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The Bitcoin Report 2 [pdf]

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Re: The Bitcoin Report 2 [pdf]

#71

Post by dragontamer »

InclinedPlane wrote: post #70
miami-dade wrote: post #69

Earlier quoted context omitted.

What a false dichotomy. So people are either buying Bitcoin purely for its use as a currency or purely speculating? You're missing the forest for the trees. Do you want to see real political and economic change in your lifetime? Campaign finance reform: not the answer. Term limits: not the answer. Voting Libertarian: waste of time. "Balance the budget": too little, too late. Political activism: occupy my asshole. The…

You are so full of yourself and living in a fantasy world it's sad to watch. Bitcoin isn't a revolution, you've been duped. It's just another pyramid scheme being used by those with more power, more money, more information, and fewer morals to take advantage of folks like you who just want to believe. Do you really want to change the system? Write blogs. Write books. Start a business. Do investigative journalism. Spe…

To be fair, bitcoin has a number of interesting technical promises. The economics of bitcoin are... probably going to be bad, for many reasons.

But some decentralized digital coin in some form seems like a good idea. The concept of a transaction log that tracks your money from start to finish is also interesting.

Bitcoin will remain a pyramid scheme due to its deflationary nature. But maybe a future coin can be invented that solves the problems with bitcoin?

Re: The Bitcoin Report 2 [pdf]

#72

Post by InclinedPlane »

dragontamer wrote: post #71
InclinedPlane wrote: post #70

Earlier quoted context omitted.

You are so full of yourself and living in a fantasy world it's sad to watch. Bitcoin isn't a revolution, you've been duped. It's just another pyramid scheme being used by those with more power, more money, more information, and fewer morals to take advantage of folks like you who just want to believe. Do you really want to change the system? Write blogs. Write books. Start a business. Do investigative journalism. Spe…

To be fair, bitcoin has a number of interesting technical promises. The economics of bitcoin are... probably going to be bad, for many reasons. But some decentralized digital coin in some form seems like a good idea. The concept of a transaction log that tracks your money from start to finish is also interesting. Bitcoin will remain a pyramid scheme due to its deflationary nature. But maybe a future coin can be inven…

To be truly decentralized you need something like "digital cash", but nobody's been able to come up with a good way of implementing that, yet. Also, I'm not sure people are prepared to mix the problems of cash and electronic transactions just yet, there are some advantages to the banking system we have now, such as the ability to reverse fraudulent transactions.

I think the example from fiction, Cryptonomicon, is actually very helpful, because they understood they needed a big honking pile of gold to kick-start the legitimacy of the whole thing, if it's just free floating then it too easily becomes a pyramid scheme and you have people who just do currency exchanges but who never actually use the new currency as money. You want people to hold onto money because it's money, not because they think the money can go up in value, that's precisely what you don't want.

Unfortunately, there are now a lot of people in the bitcoin world who do what the exchange rate of bitcoins to go up, because they view bitcoin's as an investment and they still view dollars as "real money". And in most ways they aren't wrong. But they're also making it harder for anyone else to use bitcoins just as money.

Re: The Bitcoin Report 2 [pdf]

#73

Post by Nursie »

hotpockets wrote: post #55
vyrotek wrote: post #7

"There is no capital nor wealth creation to speak of; only as much money as was put in. While somebody may buy a bitcoin for $1 and then sell it for $200, no value was added in this process, so it is simply a transfer of wealth. The people who profit will do so by taking from those who lose. As the deflationary feedback amplifies the desire to hoard, the exchanges will become illiquid. Eventually, buyers will give up…

I don't get this argument. Bitcoin lets you do things you can't do without it. That's not zero sum, that's creating value that wasn't there before. And we are only at the beginning. Pretty much no one understands what can be done with it in the future. Smart property, oracles, etc.

Such as?

Re: The Bitcoin Report 2 [pdf]

#74

Post by SilasX »

InclinedPlane wrote: post #31
Aqueous wrote: post #13

Earlier quoted context omitted.

This describes what happens in the short term, probably repeatedly. But what happens in the long term? Traders learn; they adjust with respect to risk. People will become acquainted with the volatility of the BitCoin currency and adjust their buying and selling practices as a result. People will hold onto the currency longer because they've seen it crash before and recover. The curve will flatten and become a slope.…

Long term? People stop using bitcoin. You theorize that the boom/bust swings will diminish in intensity until eventually bitcoin becomes stable. Others theorize that the boom/bust cycles will grow in severity until eventually everyone just gives up on bitcoin. So far there's very little evidence for the stability option and a lot of evidence (and economic theory) for the speculative bubble theory. Do you have any evi…

>Long term? People stop using bitcoin.

Long term? People stop using Weimar Deutschmarks, Austro-Hungarian Whatevers, French Francs, shells/wampum, doubloons, US dollars ...

Re: The Bitcoin Report 2 [pdf]

#75

Post by Nursie »

matthew-wegner wrote: post #58
ricardobeat wrote: post #16

Does it even make sense to consider Bitcoin as a separate economy containing "no real value"? I see it more as an alternative banking system, the money it contains comes from real-world value and gets converted back into real-word products; it's not a virtual currency.

