401–410 of 600 posts
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What's a good way to short bitcoin?
There are derivative markets where you could purchase an option to sell bitcoin at a set price in the future. If the price falls below your target by then, buy up cheaper Bitcoins and sell them at profit.
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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?
Person A: one who gives Bitcoins in exchange for Widgets. Person B: one who gives Widgets in exchange for Bitcoins.
Notice the symmetry. The name buyer and seller are arbitrary designations depending on what you consider the currency and what you consider the good being sold.
The inflation/deflation symmetry exists but it is not in the same terms. Deflation for bitcoins is the same as inflation for widgets. The widget holders are desperate to trade their widgets for bitcoins since their widgets's purchasing power is decreasing, but bitcoin holders are reluctant to buy widgets since their value is decreasing.
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1. Unjustified moral reference to "shameless hoarding". Where is the magical date when your property belongs to you for "too long" and you should give it to someone? And to whom exactly? 2. Why take credit for business if you can save your own earned money which appreciates over time and have 100% stake at your own project? 3. How deflationary spiral is supposed to happen? Will people be paralyzed and dead of hunger…
Property rights are a fiction invented and enforced by society. Therefore, it's not inappropriate for society to occasionally have opinions on how property should work. Some of the ways people handle their property is detrimental to society. If enough people do it, hoarding capital is one of them.
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A currency can't make value out of nothing for long. Why, my dear fellow, that is exactly how every government-backed currency works today! And, thanks to its inflationary nature, it becomes virtually worthless over time: Although inflation has remained low in recent years, it ravages the value of paper money over time. A dollar in 1900 is only worth about $0.04 in today's currency. Quoted from: http://finance.yahoo.…
Ah yes, of course, but that currency is undergoing inflation. Bitcoin is rapidly deflating. Huge difference.
Of course Bitcoin is deflating - it was designed that way. And of course fiat currencies are inflating - there is no limit to how much can be printed except reason, which is apparently in short supply.
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If they trust you, it's a matter of seconds. And anyway, try to do that in 20 minutes with gold.
If they trust you , they can do it with gold too. "I owe you an ounce of gold."
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…
I have never understood the inflation is good argument. Looking at PCs, DVD players, etc. it seems price deflation has been great for the consumer and overall "market". Perhaps it has been bad for the manufacturers, but the overall society has benefited from the deflation of those goods.
Electronics might also became cheaper due to, say, someone setting money on fire, so there's less to go around. Clearly in this case our real wealth would not be increasing, so it's not good. But it's not obvious why it should be bad, either.
The reason it's bad is due to our psychology. If the money supply shrinks (and nothing else changes), prices and wages must both go down. But people hate the idea of negotiating a lower wage, so instead wage drops are accomplished through layoffs and unemployment. That's bad because it means that people aren't working: the economy's real output is reduced.
So inflation provides a buffer that allows the economy to adjust wages downwards in a way that we find more palatable than negotiated nominal wage decreases.
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Why buy a smartphone when next year's smartphone will be better in every way?
Because today (and every day between now and next year) you can use that smartphone to do things that you can't do without a smartphone. So yes, the smartphone has lost money value, but you as a person and in your life, have gained. Not so with bitcoin.
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> 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.
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Deflation is just one form of asset appreciation. If this line of reasoning were true then we would never see anyone selling anything that appreciates in value. But this is a very one-sided way to consider this scenario--it only takes into account the supply side. When the asset is appreciating, the demand side takes this into account as well and is willing to discount their asking price to take this into account. Yo…
One problem here is that you're considering the currency as an asset that should appreciate. The argument of most economists today is that currency should not appreciate because it encourages hoarding what is essentially a useless non-good, it's just a token for convenience of value transfer. If real goods appreciate, it's because the value offered by that good to the marketplace has increased, so the market pays a c…
But that's not to say that centrally-managed currencies don't fluctuate either, because they do--just, typically, in the other direction. If I tried to find a gas station that would sell me a gallon of gas for $2USD today I'd be out of luck, but 2-3 years ago I'd be able to go anywhere in America and get that deal.
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…
Currently bitcoin is not a currency but a very speculative investment.