541–550 of 600 posts
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It'll be proven to work when you can pay taxes and buy groceries with it.
Kind of a ridiculous comment. I would buy groceries for someone and deliver them if they gave me 1 Bitcoin. I would also hand them my homegrown vegetables for a Bitcoin.
But as a society, bitcoins is still not an accepted form of exchange in general.
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…
1) High tech sector has been experiencing massive deflation for decades and is thriving. Why? Is deflation really that bad when it comes from productivity? We know deflation due to massive decrease in money supply or velocity is bad, but what is wrong with slow, steady deflation from productivity?
2) With 2-3% steady deflation, won't interest rates adjust? People will lend their money out to earn a better risk adjusted rate than deflation. There isn't some magical number or percentage where people will start or stop lending. It's more like behavioral economics where people have several choices at different risk profiles.
3) The biggest proponent for an inflationary system is the banking system and economists who are funded/trained/selected by the banking system. This casts a lot of doubt on 'inflation is bad for lenders' statement. In a deflationary system, productivity gains go to the consumers (via lower prices). In an inflationary system, productivity gains go to capital owners (via debt and higher prices).
The US experienced very strong but volatile economic growth under a capitalistic fixed currency system (gold standard) that had periods of deflation and inflation in the 19th century. There is no historical basis that shows that capitalism needs inflation.
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Why is deflation bad? Let's look at a single-currency country first. Prices fall. Including wages. Credit is tight - money appreciates without being invested and borrowers have to repay debts in more expensive currency tomorrow, making them more likely to default [Fisher]. People with money benefit - the rich get richer and the banks hoard capital, refusing to make loans. Inflation fuels asset bubbles as the economy…
With an inflationary currency, you can pay your workers nominally slightly more each year while paying them the same amount or even slightly less in real terms. With a deflationary currency, you can pay your workers nominally slightly less each year while paying them the same or even slightly more in real terms. How would the average person on the street react to being told "You've performed really well this year, so…
From January 1995 to January 2010, Japan's CPI (2005=100) has fallen from 100.8797 to 99.5851, or or -0.08% per year. In that time, real wages grew 0.23% [1]. Real GDP/capita at 0.61%. Hell, from 2010 to 2013 their CPI has fallen at 0.27% annually, but the hit has been mixed. Note that the Japanese monetary base (M2) has expanded at 2.5% annually from 1995 to 2010, so this is a demand-driven deflation, consistent with Morana. But the deflation we base our analysis on, the Great Depression, was similarly spurred by demand.
Similarly, Germany, through the Hartz reforms, engineered a wage deflation at the beginning of this century. Helping power the American recovery is wage deflation. The hope is austerity, structural re-alignment through deflation, will similarly fix peripheral Europe's bloated labour costs.
Yes, it appears people will take falling wages if forced. All this said, I do not believe a deflating national currency is the right model for Bitcoin. Instead, look to arguments levied as the world switched off gold, an international deflationary currency, to inflationary fiat ones.
[1] Own calculations from St. Louis Federal Reserve Economic Database
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Apple is a company that created a lot of real value during that period. Bitcoin is a currency that claims to offer some marginal advantages over other currency, but certainly not enough to justify the rocket ride. The biggest advantage that Bitcoin is offering these days is that it will be worth 50% more next month than it is today. That's a hard advantage for speculators to ignore, but it is ultimately an unsustaina…
Yeah, apple is obviously so much more valuable than bitcoin because having computers in prettier cases or phones with prettier user interfaces is incalculably more valuable than access to a provably fair and reliable financial system not captive to the global banking cartels or their crony governments. This place is really starting to depress me.
I worry that as Bitcoin's value rises, people are buying in not to use it as payment for services or goods, but simply as an investment vehicle. In principle, there's nothing wrong with this; currency trading is common and well-explored. The problem is that the value of a currency is supposed to also be somehow related to its utility in acquiring goods and services. When it is rarely used to that effect, people may r…
LOL.
In the two years I've been watching it I've seen no evidence that it's anything but an investment (and speculation) vehicle.
I worry that as Bitcoin's value rises, people are buying in not to use it as payment for services or goods, but simply as an investment vehicle. In principle, there's nothing wrong with this; currency trading is common and well-explored. The problem is that the value of a currency is supposed to also be somehow related to its utility in acquiring goods and services. When it is rarely used to that effect, people may r…
"I worry that as Bitcoin's value rises, people are buying in not to use it as payment for services or goods, but simply as an investment vehicle." LOL. In the two years I've been watching it I've seen no evidence that it's anything but an investment (and speculation) vehicle.
Proof that Bitcoin is worthless: I set up camp over the Golden Gate Bridge. I ask people if they'd be willing to throw their lunch into the water (use their computer's time/energy/money to mine Bitcoin), with no possibility of retrieving it, and in return I offer to give them a certificate stating that they've thrown their lunch away (a Bitcoin). Now, I see no reason why anyone would expect why these certificates wou…
Does Visa provide value to society? "mining bitcoin" translates to "certifying the current outstanding global transaction registry". FYI.
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 price of Bitcoin won't stabilise. The best you could hope for would be a similar volatility to a commodity like gold or silver. So products and services will never be priced in Bitcoin while there is a better alternative like the dollar which is relatively stable. A mistake 'economists' make with bitcoin is to draw macroecomic conclusions based on theories suited to single currency economies. Actually we need the…