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Bitcoin exchange rate reached $100 USD per BTC

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Re: Bitcoin exchange rate reached $100 USD per BTC

#301

Post by narrator »

lolcraft wrote: post #176

Some people here seem to think that this is temporary, that sometime in the future Bitcoin will stabilize into a glorious future global currency -- never mind the new class of cryptobarons it will have created from its inner circle, through shameless hoarding. My question is, what then will happen when Bitcoin stabilizes, that is, when the time to new coin mined approaches practically infinity? Let's assume the globa…

If you want to take the red pill: Please read F.A Hayek's critique of "The Paradox of Savings" (http://mises.org/daily/2804) for a refutation of inflationist monetary policy. This was an essay he wrote during the debate with Keynes and others, explaining the flaws in the Keynesian theories. It was written in the 1930s , but explains better than any other theory the dynamics of a fixed money supply currency like bitcoin vs a constantly inflating money supply.

Re: Bitcoin exchange rate reached $100 USD per BTC

#302

Post by lclarkmichalek »

aneth4 wrote: post #290
dragontamer wrote: post #268

Earlier quoted context omitted.

Gold is a piss poor investment. Owning Real Estate (and making money off of it) entails taking care of it. People taking care of their land (so that it can appreciate in value) is a good thing. The typical Real Estate "investor" adds a ton of value to their home, not just through maintenance, but also additions (ie: a new deck). This maintenance is true value added to the economy. True value that wouldn't have been a…

> Gold is a piss poor investment. Relative to what? The USD? http://pricedingold.com/us-dollar/ Real estate? http://pragcap.com/real-estate-gold-ratio-falls-to-30-year-l... Gold is an asset that holds its purchasing power pretty well. It is what it is. It is not however a "piss poor" investment.

You know, comparing a commodity against a currency isn't very sensible. I don't know many (sensible) people who say "I'm just going to keep a load of dollar bills under my bed" when it comes to investing (which is what your first link compares to gold).

Re: Bitcoin exchange rate reached $100 USD per BTC

#303

Post by Judson »

teebs wrote: post #295
aneth4 wrote: post #259

Earlier quoted context omitted.

I can buy a 2014 Cadillac or iPhone 5 next year for 30% less than I can this year. People seem to be buying these things. In a deflationary environment, people buy less stuff they don't need today, which leads to a higher quality of economic growth.

What do you mean "higher quality"? Almost everything everyone buys is something they don't need. I would guess that almost everyone using Hacker News produces things people don't need. No one needs Google or Amazon or whatever your favorite tech company is.... The economy is built on things people don't need. The problem is that if I won't buy it for $100 today because I can buy it for $50 tomorrow, I won't buy it fo…

I just have a hard time believing deflation leads to perfect demand inelasticity at $0.

Re: Bitcoin exchange rate reached $100 USD per BTC

#304

Post by numbsafari »

tlrobinson wrote: post #149
numbsafari wrote: post #111

Earlier quoted context omitted.

As a commodity, gold always had an intrinsic value separate from its value as a currency. So if the authority stamping the coin disappeared, I could always melt down the gold and sell it as a simple commodity. In the case of bitcoins, they do not have a utility outside of their use as a medium of value exchange. You can't really melt them down and use them to make jewelry, build cables or any of the myriad other uses…

Is gold's intrinsic value anywhere near what it's currently trading at? edit: I think I mean it's "use value". The value of gold if it were not used a store of value.

Of course gold's value is inflated because of its dual role as a value store and as a commodity with practical applications.

Even if gold loses favor as a value store, there will be some minimum boundary on its price based on its usefulness in practical applications. That is not true of bitcoin.

The GP was implying that bitcoin has a commodity value, which it does not. It merely has value as a means of exchange. What that means is that bitcoin does not benefit from same lower price boundary that gold does. Therefore, it is much riskier.

What good would bitcoins do for you after a Hurricane Katrina-like event when there is no communications network or electrical service to speak of? What about gold?

Re: Bitcoin exchange rate reached $100 USD per BTC

#305

Post by vbuterin »

api wrote: post #254
aneth4 wrote: post #215

Earlier quoted context omitted.

You are espousing one form of economics which many consider unsustainable. Regardless, many assets are deflationary. Rich people buy real estate and commodities because they are deflationary, or at least not inflationary. There is nothing wrong with assets that grow or maintain value. Bitcoin is a liquid and easily transferrable deflationary value store, just like gold. Telling people they should submit to inflation…

Sustainability is really the achilles heel of inflationary economics. The Earth is finite. Exponential growth cannot continue forever. When a steady state is reached, that's apocalyptic to inflationary money systems since debts all the sudden can never be repaid. Edit: I don't think space colonization matters here. Sure, it may be possible. But Mars is sufficiently far from Earth and the energy cost of transport suff…

> everything but intangibles

So, everything but 90% of the economy in forty years' time?

