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The Crypto-Chernobyl

stephendiehl.com

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Re: The Crypto-Chernobyl

#141

Post by chordalkeyboard »

leereeves wrote: post #140
chordalkeyboard wrote: post #139

Earlier quoted context omitted.

> People don't have too few assets because there aren't any secure assets to invest in. There are plenty already. People have too few assets because they are constantly forced by society to support parasites. > People have too few assets because they aren't paid enough for their labor to be able to save Yeah, between zero percent interest rates and quantitative easing, the government and the oligarchs keep eating the…

Once upon a time the world used money whose value the oligarchs and governments couldn't easily manipulate: gold (and gold certificates). The outcome? Widespread poverty, depressions, wars, etc. What makes you think that wouldn't happen again with Bitcoin?

> Once upon a time the world used money whose value the oligarchs and governments couldn't easily manipulate: gold (and gold certificates).

Why do you think gold certificates can’t be manipulated?

> The outcome? Widespread poverty, depressions, wars, etc.

You’re missing the part where you substantiate your opinion that “poverty, depressions, wars, etc.” are the result of a stable currency.

> What makes you think that wouldn't happen again with Bitcoin?

I’m not sure “again” is warranted given that the invention of government fiat has done nothing to mitigate “poverty, depressions, wars, etc.”

Also I’m not claiming that bitcoin will end war for all time. Just that governments/banks can’t currently print more than 24 million or so.

Re: The Crypto-Chernobyl

#142

Post by leereeves »

chordalkeyboard wrote: post #141
leereeves wrote: post #140

Earlier quoted context omitted.

Once upon a time the world used money whose value the oligarchs and governments couldn't easily manipulate: gold (and gold certificates). The outcome? Widespread poverty, depressions, wars, etc. What makes you think that wouldn't happen again with Bitcoin?

> Once upon a time the world used money whose value the oligarchs and governments couldn't easily manipulate: gold (and gold certificates). Why do you think gold certificates can’t be manipulated? > The outcome? Widespread poverty, depressions, wars, etc. You’re missing the part where you substantiate your opinion that “poverty, depressions, wars, etc.” are the result of a stable currency. > What makes you think that…

> You’re missing the part where you substantiate your opinion that “poverty, depressions, wars, etc.” are the result of a stable currency.

It's not a fringe view:

Economists, such as Barry Eichengreen, Peter Temin and Ben Bernanke, blame the gold standard of the 1920s for prolonging the economic depression which started in 1929 and lasted for about a decade.[35][36][37][38][39] It has been described as the consensus view among economists.[40][41] In the United States, adherence to the gold standard prevented the Federal Reserve from expanding the money supply to stimulate the economy, fund insolvent banks and fund government deficits that could "prime the pump" for an expansion. Once off the gold standard, it became free to engage in such money creation. The gold standard limited the flexibility of the central banks' monetary policy by limiting their ability to expand the money supply. In the US, the central bank was required by the Federal Reserve Act (1913) to have gold backing 40% of its demand notes.[42]

https://en.wikipedia.org/wiki/Gold_standard#Depression_and_W...

> I’m not sure “again” is warranted given that the invention of government fiat has done nothing to mitigate “poverty, depressions, wars, etc.”

I don't agree, from a US perspective, based on comparing the depressions, poverty, and wars we had before and after the end of the gold standard in 1971 (say, in the 50 years before and after).

Re: The Crypto-Chernobyl

#143

Post by chordalkeyboard »

leereeves wrote: post #142
chordalkeyboard wrote: post #141

Earlier quoted context omitted.

> Once upon a time the world used money whose value the oligarchs and governments couldn't easily manipulate: gold (and gold certificates). Why do you think gold certificates can’t be manipulated? > The outcome? Widespread poverty, depressions, wars, etc. You’re missing the part where you substantiate your opinion that “poverty, depressions, wars, etc.” are the result of a stable currency. > What makes you think that…

> You’re missing the part where you substantiate your opinion that “poverty, depressions, wars, etc.” are the result of a stable currency. It's not a fringe view: Economists, such as Barry Eichengreen, Peter Temin and Ben Bernanke, blame the gold standard of the 1920s for prolonging the economic depression which started in 1929 and lasted for about a decade.[35][36][37][38][39] It has been described as the consensus…

> It's not a fringe view:

It still needs to be substantiated.

