The Quora post that killed Bitcoins. Please discuss if his arguments are valid.

Post by vilda » Thu, Jun 02, 2011, 6:51 PM UTC

ap22213 wrote: post #14

I would love to see a currency like this work, and I would be interested in using one, but the major issue for bitcoin, for me, is that deflation is built into its core. Inflation is a good thing. Inflation encourages holders of capital to use it to invest in other things. That is, inflation encourages productivity. The inflation has to be relatively low, of course. Probably low enough to allow someone to retire with…

Post by tg3 » Thu, Jun 02, 2011, 6:57 PM UTC

andrewla wrote: post #243

barrkel wrote: post #215

Earlier quoted context omitted.

Suppose you need capital to commence on some enterprise. You'd like to borrow against and/or sell a share of future income. How can you convince a bank[1] to give you money, if the bank's money is already producing a healthy return just sitting in the bank's vault? In an inflationary scenario, money is declining in value. People with a lot of it are actively looking for ways to put it to work, otherwise they'll end u…

I think this is obvious -- a bank will lend you money if you can offer returns in excess of the risk-free rate of return, balanced by the perceived risk and collateral for the loan. Similarly, an individual will deposit money in a bank rather than keep it under their mattress only if the bank offers returns in excess of what it gets sitting in the mattress. Since at the moment there is no FBDIC, as an individual you…

Post by [deleted] » Thu, Jun 02, 2011, 7:01 PM UTC

WiseWeasel wrote: post #219

cturner wrote: post #49

Trollish headline. One fair non-structural criticism, a weak, temporary criticism and two things billed as criticisms that aren't. 1) Early adopters. I couldn't find a point here. I think he's saying that it's unfair that some people get in early. But in the current system, it's unfair that government (through tax law and control of force) mandates that you use a form of money that doesn't function well as a store of…

Re: Deflation You're thinking too small. Think of holders of vast wealth, who in an inflationary system, are forced to invest their money and earn a significant return in order simply to maintain the value of their wealth. In a deflationary system, they are no longer at risk of losing wealth by letting their money sit in a bank, and so the least risky course of action for them is to simply hold on to their money. Thi…

Post by achompas » Thu, Jun 02, 2011, 7:08 PM UTC

sigil wrote: post #248

achompas wrote: post #222

Earlier quoted context omitted.

But the GDP graph also doesn't look anything like that monetary supply graph. Huh? [0] [0] http://www.google.com/publicdata?ds=wb-wdi&met_y=ny_gdp_...

Compare those two graphs from say 2006 on. I am mystified that you would look at a graph with a giant, dominant spike, and conclude my point was about the shape before the spike. Edits: To make it clear I'm not arguing with the statement that money supply has tracked GDP fairly well until recently. Or that GDP has trended up exponentially.

Post by [deleted] » Thu, Jun 02, 2011, 7:09 PM UTC

sigil wrote: post #248

achompas wrote: post #222

Earlier quoted context omitted.

But the GDP graph also doesn't look anything like that monetary supply graph. Huh? [0] [0] http://www.google.com/publicdata?ds=wb-wdi&met_y=ny_gdp_...

Compare those two graphs from say 2006 on. I am mystified that you would look at a graph with a giant, dominant spike, and conclude my point was about the shape before the spike. Edits: To make it clear I'm not arguing with the statement that money supply has tracked GDP fairly well until recently. Or that GDP has trended up exponentially.