I think this is a hugely important distinction. The linked-to analysis seems to assume that BTC are bought with USD, sit around in a wallet, and then come back out as USD. When in fact, BTC's usefulness is its frictionless-but-secure, anonymous transactional nature. Its anonymity is even stronger if you mine coins yourself (or acquire coins directly from a miner for favors or whatever). You can probably make the case…

It's not really anonymous though, transactions are publicly recorded for all time. It's also not 100% frictionless. There are fees and though they are currently low, they are there.

Re: The Bitcoin Report 2 [pdf]

#76

Post by SilasX »

vyrotek wrote: post #7

"There is no capital nor wealth creation to speak of; only as much money as was put in. While somebody may buy a bitcoin for $1 and then sell it for $200, no value was added in this process, so it is simply a transfer of wealth. The people who profit will do so by taking from those who lose. As the deflationary feedback amplifies the desire to hoard, the exchanges will become illiquid. Eventually, buyers will give up…

So people haven't priced their knowledge of the limited supply of bitcoins into their bids? They're too stupid to realize growth will slow asymptotically despite this having been announced years ago and built into the protocol?

Are you the kind to suggest "hey, I know how to make money! Invest in hot dogs like, right before the 4th of July, and then sell right after!"?

Re: The Bitcoin Report 2 [pdf]

#77

Post by DanBC »

matthew-wegner wrote: post #58
ricardobeat wrote: post #16

Does it even make sense to consider Bitcoin as a separate economy containing "no real value"? I see it more as an alternative banking system, the money it contains comes from real-world value and gets converted back into real-word products; it's not a virtual currency.

I think this is a hugely important distinction. The linked-to analysis seems to assume that BTC are bought with USD, sit around in a wallet, and then come back out as USD. When in fact, BTC's usefulness is its frictionless-but-secure, anonymous transactional nature. Its anonymity is even stronger if you mine coins yourself (or acquire coins directly from a miner for favors or whatever). You can probably make the case…

Bitcoin is not anonymous.

(http://anonymity-in-bitcoin.blogspot.co.uk/2011/07/bitcoin-i...)

(https://en.bitcoin.it/wiki/Anonymity)

Re: The Bitcoin Report 2 [pdf]

#78

Post by flyinRyan »

vyrotek wrote: post #7

"There is no capital nor wealth creation to speak of; only as much money as was put in. While somebody may buy a bitcoin for $1 and then sell it for $200, no value was added in this process, so it is simply a transfer of wealth. The people who profit will do so by taking from those who lose. As the deflationary feedback amplifies the desire to hoard, the exchanges will become illiquid. Eventually, buyers will give up…

>There is no capital nor wealth creation to speak of; only as much money as was put in. While somebody may buy a bitcoin for $1 and then sell it for $200, no value was added in this process, so it is simply a transfer of wealth.

So like 90%+ of what the stock market does then?

Re: The Bitcoin Report 2 [pdf]

#79

Post by flyinRyan »

klochner wrote: post #28
surrealize wrote: post #24

Earlier quoted context omitted.

if you just use bitcoin for quick anonymous transactions, say dollar-->bitcoin-->purchase, then you don't care what the value is doing over time If you expect the value of bitcoins to keep going up, why would you only hold them for short periods of time? You're suggesting that people would wait until the last possible moment to change their dollars into bitcoins. But by doing that, they're losing money if the value o…

You wouldn't hold bitcoin if you're not interested in currency speculation. I'm arguing that despite likely wide swings in the value of bitcoin, it's value as an anonymous transaction currency will prevent it from going extinct. People hoard it, driving the price to $10,000 and driving speculators to tears of joy, still people can make quick transactions in fractional bitcoin. It goes bust and the value dives to $10,…

If they transfer $500 over to buy some computer hardware parts on newegg but can only get a mouse pad by the time the transaction takes I think they'll care less.

BTW, it's "could not care less" as in "I could not possibly care less than I actually do". If you could care less that would mean that you do care. Sorry, personal pet peeve.

Re: The Bitcoin Report 2 [pdf]

#80

Post by DanBC »

flyinRyan wrote: post #79
klochner wrote: post #28

Earlier quoted context omitted.

You wouldn't hold bitcoin if you're not interested in currency speculation. I'm arguing that despite likely wide swings in the value of bitcoin, it's value as an anonymous transaction currency will prevent it from going extinct. People hoard it, driving the price to $10,000 and driving speculators to tears of joy, still people can make quick transactions in fractional bitcoin. It goes bust and the value dives to $10,…

If they transfer $500 over to buy some computer hardware parts on newegg but can only get a mouse pad by the time the transaction takes I think they'll care less. BTW, it's "could not care less" as in "I could not possibly care less than I actually do". If you could care less that would mean that you do care. Sorry, personal pet peeve.

> BTW, it's "could not care less"

Oxford recognises "could care less" to mean "couldn't care less".

"I couldn't care less" is pretty new, first seen in mid 20th century. "I could care less" is newer, but has been in use since at least 1969.

This page has some interesting talk about Yiddish stress patterns. When you think about it you can imagine someone saying, sarcastically, with palms up and arms spread, "I could care less", meaning "As if there's anything in the world I could care less about".

(http://www.worldwidewords.org/qa/qa-ico1.htm)

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