How can Bitcoin stabilize if it's a Keynesian Beauty Contest? • Hacker News Board

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#51

Post by craigc » Tue, Oct 23, 2018, 12:15 AM UTC

fjsolwmv wrote: post #49

craigc wrote: post #36

Earlier quoted context omitted.

Thank you for posting this. Not surprising to see you getting downvoted to oblivion here, but this is something that people really need to keep an open mind about.

It's downvotes because it's using false facts as a basis for opinion, and using weak logic to connect them. Fiat money is over 90years old, Bitcoin is deflationat by design, and neither of these facts matter. The open market is subject to manipulation (counterfeiting and cornering) as much as government fiat.

Can you please point out the false facts to me?

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#52

Post by salty_biscuits » Tue, Oct 23, 2018, 12:15 AM UTC

ironSkillet wrote: post #44

andreygrehov wrote: post #27

Earlier quoted context omitted.

This is chart is not off at all. There is, actually, an updated version https://cryptoslate.com/wp-content/uploads/2018/10/chart.png . I have no idea if the trend will continue.

Your first chart stated that BTC would be over $10,000 by the beginning of 2018, and be somewhere in the ballpark of $20,000+ by now. Your second chart drastically reduces that forecast. You do know you are just overfitting a curve to data here, right?

Well to be fair it is just refitting not overfitting. If it was overfitting it would have heaps of free parameters and match the data really closely. The criticism should be what is the mechanistic explanation for why you would expect this logarithmic trend (for the log price, is that just linear or am I just confused?)

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#53

Post by fjsolwmv » Tue, Oct 23, 2018, 12:16 AM UTC

lordnacho wrote: post #5

adrianscott wrote: post #4

Earlier quoted context omitted.

Would you consider USD also subject to a Keynesian Beauty Contest?

Yes, there's a 24/5 FX market where people decide what it's worth in relation to other currencies.

FX markets are open all night but close on weekends?

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#54

Post by tedsanders » Tue, Oct 23, 2018, 12:21 AM UTC

craigc wrote: post #30

ummonk wrote: post #9

Earlier quoted context omitted.

There is a powerful entity (the Fed) focused on keeping it stable in reference to consumer goods and services.

Right, and how is that going for them? The average home cost around $3,400 in 1913 (when the FED was created), and today is around $200,000. And $1 is still worth $1.

It's actually going very well for the US. Inflation has been been low and stable. The real economy is larger than it's ever been. Unemployment is very low. Out of all the countries and currencies on Earth over the past 100 years, the US and its dollar have had a better track record than almost any other.

A few corrections to some possible misconceptions:

(1) Fed is short for Federal Reserve. It's not an acronym.

(2) The goal of the Fed is not 0% inflation. Because downside risks are worse than upside risks, the Fed's explicit long-term target is 2%

(3) House prices aren't great to use as a metric of inflation. A house built today is far, far better than house built in 1913. According to the consumer price index, $3,400 in 1913 has the rough buying power of $88,000 today.

https://www.bls.gov/cpi/

In my opinion, if you want to make a serious argument against the Fed, you should (a) do more work than rhetorically asking how the past century has gone for us, and (b) at least be familiar enough with the thing to spell its name correctly.

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#55

Post by craigc » Tue, Oct 23, 2018, 12:32 AM UTC

tedsanders wrote: post #54

craigc wrote: post #30

Earlier quoted context omitted.

Right, and how is that going for them? The average home cost around $3,400 in 1913 (when the FED was created), and today is around $200,000. And $1 is still worth $1.

It's actually going very well for the US. Inflation has been been low and stable. The real economy is larger than it's ever been. Unemployment is very low. Out of all the countries and currencies on Earth over the past 100 years, the US and its dollar have had a better track record than almost any other. A few corrections to some possible misconceptions: (1) Fed is short for Federal Reserve. It's not an acronym. (2)…

Thanks. I am well aware of all the things you pointed out. I think we just have a different opinion of what stable is or should be.

I think a currency that has $1.00 worth of purchasing power when I am given it should not lose 99% of its value over the next 100 years if I do not spend it. I am aware that that is impossible due to inflation, and that is why things like gold are much better stores of value than the dollar.

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#56

Post by brokensegue » Tue, Oct 23, 2018, 1:01 AM UTC

andreygrehov wrote: post #27

brokensegue wrote: post #19

Earlier quoted context omitted.

that chart is currently off by like 100%

This is chart is not off at all. There is, actually, an updated version https://cryptoslate.com/wp-content/uploads/2018/10/chart.png . I have no idea if the trend will continue.

if which trend will continue? the one from the first chart? that one already hasn't continued dude.

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#57

Post by Retric » Tue, Oct 23, 2018, 1:22 AM UTC

AnimalMuppet wrote: post #26

canhascodez wrote: post #18

Earlier quoted context omitted.

Would you say gold priced at, or above its level of utility to industry?

If gold was no longer wanted for investment, its value would go very close to 0, despite utility to industry. Why? Because there's 190,000 tons of it, most of which is being held as an investment. If it wasn't needed for investment any more, then all that becomes available for industry, and now supply absolutely swamps demand. Jewelry demand wouldn't help, either. If the price of gold went to 0, how much would be use…

As price drops it would be useful for a wider range of things. Gold high voltage power lines for example are physically better, but cost prohibitive.

Gold is directly useful for a huge range of things and the use in industry provides a very real price floor.

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#58

Post by sdinsn » Tue, Oct 23, 2018, 2:40 AM UTC

charlesdm wrote: post #17

posixplz wrote: post #15

Earlier quoted context omitted.

Gold also has intrinsic utility to industry. The same cannot be said for Bitcoin.

That value is minimal however, in comparison to the total market cap of gold.

[Citation needed]

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#59

Post by DINKDINK » Tue, Oct 23, 2018, 2:43 AM UTC

fjsolwmv wrote: post #49

craigc wrote: post #36

Earlier quoted context omitted.

Thank you for posting this. Not surprising to see you getting downvoted to oblivion here, but this is something that people really need to keep an open mind about.

It's downvotes because it's using false facts as a basis for opinion, and using weak logic to connect them. Fiat money is over 90years old, Bitcoin is deflationat by design, and neither of these facts matter. The open market is subject to manipulation (counterfeiting and cornering) as much as government fiat.

What are the errors?

Re: How can Bitcoin stabilize if it's a Keynesian Beauty Contest?

#60

Post by derekp7 » Tue, Oct 23, 2018, 2:44 AM UTC

apo wrote: post #47

The meaning of the word "stabilize" isn't clear from the article, despite being used 12 times in the body and once in the title. It would have been easy to make the article more clear. Simply explain what aspect of Bitcoin is supposed to stabilize. Given the unending fascination with the USD/BTC exchange rate, it can be assumed that the author is referring to this metric. The inclusion of the heading "Does the price…

I would say that stability refers to purchasing power, and doesn't need to be a flat line. It can also be a simple math function (liner, logarithmic, exponential) which means that it is somewhat predictable. (Edit: I think a better word than "stable" may be "dependable", which is probably what the article meant).

For example, the US Dollar loses purchasing power over time, but that is OK, since it is mostly at a predictable rate. But when something has wild swings up and down, and random times, then it is less suitable to either use as a currency (the stock person with the price gun will be working overtime correcting prices on everything several times a day), and it isn't that good of a store of value if there isn't any reason for it to not lose all of its value over a given period of time.

The Amazon graph you linked to does look fairly stable, a nice exponential function that has very good reasons to remain so for a good period of time (not saying this or anything else is guaranteed, but at least there is something tangible behind that price).