Bitcoin Forum

Bitcoin apologists and supporters often recklessly claim that a controlled supply with the 21 million coins cap is good and beats the shit out of fiat monies as well as cryptocurrencies that don't have a limit on the number of coins mined...


They forget a few things, though

What things do you think they forget?

In my mind deflationary currency is not inherently better or worse than inflationary currency, it just depends how able people are to adapt to the new way of doing things in the economy.

If people can shift focus away from wage increases, and realise that they are matching their purchasing power taking wage cuts then I dont think it is a problem...

I think what they used to forget is temptation to temptation to avoid spending a deflationary currency and keep accumulating instead as that money is getting more and more valuable. This will move most of the money supply into a speculative circle of bubbles and bursts, so it will eventually lose its currency characteristics, as no one will use it for actually buying stuff.

Hmm. I'm not sure we're anywhere near finding what Bitcoin's actual economic model is. It could take the form of several things or be something totally unexpected.

The hard limit is quite extreme and may eventually lord over all other virtues. Time will tell.

If there was no hard limit, then that would spook a lot of people away, because why not just use regular fiat money if there's unlimited supply anyway. There's a finite supply of everything on this planet, then how come the money gets to be infinite. However the 21mil hard cap causes a lot of hoarding, which would drive up the prices to abysmal levels pretty quickly. However bitcoin is currently a pretty inflationary currency at the moment and it still manages to increase in price. There is just no telling what would happen if the inflationary would turn to deflationary.

It's just as easy to bake in a hard annual inflation limit. Obviously it's too late for Bitcoin to do this but I can see future coins perhaps taking it on board. Doge does it but I don't know if there's an actual limit or whether no one cares enough to refine it. I think we'll be waiting for quite a while before we have a clue what effects a total limit will have.

Dogecoin still halves every 4 years. Just that the supply is kind of huge. I think it was something like 125k per block at the moment. It's like Kenya or some other countries hyperinflationary currency. Would be funny to see what happens if doge hits 1 satoshi. How will they go lower than that? in before 10 doge for 1 satoshi.

As for a more stable inflationary crypto coins, I think that clam is creating a new token every minute via proof of stake, so that would be quite predictable inflationary rate, however due to the nature of that coin you can't predict the supply of it because there are still a lot of clams to be dug out.

The economic model behind fiat money is even more severely flawed, but human can still adapt to it, so they will have no problem adapting bitcoin

Short version, it (the economic model behind Bitcoin) disfavors trade and production, and thereby undermines the reason for money (Bitcoin) existence as such

Long version, let's assume we have an economy that produces apples and oranges. Say, I have an apple and you have an orange, and we have decided to sell them to each other. We could just exchange them directly, but we decided to use bitcoins to facilitate the trade. Thereby we emitted two bitcoins and agreed not to mint any more bitcoins (the 21 million cap). In this way you have one bitcoin and I have one bitcoin, and we set the price for apples and oranges at a bitcoin per piece. So far so good. In a short while, I produced an extra apple, while you produced nothing. Now we have two apples and one orange in the economy, but we still have only two bitcoins, thereby bitcoins appreciate in value since we can trade for bitcoins only. I don't want apples but need oranges whereas you need apples and want to trade in oranges. In this way, you can demand two apples for your bitcoin, which represents your orange, while I can still get just one orange. Somehow you didn't produce anything but nevertheless became richer (can buy two apples instead of one) while I worked hard to produce an extra apple but actually became poorer (only two apples now allow me to buy the same one orange)...

It is obvious that I will shrink from trading my apples for bitcoins, and unless trading makes me richer, I won't produce either (since I don't need apples)

What does this example teach us? First, it shows that money has a utilitarian function of facilitating trade in the economy, that it has no value of its own (except for transactional utility). Second, it shows that the claims that early adopters have some "right" to profit from Bitcoin appreciation are unsubstantiated at best and in fact turn out to be socialistic fundamentally

Hmm I think that this  is not necessarily true. Obviously in a hyper-deflationary currency then this would be the case,  but in normal times I don't think that the 'Bitcoin economy' would react like that. Most developed countries operate with low levels of inflation, this doesn't stop them spending all of their money as soon as they earn it- despite it devaluaing every day that it is kept in the bank account. People have to spend money to live, so I don't see this being an issue.

However, if bitcoin is working alongside a two-tiered currency system then I do think there is an incentive to hold and speculate- but all it takes is a shock in the other monetary system for that to change....  

I don't think so. In fact, the economic model behind fiat money, if not abused in application, is actually more fair, since it favors producers, not savers and profiteers, thereby making the whole society richer

I think that the fundemental flaw in the argument is to do with minting the new coins. This example would be the same if we produced extra coin. Unless you give the coin to one individual who becomes richer as a result of that - not through his production, then you have to split the coin equally. If both individuals are left with 1.5BTC, then they have the same dilemma. It is not a question of not having the money in question, it is the point that there has been an over-production of one good which has caused it to fall in price/value. Even if this was an economy which didn't have a fixed monetary supply there would still be the dillema. If you valued the orange at more than the value of two apples, then you would do the trade. In the same way, if I thought that my orange was worth what it was at the start (one apple) then I would still do the trade too.

In your example it is a question of utility preferences for each good, not a problem with the monetary supply.       

Okay, I agree that my example is an oversimplification of matters (I tried to keep it as simple as possible). But it still serves the purpose of showing the major flaw behind the Bitcoin monetary model, namely, that the savers (who produce nothing) obtain an unjustified privilege of sharing profits from producers (who actually make society richer). Let's assume that we have an unlimited demand for apples, but the producers of apples see no reason to produce more apples exactly because of the system which should, ironically, facilitate production...

Why would producers want to miserably give away a part of their produce (revenue) for free because of something which doesn't even have value of its own?

But isn't that the problem with any monetary system which is backed up with something intrinsically useless?

Having a means of exchange which lets you buy services without having to do direct swaps with something you have produced is incredible practical and something that I don't think anyone would want to get rid of. Personally I don't want to have to carry around loads of t-shirts that I've made until I find a restaurant owner who is willing to give me a meal in exchange for one of my t-shirts. Having a token which expresses and proves the value of my production, although technically worthless, is worth something as long as someone else is willing to take it.

However, I think I might have missed the point you're trying to make?

 

I think when bitcoin was created im not sure he expected asics and all these bitcoin farms all over the world to pop up - I would guess with the upcoming halving that no one could expect the difficulty would of got this quick this fast.  The whole asic mining concept is very flawed and almost impossible to ROI without free electricity.  I miss the good ole days of mining with a 5850 video card after playing wow lol

If the economy expands, more goods are being produced overall, but given the limited money supply, it leads to currency appreciation (more goods chasing less money) which allows the savers to become richer for doing virtually nothing (by being able to buy more with their stash). It essentially means that producers are sharing (socializing) their profits with do-littles...

I didn't quite understand what you meant by "monetary system which is backed up with something intrinsically useless"

I think that is true, but I would imagine that producers would be changing their prices in order to make sure their production remains profitable for them. If I was a producer, then I would also be profiting from the fact that the revenue I am receiving is constantly appreciating, so my raw materials will end up being 'relatively' cheaper. Furthermore, if the currency is appreciating then I can pay my workers less and they will maintain the same purchasing power, this gets carried through the economy and as long as producers/workers are dynamic then it should not cause problems.

Sure there are some people who have a 'stash' but there is a limit to how long they can keep this without spending it, I guess this is the 'payoff' from being someone who adopts the technology early and bears the risk of it failing.

In terms of my comment on monetary system, I just meant that it is impossible to have a medium of exchange that isn't intrinsically useless. Even systems like the gold standard relies on people's perception that gold is valuable. People can argue that it is nice for jewelry/pretty but that is mainly because it is expensive to start off with - like everything else, the value is based on societies perceptions (rightly or wrongly we cant change this!)     

They won't be able to do this since their prices are determined on market terms, i.e. through the balance of demand and supply. If the currency is appreciating, raw materials actually end up more expensive to you, since your profits are diminished when you sell finished goods for less price (due to currency appreciation)...

I have explained it many times already how exactly an appreciating currency hurts producers up to a point they begin suffering losses and stop production

As I have already said, the claims of a "payoff" are neither substantiated nor fair. This technology (at least as it is declared to be) is not to profit early adopters, since its alleged aim (a universal payment system) is downright antagonistic to such an idea, unless you are going to use Bitcoin for something other than a means of payment. The claim of bearing the risk of early adoption is also unsubstantiated since there would be none if it had actually been used for making business (risky only for businesses that sell goods for it). Really, why would you want to hold Bitcoin if it was conceived for selling and buying goods?

Unless you deem it as a means of profiteering and the whole enterprise as a Ponzi scheme, indeed. But then it is good old risk of a speculator losing his money, nothing romantic or moral about it

And fiat, which is intrinsically useless, serves this purpose the best. It is the closest approximation to the concept of money, i.e. a dimensionless yardstick for measuring the value of goods against each other

Sure I think that you're right to some extent, but you are only focusing on the supply element of the trade. If people have the feeling that they are wealthier then they will naturally pay more in order to maintain the same standard of living as before.

Take a normal fiat economy for example. If I have $100 of savings in my account and there is deflation in the economy of 5%. A product that previously cost me $10 now costs me $9.50 - you're right, in this sense the producer has lost out - to the tune of 5%. But if the price level has fallen by 5% then it also means that the producers costs have fallen by 5% too - so technically they have not lost out at all.

Furthermore, if you just focus on the consumer (the guy with $100 of savings) - his savings are now worth 5% more than they were before. So if the price of the good increased by 5% then he would still buy the good. This only doesn't hold if he is irrational and doesn't value goods based on his ability to consume.

I would also make the same point again - people will adapt to continuous deflation. If you have a deflation-linked salary then you remove any excess saving incentives. In the same way that by having inflation linked pay rises in the public sector acts to protect workers from their earnings being eroded over time.

There is a simple free market solution to any of the problems from companies suffering losses- they either increase prices or as you mentioned stop production. As the least efficient leave the market it allows room for the most efficient to flourish and rebalance their supply to meet the demand.

I'm not going to discuss this matter here since it is off-topic and of no interest to me (as I had already said everything I wanted to say on the issue long ago). This has been discussed a lot of times already, and if you want to continue, you are free to make a new topic. A short version, you are wrong since the production cycle of most producers is not instantaneous, and inflicted losses remain losses even in terms of an appreciated currency...

You would just be better off if not producing at all (which impoverishes society, though)

accumulation of bitcoin will reduce the price of bitcoin,

what if there was a fee for holding bitcoins for a long term? ???

"accumulation of bitcoin will reduce the price of bitcoin,"

That makes no sense.

"what if there was a fee for holding bitcoins for a long term?"

That is not a solution. There is already a free market for cryptocurrencies.
The solution is to invent a better cryptocurrency, or more specifically, a
cryptocurrency that does some things better than bitcoin.

Think ahead. What happens when the next halving occurs? Will the miners
have to raise the fee to stay viable?

Freicoin does that. If you continue to hold it it slowly eats itself. This is a classic example of the total unworldliness of crypto developers. Would you bother with a currency that slowly kills itself? I can't think of a single normal human on the planet who would be interested in such an idea.

