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The Guns of Bitcoin (2017)

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Re: The Guns of Bitcoin (2017)

#81

Post by notahacker »

Sschellbach wrote: post #63
notahacker wrote: post #53

Earlier quoted context omitted.

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.

The supply of dollars is a function of the monetary policy. Are you suggesting you can predict what M2 will be in 5 years, or even 6 months? Please share your expectation.

I can confidently predict that M2 will be whatever it needs to be to keep PCE inflation around the 2% mark.

Re: The Guns of Bitcoin (2017)

#82

Post by tripletao »

solotronics wrote: post #74
scottmsul wrote: post #18

What's going to stop me from using bitcoin for everything, and then exchanging some into dollars at the last second to pay my taxes?

There are already initiatives to pay taxes directly in Bitcoin. https://bitcoinmagazine.com/articles/why-ohios-state-treasur... This isn't some fringe idea it is being developed by governments around the US. I remember reading about some city in America that will take Bitcoin directly for tax but I can't find the article.

See my comment below--the tax-related demand for USD comes from the holding period between incurring the tax liability and paying it, not from the payment itself. Even if you get paid in BTC and pay your taxes in BTC, 1 mBTC earned on Jan 1 with a 30% tax rate doesn't imply you owe 0.3 mBTC on April 15--USA tax law expects you to convert from BTC to USD using the Jan 1 exchange rate to calculate your tax liability, and then convert back using the April 15 exchange rate when you make the payment.

Re: The Guns of Bitcoin (2017)

#83

Post by Sschellbach »

notahacker wrote: post #81
Sschellbach wrote: post #63

Earlier quoted context omitted.

The supply of dollars is a function of the monetary policy. Are you suggesting you can predict what M2 will be in 5 years, or even 6 months? Please share your expectation.

I can confidently predict that M2 will be whatever it needs to be to keep PCE inflation around the 2% mark.

wake up. real inflation in the US has been closer to 8%. Look at real estate, equities, gold. you can't see it coming, all fiat ends with hyperinflation

Re: The Guns of Bitcoin (2017)

#84

Post by Sschellbach »

notahacker wrote: post #80
Sschellbach wrote: post #61

Earlier quoted context omitted.

You are pointing to price volatility. The comment is talking about inflation. Price discovery occurs in all markets with varying degrees of volatility. Speculative bubbles, crashes, etc result occur when new information causes price discovery. Its an ongoing process in an ever-changing world. Inflation is specifically price increases from change in the amount of money in a system. The delta in money supply for Bitcoi…

> Inflation is specifically price increases from change in the amount of money in a system. No it isn't. Inflation is a general rise in prices in an economy, period, of which change in the amount of money in circulation is only one possible cause [it can also circulate faster or slower due to change in demand, supply constraints, import prices etc].

You have confused monetary inflation and price inflation. I'm talking about monetary inflation as per https://en.wikipedia.org/wiki/Monetary_inflation

Re: The Guns of Bitcoin (2017)

#85

Post by coralreef »

wslh wrote: post #78
coralreef wrote: post #75

Earlier quoted context omitted.

Gold has a recognition as an store of value based on its network effects while Bitcoin network effect is pretty low in comparison. Not sure I understand why you believe Bitcoin's network effects are lower than golds. The more people willing to accept a unit of Bitcoin, the more useful Bitcoin becomes. Also, gold's store of value power is also attributed from its stock to flow ratio (the difficulty of inflating gold s…

> Not sure I understand why you believe Bitcoin's network effects are lower than golds. The more people willing to accept a unit of Bitcoin, the more useful Bitcoin becomes. Gold is more connected to the regulated financial world than Bitcoin. The network effect is not only about user base but interrelation with other systems. Not saying that Bitcoin could not have a bigger place but it is not there yet.

I see, you're saying gold is basically more established in the current financial system.

It might just be semantics, but when you say gold has stronger network effects than bitcoin, I'm imagining that an additional user provides X value to the gold system, but an additional bitcoin user only adds X-1 value to bitcoin. Which I believe isn't true, both networks probably follow the same marginal utility curves.

Re: The Guns of Bitcoin (2017)

#86

Post by conanbatt »

hansvm wrote: post #22
conanbatt wrote: post #15

> American dollars have value because the US Government taxes things, like land, and if you do not pay those taxes they will send you mean letters (trust me) before resorting to other means (trust Al Capone) This is just plain wrong. Currencies have value themselves for their utility as a means of exchange, not because of taxes. This idea that raising taxes increases the value of a currency is bonkers.

