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Bitcoin vs. Ben Bernanke

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Re: Bitcoin vs. Ben Bernanke

#61

Post by illuminate »

ph0rque wrote: post #49
aakilfernandes wrote: post #16

Interesting point: "And for those who wish to avoid both inflation and deflation, what about a digital currency programmed to maintain stable prices, avoiding mischief by central bankers as well as the possibility of deflation?" My gut is that this is not possible. Enforcing stable prices requires constant data about price levels, and with decentralized markets there doesn't seem to be an accurate way to get that dat…

I wonder if that part is crowdsourceable, somehow... basically, tie the transaction volume/demand/etc. to its worth.

It is not crowdsourceable when the speculators move to work against such a motive.

Re: Bitcoin vs. Ben Bernanke

#62

Post by skylan_q »

aakilfernandes wrote: post #16

Interesting point: "And for those who wish to avoid both inflation and deflation, what about a digital currency programmed to maintain stable prices, avoiding mischief by central bankers as well as the possibility of deflation?" My gut is that this is not possible. Enforcing stable prices requires constant data about price levels, and with decentralized markets there doesn't seem to be an accurate way to get that dat…

Historically speaking, the free market will gravitate to a currency that has a stable price and appreciates at least a little bit over time. No one wants to hold a depreciating currency. We use that fact to drive people to spend by driving interest rates down. Hence the lack of savings and the high levels of consumer spending.

Re: Bitcoin vs. Ben Bernanke

#63

Post by Androsynth »

parasubvert wrote: post #24
Shinkei wrote: post #14

Earlier quoted context omitted.

Rant much? I wanted to actually learn something from your post but it reads like a madman wrote it. I own exactly zero bitcoins, but following the market since 2011 has proven that it is getting easier to use and more prevalent. People will be putting down bitcoin as a serious entity even after PayPal is accepting them.

Have you atudied economics? The OP reads like someone who has and is utterly incredulous at the statements being made by Bitcoin's proponents. In fairness, the gentleman interviewed in this article insisted it was all an experiment. But the WSJ editorial board has a long time habit of being very non-mainstream and almost Austrian with its economic views, so this interview was likely intended to play into a political…

The difference between the US and Zimbabwe is that if the US had a civil war and inflation ruined the currency, it would send the world into the second dark ages. Civil wars cant happen in the US? thats good to know, but i wont take your (implied) word for it.

What about if China suddenly asked for something in exchange for the tons of american paper currency they have accumulated? It is unlikely anytime soon, but they will only take it as long as it has value. So the more you inflate, the more you have to send to China to maintain the American lifestyle.

Our economy is becoming less rugged over time. A large shock becomes more and more likely to significantly disrupt our system. There is no redundancy or backup operations. Our cpu core's are all at 120% load.

Also, its a good thing that stuff like population pressure and infectious diseases are a thing of the past (two of histories best methods for shocking a political/economic systems). You know, because the global population is under control and our climate is capable of withstanding everything we throw at it with complete aplomb.

However when everything is going well, Keynesianism works well. I will give it that.

Re: Bitcoin vs. Ben Bernanke

#64

Post by hexonexxon »

Bitcoin transactions are visible/traceable, but doesn't mean you can match txn to identities.

If there is one address in the middle of you paying somebody, and that address was generated either offline or through Tor, there's no way to prove you own that address unless somebody can extract the private keys from your seized hardware and match it up to the public address.

Transactions don't prove anything, anyways. If you sell on localbitcoins or IRC, you have no idea that the anon guy who showed up to buy them with untraceable cash isn't directly 3rd party funding his Silk Rd account. If you look at the blockchain it would appear I paid into SR directly however I sold coins to some random guy I'll never see again, who's contact info I also don't have. Since I sell under my countries $10k cash transaction limit I don't need to take ID or retain contact info. Tracing that transaction proves nothing.

I also can't recall any of the major bitcoin heists being recovered. Only one exchange (mtgox) has a history of holding transactions for ID if they appear to be stolen coins, and they've only done it twice: first time was cleared up with ID, second time they're still holding the coins (bitcoinica/linode theft). Every other bitcoin heist you've heard of through the years the trace leads to nowhere.

Re: Bitcoin vs. Ben Bernanke

#65

Post by moe »

StavrosK wrote: post #12
moe wrote: post #11

Earlier quoted context omitted.

You can easily anonymize your coins, either by tumbling or by using any number of wallets that are not associated with you.