In fact, it is very difficult to understand that the current system you are living in is a huge scam, but try watch some youtube videos and you will get to that conclusion sooner or later  ;)

Inflation or deflation is not the problem, the problem is that the money creation must be done by work or exchange resources of a value similar to its face value, that is what makes money valuable, since everyone has to work or exchange valuable resources to get money (except robbery and stealing). But fiat money is not created by any thing of similar value, so it is some kind of robbery/stealing, which impoverish the whole society

Notice that inflation or deflation is just a small variable in the big picture, you can print 2 trillion dollars to get inflation, and print 1 trillion dollars to get deflation, both do not change the fundamental flaw in the existing system

Ture, bitcoin will benefit the savers, however, everyone can be a saver, not only central bank. It will indeed encourage saving, but as observed during recent years, when bitcoin price rose, people spent them more, because they were richer, so deflation is not a problem for the same reason that inflation is not a problem either

this is wrong, because when the currency is appreciating the cost of raw materials is going down.
there arent less profits either.
in absolute numbers the final cost is less but through appreciation your buying power is the same.
hoarding raw materials happens - but not at the magnitude you are describing.
(in the end it is also another form of price speculaton)

supply and demand will lead to a equillibrium, it is not possible to hoard forever(=0 demand).

also you might want to look at scarcity theory - i think it is very interesting and closely related to bitcoin and other economic processes.

Simply put, you don't understand what you are talking about. Then again this is not a place for discussing such things, but you can go and discuss the question in this (https://bitcointalk.org/index.php?topic=975486.0) thread. Most likely that all your arguments you can ever think of have already been brought forth there (so you'd better read first)...

I strongly recommend against raising the issue of deflation vs inflation here

Bitcoin is an experiment.

It is mimicking the gold/silver supply which is limited on planet earth.

Fiat doesn't do that as now you can write $1,000,000,000,000 and now you have $1trillion.

What did they actually spend them on, I'm sorry? Personally, I converted my bitcoins to fiat and got done with that. Did they buy any goods en masse? I remember some poor wretch having sold his home for bitcoins (meaning someone did actually buy something real for crypto), when the price was almost at the top...

People felt very sorry for him, though

People also felt very jealousy for those bought a lot at $5, like Winklevoss twins  ;)

You spend bitcoin by first convert to fiat money and then buy goods, just like when you are traveling in Japan, your dollar/euro can not buy anything there, you have to first exchange to Japanese Yen and then spend

Then Bitcoin is not money, but just a speculative asset. Like many others out there. Or a Ponzi, since it neither functions as a currency (a medium of exchange) nor has any value of its own (yeah, I know nothing has value of its own)...

That, simply put, sums it up

Please provide proof and dont show me a 22 page thread where the answer might be or not.


Funny that the lawmakers are saying the exact opposite.
( in the eu btc is money)
U seem to ignore that bitcoin is just 6 years old.

Exactly; Bitcoin mimics a limited supply that had value, while fiat money is completely unlimited, be it banks or the government. That's the reason that gas costs $3/gallon; ever since the central banks were installed the numbers have just kept going up, and there is no indication that it's slowing down or that we'll see the monetary supply become stagnant.

What proof should I provide? At first you say that "the cost of raw materials is going down" and right after that you claim that "your buying power is the same". Is this not enough to prove that you don't have a clue what you are talking about?

Go finally and read that thread carefully (it has all the answers)

I don't care what lawmakers are saying. You cannot call something "money" which is not used as money. Money is what money does

How about you carefully read what i wrote?

1. Money appreciates
2. Raw material cost down
3. final price of product goes down


What should change in the buying power??

Cherry picking at its best or full choo choo retardness.

Well I think that overall, money is defined as a form of currency with which you can buy items or services, however, there are more specific definitions like Mike Maloney's "Money is a store of value" and Google's "a current medium of exchange in the form of coins and banknotes; coins and banknotes collectively" definition.

I would say it comes down to the person's definition of what "money" is defined as, however I am not sure how to interpret your definition. Would you mind elaborating? You aren't very clear with what money is, however you do make it clear you don't define Bitcoin as typical money.

There is a concept of money and application of this concept in real life. Regarding the former, as I said earlier, money is a dimensionless measuring rod for valuing goods against each other. Dimensionless means that it has no units (like meters or grams) attached, but has a numerical value. In real life, this concept is implemented in the means of exchange (or means of payment, which is the same), which allows to value goods and provides a device for an effortless exchange of goods...

Since you can't buy anything worthy with Bitcoin directly, it can hardly be considered as money

Regarding the definition of money as a store of value, this definition looks lopsided and incomplete, since any good money is necessarily a store of value, but not every good store of value is necessarily money. Real estate is considered to be a good store of value, but can it be used as an efficient means of exchange? Therefore, Bitcoin can potentially be a good store of value (which is questionable, though), but this alone still won't make it into money...

Some make it into hell, some make it into heaven

Bitcoin is not traditional money, but some kind of value abstraction far superior than money. The legacy money concept barely made it out of the boarder of a country: When you enter another country, your fiat money suddenly become useless without exchange, while with bitcoin you might still able to find someone accept it in another country without exchange

Why most of the country do not accept foreign currencies domestically? Because all the governments know that fiat money is a taxation on domestic people, it will be stupid to allow some foreign government to tax their people

However, bitcoin is similar to gold, it is wealth, not taxation, so governments might eventually allow it to circulate, since this will bring wealth into their country

This is true, I didn't phrase it very well.

What do you think is most likely to happen to Bitcoin over the long term? Will it, as you say, make it into hell or will it make it into heaven?

One of the hardest things to really accept is that because Bitcoin has a finite supply, and the emission of said supply is decentralised, it would be difficult to ever maintain any real stability of it. Monetary policy and government intervention is actually what safe-gaurds most people's money, as well as keep it relatively stable to the extent that we can price things in fiat without having to de-base it and change the price of things all the time.

and who said that bitcoin is not fuction as a currency? i can buy stuff with bitcoin, so it can be used as a currency and not only as investment, yes the primarely purpose for now is an investment

but the same was true for every other kind of money, when they first started, bitcoin is still young, not so much accepted, so it can not be really considered a means of payment for now, because of people hindering its adoption or not adopting it, not because it can not fulfil that role

Do you not think that monetary policy and government intervention is what makes storing your money in fiat more dangerous? At the drop of a hat they can flood economies with trillions of dollars all under the name of 'quantitative easing'......everyone suffers then.

The price stability of daily consumption is maintained automatically by itself, a change in money supply seldom affect it. A good example is the Ruble crash against dollar, it crashed more than 50% during 2 years, however the price domestically in Russian did not change too much. Another good example is QE, even after FED printed 5x more money, the price of daily consumption still seems stable

Even government is doing nothing, the price of daily consumption will maintain their level automatically and slowly get cheaper and cheaper due to advance in production technology, what banks do is to print more and more and added money work as a tax applied to everyone. Humans are adaptive, you tax them harder, they will work harder

It was your fatal mistake that you wrote this here, wtf. You can rest assured that the prices for a lot of the domestically produced goods in Russia (foods before all) did increase, and for some goods prices even more than doubled during the last 2 years. In fact, the crash of the ruble happened within just a few months from around 33-34 up to 70-75 in the summer of 2014. It was a kind of devaluation. Later it retraced back to 50-55, where it had been till oil fell below 50 dollars per barrel...

Now I spend on food twice as much than I spent a few years ago, but my taste preferences and food intake didn't change a lot, lol

Bitcoin will hardly be used for trading real goods in any significant amounts given its monetary model, which encourages saving and profiteering. No one will be selling anything worthy in exchange for it on commercial scale. This seems to be pretty clear by now. We should also take into account the resources that Bitcoin now requires just to support its infrastructure ticking. As I said before, I'm not very knowledgeable about its technical aspects, but it seems that it is very inefficient from a technical point of view. So it is not even guaranteed that it won't hit the wall after the coming halving...

Ultimately, it will most certainly switch into a zombie mode and end up in limbo (neither here nor there)

I *think* what you are trying to say is that miners are incentivised to hold (save) bitcoin,
thus viewing bitcoin as a monetary store of value. The paradox is that the value of
bitcoin to society is its use in trade (to simplify somewhat) and that no coin can
claim both these features. 

Well, I'm not living in Russia, just passed by Moscow airport a few times and did not discover a big change in price. But in Sweden where I'm living, its currency crashed 30% against USD, I can observe that many things just get cheaper, while some high end food get more expensive, like well processed sea food and luxury foods

So, I have never observed any clear relationship between the money supply and the price of food since there are so many different budget shops that you can get cheap food here. A meal in restaurant however get higher and higher price, but I guess that is due to the increase of the value of lunch that companies are allowed to deduct from income tax, it rose from 50 kr in 90s to close to 100 kr. now

Not miners, just holders. Miners nowadays have to pay huge electricity bills with fiat, so they necessarily sell at least some part of their mined coins, so the coins end up in someone else's hands. Regarding the functions of money being antagonistic, I explained this in another (https://bitcointalk.org/index.php?topic=1198499.0) thread:


But you are welcome with your own take on this

What if (yes, I said if) the satoshi becomes worth more than $10 each? How will we buy cheap 1-dollar goods? Will the bitcoin community decide to use a smaller denomination of bitcoin?

We don't buy any goods for bitcoins now in the first place (1 dollar or whatever), so why do you think anyone would be selling anything if one satoshi becomes "worth" $10? It is just like two people selling to each other a few satoshis for a few thousand dollars and then claiming that 1 BTC is worth 1,000,000 dollars

This is the illusion of wealth and false expectations at their bests

Yes it is. Only keynesian model and negative interest model have succeed in the past.

Wrong, it would simply cause price deflation.

You're so inundated by current economic model you can't comprehend alternative trains of thought. That's why you can't reason this simple example.

Oh, next you will tell me why deflation is bad.

We've had this type of discussion on bitcointalk over and over again over the last few years, and I sometimes wonder how people are obviously unable to use the search here or just look it up on the bitcoin wiki, for f***'s sake.

I am always amused by seeing even grow-up economists who should know better failing to understand that
there is no such thing as a limit to the money supply
in bitcoin at all.
Any first-grader in economics can explain the difference between a limited monetary base and a limited money supply.

So, basically, you're riding the dead horse of a long invalidated argument here.

I believe this is what the inventor envisioned when capping the coins:

Suppose that a precious metal such as gold becomes a society's money, and a certain weight of gold becomes the currency unit in which all prices and assets are reckoned. Then, so long as the society remains on this pure gold or silver "standard," there will probably be only gradual annual increases in the supply of money, from the output of gold mines. The supply of gold is severely limited, and it is costly to mine further gold; and the great durability of gold means that any annual output will constitute a small portion of the total gold stock accumulated over the centuries. The currency will remain of roughly stable value; in a progressing economy, the increased annual production of goods will more than offset the gradual increase in the money stock. The result will be a gradual fall in the price level, an increase in the purchasing power of the currency unit or gold ounce, year after year. The gently falling price level will mean a steady annual rise in the purchasing power of the dollar or franc, encouraging the saving of money and investment in future production. A rising output and falling price level signifies a steady increase in the standard of living for each person in society. Typically, the cost of living falls steadily, while money wage rates remain the same, meaning that "real" wage rates, or the living standards of every worker, increase steadily year by year. We are now so conditioned by permanent price inflation that the idea of prices falling every year is difficult to grasp. And yet, prices generally fell every year from the beginning of the Industrial Revolution in the latter part of the eighteenth century until 1940, with the exception of periods of major war, when the governments inflated the money supply radically and drove up prices, after which they would gradually fall once more. We have to realize that falling prices did not mean depression, since costs were falling due to increased productivity, so that profits were not sinking. If we look at the spectacular drop in prices (in real even more than in money terms) in recent years in such particularly booming fields as computers, calculators, and TV sets, we can see that falling prices by no means have to connote depression.

But let us suppose that in this idyll of prosperity, sound money, and successful monetary calculation, a serpent appears in Eden: the temptation to counterfeit, to fashion a near-valueless object so that it would fool people into thinking it was the money-commodity. It is instructive to trace the result. Counterfeiting creates a problem to the extent that it is "successful," i.e., to the extent that the counterfeit is so well crafted that it is not found out.

