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Bitcoin Is a Terrible Currency, and Not for the Reason You May Think

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Re: Bitcoin Is a Terrible Currency, and Not for the Reason You May Think

#21

Post by IshKebab »

sova wrote: post #8
nine_k wrote: post #4

Earlier quoted context omitted.

Bitcoin is only hyperdeflationary because it's being pumped, to my mind. It's mostly used as an investment and speculation tool, not as a currency, that is, not for paying for goods and services. It's not (yet) "digital gold", but rather "digital tulips" [1]. [1]: https://en.wikipedia.org/wiki/Tulip_mania

Tulips are a dumb analogy. There, I said it. Tulips come from seeds and are ornamental, once they are dead they can no longer be traded for value. There is no limit to the world-wide supply of tulips, and there is no such thing as distributed international observation and participation in tulips. To further my antagonist response, the Smithsonian Mag recently did a report explaining that Tulip Mania was also not real…

Once digital currencies are dead they can no longer be traded for value. There is no limit to the world-wide supply of digital currencies.

Re: Bitcoin Is a Terrible Currency, and Not for the Reason You May Think

#22

Post by nrhk »

IshKebab wrote: post #21
sova wrote: post #8

Earlier quoted context omitted.

Tulips are a dumb analogy. There, I said it. Tulips come from seeds and are ornamental, once they are dead they can no longer be traded for value. There is no limit to the world-wide supply of tulips, and there is no such thing as distributed international observation and participation in tulips. To further my antagonist response, the Smithsonian Mag recently did a report explaining that Tulip Mania was also not real…

Once digital currencies are dead they can no longer be traded for value. There is no limit to the world-wide supply of digital currencies.

There are limits to specific protocols, like bitcoin.

Re: Bitcoin Is a Terrible Currency, and Not for the Reason You May Think

#23

Post by badloginagain »

I may not buy a pizza with my bits, but I'd sure as hell buy a house, pay off my student debt, or whatever my proverbial lambo is. I only have enough BTC for really one big ticket purchase in my life, even if it increases in value forever.

Actually, a deflationary currency is an interesting concept for Basic Income- if everyone is given an amount of BTC at birth, so that it appreciates in value by the time they're old enough to spend it, they have a nice nest egg to build off of.

Of course, it only works if the currency circulates. I wonder if there's real world examples of deflationary currencies. Has it ever been tried?

Re: Bitcoin Is a Terrible Currency, and Not for the Reason You May Think

#25

Post by szemet »

alexmat wrote: post #20
sova wrote: post #7

Earlier quoted context omitted.

Could you elaborate on what you mean by Keynesian in 2017?

ideological beliefs about the nature of money (liberals not interested in non-state currencies, and Austrians believing that currencies must have intrinsic value) https://unenumerated.blogspot.com/2011/05/bitcoin-what-took-...

'must have intrinsic value'

AFAIK one of the main underpinning of the Austrian school is: https://en.wikipedia.org/wiki/Subjective_theory_of_value

Re: Bitcoin Is a Terrible Currency, and Not for the Reason You May Think

#26

Post by Phenomenit »

I don't think the deflationary nature of btc and other crypto that are a finite in design is necessarily a bad thing.

The most common objection is that it leads to intertemporal decisions. Is that really bad?

If you knew that your money increases in value over time you might only spend it when it's really necessary instead of driving an ever expanding economy that consumes a finite world.

Maybe a finite world needs a finite economy?

If my money reflect the wear and tear on our common ecology I might be more restricted in its use.

Re: Bitcoin Is a Terrible Currency, and Not for the Reason You May Think

#28

Post by nine_k »

sova wrote: post #8
nine_k wrote: post #4

Earlier quoted context omitted.

Bitcoin is only hyperdeflationary because it's being pumped, to my mind. It's mostly used as an investment and speculation tool, not as a currency, that is, not for paying for goods and services. It's not (yet) "digital gold", but rather "digital tulips" [1]. [1]: https://en.wikipedia.org/wiki/Tulip_mania

Tulips are a dumb analogy. There, I said it. Tulips come from seeds and are ornamental, once they are dead they can no longer be traded for value. There is no limit to the world-wide supply of tulips, and there is no such thing as distributed international observation and participation in tulips. To further my antagonist response, the Smithsonian Mag recently did a report explaining that Tulip Mania was also not real…

Agreed! Tulips are an imperfect analogy. The only analogous part is the rally, which is not due to the intrinsic value of the item (gold is ornamental, a paper can pay coupons or dividends, etc), but due to the bandwagon effect.
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