61–70 of 102 posts
> Whatever Kurgman says, it is good to keep in mind that he is an economist turned partisan-politics hack. Funny thing,I called MG Seigler a hack, and was attacked. Even PG came out of the word works to say he was "embarrassed" by the comment. Now we are calling Nobel prize winning economists hacks and asses? The economic illiteracy of this place is what is embarrassing.
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Can you explain this in more detail for those of us who don't fully understand how bitcoins come in to existence, because it sounds like one of those things that violate some laws of thermodynamics, like the "hydrogen generator" that you strap to your car to increase fuel economy. I ask because I know I've heard about people building huge computers with lots of expensive video cards for the purpose of mining bitcoins…
Rather abstractly Bitcoin is a scheme to solve the Byzantine General problem[1]. The problem is, how can we build a trusted history of accounting without knowing which nodes in the network are trustworthy. And the way Bitcoin does this is essentially by letting every miner vote with his CPU power and the history backed by the most computing power wins. Therefore as long as the majority of miners (weighted by their co…
As computing power is a function of the expenditure of wealth, this is equivalent to saying "as long as you trust the people who have thrown the most money at having power over the bitcoin system are honest."
Maybe, just maybe, it's not Adam Smith who hates bitcoin like this misleading title suggest, but Krugman. The guy may have a nobel prize, but his strong leftist views seems to be clouding his judgement. Never before in history was there anthing like bitcoin. It's not a commodity like gold - is is pure fiat money, fully based on trust. Hoarding gold or silver or any metal or rare thing was a bad idea because of the al…
any money declared by a government to be legal tender.[7]
state-issued money which is neither convertible by law to any other thing, nor fixed in value in terms of any objective standard.[8]
money without intrinsic value.[9][10]
Krugman doesn't understand Bitcoin. The computing power expended on mining is used to secure the Bitcoin network. There are many, many costs associated with securing the integrity of established financial networks too.
I hate the term "securing the network". Mining prevents double spends, that's all it does. It doesn't prevent your bitcoins being stolen or make you whole afterwards, it's not analogous to a security guard standing outside a vault, or the government guaranteeing your deposits. I'm mildly optimistic about about crypto currencies in the long term (10 years or more), but energy usage is the weak point of bitcoin, I wrot…
That is the level of security in the bitcoin network. It might be a design flaw to assume we can act like responsible adults, I agree. But if you're looking for something that makes end-runs completely impossible, I'm afraid you are asking to much and you won't find it in anything that exists.
Maybe, just maybe, it's not Adam Smith who hates bitcoin like this misleading title suggest, but Krugman. The guy may have a nobel prize, but his strong leftist views seems to be clouding his judgement. Never before in history was there anthing like bitcoin. It's not a commodity like gold - is is pure fiat money, fully based on trust. Hoarding gold or silver or any metal or rare thing was a bad idea because of the al…
Wow. Talk about the delusions of being persecuted. It is important to have a discussion about whether or not bitcoin is based on a sound system. Just stuffing hands in your ears and calling the critics names solves nothing. Having a decent conversation may help the system in the long run.
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Rather abstractly Bitcoin is a scheme to solve the Byzantine General problem[1]. The problem is, how can we build a trusted history of accounting without knowing which nodes in the network are trustworthy. And the way Bitcoin does this is essentially by letting every miner vote with his CPU power and the history backed by the most computing power wins. Therefore as long as the majority of miners (weighted by their co…
> Therefore as long as the majority of miners (weighted by their computing power) is honest, you can trust the accounting. As computing power is a function of the expenditure of wealth, this is equivalent to saying "as long as you trust the people who have thrown the most money at having power over the bitcoin system are honest."
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Central banks and central bankers don't work for free. How much is spent on normal banking infrastructure, cash security vans, fraud protection etc.
That's not how quantitative easing works. Quantitative easing doesn't fire up the printing presses. Bernanke can add $2 trillion into the system within 15 minutes, and no paper money is printed or manpower expensed aside from a few clicks on a computer mouse. Once you secure your financial system network, adding currency adds virtually no costs relative to the amount of currency you put into that system. You've alrea…
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This is not what is happening right now. Fact. BUT, if the project becomes mainstream as the dollar is today, the people of the earth will have a monetary system that doesnt allow taxation through inflation, with no banking monopolies, and globally available. Isnt that a system that "facilitate transactions and make the economy as a whole rich"?? Consider this initial profit just by hoarding Bitcoin as a reward to pu…
> BUT, if the project becomes mainstream as the dollar is today, the people of the earth will have a monetary system that doesnt allow taxation through inflation, with no banking monopolies, and globally available. First: inflation isn't equivalent to taxation (it transfers wealth from net creditors to net debtors, not from everyone else to the government.) [It also, at moderate levels, promotes investment and, there…
Does this refer to the 51% effect? Isn't the solution to that for other people to simply start mining?
I think his previous statements are also significant. "[bitcoin] has fluctuated sharply, but overall it has soared. So buying into [bitcoin] has, at least so far, been a good investment. But does that make the experiment a success? Um, no. What we want from a monetary system isn’t to make people holding money rich; we want it to facilitate transactions and make the economy as a whole rich. And that’s not at all what…
Your quote is relevant, but it's a shame he doesn't address the implied claim that bitcoin doesn't "facilitate transactions". And while it is relatively small in that use now, he really needs to make a compelling argument to why it won't work that way in the future. Further, it's worth pointing out that Krugman endorses a monetary system that makes people poor, via inflating the money supply by printing funds to unde…
Deflation is bad because it shifts investment into savings.
Computers are mostly immune to this effect because until a company has enough computer equipment, it's one of the highest ROI things they can spend funds on, and once the need is filled, there is very little additional benefit from buying more. This gigantic cliff in the demand curve overwhelms any marginal benefit to altering the number of computers you buy.
Most of the targets of investment are not like that, and you see a small return on incremental investment after accounting for things like risk. Deflation makes these productive investments impractical because they lose out to just holding the currency.
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Central planners like central banking? Get out.
Mainstream economists aren't central planners. I don't mean just economists from both administrations. I meant mainstream economists from every school on the US News and beyond.