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How Dogecoin changed my perspective on cryptocurrency

words.steveklabnik.com

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Re: How Dogecoin changed my perspective on cryptocurrency

#131

Post by guscost »

steveklabnik wrote: post #111
derleth wrote: post #108

Earlier quoted context omitted.

If the 'point of a gun' element was the major determinant in how much currencies are worth, Zimbabwe, which had and has a military sufficient to kill its own citizens, would never have had hyperinflation.

The US's place in the global economy is just a bit difference than Zimbabwe, so that's a false equivalence. Hint: I was talking about imperialism, not "buy stuff with the national money, citizen!"

The American hegemony is bigger and involves a lot more moving parts, sure, but is that really a difference in kind rather than scale?

And if being a global superpower is the key to running an economy based on fiat money, how did it get that big in the first place?

Re: How Dogecoin changed my perspective on cryptocurrency

#133

Post by minimax »

ChuckMcM wrote: post #127
minimax wrote: post #120

Earlier quoted context omitted.

It's not about liquidity. EURUSD is one of the most liquid currency pairs in the world. You can exchange millions or tens of millions in one trade at a firm price. That's liquidity at scale. In spite of that, Euro is still completely useless as a currency in the U.S. The liquidity argument is not a real argument.

Perhaps we're not talking about the same thing. For any national currency, a bank has a way of resolving your request to exchange their currency for a local, more acceptable, currency. That is part of what the banking system does, and BitCoin eschews. In my fictional example, if an exchange didn't have deposits to cover the conversion they would go to their currencies central bank for the $90M and then exchange the B…

There are a lot of question marks in your comment and I'm sure some of them are meant to be rhetorical and maybe some aren't. Also you mentioned something about exchanges talking to central banks which isn't something that happens. Your fictional example is:

I've got 150,000BTC, please convert that into dollars for me at the market rate. What? No worries I'll just wait here. You can wire the dollars to this account here ...

That isn't the kind of thing you do at the teller window. That kind of liquidity doesn't exist in bitcoin (though it would be a cinch in other major currencies). At this point you are in need of a really clever broker to find you someone to take the other side of the trade at a price that doesn't totally suck. Though that probably isn't very likely...

You seem to imply that the exchange has some responsibility here that I don't understand. The exchange matches buyers and sellers at a price they can both agree on. If there are no buyers for what you are trying to sell, that's too bad but it isn't the exchange's problem. Go look on the CME product list and you'll see tons of contracts that are listed but have no bids because nobody is interested in trading them.

If you want to trade a shitload of a questionable thing then you just might find there's no bid. See also: people selling mortgage backed securities in 2008. The price for not being able to sell a thing is paid by the people that own the thing (especially if they purchased the thing with borrowed monies and they are forced to price the thing by marking it to the market).

I think maybe your question is just "What happens if you want to sell bitcoins and nobody wants to buy them?" and in that case the sellers are just screwed.

Re: How Dogecoin changed my perspective on cryptocurrency

#134

Post by pistle »

Dogecoin confirms everything about Bitcoin, but the pious is the pious.

Some MLM-minded peeps know you have to be at the top, so they start their own half-assed thing and prod the overly self-loving crowd of rabidly anti-fiat currency Ron Paul lovers and a few naive shiny thing followers to pump and dump the hot new thing. Cryptocurrency.

Make millions in the comfort of your own home working only a couple hours a week. You could live this lifestyle and so much more. You could probably become an Herbalife distributor!! The first to accept only cryptocurrency.

Re: How Dogecoin changed my perspective on cryptocurrency

#135

Post by tarlyn »

hayksaakian wrote: post #54
natural219 wrote: post #27

There is one other aspect here I find very interesting, and it has to do with the efficient market hypothesis. The fact that people are buying Dogecoin simply because it is a fun internet meme kind of flies in the face of people who still view the price of financial assets as mostly rational, value-based prices, that can be deconstructed along the lines of asset-based valuation, financial ratios, available informatio…

Part of the reason is because for the longest time, the smallest unit of "value" recognized by most people was 1 US Cent. Crypto currencies, like Dogecoin are intrinsically more divisible. If someone made a funny comment on the internet, and i wanted to reward them. In 2012, I might "like" or "upvote" their comment -- a subjective measure of appreciation. In early 2013, I might "give gold" or "gild" comments or posts…

This is one of the most insightful things I have read. If doge turns into the defacto "tipping" or "internets" coin, then it truly will be something useful ;)

Re: How Dogecoin changed my perspective on cryptocurrency

#136

Post by minimax »

theboywho wrote: post #116
minimax wrote: post #83

Here we have more evidence of the miraculous ability of crypto currencies to turn unassuming computer programmers into economics experts. Let's take a look at some choice quotes. There’s no inherent reason that a piece of paper has a certain amount of value. There is a subjective reason, though: namely, that a large enough number of people agree that USD is a worthwhile commodity. They believe that for a number of re…

Why is this the top rated comment? I just stopped reading it because of all the twisted logic, I was worried for my brain.

