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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

#391

Post by rwmj »

baddox wrote: post #363
AnIrishDuck wrote: post #312

Earlier quoted context omitted.

> Wouldn't it follow that they will wait in perpetuity and never buy that new phone/laptop/etc? People derive utility from those things. They make calls with their phone and do work on their laptop. Bitcoin is entirely different. It's only purpose is to allow you to buy other stuff.

> It's only purpose is to allow you to buy other stuff. There is certainly utility in being able to buy stuff that cannot easily be bought with traditional (government) currencies. Namely, things that are illegal in various countries, like drugs or gambling.

You're saying that drugs cannot easily be bought with government-issued cash? It's totally the other way around: drugs are easily and frequently bought using cash, and vanishingly rarely bought with bitcoins.

Re: Bitcoin exchange rate reached $100 USD per BTC

#392

Post by Symmetry »

baddox wrote: post #364
pg_bot wrote: post #279

Earlier quoted context omitted.

Deflation increases the value of holding cash. By definition deflation occurs when the price of a basket of goods decreases. Why invest your money in a basket of goods today when it is going to be cheaper to buy that same basket tomorrow?

Why buy a smartphone when next year's smartphone will be better in every way?

Because you want to use your smartphone. Smartphones are a horrible investment and you really shouldn't buy one if you're planning on storing it in the basement in its original packaging.

Re: Bitcoin exchange rate reached $100 USD per BTC

#393

Post by vrotaru »

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…

You totally wrong, and the reason you are wrong, is because you do not understand growth. Like... totally.

Yes, I'm arrogant and I'll deal with an idealized model where the same set of resources is transformed into final goods, but bear with me.

In order to get a real growth of 4% be it per year or per century in such a scenario, you need to find a better use of resources so that with the same resources you may produce an output which is 4% greater than before.

Which is the same as saying the the only way to grow is to find ways to produce final goods cheaper.

And because production is cheaper, more goods could be sold but.. entrepreneurs will still make a profit. Pretty much the same.

And the fact that final goods get cheaper means just that.. That goods get cheaper.

And you will not get rich by just holding bitcoins, or any other fixed supply money. Yes, you will be able to get more stuff for but only because the stuff get cheaper..

You'll still hold the same fraction of total purchasing power that as the day you decided to "hoard" your money for a while.

That's not what I call getting rich, and that's why loans and interest make sense and are safe with bitcoin.

P.S. Take you time. It's late in my TZ.

Re: Bitcoin exchange rate reached $100 USD per BTC

#394

Post by stevedekorte »

deelowe wrote: post #218
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…

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

Isn't deflation for the buyer seen as inflation for the seller and vice versa?

Why would you then not (applying your deflationary spiral model) expect a "market death" from sellers not selling under currency inflation?

Re: Bitcoin exchange rate reached $100 USD per BTC

#395

Post by areyal »

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…

the need for inflation is a widespread belief, not a fact. Of course people would still spend their coins. How would they buy services otherwise? what monetarists do not understand is that if you could save money, that would free many resources now used to hedge against inflation, and they would be available to better use and cheaply. Furthermore we all would be inflation-protected, and not just the rich who can afford to do investment. Furthermore deflation revalue your salary, and you should not be fighting with your boss for a payment increase, but he would have to give that fight you to decrease it. We wouldn't have an economy based on the ever growing, ever spending

Re: Bitcoin exchange rate reached $100 USD per BTC

#396

Post by BrianEatWorld »

dragontamer wrote: post #212
BrianEatWorld wrote: post #196

Earlier quoted context omitted.

Thats a bit of a logical fallacy. Just because modern currencies tend to not exhibit volatility, doesn't mean its a bad trait for a currency. In the past, ideas like "menu costs" might make it less favorable because of sticky prices not aligning with a free floating currency, but that isn't as much of an issue anymore. The real issue would be if the underlying fundamentals, IE the supply and demand of the currency, d…

Have you even read the parent post? https://news.ycombinator.com/item?id=5473508 Scribophile cannot sell services based on BTC at the moment, because the BTC market keeps swinging by 50% or more each month. It is impossible to peg the price of anything to BTC right now.

Have you read my post? I even mentioned "menu costs" in my response.