 Suppose that Joe Doakes and his merry men have invented a perfect counterfeit: under a gold standard, a brass or plastic object that would look exactly like a gold coin, or, in the present paper money standard, a $10 bill that exactly simulates a $10 Federal Reserve Note. What would happen?
In the first place, the aggregate money supply of the country would increase by the amount counterfeited; equally important, the new money will appear first in the hands of the counterfeiters themselves. Counterfeiting, in short, involves a twofold process: (1) increasing the total supply of money, thereby driving up the prices of goods and services and driving down the purchasing power of the money-unit; and (2) changing the distribution of income and wealth, by putting disproportionately more money into the hands of the counterfeiters.

The first part of the process, increasing the total money supply in the country, was the focus of the "quantity theory" of the British classical economists from David Hume to Ricardo, and continues to be the focus of Milton Friedman and the monetarist "Chicago school." David Hume, in order to demonstrate the inflationary and non-productive effect of paper money, in effect postulated what I like to call the "Angel Gabriel" model, in which the Angel, after hearing pleas for more money, magically doubled each person's stock of money overnight. (In this case, the Angel Gabriel would be the "counterfeiter," albeit for benevolent motives.) It is clear that while everyone would be euphoric from their seeming doubling of monetary wealth, society would in no way be better off: for there would be no increase in capital or productivity or supply of goods. As people rushed out and spent the new money, the only impact would be an approximate doubling of all prices, and the purchasing power of the dollar or franc would be cut in half, with no social benefit being conferred. An increase of money can only dilute the effectiveness of each unit of money. Milton Friedman's more modern though equally magical version is that of his "helicopter effect," in which he postulates that the annual increase of money created by the Federal Reserve is showered on each person proportionately to his current money stock by magical governmental helicopters.

While Hume's analysis is perceptive and correct so far as it goes, it leaves out the vital redistributive effect. Friedman's "helicopter effect" seriously distorts the analysis by being so constructed that redistributive effects are ruled out from the very beginning. The point is that while we can assume benign motives for the Angel Gabriel, we cannot make the same assumption for the counterfeiting government or the Federal Reserve. Indeed, for any earthly counterfeiter, it would be difficult to see the point of counterfeiting if each person is to receive the new money proportionately.

In real life, then, the very point of counterfeiting is to constitute a process, a process of transmitting new money from one pocket to another, and not the result of a magical and equi-proportionate expansion of money in everyone's pocket simultaneously. Whether counterfeiting is in the form of making brass or plastic coins that simulate gold, or of printing paper money to look like that of the government, counterfeiting is always a process in which the counterfeiter gets the new money first. This process was encapsulated in an old New Yorker cartoon, in which a group of counterfeiters are watching the first $10 bill emerge from their home printing press. One remarks: "Boy, is retail spending in the neighborhood in for a shot in the arm!"

And indeed it was. The first people who get the new money are the counterfeiters, which they then use to buy various goods and services. The second receivers of the new money are the retailers who sell those goods to the counterfeiters. And on and on the new money ripples out through the system, going from one pocket or till to another. As it does so, there is an immediate redistribution effect. For first the counterfeiters, then the retailers, etc., have new money and monetary income which they use to bid up goods and services, increasing their demand and raising the prices of the goods that they purchase. But as prices of goods begin to rise in response to the higher quantity of money, those who haven't yet received the new money find the prices of the goods they buy have gone up, while their own selling prices or incomes have not risen. In short, the early receivers of the new money in this market chain of events gain at the expense of those who receive the money toward the end of the chain, and still worse losers are the people (e.g., those on fixed incomes such as annuities, interest, or pensions) who never receive the new money at all. Monetary inflation, then, acts as a hidden "tax" by which the early receivers expropriate (i.e., gain at the expense of) the late receivers. And of course since the very earliest receiver of the new money is the counterfeiter, the counterfeiter's gain is the greatest. This tax is particularly insidious because it is hidden, because few people understand the processes of money and banking, and because it is all too easy to blame the rising prices, or "price inflation," caused by the monetary inflation on greedy capitalists, speculators, wild-spending consumers, or whatever social group is the easiest to denigrate. Obviously, too, it is to the interest of the counterfeiters to distract attention from their own crucial role by denouncing any and all other groups and institutions as responsible for the price inflation.

The inflation process is particularly insidious and destructive because everyone enjoys the feeling of having more money, while they generally complain about the consequences of more money, namely higher prices. But since there is an inevitable time lag between the stock of money increasing and its consequence in rising prices, and since the public has little knowledge of monetary economics, it is all too easy to fool it into placing the blame on shoulders far more visible than those of the counterfeiters.

The big error of all quantity theorists, from the British classicists to Milton Freidman, is to assume that money is only a "veil," and that increases in the quantity of money only have influence on the price level, or on the purchasing power of the money unit. On the contrary, it is one of the notable contributions of "Austrian School" economists and their predecessors, such as the early-eighteenth-century Irish French economist Richard Cantillon, that, in addition to this quantitative, aggregative effect, an increase in the money supply also changes the distribution of income and wealth. The ripple effect also alters the structure of relative prices, and therefore of the kinds and quantities of goods that will be produced, since the counterfeiters and other early receivers will have different preferences and spending patterns from the late receivers who are "taxed" by the earlier receivers. Furthermore, these changes of income distribution, spending, relative prices, and production will be permanent and will not simply disappear, as the quantity theorists blithely assume, when the effects of the increase in the money supply will have worked themselves out.

In sum, the Austrian insight holds that counterfeiting will have far more unfortunate consequences for the economy than simple inflation of the price level. There will be other, and permanent, distortions of the economy away from the free market pattern that responds to consumers and property-rights holders in the free economy. This brings us to an important aspect of counterfeiting which should not be overlooked. In addition to its more narrowly economic distortion and unfortunate consequences, counterfeiting gravely cripples the moral and property rights foundation that lies at the base of any free-market economy.

Thus, consider a free-market society where gold is the money. In such a society, one can acquire money in only three ways: (a) by mining more gold; (b) by selling a good or service in exchange for gold owned by someone else; or (c) by receiving the gold as a voluntary gift or bequest from some other owner of gold. Each of these methods operates within a principle of strict defense of everyone's right to his private property. But say a counterfeiter appears on the scene. By creating fake gold coins he is able to acquire money in a fraudulent and coercive way, and with which he can enter the market to bid resources away from legitimate owners of gold. In that way, he robs current owners of gold just as surely, and even more massively, than if he burglarized their homes or safes. For this way, without actually breaking and entering the property of others, he can insidiously steal the fruits of their productive labor, and do so at the expense of all holders of money, and especially the later receivers of the new money.

Counterfeiting, therefore, is inflationary, redistributive, distorts the economic system, and amounts to stealthy and insidious robbery and expropriation of all legitimate property-owners in society.


pages 20-27
https://mises.org/library/case-against-fed-0

Alright so here's the thing with the maximum value of Bitcoin that I've been mulling over;

Say we reach a point where each Satoshi is worth $10, why would we not simple end up buying more things in bulk? If a pack of gum costs $1 or $2 now, why not buy 5/10 of them? Chances are you'll use more in the future, and it just prevents you from having to run out to get more. Would this not also encourage higher-quality products since it would be borderline impossible to purchase anything for <$10?

This would have more implications for low-wage workers, such as many workers in China, however this might help to increase their quality of life at the same time, since they have to be paid a minimum of $10 per day, yet they might become jobless for that same reason.

The market cap for Bitcoin would be $21 Trillion at $10/Satoshi, unless I can't do math, and so it would be approximately equal to the current monetary supply, meaning we wouldn't necessarily see a difference aside from not being able to buy goods and services individually for <$10.

Hypothetically you can work around $10/Satoshi by having stores you shop at have a credit system, or similar, where they only charge you when you spend over $10, after any sort of period of time. This has it's own implications, however one could ignore those for right now, for the sake of the argument.

I'm probably making a bunch of mistakes, I don't have a degree in economics so I won't have all the models and ideas properly set out. If there are any corrections or additions you want to comment on, feel free to reply. I'm care less about being right than I care about learning new things.

All your logic and calculations are based on the assumption that Bitcoin is actually used as a means of payment while it is not. Its exchange rate can be whatever large ("only sky is the limit" and "to the moon"), but you won't buy anything with it. You won't even be able to convert any decent amount of bitcoins into fiat without crashing the price. The true exchange rate should be calculated by the amount of goods sold for Bitcoin...

Anything beyond this is pure speculation

IF we ever reach the point that one satoshi equals 10$ we would simply add more decimal places.
so it would still be possible to spend 1cent

That's what I was thinking, but I'm not a genius when to comes to the Bitcoin protocol, so I wasn't sure how best to interpret what adding more decimal places would do, e.i. Would it be a hard fork for the blockchain, etc.

I'm not sure why we would want to add a decimal place of $0.01, however. Most things we buy are either nearly rounded to a dollar, or are half of a dollar. What would we buy where $0.01 is a necessary denomination of currency?

yes, adding decimal places is a hard fork.

IMHO a currency should provide more decimal places than needed because of price swings. an hardfork isn't an easy thing to do and needs some planning. so i'd say doing it early and not very often is the right thing to do.

even if bitcoin wasn't hard capped to 21mil it would still be better than the current fiat system, because you could predict the supply of money. However a deflationary currency is far superior to a inflationary currency.

The only flaw that I see in this system is the early adopters, get the cheap coins at the expense of latter adopters.

The problem with this system is not only the early adopters but the slow circulation of money. Silvio Gesell stated, in his book "The NATURAL ECONOMIC ORDER" http://www.geokey.de/literatur/doc/neo.pdf that slow circulation of money is the principal cause of the faltering economy. Only Keynes and Silvio Gesell solved this problem.

Could you please give a concise version of his idea as you see (understand) it. Not that I disagree with you (him), but I have my own conception in respect to money circulation

I think the op has a point here. Bitcoin DOES encourage hoarding and we know that a healthy economy requires money to be spent.

it encourage it until a certain point, and it's good this way, because you limit the inflation, then when the target is reached, for many they will begin to use bitcoin

i can not see anything wrong about this, unless you think that thhey will hold indefinitely, certainly i don't believe that the current inflated system is the answer, and a deflazionary-inflazionary system is hard to get

Let's be honest, that's pretty much impossible. In the future if bitcoin becomes a currency that everyone uses I'm sure people won't compare bitcoin to dollars anymore, like we do with euros. When I go to the shop I'm not comparing euros with dollars like, hey this is 5 euros, before I spend them, let me see how many dollars that is.

In the fiat system, the early adopters get the high interest rates at the expense of later adopters.

I told you, Keynesianism and Freigeld are the best systems.

https://en.wikipedia.org/wiki/Freigeld

Lol, if you can't explain an idea or concept in a few words, you don't understand it yourself. Saying that something is best doesn't cut it, sorry

Read the link to understand the concept.

If you refer to the Wiki article, I read it long ago. I want to hear your understanding of this concept, how you see it. Look, at first you make mention of it here (as the best monetary system out there), no problem, and then you decline from explaining why it is so?

What are your arguments supporting your claims really?

It isn't flawed. If bitcoin becomes add widely used as you say, then the demand will go up, along with bitcoin's price
 Maybe a satoshi might be worth 5 cents in a few months time!

^^ If that happens, that means a whole bitcoin would be worth 5*100 million / 100 = 5 million dollars?
Ok... how much would a loaf of bread cost if that happens?  ;D  And how much would Bill Gates earn in a second?

