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Bitcoin vs. Ben Bernanke

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Re: Bitcoin vs. Ben Bernanke

#51

Post by drcode »

PaperclipTaken wrote: post #31

There are a few challenges facing Bitcoin, and I think that in the long run Bitcoin will not be the chosen digital currency of the world. The first problem is that there is a highly predictable and (at the moment) constant supply of bitcoins, which means that the value of the coin will adjust like a commodity as more or less people start to use it. It's like Gold or Oil in the sense that when people want it, it's wor…

> ... you are putting yourself at the complete mercy of the market.

This is the "No one will want bitcoins because everybody's buying them" argument- I don't see much credibility in it. Also, what is an example of a commodity that isn't at the mercy of supply and demand?

> Another problem is that the currency is highly traceable ...

I agree with you that that is a major issue, and might hurt the popularity of bitcoin in the long run. Bitcoin is strange in that it separates the argument of "I don't want the government to control what I do" and "I don't want the government to know what I do". I'm not sure how this will play out long term. (yes, I know there is pseudo-anonymity, but if the tax man comes to you and asks you "how did you get the money to buy that car?" the block chain makes it possible to confirm/refute your response.)

> ... and thus caution should be used.

Yeah, I'm tired of folks who think they know with 100% certainty how the economy works. I have some good guesses that suggest to me bitcoin is going to do very well, but things could play out any number of ways and I have no clue whether my guesses are right.

Re: Bitcoin vs. Ben Bernanke

#52

Post by drcode »

irickt wrote: post #15

The biggest risk to Bitcoin is that it will become the Myspace of currencies as its many future competitors come along.

Yeah, I'm worried what happens if one of the big three (Apple/Amazon/Google) builds a bitcoin variant pegged to a baseline dollar price, which also has a large marketing budget.

Re: Bitcoin vs. Ben Bernanke

#53

Post by srdev »

1337biz wrote: post #28
parasubvert wrote: post #24

Earlier quoted context omitted.

Have you atudied economics? The OP reads like someone who has and is utterly incredulous at the statements being made by Bitcoin's proponents. In fairness, the gentleman interviewed in this article insisted it was all an experiment. But the WSJ editorial board has a long time habit of being very non-mainstream and almost Austrian with its economic views, so this interview was likely intended to play into a political…

"right-wing/Austrian economists" Stopped reading right there. Seriously, if you want to frame Austrians as evil at least try a little harder to be subtle about it.

Nothing he said tries to frame them as evil. It was an accurate statement.

Re: Bitcoin vs. Ben Bernanke

#54

Post by parasubvert »

bob13579 wrote: post #34
parasubvert wrote: post #30

Earlier quoted context omitted.

Some would say "left-wing" is actually a euphemism for evil. What you read into "*-wing" is in the eye of the beholder. All I said was these views were non-mainstream, though there are interst groups working to change that such as the WSJ and certain entrepreneurs or business leaders and think tanks. Not that the views are evil. Please point me to some left wing Austrian-school economists to refute the association.

What? The burden of proof is on you. What examples of non mainstream economics are you citing with the WSJ? Links to actual articles that prove your point, please.

I am not quite sure how one proves an observation on a board like Hacker News. All I can do is provide a few links as examples that clearly won't be enough to prove anything, just illustrate that I am not deliberately making things up.

Also keep in mind that most WSJ articles are behind a paywall.

To be clear, my view is: The WSJ editorial board (not their news dept, which is exemplary) has backed a number of somewhat dubious economic ideas for nearly a century, between their own editorials and op-ed contributors with ideas far from the mainstream whose ideas have lacked empirical support, but are popular among certain interest groups. This also goes for scientific ideas with political implications, such as global warming (which i'll not discuss here).

I am not claiming that they're "wrong" in doing this - people clearly have a right to promote what they believe in - just that I think the many of the ideas themselves are wrong, and damaging to the economy overall but also the middle class. though that is a different and much longer conversation.

Topics include:

Support for "expansionary austerity" - ie. if governments spend less the economy will recover because of "confidence".

Debt and Growth (2013) http://m.us.wsj.com/articles/a/SB100014241278873235284045784...

The Real Stimulus Record (2012) http://m.us.wsj.com/articles/a/SB100008723963904448732045775...

Rejecting Macroeconomic theory as not common sense enough (ie. doesn't fit with 19th century micro)

Why Americans Hate Economics (2011) http://m.us.wsj.com/articles/a/SB100014240531119035969045765...

Unemployment insurance benefits "causes" or "encourages" unemployment

The Wages of Unemployment (2013) http://online.wsj.com/article/SB1000142412788732446160457819...

Stimulating unemployment (2010) http://m.us.wsj.com/articles/a/SB100014240527487037205045753...

Support for hard money (despite evidence that a gold standard was and would continue to be very deflationary and that current policies haven't been inflationary at all)

Bernanke: Currency Manipulator http://online.wsj.com/article/SB1000142405297020453050457807...

Capitalism Needs a Sound Money Foundation (2009) http://m.us.wsj.com/articles/a/SB123440593696275773?mg=reno6...

