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The Guns of Bitcoin (2017)

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Re: The Guns of Bitcoin (2017)

#51

Post by cameldrv »

clarkmoody wrote: post #37
seibelj wrote: post #3

> What makes dollars valuable is that the government wants them back. Very common misconception. Dollars have value because there is demand for them (governments, other governments, other people and institutions). Bitcoin also has value because there is demand for it. As does your house, expensive art, etc. Why does anything have value? Because someone else will pay your for it. I can say my pencil is worth $1 billio…

Specifically, "reserve demand." People and institutions demand to hold a positive balance of the monetary good, and the aggregate sum of these reserve demands set the purchasing power. The notion that fiat money has value because governments demand it in taxes, might set a non-zero value for the money, but it does not set a specific price level. For instance, I could make a trade for dollars at the exact moment that…

There is a reserve demand created because taxes are not due until some time after the transaction that created the tax liability. If you don't want to have exchange rate risk, you need to hold the dollars until the tax is due.

Re: The Guns of Bitcoin (2017)

#52

Post by coinward »

rlucas wrote: post #39
coinward wrote: post #23

full decentralization and seizure-resistance work as good guns against state tyranny

That is orthogonal to the point of the article. The state can demand, using their guns, that you pay them in the coin of their realm. At that point, you need to come up with those coins, or face their guns. You can have your BTC be decentralized and seizure-resistant at that point, but that will not stop the Leviathan from jailing or killing you. The "guns" of the article are the actual guns of the IRS.

Do the IRS really carry guns? The man-power needed and costs to enforce collection of coins means this doesn't scale well for the state

Re: The Guns of Bitcoin (2017)

#53

Post by notahacker »

akavi wrote: post #47
coinward wrote: post #26

Earlier quoted context omitted.

you ask for a benefit. a benefit of Bitcoin is zero unexpected inflation. Zero unexpected inflation means the cantillon effect is reduced with adoption of Bitcoin as money, driving out the systems behind central bank caused wealth inequality

Seems like bitcoin experienced a whole lot of unexpected inflation in early March this year. And fall of last year. And November 2018. And January 2018. And... well, you get the picture. Bitcoin guarantees the supply remains fixed. But inflation is also a function of demand, and that is well outside its control.

Indeed it's the exact opposite: as the supply of the dollar is a function of its demand [at an interest rate which can be varied if an inflation target is expected to be missed] its inflation is almost entirely predictable. cf BTC, which predicts zero inflation but has experienced more diminution in purchasing power since late 2018 than the dollar has seen in decades.

Re: The Guns of Bitcoin (2017)

#54

Post by coinward »

akavi wrote: post #47
coinward wrote: post #26

Earlier quoted context omitted.

you ask for a benefit. a benefit of Bitcoin is zero unexpected inflation. Zero unexpected inflation means the cantillon effect is reduced with adoption of Bitcoin as money, driving out the systems behind central bank caused wealth inequality

Seems like bitcoin experienced a whole lot of unexpected inflation in early March this year. And fall of last year. And November 2018. And January 2018. And... well, you get the picture. Bitcoin guarantees the supply remains fixed. But inflation is also a function of demand, and that is well outside its control.

What inflation in early march are you referring to? From my view the fixed supply growth and production from new blocks went right on schedule. Nothing unexpected

Re: The Guns of Bitcoin (2017)

#56

Post by inscionent »

coinward wrote: post #52
rlucas wrote: post #39

Earlier quoted context omitted.

That is orthogonal to the point of the article. The state can demand, using their guns, that you pay them in the coin of their realm. At that point, you need to come up with those coins, or face their guns. You can have your BTC be decentralized and seizure-resistant at that point, but that will not stop the Leviathan from jailing or killing you. The "guns" of the article are the actual guns of the IRS.

Do the IRS really carry guns? The man-power needed and costs to enforce collection of coins means this doesn't scale well for the state

They have guns and a yearly budget of US$1.2 billion

https://en.wikipedia.org/wiki/IRS_Criminal_Investigation

Re: The Guns of Bitcoin (2017)

#57

Post by akavi »

coinward wrote: post #54
akavi wrote: post #47

Earlier quoted context omitted.

Seems like bitcoin experienced a whole lot of unexpected inflation in early March this year. And fall of last year. And November 2018. And January 2018. And... well, you get the picture. Bitcoin guarantees the supply remains fixed. But inflation is also a function of demand, and that is well outside its control.

What inflation in early march are you referring to? From my view the fixed supply growth and production from new blocks went right on schedule. Nothing unexpected

The price in bitcoin of a basket of actual consumable goods went up significantly (ie, BTC's dollar value tanked). How is that not inflation?

Or are you claiming that was not "unpredictable"?

Re: The Guns of Bitcoin (2017)

#58

Post by WorldMaker »

seibelj wrote: post #44
munk-a wrote: post #40

Earlier quoted context omitted.

Gold is a very good comparison (especially since it is inherently pretty worthless much like bitcoins) but I think the core currency quality it has is the limit of supply. One of the more amusing qualities of the fallout world to me was always the usage of bottle caps as a currency. Oh sure we have a pretty much infinite supply now but in a post-war setting it's a relatively common material (we don't use rhodium for…

The fixed supply is the most interesting aspect. There could be an extremely huge gold deposit, or someone could figure out how to extract it from the ocean efficiently, or an asteroid / planet made of gold discovered and mined. But there will never be more bitcoin. More bitcoin would just fork the chain, and it wouldn't be bitcoin anymore.

Forks are so easy in practice though that it seems magic/wishful thinking to assume there's anything particularly special about one branch's artificial scarcity. It seems axiomatic that in using a tree-based structure branches should be the natural and expected state and pretending the other branches don't exist is a fascinating strategy that I just have a rough time thinking holds over the long term, especially when trying to maintain something like artificial scarcity.

Re: The Guns of Bitcoin (2017)

#60

Post by WorldMaker »

inscionent wrote: post #56
coinward wrote: post #52

Earlier quoted context omitted.

Do the IRS really carry guns? The man-power needed and costs to enforce collection of coins means this doesn't scale well for the state

They have guns and a yearly budget of US$1.2 billion https://en.wikipedia.org/wiki/IRS_Criminal_Investigation

They are notorious for "always" catching their criminals, too. Local law enforcement of many stripes in multiple states tried to catch Capone, but in the end it was the Revenuers that caught Capone on tax evasion.
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