But I agree with you on the demand of bitcoin and the correlation of that to it's price. Tho I'll be modest (and also stick to reality) and say it will hit 500 USD soon, especially with the halving comming.

You are a idiotic hypocrite. You did the same shit as the guy who you blame. (Page 2)

Go away clown

Im much impressed. Maybe care to explain me your wikipedia economics with your own words? :)

Negative interest rate system is superior to bitcoin system.

What is the point of discussion of this now? Is not that we can change basic principles of bitcoin now anyway. There might be better economic systems out there, I am not questioning it.
But bitcoin is still FAR superior to current FIAT system, and that is what matter for me. To all who think that bitcoin is not good - maybe someday you will earn Nobel Prize for your own economic system.

In what aspect(s) is it superior to a balanced (read not being constantly abused) fiat system? In that it encourages saving? But without an underlying asset having value of its own (like gold), it will eventually turn into an outright Ponzi, if not already...

Are you one of the early adopters or just hope not to be the last to jump off the train when it finally derails?

In my opinion, a balanced system can only exist in the absence of usury.
What do you think a balanced system would look like?
How do you propose to bring about a balanced fiat system?
How will the people acquire control of the money? How can it be taken from the central bankers who will NOT give it up voluntarily?
I personally cannot see the system coming to balance when so much wealth and power is held by so few. I think we must democratize currencies and cryptography while eschewing all private credit and usury systems, then we can realize the vision of the founding fathers:
"The liberties of a people never were, nor ever will be, secure, when the transactions of their rulers may be concealed from them." - Patrick Henry
"Bank-paper must be suppressed, and the circulating medium must be restored to the nation to whom it belongs." - Thomas Jefferson
"But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create money and control credit." - Sir Josiah Stamp 1920 - Director of Bank of England
More Quotes Here (http://www.trueworldhistory.info/docs/quotes.html)
Bitcoin is backed by the credit of those who accept it (i.e. demand it). The people who DO accept bitcoin are giving it value by driving the demand; I am convinced that these people will always exist, so therefore bitcoin is an asset with value of its own.

Does ZIRP cut it?


This won't cut it either. Even if you somehow managed to remove control over the monetary system from the hands of the few (the central bankers) and give it to the many (the people), the control would still eventually end up in the hands of the few, since the masses are ignorant, but the chosen (lol) are corrupt. The problem is ironically aggravated by the fact that the masses can't even accept their ignorance as a fact of life which is actively used against them for the sake of the few...

“Every woman must learn to rule the state” by Lenin was a flattery toward the masses and an example of just that

All those distinguished people are either idealists or just have an agenda (like Lenin), sorry

And Bitcoin, the money "for the masses", is an epitome of wealth inequality itself, though all its "wealth" is fake and illusionary, indeed (all those who are eager to discuss or refute this walk here (https://bitcointalk.org/index.php?topic=1198499.msg12580845#msg12580845))...

How are you going to "democratize" it?

Any ponzi works like that, and faith (or credit, in your terms) is not a lasting asset, let alone it's not inherent to Bitcoin, not its intrinsic feature which can't be taken away from it to declare it as having value of its own. Unless you make it into a religion of sorts...

But you have tight competition in the field, lol

Well we have the USD which only value is given by peoples faith and gold as well. Every money ever created is a ponzi scheme if you think about it. Why do we let people we don't trust run this ponzi, why not a protocol that everyone could inspect and review. We know exactly what it does and how it works. You can't really say the same about fiat.

With a little change (not every money, but fiat only) this is what I say myself, lol. The strength of a fiat currency is a mirror of the strength of the state behind it. In a sense, it is a derivative from the power and might of the state. It lives only as long the state exists. When the state weakens (for whatever reason), it deliberately weakens its currency in an effort to postpone its collapse and ultimate destruction...

But the faith is subjective while the power of the state objective

There are two major issues with that. First, even if the Bitcoin protocol were set as a law of nature, this wouldn't by any means make it perfect per se. In fact, this whole topic is about that it is actually far from being perfect (or just good enough, lol), mildly speaking. Second, it is not set by nature, but what is made by humans can be unmade by humans too. So why should I trust it?

Why should I trust my real wealth to a relatively small group of people who control Bitcoin and who could kill it if they chose to?

But you do that with fiat don't you? The people running things most likely don't wan't anything bad to happen to the system just because they're at the top, that's human nature. However bitcoin truly isn't perfect, but what is? You could nitpick about anything and everything, the only thing bitcoin is in my opinion a better and superior alternative to fiat.

I expected that you would raise this issue, lol. No, I don't. But in fact this is irrelevant, for two things. First, fiat (unlike Bitcoin) is neither meant nor actually thought as a long-term store of value. It is meant and used as a means of exchange, but being a means of exchange is antagonistic to being a store of value in the long run. Thereby it cannot be trusted by definition...

So whoever decides to store their wealth as fiat is shooting themselves in the foot... with a cannon, wtf

Second (and it is an entirely separate issue), even if you store your wealth in anything (Bitcoin included) but fiat, or even turn your wealth into capital to work as an investment (your own personal enterprise), you still have the same state behind your back, which could strip you of your wealth (or your life, for the record) just as easily as it could strip money of its value (in fact, even more easily, for your own personal insignificance, wtf)...

Ultimately, it all boils down to whether you trust (lol) the state you happen to live in

As I stated in my opening post, the Bitcoin economic (monetary) model itself is flawed. Fiat money is damaged heavily by people who use and abuse it, but as a model it is still superior to that of Bitcoin and closer in its application to the abstract idea, or concept, of money as such. In fact, the Bitcoin monetary model is anachronistic economically...

It is not a step ahead, it is two steps back actually

Demurrage means depreciation of money over time at an arbitrarily set fixed rate (just like Bitcoin is set to appreciate by halving). You can do exactly the same by just printing more money. I can't possibly conceive how the former can be better than the latter, since in the case of printing more money you are, at least, free to choose how much more to print...

Did I miss anything of substance?

How is that so? The idea of a global exchange token, which is scarce and can be moved around freely within it's network? Or the part that it's capped and this idea alone lures in new adopters to this massive ponzi? Or the concept of having a fundamentals set in stone(like the US amendments)?

I mean it removes all boundaries we currently have with money and our banking system.(a bit exaggerated, but that's the idea) Our current monetary system took at least several hundred years to evolve, with each passing year the fundamental goals of this system get forgotten, Intentionally or not.

We're in a point in time where pretty much every investment option could go to shit with the collapse of any of the big currencies. After you take away gold and silver from the equation, you're left with pretty much nothing. Like you said you could run a store but if state doesn't like you you're fucked.

However bitcoin is pretty hard to shut down, even when there's war raging on. I mean you'd need to shut down the entire electrical system for that to happen.

I have already explained it earlier. The Bitcoin economic model is based on the concept of money as a store of value. But without functioning as a means of payment (i.e. mediating trade in goods), it cannot reach the goal of being money, since the function of preserving value is secondary to this primary function. But given that it has no value of its own (like gold, homes, etc), it is technically no more than a kind of Ponzi...

I have specifically emphasized that its model is economically decrepit and obsolete, but that part you decided to omit

What boundaries does it remove if it doesn't function as money in the first place, i.e. doesn't remove its most important boundary so far? It is like saying that being able to SMS anyone (who has a cell phone at least) "removes all boundaries we currently have with money and our banking system". This statement makes no sense, until we somehow start using SMSes as a means of payment...

Though, most likely, it is impossible altogether, and that problem would be its prior "boundary"

The problem with current economic system is that it is "system of debt". I system of debt one of the two parties is always the slave. Is is an architecture of money where you have no control.
An architecture of money where every interaction is mediated by a third party that has absolute control over your money.
Bitcoin is fundamentally different because in bitcoin system, you don't own anyone anything, and no one owes you anything.

You can learn more from this awesome video: Documentary: The Bitcoin Gospel - https://www.youtube.com/watch?v=8zKuoqZLyKg&feature=youtu.be&t=224 (https://www.youtube.com/watch?v=8zKuoqZLyKg&feature=youtu.be&t=224)

Okay, I have a coin, say a quarter (25 cents). Whom do I owe exactly and what? Who is a slave of whom?

OP is a wannabe economic expert who needs to earn 10 cent per post.
We gotta believe his words that he cant backup with arguments and facts. ::)

You are hero member and dont even know why bitcoin has intrinsic value.

For gods sake delete your account.

However Rai stone stones were used as a viable payment on the island of yap, If they achieved to make that happen, then why should bitcoin be worse off doing the same thing? I myself bough a steam game recently with bitcoins. Functions just like a better than a credit card.

However we need to change the consensus about the store of value, by making it more lucrative to merchants and consumers, which will most likely happen in the future. I'd just give it more time.

And so what? I don't quite understand what you are trying to say. I guess there should be nothing either wrong or bad if Bitcoin did the same thing, i.e. became a means of payment like Rai stones or Cypraea shells. The main issue is it doesn't, and it cannot be called money until it does (on a commercial scale). A copy of a game you pay for with Bitcoin costs the developer nothing (the game is already there)...

Try to buy a new car from a car-maker for Bitcoin

http://www.coindesk.com/lamborghini-mclaren-bitcoin/ (http://www.coindesk.com/lamborghini-mclaren-bitcoin/)
Soon.

Published on January 30, 2014. How soon exactly?


I concur, it doesn't quite qualify as a bitcoin deal, lol


I tried to follow the link but it's dead, though

So you classify something as a meas of exchange you need to be able to buy a car with it? Some people are able to live solely off of bitcoins, by never touching fiat. That just proves how effective it is. There are a lot of workarounds in the bitcoin ecosystem for every problem one may face.

Not at all. First of all, I meant a commercial scale of trades. Cars are like that (large scale production). And then almost everyone has an idea of what a car is and how much it costs, lol

I just want to see things in their real pristine light, stripped of all hype and bullshit, wtf

Further, I don't think it proves anything per se. If the seller of goods immediately converts the proceeds into fiat, how would it change the matters? What is the difference between the buyer converting bitcoins into fiat before the purchase or the seller doing the same right after?

I think this is all six of one and half a dozen of the other, wow

The Fed is the source of credit. Credit is no different from faith (credibility), so the Fed has created a monetary religion that controls the barter economy. Fortunately, anyone can barter with bitcoin or any other commodity without the need to participate in a deceptive religion.

Usury is when the state uses the peoples' assets and keeps them ignorant about how to access their own value.

Could you expand more on that, namely, what you mean by accessing the value of assets? I don't get it

I am so glad that you asked. There is A LOT of misinformation surrounding this topic and the monetary system in general, so I will summarize my understanding and I hope that those who read will educate themselves enough to formulate a response.

First, you have to understand the entire context around HJR 192 and the 14th Amendment.
Second, you need to be aware of the nature of the SS Card: it is a promissory note.
Finally, you need to stand as a fiduciary over that SS account and utilize (or liquidate) that note.

Required reading:
Wizard of Oz ….The “Coded” Movie of what really happened to America
http://www.whale.to/c/wizard_of_oz1.html
HJR 192 Overview, it seems to contain some misunderstanding about "Trust" but this is a good place to start
https://iuvdeposit.wordpress.com/hjr-192/
Archive of Documents posted on the Yahoo Group "WeThePeople_Shareholders" (check Yahoo to get the latest documents; it is a work in progress)
http://econcurrent.com/devine/files/37-TreasuryAccount/
Nature of the Dollar (it may also contain misunderstanding about "Trust"):
http://thefederalmafia.homestead.com/letteronmoney.html
Nature of a Bond:
http://stopthepirates.blogspot.com/2014/03/in-order-to-win-in-court-you-have-to.html

If something is hard to understand, you will probably need to use a law dictionary; Ballantine's and Anderson's are recommended.