Get ready for inflation and higher interest rates (2009) http://online.wsj.com/article/SB124458888993599879.html

Counter-points:

Laffer's anti stimulus curve ball is a foul http://business.time.com/2012/08/09/arthur-laffers-anti-stim...

70% of economists believe that stimulus and monetary expansion (ie. fiat money) has helped the economic recovery

http://m.us.wsj.com/articles/a/SB100014240527487036253045751...

reduced participation in the labor force is due to boomer retirement, Not unemployment insurance

http://www.offthechartsblog.org/why-is-labor-force-participa...

Unemployment insurance has small negative effect on return to employment

http://papers.nber.org/papers/w17534

Re: Bitcoin vs. Ben Bernanke

#55

Post by drcode »

wfunction wrote: post #44
nijk wrote: post #40

Earlier quoted context omitted.

This already happened in he 0.8 fork

I know, but it's not going to be as easy to fix if it happens on a massive scale, i.e. when everyone's using it.

If the core bitcoin team tells miners their mining is going to be ignored if it isn't part of a specific fork because of some credible reason, the miners will follow, no matter how many of them there are.

Re: Bitcoin vs. Ben Bernanke

#56

Post by pbreit »

notahacker wrote: post #7
lolcraft wrote: post #5

I'll admit that the WSJ here is not as laughably bad as some quotations from their infamous op-eds had led me to believe. Maybe I was too harsh with them. They seem to do the balance thing, or more correctly here, the common sense and economics thing, at least passably well. Either way, there are some real pieces of work here, misconceptions about economics that were dispelled before, again and again. You're going to…

I liked the anecdote about the delays in wire transfers for renting a house overseas whereas with Bitcoin "the whole world is your market". I'm going go out on a limb and suggest there's a bigger proportion of the world willing to accept rental deposits in dollars than Bitcoins...

And PayPal is commonly, easily and effectively used in these instances.

Re: Bitcoin vs. Ben Bernanke

#57

Post by skylan_q »

parasubvert wrote: post #24
Shinkei wrote: post #14

Earlier quoted context omitted.

Rant much? I wanted to actually learn something from your post but it reads like a madman wrote it. I own exactly zero bitcoins, but following the market since 2011 has proven that it is getting easier to use and more prevalent. People will be putting down bitcoin as a serious entity even after PayPal is accepting them.

Have you atudied economics? The OP reads like someone who has and is utterly incredulous at the statements being made by Bitcoin's proponents. In fairness, the gentleman interviewed in this article insisted it was all an experiment. But the WSJ editorial board has a long time habit of being very non-mainstream and almost Austrian with its economic views, so this interview was likely intended to play into a political…

An economy is a closed system - if some are saving, others have to spend to keep the music going. If we all stop spending, we get into a depression, where people lose their jobs, and the economy isn't working to its potential - all because the currency is rising in value.

http://en.wikipedia.org/wiki/Long_Depression#Interpretations

Consistently low unemployment, improving productivity, constantly increasing real value of wages, corporations struggling to earn a profit. A Currency that doesn't constantly lose value seems like a not-so-terrible proposition. God forbid, people end up having savings to live from.

Re: Bitcoin vs. Ben Bernanke

#58

Post by illuminate »

Symmetry wrote: post #13

Decent enough article, but whenever talking about Bitcoins I find it helpful to separate the various roles that money performs. That is, Bitcoin is an awesome medium of exchange, a risky store of value, and a horrible medium of account. Just use it for what it's good for and everything's fine. http://en.wikipedia.org/wiki/Medium_of_exchange http://en.wikipedia.org/wiki/Store_of_value http://en.wikipedia.org/wiki/Unit…

Stop adding nuance to the discussion! It's monolithically evil and/or the destroyer of capitalism/communism/The State/non-Austrian economics!

Re: Bitcoin vs. Ben Bernanke

#59

Post by illuminate »

consz wrote: post #23
antonius wrote: post #4

Earlier quoted context omitted.

I'm sure people that read Bitcoin articles make their judgement through the articles' content as opposed to a picture.

I don't. Pictures are very appealing and easy to digest, I'd rather they be more clear with visual media than with the article itself.

This is why USA Today exists.

Re: Bitcoin vs. Ben Bernanke

#60

Post by skylan_q »

thebmax wrote: post #45
parasubvert wrote: post #24

Earlier quoted context omitted.

Have you atudied economics? The OP reads like someone who has and is utterly incredulous at the statements being made by Bitcoin's proponents. In fairness, the gentleman interviewed in this article insisted it was all an experiment. But the WSJ editorial board has a long time habit of being very non-mainstream and almost Austrian with its economic views, so this interview was likely intended to play into a political…

I really don't get why people who call themselves 'mainstream' economists can't see or choose not to acknowledge the issues the Austrians bring up. It strikes me as quite odd. Not everything the Austrian school preaches is correct, but they do have some valid points that I would expect most smart people to understand. To bring up just a few big ones: Printing money and low interest rate policy of the Fed influences m…

That all sounds very silly. There is nothing complex about interest or how controlling it can effect an economy. The interest rate is just a knob you can turn to adjust inflation and employment. It's science!
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