> In the United States, adherence to the gold standard prevented the Federal Reserve from expanding the money supply to stimulate the economy, fund insolvent banks and fund government deficits that could "prime the pump" for an expansion.

Argument by authority combined with argument by assertion.

why do you think that devaluing people’s money and inflating the price of assets that the wealthy already own is going to help poor people feed themselves? Per Krugman, the point of quantitative easement is to decrease wages in real terms while keeping the same nominal price.

Re: The Crypto-Chernobyl

#144

Post by pmiller2 »

chordalkeyboard wrote: post #135
pmiller2 wrote: post #118

Earlier quoted context omitted.

What are these "fundamentals" you speak of? Why should I pay anything at all for a record of the fact that someone, sometime in the past solved a useless math problem?

Scarcity. It’s ledger money. People want a unit of exchange that won’t depreciate as a result of the creation of new units. bitcoin meets that need.

So what if it's scarce? Why should I be transacting using a record of someone's solution to a useless math problem to begin with? You haven't answered my question at all.

As for it "not depreciating," I claim that's because people believe it should go up, i.e. BTC is worth something (meaning you can exchange it for USD at a favorable rate) because people say it should be -- by fiat of the speculation market rather than fiat by a central backing agency. If it were only worth something because it "didn't depreciate," it BTC rises would correlate strongly with inflation. Since there's been essentially no inflation since BTC has been created, that's obviously untrue.

I would also take issue with the assertion that it is, in fact, scarce. Scarcity means nothing when you literally have something that is arbitrarily subdividable.

PS, the USD is also "ledger money." Well over 90% of USD only exist as bits in a computer system. It's essentially the same as a private blockchain.

Re: The Crypto-Chernobyl

#145

Post by chordalkeyboard »

pmiller2 wrote: post #144
chordalkeyboard wrote: post #135

Earlier quoted context omitted.

Scarcity. It’s ledger money. People want a unit of exchange that won’t depreciate as a result of the creation of new units. bitcoin meets that need.

So what if it's scarce? Why should I be transacting using a record of someone's solution to a useless math problem to begin with? You haven't answered my question at all. As for it "not depreciating," I claim that's because people believe it should go up, i.e. BTC is worth something (meaning you can exchange it for USD at a favorable rate) because people say it should be -- by fiat of the speculation market rather th…

> So what if it's scarce?

So that allows it to be a medium of exchange with a stable number of outstanding units, which is an improvement over USD.

> Why should I be transacting using a record of someone's solution to a useless math problem to begin with?

People who want to transact don’t wonder why they need an exchange medium.

> As for it "not depreciating," I claim that's because people believe it should go up, i.e. BTC is worth something (meaning you can exchange it for USD at a favorable rate) because people say it should be -- by fiat of the speculation market rather than fiat by a central backing agency.

Why should anyone care about your opinion on btc? You don’t even seem to understand why a currency should be scarce (in the economic sense).

> If it were only worth something because it "didn't depreciate," it BTC rises would correlate strongly with inflation. Since there's been essentially no inflation since BTC has been created, that's obviously untrue.

Obviously, you’re mistaken about inflation.

> I would also take issue with the assertion that it is, in fact, scarce. Scarcity means nothing when you literally have something that is arbitrarily subdividable.

“Scarce” here refers to the economic sense of the word, not its common analogue.

> PS, the USD is also "ledger money." Well over 90% of USD only exist as bits in a computer system. It's essentially the same as a private blockchain.

This would be a good opportunity for you to reflect on why USD are decreasing in value while BTC are increasing.

Re: The Crypto-Chernobyl

#146

Post by leereeves »

chordalkeyboard wrote: post #143
leereeves wrote: post #142

Earlier quoted context omitted.