Hello guys. In our project (released already) we tried to resolve the problem described here by providing unlimited supply and constant mining complexity. But of course got some new instead, like centralization. Link in the signature. If anybody interested to discuss the concept i'm ready.

What is the economic (monetary) model behind your coin? Or, rather, how is it fundamentally different from a lot of other digital monies out there that have no limit on the number of coins mined?

How the supply of new coins is constrained and on what conditions, if ever?

Well, i haven't checked whole 1500 altcoins, but emission differs from fiat, btc and most alts. https://bitcointalk.org/index.php?topic=1241229.msg13038013#msg13038013 here is expanded version.

In 2 words - we have constant "production cost" of 1 coin. Constant in terms of cpu time and electricity. So when economy behind requires more currency price of currency goes up, miners enable addition power to get profit, or reduce if there is no need. Mining not necessary for payment processing.

Thereby, if you have a huge inflow of new miners, the currency would hyperinflate, right?

Why would they do it? I guess there are better opportunities to use cpu than mine with rate for example 0.1$month. But price generally will have "low" price, yep. But not hyperinflation, just not profitable to mine for most on the planet :)

Because they would want more coins? If they are worth anything, of course. If they aren't, what's the purpose of your "money" then?

You are missing the point. They can worth some value, but it doesn't mean it's more than you spend to get it. As CPU mining of Bitcoin now.

Okay, you say that mining right now is more expensive in general than the price of the coin, no problem. But what the heck are you doing here advertising new coin if it is not profitable to mine at the moment?

Namely, where is our interest hidden? Why should we care, really?

Right now it's still profitable, as price up from 100btm/0.001 btc to 4000 now (we got public on bTalk 8 nov), but it's not for a long time. I ever thought money is for trading, not for mining. We have instant (10-20s due to i2p) transactions, low fees, easy integration. We never advertise investing\saving as primary target, but it's really useful as microtransactions tool.

Our interest is not hidden - we can print the money as it's our system.

I agree with that, but, look, if mining is still profitable, people will be mining the coin just for the purpose of converting it into fiat (BTC) later. When it finally becomes unprofitable to mine new coins, you are stuck with a shitload on new coins that nobody cares for...

Until it somehow becomes profitable to mine again, of course


I meant our interest, that of users, not yours (as an entity behind this coin)

Ah, read as "yours" (usually it's the first question sry).
I guess most interested are site\service owners, as they will be able to accept some funds, and users gets after them. We'll have some end-user oriented services but it will be later.

About stuck - user can buy our currency for BTC or selling some service\goods and so on. Due to exchange fees it will be ever easier to mine 1 coin than buy in somewhere so playing with any self regulations system (as our forum take a look) will work still. But generally without real life usage we are in trouble yep.

If I got your point correctly, you are waiting when it becomes unprofitable to mine any more (i.e. after the pump-and-dump stage is over), and accept this coin as a payment for "some end-user oriented services" of yours, right?

Now it is time to actually ask what is your interest, since you will essentially be offering services for free

There has not been "pump" and will not be by design, that end-user services will not be soon. I'm waiting some integration review now to understand api design flaws :) It's useful already without any additions for "look previous post" guys. Like spam protection systems etc.

Services are not for free just for our currency. I din't understand the part about my interest. In the future it'll look like "tax" for miners i guess.

That's what I meant exactly, since your currency will be worth next to nothing (after it becomes too expensive to mine it, i.e. not worth it). Why all the fuss with a new monie if you could just accept fiat for your future "services" and be done with that?

If they would be really worth it, of course

Understood.

1. We don't want to depend on fiat payment systems (additional costs in many ways).
2. We don't want to be based on BTC because the whole thread above about money supply etc. Bitcoin price looks unstable (and it still is by design). Own emission scheme looked the best choice (as concept by itself and as part of some technical details like ddos protection servers). There is a question about convenient exchange but it'll be solved in the future.

Furthermore, if you decide to set the price for your services in your currency high enough (so as to at least cover your expenses) given the settled market exchange rate for your coin, you will be losing anyway. Why? Because the profitability of mining is essentially limited by the cost of electricity, while your costs (not even speaking about profits) will obviously be higher than the cost of electricity (since they most likely will include it plus a lot of additional expenses)...

So whatever price tag you set for your services, you will be heavily losing as compared to just selling them directly for fiat

As i understand you right... It's the question about market liquidity. The more services will use the currency the more we can sell on exchange without significant price change. There is no profit now yep, just fun ;D.

Nope... In fact, I assumed that there is already enough liquidity in the market ("given the settled market exchange rate for your coin"). This is a shaky assumption (in reality things would be worse for you), but it was necessary to show why you will most certainly lose profits or just suffer losses even in the case when the exchange rate was fixed. Liquidity won't prevent you from subsidizing your users (if they pay for your services in your coin)...

Unless you cap the amount of coins allowed to be mined, indeed. Otherwise users will steal from you arbitraging the system

1. You are right if there would be just we, users and our services (like twitter, dropbox, hosting, etc). But as i said that end-user services aren't primary target, it was just part of the explanation why now it's more interesting for service owners.
2. That services won't be twitter, dropbox, etc things requires data-center.
3. In general there will be still some point where i can get profit anyway (like mining litecoin for example) so the whole assumption is not very solid imho.

But then we are back where we started at, that is, why should we, the adopters, care (after mining is no longer profitable)? Service owners accepting your coin as a means of payment would be in exactly the same situation that I described earlier...

Apparently, they won't let their users steal from them (read take your coin as a means of payment)

I don't quite understand what you mean. I thought we had already agreed that mining your coin was not profitable due to electricity costs as an initial condition:


Until then people would just mine it and convert to fiat or Bitcoin

1. Miners consume more electricity than i am (as i just check tasks solution and they actually find it, it's 2000+ difference at least). If it wasn't clear.
2. They care because that's the way to get some additional profit from their services. Let's take your example. I have the payment system, some service (like twitter with payable tweets and subscriptions) and exchange with BTC and stable exchange rate. Then i just sell twitter service with middleman for BTC. Where they steal from me?

I understood neither the first nor the second. How exactly the service providers get additional profit from their services by accepting your coin as a means of payment?

Remember, though, that we are at a stage where it is no longer profitable to mine your coin

1. It was about your "Because the profitability of mining is essentially limited by the cost of electricity, while your costs (not even speaking about profits) will obviously be higher than the cost of electricity (since they most likely will include it plus a lot of additional expenses)...". There is some misunderstanding i think.
2. They'll get additional profit because it's easier faster and cheaper to accept it so more people will buy something.
3. Again, mine is not the only way to get the currency, you can sell BTC or some service to miners or previous holders. Why unprofitable mine is so important? Bitcoin is not minable for the most but still is useful.

I don't know what kind of service you are actually going to provide, but services that don't require a lot of expenses or just popular enough are usually provided for free altogether (like gmail, facebook, whatever). In fact, I was initially assuming that you are going to provide something very original, specific, and expensive (like child pornography, lol) to make use of yet another coin justified. That said, you (and other service providers, for that matter) are still bound by the amount of expenses you (them) may have to bear for their services rendered and the price of electricity (as the decisive factor for mining) that miners would pay for mining your coin in the way I described above...

I hope this clarifies the matter

Faster and cheaper than what? There are a lot of coins that are fast and cheap aiming at exactly the same as well as being well-established at that (say, Dogecoin). Do the service providers actually use them? I guess, no, at least, not to a significant degree. Even if we take online gambling as one such "service" (though this is a far cry from what you intend your coin for), I can only name bitcoins, litecoins and doges (in a few places) as being actively used...

Why would the things be different for your coin?

Until then prices (i.e. exchange rate) will be too volatile. Not that I somehow imply that they won't be so (lol) when mining stops being profitable for the majority of miners (see Bitcoin), but the former is a given for a currency that doesn't have limits on the number of coins mined (see Dogecoin). Needless to say that high volatility of a coin is a big no-no for those who are going to trade goods for that coin...

Essentially, the unprofitability of mining sets the cap on the supply of new coins, which should stabilize the price, at least, theoretically, lol

It clarifies nothing ??? Lets leave our services aside, it's not relevant here. And I still don't see the reason why i should pay the miners electricity price.

Than any decentralized system, by design. We can process hundreds tps without any limitation of the whole blockchain distributed to another full nodes like almost any altcoin. Plus stable exchange rate due to emission scheme.

Price will be falling until some equilibrium price will be found, then volatility will decrease. And i think it'll be soon. So what is the question?

Okay, let's assume that you are selling an illicit content on the net. Child pornography would do just fine for this task, lol. It is a criminal activity in the majority of jurisdictions (if not in all) and severely punished. So as not to get caught, you create a super-duper cryptocoin, with an unlimited supply of new coins. The mining is no longer profitable, the liquidity is abundant, and the price for this coin is low (due to huge money supply) but nearly frozen (which is good for you). The "content" you provide is very expensive for pretty obvious reason, so you set the price for 1 minute of watching it according to the costs incurred, the exchange rate (since you pay your "employees" in fiat), and add a decent profit margin, of course (just in case, lol). So far so good. Now what happens if miners can mine much more coins with the same expenses than you decided to collect from them by viewing your "special" content (since they pay only for electricity)?

You will be subsidizing them in terms of fiat

"Why would the things be different for your coin?"

There seems to be an acceptance of this paradox of money : that particular
forms of money cannot be both a store of value and a means of exchange.

Stated differently this becomes Gresham's Law:
https://en.wikipedia.org/wiki/Gresham%27s_law

Summary : "Bad money drives out good"

Regarding Government : "When a government overvalues one type of money
and undervalues another, the undervalued money will leave the country
or disappear from circulation into hoards, while the overvalued money
will flood into circulation."

Thus when government introduced their fiat money, specifically paper fiat
money, silver and gold coinage went into hiding. It is instructive to
observe that when the Mongols conquered China, the conquest was greatly
facilitated by the issuance of new paper money (at an extortionate
exchange rate). Fiat money is merely a transfer of power from savers to
the issuer of the fiat money. All fiat money is credit (and debt).

<Insert Rothschild quote here>

These things were once universally known. Today, the internet has made
new forms of money possible, and bitcoin may only be the first of many.
The lessons of history are being re-learned. For some, it may be painful.    
This collective amnesia is surely not accidental - the punishment for
currency debasement could be both gruesome and medieval, hence those
promoting fiat currencies have strong incentives to succeed.

History suggests that store-of-value money is sub-optimal, and that a
trimetallic (gold, silver, bronze) currency has advantages (and
disadvantages). This paper asks the question:
https://www.mpls.frb.org/research/wp/wp536.pdf
"The puzzle, of course, is not why sovereigns carried out debasements
(in fact it might even be why they did not do so more often),
but rather why did private agents respond so."

The author does not directly provide a convincing answer. It seems
probable that an informed merchant, on learning of a forthcoming
debasement, will borrow, then covert the bullion into debased coins,
and replay the debt at profit. Thus proximity to the Mint may have  
determined the market price of the debased silver coinage.

Note also "Accountants and merchants would count in livres of this
or that coin, and convert to gold coins to keep track of the
different values of the silver coins ..."

Monetary systems gravitate toward store-of-value (bitcoin) and
"overvalued money" that floods into circulation. Clearly, banks and other
middlemen are incentivised to keep fiat money circulating. Whether
bitcoin can disintermediate the third party in future transactions is
an open question, and there could be an opportunity for the right altcoin.

What about fault tolerance? You would need a data-center (or two, just in case, lol). All of a sudden, things get serious and much more expensive than previously thought, wow...