Ask a question or offer a critique of my twisted logic and I'll respond to it.

Re: How Dogecoin changed my perspective on cryptocurrency

#137

Post by minimax »

oafitupa wrote: post #104
minimax wrote: post #83

Here we have more evidence of the miraculous ability of crypto currencies to turn unassuming computer programmers into economics experts. Let's take a look at some choice quotes. There’s no inherent reason that a piece of paper has a certain amount of value. There is a subjective reason, though: namely, that a large enough number of people agree that USD is a worthwhile commodity. They believe that for a number of re…

"oil tends to be priced in dollars internationally" And when that doesn't happen, suddenly they have the CIA overthrowing their leader, creating terrorists groups for false-flag operations, the US government spreading lies about WMDs, and then the entire army can go and fight the illegal (by international laws) war on terror. There should be a war on ignorance, so that we don't have to read comments like yours anymor…

When oil isn't priced in USD what do you think it will be priced in? And what do you think CIA will be able to do about it?

Re: How Dogecoin changed my perspective on cryptocurrency

#138

Post by shurcooL »

vacri wrote: post #95
shurcooL wrote: post #50

Earlier quoted context omitted.

Are there any crypto-currencies that are not anonymous? I like secure, modern, low cost transactions, but I don't like the anonymity. I want a currency where everyone knows how much I spent, what I bought, and it applies to everyone. Does that exist?

I think that such a currency would have a particularly low buy-in from people, making it quite difficult to get off the ground. Simple privacy like "I don't want my friend who I'm dieting with to know I sneaked off to get a burger" is just the start of the issues...

I believe you that many people wouldn't want this; but I'm curious about something like that. It'd be fun to try.

I don't need to keep it a secret that I'm eating a burger, for example. It's pretty fun and liberating to have as few secrets as possible. Less things to worry about keeping secret, less work (and I'm lazy).

Re: How Dogecoin changed my perspective on cryptocurrency

#139

Post by shurcooL »

steveklabnik wrote: post #62
shurcooL wrote: post #50

Earlier quoted context omitted.

Are there any crypto-currencies that are not anonymous? I like secure, modern, low cost transactions, but I don't like the anonymity. I want a currency where everyone knows how much I spent, what I bought, and it applies to everyone. Does that exist?

Every transaction to every address is public with blockchain technology. The tricky bit is associating an address with a particular human... This would affect any attempt at making something like this. I'm not sure that you can enforce the human/address connection in software.

> I'm not sure that you can enforce the human/address connection in software.

It's a hard challenge, but not impossible. Online banking (mostly) works because it's possible.

Re: How Dogecoin changed my perspective on cryptocurrency

#140

Post by minimax »

twobits wrote: post #112
minimax wrote: post #83

Here we have more evidence of the miraculous ability of crypto currencies to turn unassuming computer programmers into economics experts. Let's take a look at some choice quotes. There’s no inherent reason that a piece of paper has a certain amount of value. There is a subjective reason, though: namely, that a large enough number of people agree that USD is a worthwhile commodity. They believe that for a number of re…

"That's a bunch of needlessly cynical and completely ignorant bullshit. We don't use the army to convince people to use dollars. That's quackery. People use dollars because the value is relatively stable, most goods for sale in the U.S. and exported from the U.S. are priced in dollars, people in the U.S. pay their taxes in dollars, oil tends to be priced in dollars internationally, foreign countries hold lots of doll…

a) A predictable low rate of inflation is good for a currency.

b) Yes, that's my point.

c) I didn't say it was "valued in dollars" I said it was priced in dollars. Point me at a liquid oil futures contract not priced in USD that outpaces Brent or WTI and I'll retract my comment.

d) Wat.

e) I have $250k in the bank. Bank blows up. FDIC gives me back $250k. What don't you understand?

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