The issue is not that the currency has volatility, but that they refuse to peg the value. Scribophile is facing menu costs, but the menu costs are of their own creation. Simply allowing their prices to fluctuate with value would solve the problem. My point was that technology can make volatility a much smaller issue than it was in the past, hence why using old currency paradigms hinders thoughtful examination of the costs and benefits of a currency like bitcoin.

Re: Bitcoin exchange rate reached $100 USD per BTC

#397

Post by jamoes »

smsm42 wrote: post #341
jamoes wrote: post #293

Earlier quoted context omitted.

From 2003 to 2013, the price of AAPL rose from $11/share to over $400/share. Rapid price increase doesn't always mean "bubble". Sometimes innovative things are created.

There's nothing that happened with BTC between when it cost $14 and now. Comparing it to the shares of Apple that created a whole new consumer industry and substantially changed the information interactions of the whole humankind betrays deep misunderstanding of the question at hand. Bitcoins did not suddenly turned into new way of living, did not produce hundreds of amazingly useful things and did not change how man…

Bitcoin technology allows something that has never before been possible in human history: Two individuals, that never meet in person, can trade with each other without placing any trust in a third party. The implications of this are far-reaching, and will fundamentally shape how governments and businesses operate.

Re: Bitcoin exchange rate reached $100 USD per BTC

#398

Post by prodigal_erik »

Karunamon wrote: post #191
niggler wrote: post #63

Earlier quoted context omitted.

That's a misunderstanding of history. USD used to be backed by silver and all bills said "in silver payable to the bearer on demand". It was only relatively recently that the practice ended. https://upload.wikimedia.org/wikipedia/commons/7/70/US-%245-...

It doesn't really invalidate his statement though. The USD is not backed by anything (whether it was in the past or not is irrelevant), and aside from the fact that it's commonly accepted, has no more intrinsic value than Bitcoin.

As long as 300 million people are required to convert a fraction of their income to USD for taxes, its value can't go to zero. Bitcoin's value is purely an article of faith so far.

Re: Bitcoin exchange rate reached $100 USD per BTC

#399

Post by BrianEatWorld »

yxhuvud wrote: post #266
BrianEatWorld wrote: post #196

Earlier quoted context omitted.

Thats a bit of a logical fallacy. Just because modern currencies tend to not exhibit volatility, doesn't mean its a bad trait for a currency. In the past, ideas like "menu costs" might make it less favorable because of sticky prices not aligning with a free floating currency, but that isn't as much of an issue anymore. The real issue would be if the underlying fundamentals, IE the supply and demand of the currency, d…

Uh, do you realize big companies already put big hedges for the value of existing currencies to minimize the swings in value? That will not be possible with bitcoins with the current volatility since it will be way too expensive. That is bad for business and therefore also bad for the economy and the currency.

That alone doesn't prevent something from being a currency, it simply changes who prefers to use the currency, altering its supply and demand. Currencies have many characteristics and a "store of value" is just one. A volatile currency, may make a poor store of value and thus less favorable to companies that hold large cash accounts (the ones who have to do the hedging you mention), but this volatility may also make it desirable to other economic actors. By accurately reflecting the supply and demand (IE not having an artificially manipulated price as many global currencies do) bitcoin makes a much stronger medium of exchange than many other currencies in the world. The growing interest out of Cyprus is a great indication of this.

My main point was just that for a traditional controlled currency, volatility would be bad, but for bitcoins, which rely on supply and demand to set the price (this includes speculative demand), volatility is not necessarily a bad thing.

Re: Bitcoin exchange rate reached $100 USD per BTC

#400

Post by SODaniel »

I think a lot of people here would benefit from reading some William Gibson novels.

I don't think the BTC will ever be a 'currency' as the USD or the GBP. It is also not necessary for the BTC to be at a 'fixed value' at any time. As a virtual currency it's ok for the BTC to fluctuate heavily as the only thing needed for it to still succeed is that payment systems are 'always on' and can determine a spot price for goods and services.

I would rather see the BTC tied to 'Pizza index' than USD. This would make it easy for people to use an in-app value determinator when making purchases.

Say you just tap your phone with a BTC wallet against a cash register. The register answers, well your burger will be 0.00065 BTC at spot price as of 12.24.44.32 PM. Accept/decline.

That's it. I see the BTC/LTC (Litecoin) as alternative currencies but still worthy of a HUGE market share for micro/everyday transactions.

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