And why should we trust you, in the first place?

Fairy tail. Some crazy man will spend his electricity for... what is the purpose?
In general miner's cost will pay the client who needs money for transfer and there is not enough on free market, than it becomes profitable to mine that small amount. Seller pay nothing. Client will, if it's the only way. But he'll be able to sell it to the next generation of users, so the full price spreading among all clients.

P.S. I don't think CP is the subject for discussion. Our system will have some rules for such things, probably not for the first time but still.

The whole twitter worked on one DB instance, what data-center? We'll need some infrastructure but it'll be significantly less than BTC with 10$/tr and fiat payment systems with their jurisdiction issues.

Are you kidding? For a moment, you were talking about a payment system (like Visa or MasterCard, for the record), hundreds of transactions per second, 24/7/365

Did you finish school, really?

You can substitute CP with anything more decent or legal (lol) but as expensive, though (say, just porno). The result will be the same, unless you decide to cap your coinage one day, indeed. As I said, users will be arbitraging such a system if there would be providers of expensive content/services in it...

But there would be none, obviously

Every tx around 300B. 300*1000*3600*24*365 oh god the whole 10TB. You live in 90s? Btw we already have node partition design internally too.

Just in case, 24/7/365 means service availability. Think again about a data-center (or two)

We obviously can't provide 99.999% availability time (as and many other VISA advantages), but it's not necessary, we are discounter :) Fast and cheap. But of course we'll have failover systems (replication based with rollback time notification smthg like that). But not the whole data-center.

Hi deisik and hi all :)
Just have noticed this discussion. I am also a member of BitMoney dev-team. Hope to make all clear about our project, if it is so actively discussed.

- What is it about exchange rate? Will it always fall?
As soon as we integrate many services, people will start to buy BTM for their needs. Most people can't mine as much as they need for usual transactions. So the rate will stabilize, with small inflation like any currency has.

-Well then, what is the reason to integrate it with my service or just use?
And it's the main point. Here we come to the topic subject.
We are developing payment system which should have many obvious advantages if compared with Bitcoin. I just paste here some description from the manual:

* Anonymous (for clients) transfers optionally.
* Small storage requirements
* Ready to work immediately after start.
* Client-server protocols based on the i2p network, most experienced system for anonymous and encrypted communication.
* Client authentication and encryption key exchange based on RSA with 2048 bit keys. Everything including local settings is encrypted with AES-256.

In short, BitMoney transactions are fast, and can not be tracked like Bitcoin payments. This fact and out i2p relation provide many opportunities and we are trying to catch and use all of them (ani-spam system is just the first and one of the most simple examples). I can't say if we shall succeed or not, but the next generation cryptocurrencies have to provide this properties for their users. Bitcoin can't reach it by design, and we are already doing it.
Just for example. Fast transactions provide opportunity for shops to sell goods with a price based on almost current exchange rate, not making 3-10% markup for safe currency exchange. Moreover, low commissions let shops to make even lower prices in BTM, that is good for their consumers.
Offline payments are the other interesting feature. It will be implemented in the future release.
And I can go on long enough.

-What is the reason to mine BitMoney anyway, if my electricity doesn't cost ~0?
First, for small amounts it's easier to mine BTM than to buy it. It's most about different ani-spam services (look our forum or build-in chat for example).
Second, we have plans to provide a kind of investments with BTM, but it's not about HYIP pyramids or something alike. It should be a kind of investment in external services implementation, clean and profitable for all sides with a goal of further project development. But now it is all I can tell about that.
Third, BTM mining is still profitable just to buy BTC with current rates.

Finally, if we are speaking about Bitcoin. It is also not profitable to mine for most of users. But they use it, and not because of profitable mining, but for its comparative security and anonymity.

-Where is admin's profit?
We have commissions for most of transactions like any other payment system has.  But our commissions are much lower.

-What happens, if you have problems with fbi?
https://bitcointalk.org/index.php?topic=1241229.msg12975575#msg12975575 (https://bitcointalk.org/index.php?topic=1241229.msg12975575#msg12975575)

Please, just check our news sometimes. We are in constant development and have ideas how to implement our plans in reality, with benefits for everyone.

The one million dollar question... Why should we trust you?

A recent survey showed:
50% of merchants who accept bitcoin convert it all to fiat. 10% keep the bitcoin. 40% take a mix of fiat and bitcoin.
I conclude that the use and acceptance of bitcoin as money is growing.
Another recent survey showed:
Bitcoin acceptance and use is growing faster than the internet but slower than mobile phones because the latter network was able to utilize existing networks while the former had to create a new network from scratch. This indicates that trade conducted in bitcoin is growing, and not diminishing.
I have thought about how VAT and sales taxes are often comparable to the loss incurred by a barter transaction (up to 10%); it seems to me that avoiding VAT and sales tax is a great use case for bitcoin, and obviously certain groups of people will try to use it for most of their transactions. Also, Since there is apparently not enough money to pay back all the loans with interest, the fiat system creates economic distortions on a massive scale, so bubbles in fiat assets are somewhat comparable to those of crypto-assets.

It's the weakest point of the system, you are absolutely right. Trust shall be accumulated due the time of stable work, but it will never be enough.
The main point: we are developing it and we have profits from BitMoney stable work and popularity. Absolutely no reasons for us to harm the project or our clients interests.
I hope that build-in exchange will not be the main BTM market, so users will not have to rely upon us in this point either.

What fraction the merchants accepting Bitcoin convert to fiat is not as important as the total amount of goods traded for it (in terms of both fiat and Bitcoin). What is it equal to, does it grow and how fast? If two people sold something to each other for bitcoins and kept them, we would have 100% of "merchants" loyal to Bitcoin, wow...

But does this "statistic" tell us anything?

The good ole day..... i would have loved to have known about bitcoin back then.  it must have been really interesting doing that, who actually got you into it was it a friend or sumthin?

The number of goods traded for bitcoin is basically a function of the market cap.
I don't think that the market cap is as important as the fact that it is a viable alternative that works; I can and DO trade ALL of my bitcoin for goods because there are many advantages to using bitcoin for trading in goods, the first one being that one gets to "starve the banks"! As mentioned in another thread:

Well, you shouldn't trust, just calculate your profit\risks ratio. You definitely shouldn't hold that 1m$ here, but sell some service with almost immediate BTC withdraw could worth it.

Another one attempt to answer your main question. Lets imagine money workflow.

Client wants to get some currency to buy some good\service, he'll buy it on free market or mine it by himself. In result clients pay to Intel and electricity provider to get medium of exchange. History over, first money holder took the risks here. So actual question for him is - will he be able to sell it month later with the same exchange rate (or what discount will be)? The risks are:
1. Fbi arrests the server, some attack happens, all hardware along with backups fails. Most severe case, there are some ways to mitigate consequences but discount will be big.
2. Mining alg cracked, asic appears, admins print huge amount of money. There will be some reasonable daily limit of mining withdraw so we'll be able to catch emergency cases, algs will be adjusted to existent hardware. We'll not print much because it's a long term story for us, nobody will just throw out the reputation.
3. Economy behind will shrink, trust will fall (if somebody will use as medium of saving too), competitors will rise, velocity of circulation rise. Required money supply shrink too, price will go down. Possible but it's long time processes, it can't happen fast.

As i said, calc it on your own, if the risks are too high for you then sry for bothering.

Are you serious? In the case of Bitcoin (as well as other cryptocurrencies) the market cap (in terms of fiat, say, USD) is calculated by the number of coins in circulation multiplied by its current exchange rate (or something to that tune). We don't even know how many bitcoins are lost for good. Indeed, you can always say that the amount of goods traded is some % (or rather ‰, lol) of that number...

But do you have any real figures in absolute terms, however pathetic they might be?

Basically, you are admitting that you can inject as much money into the system as you see appropriate (with all ensuing consequences), essentially bypassing the proof-of-work protocol, provided it is in fact implemented (which I doubt). This doesn't bode well...

But everyone is free in drawing their own conclusions, of course

I like that "dimensionless yardstick"; quite apt :)  Of course "yard" is a unit aka a dimension, so it appears to be an oxymoron, but "dollar" is similar in that it refers to a real unit or dimension (a quantity of silver) but yet doesn't really.  Dimsensional analysis as any other physical or scientific analysis with such units is doomed to failure.  Perfect!

As in:  I'm 1.5 yards tall.  4 2015-funk yards, which represent some unspecified amount of distance which you can't ever know.  Pretty tall for a dwarf wouldn't you say?

Anyway fiat is also great because you can issue yourself as much as you want at any time with no work.  It only takes 1 bit flip on a 32 bit integer to create over a billion dollars.  Can you do that with bitcoin?  I didn't think so.  You need quadrillions of bitflips just to get 25 coins. 

That's a nitpicking at its best... Does a sequence of natural numbers have a dimension, wtf?

No, definitely not.  And hence why I liked your phraseology so much.  Dimension solely comes from a well defined definition of unit.   

Dimensional analysis is the use of well defined units as a sanity check.

Fiat is a dimensionless yardstick.       

You are welcome, bro

The Dollar just isn't what it used to be; it is no longer a measure of value, it is pure "dimensionless" ponzi.


"Federal Reserve Notes are not Dollars." - Russell Munk Assistant General Counsel, Dept. of the Treasury 1977

"Of all contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money." - Daniel Webster

More quotes (http://www.trueworldhistory.info/docs/quotes.html)

It ain't until and unless people are no longer willing to trade goods for it. A yardstick for measuring the value of one good against the other is not required to have value in and of itself, wow. Balance scales to measure weight would work just fine even if they were weightless themselves (in fact, they would work even better)...

They just need to be balanced properly, the scales of justice

I tire of your theory.
WHO does this system work for?
The current system does not work fine for anyone but the elites; they are the ones who hoard the credit and assets and leave them idle; money velocity has slowed down dramatically. It is pure "idle worship"; energy must flow through a system because stagnation is death.
How all of this could possibly be "economically better" than sound money is something that I fail to comprehend. I don't think that you can determine that an economic system is "better" unless it is in reference to some group of people; economics is a social science and is properly called "political economy". It has been shown that the people manage money better than the State but the peoples' productivity and creativity is cheated by the monetary system. Cui bono??

"Of all contrivances for cheating the laboring classes of mankind, none has been more effective than that which deludes them with paper money." - Daniel Webster

People overall are living much better today than they lived some 100 years ago (just when fiat began to take over the so-called "sound" money). I'm not even mentioning the miserable conditions the total majority of population lived 500 years ago. That would simply be beyond comparison. You may indeed question the validity of this assertion (that people live better today), but you can't possibly deny the explosive growth of population as well as human lifespan...

I don't think that any of the latter would be possible if the former was not true

True, but dollar purchasing power has decreased a lot:
https://images.duckduckgo.com/iu/?u=http%3A%2F%2Ftse4.mm.bing.net%2Fth%3Fid%3DOIP.Mc2fae66a30182bc3b9f2ee08179d76d0H0%26pid%3D15.1&f=1

Of course, anything that can be traded will have value. Bitcoins, dollars, paintings or even collection cards :)

But wages did get increased too. Thereby, the dollar purchasing power alone is not enough to draw any definitive conclusions, right?

There is no economic system that is flawless, so we have to choose the system which has least flaws. That's why I choose Bitcoin over fiat money. Do you suggest me a better monetary system?

Here is a definitive conclusion:
Ask anyone who was earning a wage prior to Nixon's default on the currency (the end of sound money)
about how much they earned and how much their purchasing power was.
They will all tell you that they had money to burn even though the wages were miniscule.
Nowadays most people are just barely getting by; life was better with sound money.
Basically, their wages were in silver dollars, so one dollar was an ounce of silver (about $15-$17).
The value of labor has obviously been stolen from the workers by the debasing of the currency;
this is what happens in all slavery systems: over time the slaves are made to work harder for less.