> You’re missing the part where you substantiate your opinion that “poverty, depressions, wars, etc.” are the result of a stable currency. It's not a fringe view: Economists, such as Barry Eichengreen, Peter Temin and Ben Bernanke, blame the gold standard of the 1920s for prolonging the economic depression which started in 1929 and lasted for about a decade.[35][36][37][38][39] It has been described as the consensus…

> It's not a fringe view: It still needs to be substantiated. > In the United States, adherence to the gold standard prevented the Federal Reserve from expanding the money supply to stimulate the economy, fund insolvent banks and fund government deficits that could "prime the pump" for an expansion. Argument by authority combined with argument by assertion. why do you think that devaluing people’s money and inflating…

Anything more than citations would be too much for a HN comment. There's more depth in the citations for the excerpt I linked.

To oversimplify: Bitcoin has a limited supply, the majority of which is already held in too few hands, many of whom have a HODL attitude that prevents circulation. It also has transaction fees and technical obstacles that prevent circulation.

How can Bitcoin ever be widely adopted as money without strangling the real economy? Fiat isn't perfect, but at least it allows concentration of wealth to be countered by issuing more fiat money, even if too much of that goes to the rich.

And if Bitcoin won't be widely adopted as money, how is it going to be anything more than an speculative asset traded from one hand to another, with any profits extracted from a new speculator (sometimes called a pyramid scheme)?

Re: The Crypto-Chernobyl

#147

Post by Apocryphon »

chordalkeyboard wrote: post #145
pmiller2 wrote: post #144

Earlier quoted context omitted.

So what if it's scarce? Why should I be transacting using a record of someone's solution to a useless math problem to begin with? You haven't answered my question at all. As for it "not depreciating," I claim that's because people believe it should go up, i.e. BTC is worth something (meaning you can exchange it for USD at a favorable rate) because people say it should be -- by fiat of the speculation market rather th…

> So what if it's scarce? So that allows it to be a medium of exchange with a stable number of outstanding units, which is an improvement over USD. > Why should I be transacting using a record of someone's solution to a useless math problem to begin with? People who want to transact don’t wonder why they need an exchange medium. > As for it "not depreciating," I claim that's because people believe it should go up, i.…

> Why should anyone care about your opinion on btc? You don’t even seem to understand why a currency should be scarce (in the economic sense).

And why should anyone care about yours? You seem to be operating under the extreme naiveté of someone who believes that the massive presence of bandwagoning speculators, would-be manipulators like the Elon Musk/Winklevoss billionaire cheerleaders, Chinese miners buying massive amount of asics, various schemes such as Tether, are irrelevant to Bitcoin. A currency is subject to real world conditions and influence by real-world actors. It's not a system that can exist only perfectly in a vacuum.

> This would be a good opportunity for you to reflect on why USD are decreasing in value while BTC are increasing.

You can say the same of $TSLA, $GME, or any other meme of the moment. Why did BTC increase in value in 2018- until it didn't?

Re: The Crypto-Chernobyl

#148

Post by chordalkeyboard »

Apocryphon wrote: post #147
chordalkeyboard wrote: post #145

Earlier quoted context omitted.

> So what if it's scarce? So that allows it to be a medium of exchange with a stable number of outstanding units, which is an improvement over USD. > Why should I be transacting using a record of someone's solution to a useless math problem to begin with? People who want to transact don’t wonder why they need an exchange medium. > As for it "not depreciating," I claim that's because people believe it should go up, i.…

> Why should anyone care about your opinion on btc? You don’t even seem to understand why a currency should be scarce (in the economic sense). And why should anyone care about yours? You seem to be operating under the extreme naiveté of someone who believes that the massive presence of bandwagoning speculators, would-be manipulators like the Elon Musk/Winklevoss billionaire cheerleaders, Chinese miners buying massive…

> And why should anyone care about yours?

No reason at all, thanks for the reply.

> You seem to be operating under the extreme naiveté of someone who believes that the massive presence of bandwagoning speculators, would-be manipulators like the Elon Musk/Winklevoss billionaire cheerleaders, Chinese miners buying massive amount of asics, various schemes such as Tether, are irrelevant to Bitcoin.

Not at all.

> You can say the same of $TSLA, $GME, or any other meme of the moment. Why did BTC increase in value in 2018- until it didn't?

