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A Prediction: Bitcoin Is Doomed to Fail

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Re: A Prediction: Bitcoin Is Doomed to Fail

#141

Post by jafaku »

brador wrote: post #107
Aqueous wrote: post #83

Earlier quoted context omitted.

They are applying old-world money ideas to something that is so new that we don't have useful models yet for deciding how it will behave, thinking that they do apply without loss of content. The rules of supply and demand apply, sure, but none of the other common-sense intuitions about how money works. BitCoins don't have any resistance to movement, or very little. Physical money does. This means the difference betwe…

That's because Bitcoins are relatively easy to buy and very difficult to cash out into real currency. Once enough people see how hard it is to liquidate their Bitcoins back to USD the realization will follow.

News flash: A transaction requires a buyer and a seller. If you bought Bitcoin, someone else sold Bitcoin.

Re: A Prediction: Bitcoin Is Doomed to Fail

#142

Post by GhotiFish »

stevewilhelm wrote: post #118
cryowaffle wrote: post #105

Earlier quoted context omitted.

This makes no sense. If, say the IRS, pegged the exchange at 1 what difference does that make? There are not infinite bitcoins and the IRS certainly wouldn't have all of them. People VALUE bitcoins which is why they pay a lot of USD for them.

People value goods and services. They use currency to denote the value of these goods and services. If enough goods and service providers pegged their BTC/USD exchange rate to one, the initial BTC speculators would take a bath. But subsequent Bitcoin users would receive the benefit of Bitcoin transaction technology and the benefit of the US government's fiat currency for monetary policy.

In a sense, it's true that the value of a currency is how much you can get for it. The problem is that you can't just peg it at a value, bitcoins supply is limited.

Imagine if every goods and service provider pegged their unit product at $1,000,000USD. The VALUE of the US dollar would drop immensely. What force could actually make them do that though? Because no one's going to pay a million bucks for a big mac, unless they have 4 billion in the bank at least. Something that can't happen to bitcoin.

Re: A Prediction: Bitcoin Is Doomed to Fail

#143

Post by kdeforche »

TylerE wrote: post #60
jamestnz wrote: post #55

Earlier quoted context omitted.

Something that might be considered an "intrinsic" value of bitcoin is its ability to instantly and securely transfer wealth across large distances at zero or near-zero cost. This is an feature not present in some of the incumbent currencies and store-of-value assets. For example, physically shipping hundreds of kilograms of gold (or physical, folding USD) is a costly exercise fraught with security risks, and the risk…

I think you misunderstand me. I am talk about non-currency use. If the Bitcoin network collapses, you have nothing. The market for gold by definition cannot collapse to zero as it has non-currency industrial and decorative value.

If the electricity collapses, the light goes out. Stay away from LEDs.

Re: A Prediction: Bitcoin Is Doomed to Fail

#145

Post by makerops »

adamnemecek wrote: post #92
Locke1689 wrote: post #73

Earlier quoted context omitted.

Nope. It's good policy to expect that a govt. can do anything, unless presented with evidence to the contrary. This is a good rule of thumb, mostly because its true. I'm not sure why people have trouble understanding this (poor civics classes? too dense?) but the US govt. can do anything it physically can. Sure, it may require a constitutional amendment, but if the political will is there the govt. can do anything .…

"It's good policy to expect that a govt. can do anything, unless presented with evidence to the contrary." WTF does this sentence even mean. Evidence to the contrary that the gov't can't do anything? Could you give an example of such a piece of evidence? Also TIL Disney dollar is against the constitution.

But, it can. Sometimes it's hand is slapped, and sometimes it isn't, but the government has proven its willingness and ability to violate everything in the constitution on multiple occasions.

Re: A Prediction: Bitcoin Is Doomed to Fail

#146

Post by makerops »

hacknat wrote: post #23
makerops wrote: post #5

"After all, no bank or bitcoin-emitter can be as public-minded as a government, and no private power can raise taxes or pass laws to unwind monetary excesses." I am not an expert by any stretch of the imagination, but this seems like a big point in the authors argument. Isn't the removal of this flaw baked into bitcoin by it's nature? " Besides, if bitcoin ever really started to take off, governments would either ban…

Isn't the removal of this flaw baked into bitcoin by it's nature? No, it's not. Bitcoin isn't backed by any political will of any kind. It is a sheer market. That is the author's main point. That since it is money not backed by the, hopefully, benevolent will of a state it will be subject to the whims of market makers or the panic of the crowd. I think the author of the article is quite correct in making this point.…

Makes sense, thanks

Re: A Prediction: Bitcoin Is Doomed to Fail

#147

Post by waterlesscloud »

brador wrote: post #107
Aqueous wrote: post #83

Earlier quoted context omitted.