As far as living standards, the Fed caused the Great Depression and the next crisis is just around the corner. Wealth has not "trickled down"; inequality and social mobility are important measures of the standard of living and these were clearly better during the sound money eras of the past.

No, I don't actually need to ask anyone living prior to Nixon, lol. Why? Because I already know the answer. Since the life was so much more fun in those good old days. Even the grass was greener back then...

And the light was definitely brighter, amen

Depends. The dollar has lost a lot of value over time.  These are the average hourly wages in the US:

https://images.duckduckgo.com/iu/?u=http%3A%2F%2Fwww.visionofearth.org%2Fwp-content%2Fuploads%2F2011%2F08%2FUS_Real_Wages_1964-2004.gif&f=1

So inflation-adjusted wages remain essentially the same. Thereby, the real purchasing power of the US dollar didn't change a lot (in terms of hourly wages in the US). That is, the hourly work can buy you the same amount of basic goods...

And in 1964 you just couldn't buy a lot of useful things like cell phones or personal computers

Inflation is not good for a currency. Here is the chart of the German Mark at time of the Weihmar Republic:

https://images.duckduckgo.com/iur/?f=1&image_host=http%3A%2F%2Fupload.wikimedia.org%2Fwikipedia%2Fcommons%2Fthumb%2F8%2F8f%2FGermanyHyperChart.jpg%2F220px-GermanyHyperChart.jpg&u=https://upload.wikimedia.org/wikipedia/commons/thumb/8/8f/GermanyHyperChart.jpg/220px-GermanyHyperChart.jpg

You can of course argue that wages rise but for how long can wage scale along with inflation? If inflation out scales the wages there is an enormous catastrophe waiting for us. I think a debt based currency system will always collapse at some point.

This is not a topic about inflation vs deflation. If you feel inclined to talk about this issue, there is a special thread sticked right in this sub-forum. Germany lost in WWI (and in WWII, for the record) and had to pay reparations which it simply couldn't pay out. The ultimate fiasco of its fiat currency was due to the failure of the state before anything else...

You don't see the forest for the trees

Right, I told you the answer  :D ; the fiat system is based on slavery; we live in a dulocracy.
In all slavery systems: over time the slaves are made to work harder for less, this fact is a result of the ignorance of the masses within the political structure (i.e. dulocracy) and it has nothing to do with technology.
I detect some sarcasm in your reply; what is the purpose? You need proof that you are a slave?
Since you are promoting slavery as the best system "economically", I am entitled to ask who benefits and what exactly is meant by "economically".

As I can see you decided to ignore the fact that "slaves to fiat" turn out to live longer and, on average, better than "slaves" (well, adherents) to "sound" money. Your question is meaningless since under slavery slave owners and slavers (i.e. sellers of slaves) are the primary beneficiaries...

But I think you are grossly misusing the term

So in your opinion it is OK to enslave--so long as the ends justify the means?
In my opinion, ethics and philosophy should influence the political structure which will dictate the nature of the economy. I believe in natural rights, so my opinion is that slavery is immoral and the present slavery system cannot be justified. What do you have to say about that?

You have not educated yourself about how the banking system really works in this country. I suggest a careful examination of the reading material that I posted earlier, in particular the flow chart labeled "loan accounting reveals the true creditor" which is linked from the HJR 192 site. The Treasury was supposed to belong to the people, not private elitist bankers. Until you can access the Treasury for yourself, you are a slave who cannot access your own value. Everywhere in the USA the peoples' rights are being ignored; literally every one of the 10 Amendments have been and still are being grossly violated on a national scale and particularly the ubiquitous crimes involving illegal "bills of attainder" and debtors' prisons are a direct result of the monetary system which by all appearances has taken over the original justice system that was designed for this country; that is because slaves have no rights and the people have not educated themselves; it is obvious that a slavery system has been imposed upon the populace. Your defense of the slavers is an apparent case of Stockholm Syndrome.

Lol, you are talking as if you were the Collector and I were going to sell my soul to Satan. When in fact you are pretty much talking bullshit. In Ancient times there had been real bloody slavery (I don't think the Medieval times were a lot different in this aspect), and, ironically, quite under the "sound" money system...

We are all slaves to our own nature, before all

Which country? I don't live in the US, so I can't possibly access the Treasury even if I wanted to. Does this alone make me into a slave too, wtf?

Virtually all nations have a central bank based upon the fiat model, and all are controlled by the same cartel.
So what about the ethical model behind today's USD? Is it not grossly flawed?
Here are some of the results of the slavery system that has been imposed upon America:
https://blogsensebybarb.files.wordpress.com/2013/01/obamas-bill-of-rights.jpg

So do you have any questions to the fiat model itself? I don't quite get your point. The fact that it can be and is heavily abused doesn't in the least take from the fact that it is the best monetary system in existence today from an economic stand-point. And ethics cannot be applied to it since it is simply an economic model. It lies beyond your dilemma of the ends (not) justifying the means. I don't know if this category can be applied to a model at all...

Can we say that one model is more evil (or less benign) than another?

Ethics has to be applied to politics to be of any value, so therefore philosophy and politics apply to political economy.
Economic systems cannot be isolated from their political milieu and the political system must be ethical to be justified.
So if the (political) economy is not ethically sound, then the economic model is flawed ab initio.

This is human's adaptive nature, they usually accept what exists as best. Have you seen those north korean women meeting their leader? They would gratitude to even cry

http://i.dailymail.co.uk/i/pix/2015/04/02/13/273A100900000578-3023058-image-a-27_1427978391904.jpg

Similarly, first you have a group of banker invented fiat money system, then you have a group of economists crying that this is the best system in the world

Did you miss that I said today? Its drawbacks are fairly well known (which I also mentioned, by the way). Do you see only what your eyes want to see, huh? And no, Bitcoin doesn't cut it (as a better system)...

In fact, as of now it is a parasite living off fiat systems across the world

I don't care about politics in this topic. Taking your words to their logical conclusion, we could say, for example, that the Bitcoin economic model is less evil (or just more benign, wtf) than that of fiat (or the other way round), right? I understand that you kinkily perverted and twisted the notion of slavery as it fitted your propaganda, but with this you seem to have gone too far...

Failure is success and war is definitely peace, wow

It is going too far to say that the economy should have ethical actors?
It is called political economy because the state is a big player and you cannot separate the politics of the state from its influence on the economy.
And in the U.S. we have illegal debtors prisons, mass surveillance, indefinite detention, and the largest population of prisoners on the planet all thanks to the bankers who brought about this system (of legalized slavery). I would post details about how exactly it got this way, but I doubt you will read any of my sources.

This is beyond the scope of the question raised in this topic. As an aside, you could have the most "sound" monetary system that you can only dream of married to the most atrocious form of slavery that history has ever seen. It is not the makeup of an economic model that can and should be judged ethically. Honestly, I think you are just trying to find any pretext to push your ideas...

Is it going too far to say that mathematics should have ethical actors?

Conspiracy theorist detected, wow. It is our nature that we don't want to take the responsibility for our lives. We want that someone else would take it for us and instead of us. As humans we don't want to be free in general. The bad guys (bankers, illiminati, aliens, whatever) are there to blame them, to keep us from going insane with insecurity of our life and our inborn fears, a foothold to stand on. You can't force or bestow freedom upon anyone...

Big Brother is watching you

After reading all your replies I can see your point. Partially I agree with you. I don't think that it is so easy to answer the question Which currency is better? I never thought that the 21 million coins cap is good, on the contrary, I talked to an economist once and he said that a bit of inflation is always good for economy.

But on the other hand we all know that fiat money are not flawless either. So we'll see who wins. :)

Bitcoin is not a currency, at least as of now. The best way to think of it is consider it as a financial asset, for example, as stock of a startup that aims its product at becoming a currency. Its main problem, though, is that Bitcoin's success at financial markets (the stock part of Bitcoin) heavily impedes the success of this startup in attaining its primary objective (the monetary part of Bitcoin)...

The separation of functions (i.e. separate Bitcoins for stock and money) could probably solve this dilemma

Then bitcoiners can work to a new change in bitcoin's code, to make a denomination, say... The hundredth of a satoshi? That'll make it more usable if bitcoin if widespread.

It could be bad for the economy if Bitcoin was the only major currency, BUT, Bitcoin does serve it's owner's very well by preserving value. That's a legitimate purpose.

Did you miss that I said before? Fiat money's drawbacks are fairly well known (which I also mentioned, by the way). Do you see only what your eyes want to see, huh? And no, fiat money doesn't cut it (as a better system)...

In fact, for more than 40 years it is a parasite living off people across the world

Bitcoin itself has some flaws regarding deflation for example. But i do not see the real potential on Bitcoin itself but rather on the Bitcoin blockchain. Colored coins stored on the BTC blockchain will be the future and they could eliminated most flaws of Bitcoin.

Wtf, you should have known that it has been so (if so) since Bretton Woods (1944), or even since 1933 when Roosevelt banned gold (thereby making it impossible for ordinary people to convert their dollars into bullion gold). Some go as far as to claim that it all has started in 1913 when the Fed was established (injecting fake dollars into the system). Make your choice, buddy...

When the fiat actually took over

At least before 1971 FED still can not print at will, it is limited by the number of gold reserve, which require equal amount of value to acquire. Then it became a "I print money, you work" model, this is equal to "all your properties belongs to me"

Of course with a limited money supply model, the money hoarder gains, but anyone can choose to save money thus benefiting from saving (In fact saving money is difficult thus the reward worth it). But in fiat money system, all the benefits goes to the money creator, rest of the people do not have a choice

You are uninformed and seem to be obsessed with that, lol. I asked you to choose the year right to check how familiar you are with the question. You failed the test, wow. One of the reasons to establish the Fed (as you may remember, in 1913, i.e. almost 60 years before 1971) was a recurrent shortage of liquidity, that is, the true dollars that were fully backed up by gold. The Fed was allowed to print its Federal Reserve notes that were required to be covered in gold only partially. In 1933 the former were abandoned altogether, and the latter became what is today known as the US dollar. Nixon had to cancel the gold content of the dollar since France (and a few other countries) demanded to exchange their dollar reserves for gold in the second half of the 60s. The US dollar had fully divorced gold long before that, otherwise why would they care?

Many consider year 1933 as the end of the gold standard epoch

I think we are not slaves in our nature, it`s more like this system make us like that. It was like that before thousands of years and its like that now. Politic and faith is what deceive us all the time for sure. And as long we trust in this things and make idols from this kind of people (Obama, Putin, Bush... many, many more...) we will be in this economic slavery period. In that system for some people will be good, for many more will be not so good. I dont think we can rise our conscience in some near future.

I suggest you google "gold standard". Anyway, no meaning in arguing over details, let's say that creating money out of nothing has been existing since 1913, then we have more reason to flee it since the scam has been going on for more than 100 years

The establish of FED is the result of centuries effort of bankers since John Law tried to create money out of nothing. This financial alchemy can work because majority of people want money, it is actually a psychological game. If no one want money, only want physical goods/services direct delivery,  then this trick will not work. Unfortunately, people all want money, and they became enslaved by their own desire

In fact I regard any kind of fiat money (even it is backed by gold or assets) to be a scam, the reason has been discussed long ago (With one ounce of gold, I can issue money to buy another ounce of gold and repeat the process until I have bought everything on the planet). Financial is all about fraud, if you think you are doing just fine, then it is very likely you are the one that is being scammed

Then you have to deal with the fact that people during the last 100 years have become much richer overall, despite all the fiat floating around since then. Otherwise, you will have a hard time proving that "for more than 100 years fiat has been a parasite living off people across the world"...

