151–160 of 173 posts
-- these currencies are not denominated in other currencies except as a convenient way of thinking about their value; they can serve the purpose of "exchange" without any particular currency
-- there is no debt attached to their creation; in that sense they are not like Euros and USD, which always have been borrowed into existence; they are more like a physical item used as currency in that way, like silver or gold
I mean, it's a joke... right? And yet people seem to infatuated with it. Their subreddit has over 12,000 subscribers and it's just under 2 weeks old.
I love a good joke, but I still don't understand dogecoin.
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Someone might rightfully ask the question, "Should I invest in Dogecoin?", and at this stage of our financial markets, I really don't have a good answer for that. This is where recognising a distinction between investing and speculating comes in handy. It's quite possible to speculate in dogecoin (relying on greater fools coming after) in the short term and make some money. In the long term it is extremely unlikely t…
I disagree. Dogecoin has the backing of one of the strongest communities on the internet. It's quite feasible to see it as a virtual currency used to pay for online goods, such as karma, games, or media. It's friendliness means it may be adopted by the majority of consumers, who are scared off by the volatility and high price of bitcoins. What needs to happen? First, it needs to distance itself from the meme part of…
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I'd argue that cryptocurrencies have a fair amount of commodity worth to them. The security of the coin is enabled by work put into the system by miners. Hypothetically there is some value in linking a commodity compute operation to crypto coin value. BTW, I looked to see if there was a correlation between oil commodity and USD, and here's what I found: http://en.wikipedia.org/wiki/Petrocurrency Note the bit about oi…
I spend a bunch of money buying electricity to run my electric kettle but that doesn't mean there's a huge market for selling hot water.
I have been involved with Bitcoin since 2011 and Dogecoin is seriously hurting my brain. I can't wrap my head around 1) why so many people are mining a coin (spending their hard earned money to protect the dogecoin blockchain) and then turn around and repeat "much wow, such doge, etc etc" on the subreddit. AND 2) just how popular this thing has become. I mean, it's a joke... right? And yet people seem to infatuated w…
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wow. much serious. many tears. so angry. I specifically said I wasn't an expert. ;) > That's a bunch of needlessly cynical and completely ignorant bullshit. We're arguing the same thing. I'm just being a bit snarky about _why_ those things are true. You're totally right that those are the first-order reasons. > Stop calling currencies commodities. Sorry, my Marxism is showing. From a Marxist perspective, money _is_ j…
Sorry steveklabnik, I would have replied sooner but got stuck on a long phone call. I'm not angry. I thought the post was worthy of a reasonably harsh takedown comment (sidenote: HN loves harsh takedown comments) because of its hubris. "Ho hum. We SF computer guys have got this shit all figured out. Paper currencies are bullshit because x, y, z. Also U.S.A. will bomb you if you don't agree." It's so completely fallac…
Basically, the author is saying that the absurdity of Dogecoin made him realize that most currency is intrinsically worthless, with the only reason that it has value being a state power or arbitrary group of people (as in the case of cryptocurrency) has assigned it one... also known as fiat. A very old and evident observation. Not exactly enlightening, but there you go.
While that's true, a state has much more power in "assigning" value to currency. They have the power to levy taxes on all economic activity in their territory, and the power to demand payment of those taxes in the national currency.
If you have a job, do business, or make any other sort of profit in the U.S., you must pay taxes, and you must pay them in USD only - otherwise the state will throw you into jail. This means that there is always a demand for USD, no matter which other currency you use for transactions.
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It's all good. I enjoy your other comments on HN, i've upvoted many of them. I probably should have been working today rather than writing blog posts, oh well. I do not think paper currencies are bullshit. I really really hate it when people say 'fiat' as a derogatory term. I also agree that SF techies running into other people's fields is terrible. However, economics is a field that I have actually attempted to educ…
I think that you undervalue the role of imperialism with regards to the purchasing power of USD Point me to a historical example of the US government saying "Use dollars or else!" and I'll change my tune. I think foreigners use dollars because dollars are actually a really great currency relative to the local alternative ... or bartering (3 goats for 1 iPhone sort of thing). My objection to your argument is that USD…
I agree that we should be very careful to just suddenly start running around yelling "the sky is falling" but I have heard an economist at the Fed (during a banking townhall) say "We are in totally uncharted territory" referring to how they will pull back all of the liquidity they have pumped into the market.
As for your comment about the US government saying "Use US Dollars or else..." that may not be the way that it looks on the surface but the US Government is very heavy handed in how other countries are allowed to control their own currencies, how multilateral trade deals are written in terms that force other countries to give up control over their own monetary policy.
You are correct that individuals around the world views the US dollar as stable and prefer to keep at least some portion of their wealth in US backed treasuries- but I would caution anyone from thinking that this is a foregone conclusion.
The fed uses a few people to try and hit multiple targets all at the same time... they have to deal with a bureaucracy that favors age and longevity, they have political pressures (see the Greenspan article above), and they have to make certain that their decisions keep their institution (coincidentally not a gov't institution but a private company)alive. The Fed is first and foremost a US-centric org. Whereas cryptocurrencies use the global market to find their level- whatever people agree is the price is the price... set number of bitcoins, completely liquid, and can cross borders without blinking... making trade easier than has ever been imagined before.