It's not "plain wrong." When minting a new currency you need a way to bootstrap it into being an accepted medium of exchange, and taxes help serve that purpose. They aren't the only method (and I'm not sure historically whether that was the case for the USD), but it isn't baseless.

Currencies existed well before governments minted them. Plus the dollar was once backed by gold: you can transition from a convertible system to a fiat system, which has nothing to do with fiscal policy.

Re: The Guns of Bitcoin (2017)

#87

Post by notahacker »

Sschellbach wrote: post #84
notahacker wrote: post #80

Earlier quoted context omitted.

> Inflation is specifically price increases from change in the amount of money in a system. No it isn't. Inflation is a general rise in prices in an economy, period, of which change in the amount of money in circulation is only one possible cause [it can also circulate faster or slower due to change in demand, supply constraints, import prices etc].

You have confused monetary inflation and price inflation. I'm talking about monetary inflation as per https://en.wikipedia.org/wiki/Monetary_inflation

No, people that fixate on low rates of money supply growth whilst their asset halves in value over a very short time period are the ones confusing monetary and price inflation. Price inflation matters; it's what your money pays for in future [and what economists refer to when they say 'inflation]. 'Monetary inflation' matters only inasmuch as it influences price inflation, which turns out to be surprisingly little.

The original thread was about benefits. Fixing the money supply growth rate isn't a benefit if your asset's purchasing power drops over 60% in two and a half years. And money supply growing quite considerably turns out not to be a drawback when prices grow predictably and slowly and the system allows for the money supply to contract again if prices overheat.

Re: The Guns of Bitcoin (2017)

#88

Post by WorldMaker »

keymone wrote: post #79
WorldMaker wrote: post #76

Earlier quoted context omitted.

My exact point is that this is a fun "semantic" game. From a technical standpoint, the entire merkle tree is bitcoin, because that is the root data structure, however you want to "brand" individual forks/branches they are always going to be inter-related. The fact that forks already exist today seems to clearly undermine the idea that there are "only ever 21 million bitcoin" because even just taking "Bitcoin Gold" an…

You are confused. If you try spending bitcoin cash on bitcoin network you will fail, because bitcoin cash utxos are not bitcoin utxos and bitcoin cash is not bitcoin. There are no additional 42 mil bitcoin, there are additional 42 mil of some other tokens spendable on some other networks.

I don't think I am confused. I told you I have a different viewpoint on this. You are claiming different branches of the same tree are magically distinct from each other because they have different names and magic runes sketched into them with a pencil, and all I see is a single tree in a huge forest full of trees. I don't think I'm going to convince you of my viewpoint, but my viewpoint is not confused.

You aren't likely to convince me that one branch is more scarce than the others because I can see how big the whole tree is, and especially because I can see how many other trees are in the forest already.

(ETA: To make it clearer, you especially aren't going to convince me because I think Proof of Work is a waste of processing power. The real scarcity is processing power, and again, that's a political/economic game, that only props up artificial scarcity so far. Certainly not far enough that I trust the bitcoin tree to remain scarce in the long run. Not a question of if, but a question of when.)

Re: The Guns of Bitcoin (2017)

#89

Post by monokh »

WorldMaker wrote: post #88
keymone wrote: post #79

Earlier quoted context omitted.

You are confused. If you try spending bitcoin cash on bitcoin network you will fail, because bitcoin cash utxos are not bitcoin utxos and bitcoin cash is not bitcoin. There are no additional 42 mil bitcoin, there are additional 42 mil of some other tokens spendable on some other networks.

I don't think I am confused. I told you I have a different viewpoint on this. You are claiming different branches of the same tree are magically distinct from each other because they have different names and magic runes sketched into them with a pencil, and all I see is a single tree in a huge forest full of trees. I don't think I'm going to convince you of my viewpoint, but my viewpoint is not confused. You aren't l…

Your viewpoint on forks doesn't really check out. It's based on a misunderstanding of how related these forks are to Bitcoin.

Anything that forks off of bitcoin is an entirely separate network, asset and market. You can in fact fork Bitcoin today and attempt to create a market, will your new coin be valued as a Bitcoin and derive its current ~9000 USD price? So the value of a fork coin is not in its approximation to Bitcoin. It's merely tied to how much fire power you have to convince others to buy it.

Regardless of how you personally view the best use of cpu cycles, the market overwhelmingly disagrees. The network total hashrate has done nothing but go up and to the right since inception. Which is to say, that the market also disagrees with your theory that Bitcoin will lose scarcity (therefore value) over time.

Based on which signs or hypothetical scenario are you imagining that this whole systems turns back on itself and breaks?

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