Price != value.

Re: The Crypto-Chernobyl

#149

Post by pmiller2 »

chordalkeyboard wrote: post #145
pmiller2 wrote: post #144

Earlier quoted context omitted.

So what if it's scarce? Why should I be transacting using a record of someone's solution to a useless math problem to begin with? You haven't answered my question at all. As for it "not depreciating," I claim that's because people believe it should go up, i.e. BTC is worth something (meaning you can exchange it for USD at a favorable rate) because people say it should be -- by fiat of the speculation market rather th…

> So what if it's scarce? So that allows it to be a medium of exchange with a stable number of outstanding units, which is an improvement over USD. > Why should I be transacting using a record of someone's solution to a useless math problem to begin with? People who want to transact don’t wonder why they need an exchange medium. > As for it "not depreciating," I claim that's because people believe it should go up, i.…

I understand why there needs to be a limited amount of any currency unit. It's because currency is for conducting transactions involving resources which are also limited. What I don't understand is why you think scarcity implies any sort of value. You do understand that there are plenty of things that are scarce that are essentially worthless, right?

As well, I'm not questioning the need for an exchange medium. I'm questioning why a certificate that says someone solved a useless math problem is a valid exchange mechanism.

> Why should anyone care about your opinion on btc?

Apparently you do, just not enough to be civil about it. If I had to speculate as to your motivation, I would say that it's because my point of view is dangerous to your interests. That is, if everyone thought the same as I did, BTC would be worth $0, just like I claimed in an earlier comment.

You also claim I don't understand inflation, but don't care to explain it to me. Well, here it is: inflation is the result of too much money chasing too few things. That's it, nothing else. As I've mentioned, that's also the reason the price of BTC climbs relative to USD. More people want to buy BTC with USD than they did yesterday. It's as simple as that. What you don't seem to understand is that the value of a currency is relative to the things people want to buy with it.

Let's illustrate the point with a hypothetical. Suppose a magical genie snaps their fingers and suddenly, everyone's USD bank balance gets multiplied by 10. What happens then? People still value the things they were buying with USD yesterday the same, so, prices will just go up by a factor of 10. You can call that the USD depreciating, or you can call it the price of goods increasing. Those things are equivalent.

See, the whole problem with your argument is that BTC only has any value whatsoever with respect to USD and other currencies. With fairly limited exceptions, you can't buy things with BTC, so it's not exposed to the true value of things one would theoretically buy with it.

One final question: do you take issue with my statement that the USD essentially is a blockchain-based digital currency? If so, how? If not, why bother with BTC?

Oh, and you still haven't explained why BTC should be worth anything at all. I thought you were one of those "enthusiasts" who understood those things? Is there a reason you don't want to explain it to me so I can become an enthusiast as well?

Re: The Crypto-Chernobyl

#150

Post by rfd4sgmk8u »

user-the-name wrote: post #127
rfd4sgmk8u wrote: post #36

Earlier quoted context omitted.

All technology behaves this way! It generates a significant quantity of non-reusable electronics waste, from that 10 year old laptop to that 3 year old cell phone. Its ALWAYS a Red Queens race. This is good actually, because our lives are enhanced by the resultant technology to solve our problems. What I feel is missing from these comparisons to waste is a sense of scale. Quoting Gigajoules of usage should be seen as…

There exists no technology, and there has never existed any technology, that has such an abysmal rate of utility to waste as Bitcoin does. It is singularly inefficient in the history of mankind.

One man's waste is another man's treasure. Ultimately it is a black hole, the black hole that sucks all value from other monetary systems. It provides immutability, permanence and durability like no other data structure that has come before it. This takes a lot of energy. It is best to stop looking at "factories" and "mines" producing "waste", it is more akin to software running in data centers using available energy to secure a ledger. This utility is almost unmeasurable, but we can put a market value to its units based on how useful it is to its users and how willing they are to trade their national currencies for it. Knowing how many SHA256^2's my rivals can hash a second is also pretty useful information. The system is opt-in, permissionless and extremely resilient. You don't have to use it, but if you try it, you might like it.
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