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Bitcoin is fiat money, too

economist.com

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Re: Bitcoin is fiat money, too

#281

Post by tim333 »

>it has always been tempting for private finance to create too much money. There is no evidence that money born on a distributed ledger will be clean of this sin.

That's not true for Bitcoin, disregarding the various other coins. The supply is effectively capped and it is economically much more similar to gold where in the long term the price roughly equals the mining cost to fiat money where that doesn't apply.

For use as a normal currency bitcoin is probably creating too little money. For normal currency you want the value to be roughly constant not to double quite often.

Re: Bitcoin is fiat money, too

#282

Post by alexasmyths »

dmichulke wrote: post #184
nikcub wrote: post #174

Earlier quoted context omitted.

Replace TBills with gold - is it still being created out of thin air? The point is it’s backed by an asset

Did the fed dig out the gold nugget? If not, there is now more dollars chasing the same amount of goods. Yes it's still backed but less than before, i.e., devalued.

"Yes it's still backed but less than before, i.e., devalued."

No.

1 Trillion in Assets = 1 Trillion in Currency.

1 Trillion + 1 dollar in Assets = 1 Trillion + 1 Dollar in currency.

No dilution by the Fed.

(Fractional lending notwithstanding - that's another can of worms)

Re: Bitcoin is fiat money, too

#283

Post by aversafe »

dnautics wrote: post #62
notadoc wrote: post #3

ICOs are the hyper speculative .com penny stocks of this particular economic cycle/bubble. A few may rise from the ashes of an eventual burst, and the general idea may be have some validity to it, but most cryptocurrencies are a sham and are going nowhere.

That's true for startups too (admittedly the ratio is probably less stark)

The ratio is probably identical from the time we've spent with startups. Comes down to your measure of success.

Re: Bitcoin is fiat money, too

#284

Post by kaffeemitsahne »

b1daly wrote: post #273
noddy1 wrote: post #145

Had a chat with a high ranking public tax official last week who said that the age of secret offshore bank accounts is over - mass leaks resulting from bounties mean that any rogue employee with a USB of account information can get a 7 figure payout from major goverments. So where to now for high net worth people/families? I would absolutely be piling my wealth into anonymous cryptocurrencies - zcash, monero, and wel…

This is ridiculous. If any of these crypto currencies became a significant way to hide wealth from the government, all the government has to do is make the crypto currency illegal to use or hold. If the US did this, it could easily pop the speculative bubble in crypto coins, and your wealth would vanish.

Good luck making it illegal to remember a 20-word string.

Re: Bitcoin is fiat money, too

#285

Post by sneak »

Retric wrote: post #93
Taek wrote: post #89

Earlier quoted context omitted.

This is a big misunderstanding of bitcoin, and if you believe it I can understand why you might think bitcoin is not special. The truth is that the everyday user gets full control over the law of their currency simply by running a full node. Your node will reject any transactions that do not comply with the rules of your node. The soveirgnty of bitcoin comes from knowing that the devs can't force an update upon you o…

Without massive investments in ASIC's you have effectively zero influence. Until you have 51% of the hash power you can't make any changes as you simply get ignored unless you follow the exact same rules as the majority.

Actually, even with 51% of hashpower, you cannot force all the other nodes to forward or propagate your invalid blocks if you decide to start changing the rules.

This is a common misconception about bitcoin. Every single node on the network validates every single block, not just miners.

Re: Bitcoin is fiat money, too

#286

Post by seanot »

rblatz wrote: post #193
aviv wrote: post #75

Earlier quoted context omitted.

Right, the same people telling you it's going to $100K are the ones saying this is a digital currency that should be spent. Well, I sure ain't about to spend $100K to buy 2 MacBook Pros.

And that’s why the fed ensures we have a mildly inflationary currency. If it deflated spending would drop, cutting the velocity of money, and cutting out economic growth.

You're discounting the technology sector and nearly the entire 19th century.

Re: Bitcoin is fiat money, too

#287

Post by JumpCrisscross »

spdionis wrote: post #266
radarsat1 wrote: post #265

Earlier quoted context omitted.

1 vote for a poor person = 1 vote for a rich person (ideally). In mining, the more mining power you have, the more "say" you have. One stays constant, the other scales. Don't you think that is an important distinction?

In a way it's a pretty naive view. The rich person will have more influence over other people that will give him effectively more than 1 vote.

OP's point is the big mining rig will have more influence than the numpty rig one boots up on their laptop.

Re: Bitcoin is fiat money, too

#288

Post by 127 »

snitko wrote: post #23
kobeya wrote: post #11

Earlier quoted context omitted.

The price doesn’t define the success of bitcoin.

Well what does? More people using it and interested in it? Doesn't define success. More merchants accepting it? Doesn't define success. More governments paying attention to it? Doesn't define success. What on earth would define success? It's like nothing is ever enough for you people.

Liquidity, volume, transaction speed, transaction fees, ability to integrate into a store front.

Re: Bitcoin is fiat money, too

#289

Post by tboyd47 »

sneak wrote: post #285
Retric wrote: post #93

Earlier quoted context omitted.

Without massive investments in ASIC's you have effectively zero influence. Until you have 51% of the hash power you can't make any changes as you simply get ignored unless you follow the exact same rules as the majority.

Actually, even with 51% of hashpower, you cannot force all the other nodes to forward or propagate your invalid blocks if you decide to start changing the rules. This is a common misconception about bitcoin. Every single node on the network validates every single block, not just miners.

Thank you. I see this argument pop up on HN all the time and can't understand why it's so common. You'd think if a 51% attack were such a threat to Bitcoin it would have at least been attempted by now, after so many years.

Re: Bitcoin is fiat money, too

#290

Post by jedrek »

musage wrote: post #253
AlexCoventry wrote: post #231

Earlier quoted context omitted.

If you really think you have a say in monetary policy, I suggest you read Barofsky's Bailout .

You have a say in it in principle. In contrast, you have in principle no say what others do with their private property. That's the difference, and it's an important one.

It's interesting how so many people want government to be run like a business while hating it most when it runs like a business. Business is opaque, secretive, with no oversight and loyalty only to the bottom line. Well run government institutions are none of these things.
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