Yeah, but that's like saying "you can easily launder your cash by using a laundering service".

No. It's not like saying that at all.

All it means is that you can trivially have any number of wallets and it's up to you how you use them. Same as with cash.

Re: Bitcoin vs. Ben Bernanke

#66

Post by StavrosK »

moe wrote: post #65
StavrosK wrote: post #12

Earlier quoted context omitted.

Yeah, but that's like saying "you can easily launder your cash by using a laundering service".

No. It's not like saying that at all. All it means is that you can trivially have any number of wallets and it's up to you how you use them. Same as with cash.

Except cash isn't trackable. How are you going to do this in a world where undeclared wallets are illegal?

Re: Bitcoin vs. Ben Bernanke

#67

Post by parasubvert »

Androsynth wrote: post #63
parasubvert wrote: post #24

Earlier quoted context omitted.

Have you atudied economics? The OP reads like someone who has and is utterly incredulous at the statements being made by Bitcoin's proponents. In fairness, the gentleman interviewed in this article insisted it was all an experiment. But the WSJ editorial board has a long time habit of being very non-mainstream and almost Austrian with its economic views, so this interview was likely intended to play into a political…

The difference between the US and Zimbabwe is that if the US had a civil war and inflation ruined the currency, it would send the world into the second dark ages. Civil wars cant happen in the US? thats good to know, but i wont take your (implied) word for it. What about if China suddenly asked for something in exchange for the tons of american paper currency they have accumulated? It is unlikely anytime soon, but th…

I did not imply civil wars can't happen in the USA. I said that its not happening right now.

China does not own that much American debt, and has not been accumulating in the past few years. They have maybe 1.2 trillion out of the 15 trillion: http://en.m.wikipedia.org/wiki/National_debt_of_the_United_S...

China moving away from US currency implies they don't want to trade with us - unlikely. But if they did do this, they'd sell the currency on the global market, the cost of the dollar would go down, and US exports would likely boom due to increased competitiveness. In other words, it remains in China's interests to keep their US reserves. And in everyone's interest -- as far as the numbers show, the safest asset on earth (as crazy as it sounds) is US government debt.

Re: Bitcoin vs. Ben Bernanke

#68

Post by querulous »

drcode wrote: post #55
wfunction wrote: post #44

Earlier quoted context omitted.

I know, but it's not going to be as easy to fix if it happens on a massive scale, i.e. when everyone's using it.

If the core bitcoin team tells miners their mining is going to be ignored if it isn't part of a specific fork because of some credible reason, the miners will follow, no matter how many of them there are.

that's not how bitcoin works. the blockchain (the ledger) can fork into competing chains. if your client and my client disagree about which is the live chain we can't transact. the core bitcoin team can only suggest which chain to consider the live chain. anyone who disagrees is free to use different chains.

Re: Bitcoin vs. Ben Bernanke

#69

Post by brazzy »

drcode wrote: post #55
wfunction wrote: post #44

Earlier quoted context omitted.

I know, but it's not going to be as easy to fix if it happens on a massive scale, i.e. when everyone's using it.

If the core bitcoin team tells miners their mining is going to be ignored if it isn't part of a specific fork because of some credible reason, the miners will follow, no matter how many of them there are.

As I understand it, the core bitcoin team (as well as all bitcoin users) can do absolutely nothing if the majority of the miners ignore their request, as long as THEY agree on a fork to work on.

Re: Bitcoin vs. Ben Bernanke

#70

Post by scrollbar »

saalweachter wrote: post #47
scrollbar wrote: post #20

Earlier quoted context omitted.

Regarding your point about the lending vs borrowing: The use of the word "encouraged" makes sense to me. If people are "encouraged" to lend vs borrow, that means they will have more desire to lend vs borrow. This has an important effect on the supply vs. demand equation. Supply of loans, ie. people willing to borrow, goes down and the demand, ie. people willing to pay money now for interest later, goes up, causing pr…

A deflationary currency doesn't encourage people to lend , it encourages them to save . If currency is deflating at a low, constant rate (say, 2-3%, comparable to the normal rate of inflation), then the interest rate -- in real terms -- must be strictly higher than this. A 0% loan with 2% deflation the equivalent of a 2% real interest rate. But no one will ever lend money in this situation. You take on risk, but have…

Yep, thanks for the clarification, I don't disagree but just taking issue with parent's point that dollars lent = dollars loaned therefore it's impossible for policies to affect lending rate.
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