Re: Bitcoin exchange rate reached $100 USD per BTC

#306

Post by blibble »

MacsHeadroom wrote: post #273
blibble wrote: post #251

Earlier quoted context omitted.

if she owns the property but not the land (i.e. the house is a leasehold instead of a freehold), she has a landlord

Sounds like feudalism.

that is where it all originates from: our property/land laws are all built on medieval law, as we haven't had a revolution to shake things up!

houses are nearly always freeholds, whereas flats (apartments) are normally leaseholds, as it would be unfair if one flat owning tenant has land rights over the others.

recently the government has given leaseholders the right to purchase the freehold from their landlord (if they all agree), but this involves setting up a company that all leaseholders are shareholders/directors of, with all the rights and responsibilities that that entails.

Re: Bitcoin exchange rate reached $100 USD per BTC

#307

Post by leot »

jamoes wrote: post #278
deelowe wrote: post #218

Earlier quoted context omitted.

There are a few replies here that seem to be reacting negatively to the OP due to the tone of the submission instead of the content. To be clear, deflation is categorically bad for a currency. It's terrible, like great depression terrible. The reason it's bad is that deflation makes it more profitable to do nothing than to invest. When this happens, people react by not spending money. The market dies. While inflation…

> deflation makes it more profitable to do nothing than to invest Saving is investing. You're investing in your ability to manage your risk at a future date. If you have no savings, then you are at risk of any minor problem (e.g. an injury, decreased revenue, or a natural disaster) causing you a major setback. The "common wisdom" you've heard about inflation being necessary for an economy is a lie. It's a lie that ju…

No, it's not a lie. Why in heaven's name would the investor class want higher inflation? They don't. The really don't. Our understanding of the benefits of a small amount of inflation comes in spite of the interests of those who already possess of a lot of wealth.

The investor class doesn't want bail-outs, though I'm sure they appreciate bail-outs when they happen. The wealthiest lost the most (in money, though not in utility/standard of living) in the 2008 crash. They'd have much rather avoided the 2008 crash's happening in the first place.

The lie, in actuality, is the idea deliberately promulgated by certain members of the investor class that inflation is evil. They do this for obvious reasons. It is precisely this lie to which you evidently subscribe.

Re: Bitcoin exchange rate reached $100 USD per BTC

#308

Post by xhrpost »

MacsHeadroom wrote: post #136
xhrpost wrote: post #79

Everyone keeps saying that a crash is around the corner and the current price is unsustainable, been hearing it since $40/BTC, maybe earlier. I don't completely disagree, the question I keep pondering though is, if there is a big sustained crash coming, is it from $100 to $30, or $900 to $300?

MtGox verification cue for people who want to buy more than $50k USD in a month is almost 10,000 long right now. You do the math. I'm going to go with something closer to $300 to $150 at least. If there's a pop coming, it is a long ways off.

Are you referring to the Verified Status? That could also include people who are looking to withdraw $50k USD. Perhaps a lot of people got in early and are looking to cash out.

Re: Bitcoin exchange rate reached $100 USD per BTC

#309

Post by acabal »

napoleoncomplex wrote: post #135
acabal wrote: post #72

I added a Bitcoin purchase option to Scribophile to test the waters. But I'm interested in a Bitcoin economy, not a USD cash alternative--the situation where a Bitcoin has its own value, not a value dependent on a different currency. For that reason, I decided to fix the price of an upgrade to 2 BTC, not peg it to the dollar like most other sites do. Unfortunately it seems like that's just not going to work at this p…

Out of curiosity, did you see any uptake on that option? A lot of places seem to be adding the BTC option lately, but I haven't managed to find any good sources on how much use there is once the option is provided.

Nobody has bit, and for a few reasons I think:

1. The site audience tends to be a little older and not very tech-savvy, so Bitcoin isn't something that many are interested in comprehending.

2. Since the price was fixed at 2BTC a few weeks ago when 1BTC~=35USD, and now 1BTC~=100USD, people will see this is a raw deal. (The USD price for a membership is $65.)

It's #2 that's the hard part. I'm not interested in accepting BTC just so I can convert it to USD, but since everyone's so focused on the BTC->USD exchange rate as the measure of value for BTC, and since the rate is so insanely volatile, it's impossible for a merchant to fix a "fair" price without auto-adjusting the BTC price to the USD exchange rate.

Re: Bitcoin exchange rate reached $100 USD per BTC

#310

Post by [deleted] »

aneth4 wrote: post #256
deelowe wrote: post #218

Earlier quoted context omitted.

There are a few replies here that seem to be reacting negatively to the OP due to the tone of the submission instead of the content. To be clear, deflation is categorically bad for a currency. It's terrible, like great depression terrible. The reason it's bad is that deflation makes it more profitable to do nothing than to invest. When this happens, people react by not spending money. The market dies. While inflation…

That is one theory, and is the prevailing one. It is not necessarily correct. Regardless, it is certainly a consumer's right to store their assets in something that is not inflationary, as most do. Is the population holding empty real estate or gold instead of currency really that much better for the economy? No. Smart money will simply shift out of cash in an inflationary environment, and the value will not necessar…

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