg…

Everything that you mentioned is most likely a shortcoming of the current version of Bitcoin. That being said, it is not a big leap of faith that each of these will be rectified in due course. If not with updates to Bitcoin, then with another coin.

My post wasnt just about Bitcoin specifically, but around the entire blockchain ecosystem.

Re: Bitcoin is fiat money, too

#258

Post by ozim »

sonink wrote: post #190

Fundamentally, Bitcoin is software eating the Fed-Bank-Retail ecosystem. The Fed governance is replaced by code. The banking utility is replaced by miners. I think the march of bitcoin is actually a better example of how AI is taking over the world. People in AI are fascinated by AGI - but the bitcoin ecosystem is actually a real world example of how AI will take over the world. Specifically, the march of AI won't ha…

Yes comrade we want to bring equality and low fees to poor nations which are oppresed by capitalistic banks! March of new era will bring better future for everyone. They want to stop our revolution, China with JP Morgan as they stand for old order. We have to get rid of those monopolistic pigs. /s

I hope those bitcoin guys won't get guns to actually execute people who are not buying.

Re: Bitcoin is fiat money, too

#259

Post by Terr_ »

mseebach wrote: post #254
labster wrote: post #183

Earlier quoted context omitted.

So you're telling me that government money, where everyone gets a say in policy through republican institutions, is worse than a system where the most wealthy users get more control of the currency. Um, okay. I guess the oligarchy is more explicit in the cryptocurrency.

Just download a mining program and run it on your computer. Voilà, you now have "a say" that is exactly equivalent to your say in the policy of republican institutions.

Don't be silly, that's like saying that incorporating a one-person business automatically puts you on-par with the lobbying power of major industries.

Re: Bitcoin is fiat money, too

#260

Post by [deleted] »

baddox wrote: post #157
AFNobody wrote: post #141

Earlier quoted context omitted.

A 51% plutocracy is still a form of state governance that qualifies as fiat money and effectively can destroy the value of your coins if you resist. It is really no different than the government fining you for disobedience. There are philosophical theoretical arguments against this, not pragmatic ones.

According to this definition, is there any possible form of widely-used money that isn’t fiat money?

[deleted]
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