They are applying old-world money ideas to something that is so new that we don't have useful models yet for deciding how it will behave, thinking that they do apply without loss of content. The rules of supply and demand apply, sure, but none of the other common-sense intuitions about how money works. BitCoins don't have any resistance to movement, or very little. Physical money does. This means the difference betwe…

That's because Bitcoins are relatively easy to buy and very difficult to cash out into real currency. Once enough people see how hard it is to liquidate their Bitcoins back to USD the realization will follow.

I'm sorry, but this is simply not true. It's plain wrong.

Re: A Prediction: Bitcoin Is Doomed to Fail

#148

Post by andrewla »

fiatmoney wrote: post #45
vijayboyapati wrote: post #12

He is essentially giving the chartalist theory of money. Money cannot arise except through the fiat of the state. Chartalists hate the Mengerian theory on the origin of money because it posits that money arises as a market phenomena. Eventually the state co-opted money, but that does not mean money arose because of the state. The emergence of bitcoin is a thorn in the side to chartalists. We can't really go back and…

That's not my reading; I believe what he is getting at (similarly brought up in Graeber's book) is that when the government controls a large enough share of the economy, the sine qua non of "money" is that you can pay taxes with it. That doesn't require anything about the historical origins of money.

I should probably read Graeber's book, though based on what I see here I might find it a bit exhausting. I hear this argument a lot in discussions about bitcoins, and I ask, but have not yet received, a good explanation.

Let me ask you if you can summarize the reasoning for why paying taxes in a currency helps a currency? It seems very obvious that the opposite is true -- if you don't have to pay taxes by working in an alternate currency, then you would obviously want to use that. Which is why tax law always requires arcane provisions to allow the taxation of barter and foreign currency transactions so that the loophole can be closed.

It seems that if the ability to pay taxes in a currency were sufficient to support a currency, then laws dictating how to handle non-local-currency transactions would be unnecessary.

Re: A Prediction: Bitcoin Is Doomed to Fail

#149

Post by mindstab »

stevewilhelm wrote: post #128
mindstab wrote: post #104

Earlier quoted context omitted.

No, because no one would give them bitcoins at 1:1 and they can't magic up their own, they 'd have to buy them at market price and then sell them at a hilarious loss.

eBay, Amazon, and IRS don't need Bitcoins, they can set any exchange rate they want. If enough goods and service providers followed suit, current speculators would have to take a hilarious loss to buy anything.

they can sure set them, and then no one would use them. do you not understand money?

what are you, the owner of 100btc going to do:

a) buy $100usd worth of goods at ebay directly

b) cash out at a proper exchange for $100,000usd, then buy $100usb worth of goods on ebay and have $99,900usd left over? or cash out ONE btc for $1000usd, buy $100usd of goods and have $900 usd left over AND 99btc?

How do you expect any even remotely rational players do participate in this farce?

Re: A Prediction: Bitcoin Is Doomed to Fail

#150

Post by Crito »

elwin wrote: post #114
fleitz wrote: post #78

Earlier quoted context omitted.

Please explain how bitcoin can discern vicarious liability. You're still going to need lawyers. Please explain how a bitcoin blockchain record can testify in court that a copy of a document is authentic. Hint, you're infront of a jury, you have a blockchain hash, and opposing council has a notary public with 40 years of experience, both copies of the document differ, the original cannot be found. Hers has an official…

> Please explain how a bitcoin blockchain record can testify in court that a copy of a document is authentic. Hint, you're infront of a jury, you have a blockchain hash, and opposing council has a notary public with 40 years of experience, both copies of the document differ, the original cannot be found. Hers has an official looking seal, you have some random numbers. Here's an imaginary possibility. A hundred and fi…

Bitcoin might let you say things like "both parties signed this document on this date" but you will still need a jury to decide "Action [foo] does or does not constitute a violation of this document which they both signed on this date".
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