Since becoming richer and better off is surely not something you would expect from the victim of a parasite

Regarding Google and all that kind of thing, I think you have to be already deeply engaged in filling up the vast gaps in your knowledge. You were posting a lot of verbiage and prolixities (read garbage) recently about economics in general and money in particular, and just proved that you lack pretty basic knowledge and info about the subject you try to get in argument about...

Welcome to the cohort of self-proclaimed experts, semi-experts, pseudo-experts, and just outright charlatans

I think you are confusing cause and effect, or putting the cart before the horse, figuratively speaking. Those who make up this system are us, so we are doing this to ourselves and by ourselves due to our human nature. Those who come to question the system, get to the point of inventing the idea of an oppressor (Obama, Putin, Bush, etc), which we should reach out to and get down with...

When, in fact, they should be more concerned with their own lives, amen

Even the animals want to be free. Man's nature is freedom and with freedom comes responsibility. The tendency of man to run away from his problems is by no means an inherent feature of man's psyche; actually, man is a creature of reason and to blank-out the mind in an attempt to escape is anti-reason.

It seems that I am in great company: Jefferson, Webster, Washington, Kennedy...
all were conspiracy theorists if you actually read what they wrote (http://www.trueworldhistory.info/docs/quotes.html)!
I suspect that they did not speak idly. They were men who took responsibility for their lives and the lives of others as well. These men directed blame towards the American people AND the foreign bankers.

I did not see you address my point that political economy is the true nature of economics and that the state cannot be separated from the economy. In the West, we have the rule of law which exists so that we can ethically judge what happens in the political economy. In Communist China for instance, there is no rule of law so the mathematics of the economy is not constrained by ethics, but the system is against man's nature because property rights are in the nature of man and the ancient concept of justice (which is really "just exchangement") is the proper goal of any political economy.
There is a famous satirical essay concerning the absurdities that result when one tries to isolate ethics from political economy, it is Swift's A Modest Proposal. The point of the essay is that Any proposal that attempts to negate the role of ethics in the political economy is invalid because it is AGAINST LIFE; life is more important than mathematics. The essay concludes that only that which is just should be given credit (belief) in the economy. An unjust system, no matter how economical, must be stopped.

So basically you are claiming that:
"Since the economy has grown then there is nothing wrong with the system, in terms of utility."

An increase of wealth "overall" does not in fact attest to the utility of the system. For example, if a banker holds 50% of the money in the economy and earns an interest upon that, this "overall" wealth increase does not suffice to justify the system by any means (even Aristotle recognized that such an economy would be inherently unstable and unsustainable (http://rationalwiki.org/wiki/Just_price)). I am entitled to ask: Cui bono?

Your claim that widespread and increasing wealth over time (which inconveniently does not exist if you start the clock during the Nixon era) is the main result of the monetary system is another case of post-hoc reasoning. Why should alleged widespread fiat wealth be the main result and not just a side-effect? A parasite may compel the host to eat more food and gain weight because the parasite does not consume everything that the host eats; mere weight gain does not prove that the parasite is not enriching itself at the expense of the host, and at an alarming rate! IN FACT, the rate and scale of the THEFT is so alarming that there has been a reduction in the wealth of most people since the Nixon era when measuring the value of labor; I have confirmed the stark reality myself through interviews; a laborer was paid much more relative to typical expenses like cars, food, rent, gas, and electricity; it used to be that a man could labor for 40 hours a week and support the household without government assistance in virtually any job but this is no longer so. All evidence points towards the value of labor diminishing in favor of capital, so wealth overall is down if you measure the value of a man's labor. Ever since the banks stole the household wealth of America by crashing the housing market, surveys show that about 50% of America's people live "paycheck to paycheck" which means that the ONLY value they can trade for money is their labor, so half of the people are provably less wealthy overall. Do you have facts to the contrary?

Anyway, I find it ironic that your argument rests on the dubious idea that there has been an increase in wealth "overall"; were you not recently arguing that this debate is purely a matter of mathematics? If so, then I would think that money velocity would be a better measure of economic efficacy; money velocity is an excellent metric of the effectiveness of the economy in facilitating trade, it is especially useful when paired with trade volume, and you have neglected money velocity completely (bitcoin has a very high money velocity, despite the limited trade volume). When you focus on the weight gain of one who is infected, you should not neglect the overall health of the patient.

So this monetary system is a result of peoples' human nature and the masses have brought this system upon themselves?

I have some disagreement. History demonstrates that the monetary system is a result of foreign bankers who were originally and still are concerned with the suppression of liberty, which is identified (e.g. by the Austrian school) as a human's natural right. The system was brought about as a result of directed economic attack by these foreign bankers; they hated America's freedoms and wanted to control the wealth of a free nation so they would not stop until they brought slavery into this country. You are using post-hoc reasoning to justify the existing system without any appreciation of the history or the actors involved, you do not even recognize the agenda behind the money-changers so you do not recognize the true cause. Here is a history lesson for you; the cover story is an excellent essay and if you are such an expert then you will surely not hesitate to read it.
http://www.phoenixsourcedistributors.com/950307.pdf

I recognize that each one is a Creator and has the power to access one's own value if one can bear the responsibility; the problem is that this possibility has been hidden by the bankers via the monetary system which was fraudulently imposed upon President Wilson and the people, as you can see from quotes I linked to earlier. An agent (government) must disclose certain facts to the principal (people), but we are not told how to access our own value. So I am here to expand on the possibility of accessing your own value within the system so that one can behave ethically and create a soul-ution for oneself and others. With knowledge comes intelligent action, so the first step is to realize one's own situation by remembering history.

I've only been bouncing around this thread, but what are you implying here? Exactly what cartel controls all the central banks in the world?

I am making a correction to my statement above in bold.

A search engine can answer that question. I did a search and found that this page has some good answers; you do have to read the whole page from top to bottom (including comments) to get a real understanding, so I will not be quoting any short answers:
http://henrymakow.com/2013/07/do-the-rothschilds-own-all.html

Actually, I have already posted what I claim (just in case, as a reply to your post), though you seem to have missed it (or just decided to ignore). But never mind, I can post it again, wtf...


As you can see, I don't even mention the economic growth as such

You are again distorting the meaning of words as you see fit. Humans like animals want their familiar surroundings and habitat (their way of life, in short). Man is a social being (a handy substitute when you just wanted to say herd animal, lol), and as such he is willing and naturally predisposed to delegate the responsibility for his actions and life to some bellwether, meaning that obedience and submission are built-in features in him...

Still wanna talk about what is Man's nature?

I pretty much don't care. I'm not interested in expanding this issue any further here since it is of no interest to me. You can hardly say anything that I haven't heard before. I hope you understand also it is quite off-topic in this thread and surely deserves its own one, though, most likely, not in the Economics section

First, two world wars killed billions of people, so the rest of the people get to share a little bit more resources on the planet

Second, people's productivity raised by hundreds of times due to technology advancement, but their income just increased by 10 times, they indeed became richer, but their slave master became millions of times richer, that is the huge wealth gap we observe since removing of the gold standard

And so what? Economics (as a set of economic, monetary, fiscal methods) is a tool with which the state sets up its economy, but this doesn't in the least prevent us from 1) considering these methods (and models that they implement) separately from the state on a purely technical (i.e. economic) basis, and 2) assessing their efficiency in attaining the aims that the state tries to achieve. I don't know whether you understand it yourself, but if your claims that economic models (e.g. monetary models) should be ethically judged were to be taken seriously, then your "sound" money system should have been written off long ago as the most atrocious, hideous, and revolting system in the known history since it was the primary economic (monetary) model behind the most inhuman and brutal political systems that ever existed...

In fact, your own view taken to its logical conclusion actually reveals that fiat is by far more "humane" than any other monetary system out there (that were tested on a society level)

Billions of people, wow?! What did I miss? The world population on the eve of WWII was only slightly above 2 billions of people, and around 1.7 billion in 1914, before the First World War started. By the way, the Spanish flu of 1920 killed in one year more people than had been killed during the four years of the First World War. And just smallpox killed by far more people than all wars combined (literally billions of people throughout history)...

So your argument of "a little bit more resources" is inconsequential at best

There is no linear dependence between productivity growth and the wealth of society. And I'm doubtful about the productivity growth in terms of hundreds of times (during the last 100 years, at least), though I understand what made you think so. Obviously, you don't know what actually moves the society to the next level of wealth. Hint, this is not productivity per se, but since you think it is, you should necessarily gauge its growth so much (given the growth in total wealth). But this is irrelevant because you obviously prefer that we were all equal in poverty (under the gold standard) rather than different in wealth (after we moved to fiat)...

Are you a communist, johny, Swedish style?

If you have been reading not only my posts (wow) but also the posts I replied to, you would have seen that "this system" referred to something else, surely not to a monetary system of society. Actually, it was more about the structure and organization of it that we have, or just the society that we live in...


Then yes, the masses have brought "that system" upon themselves all by themselves. Otherwise, who did this really, some "bad guys" that we should find and punish? There are no genuine "bad guys" out there (Putin or no Putin)...

And why are you constantly trying to misinterpret my words, wtf?

You did not count those dead people's children and grand children?

Are you a central banker or something?

So I agree to whatever your economy belief, I will print money and you work, I'm fine with that

Just in case, it is estimated that smallpox alone killed about 500 million (sic) people in the 20th century only, until the decease was finally extinguished in the late 70s (that is, within 80 years). Are you going to count those dead people's unborn children and their grandchildren or what? It should have spared humanity a lot more resources than the two world wars combined, right? What about the Black Death then, when half of the European population died within just a few years in the mid-14th century? Did it make those who managed to survive richer and their lives better?

You are treading on a very slippery path going this way, the Malthusian way

Special kudos to deisik for taking the impossible devils advocate position in this thread :)
However, lets not get too carried away.    


I lolled!!  It is tough to match that statement but I will try:  
 
Shooting yourself in the head is also the best way to extend your lifespan from a medical standpoint.    

Or how about:  letting somebody steal your coat is the best way to keep warm.  



It is certainly off topic but I'm still interested in what you might possibly mean by "people have become much richer".  Perhaps a reference to improvement of infrastructure on global average, e.g. more running water, or technological progress?  Clearly the population has hugely increased, meaning that individual's fraction of ownership of the whole shebang has gone down.  Of course none of this has anything to do with being robbed blind due to stupidity of accepting counterfeitable dimensionless tokens in exchange for labor but I am still curious what metric you refer to which has increased in 100 years.  

Irregardless of your metric, this is hardly an argument in favor of rule-by-counterfeitters.   

Consider a similar argument: 

"I've been slamming every finger hard in the door every morning since I was 6 years old.  Now I'm 12 and look how much taller I am!  Everyone should slam their fingers in the door.  So successful!" 

  

You still have to explain this. Given all your courage you should necessarily be granted the chance to be the first (to fall, wow):

http://cdn.zmescience.com/wp-content/uploads/2014/10/world_population_1050_to_2050.jpg

Note the exponential growth after 1950

I hate to interject, but didn't the population increase exponentially due to the end of World War 2 and the lack of wars between developed countries thereafter? There is also more globalization and so that ended up occurring during that period, so I would assume that a lot of the growth was related to that. I could be wrong.

You obviously forget about the threat of an all-out full-scale nuclear war between the major superpowers back then (well, and now too), something that doesn't quite warrant the idea of runaway reproduction. Besides, the growth started circa 1800, i.e. well before the last world war. There had been Napoleonic wars and Franco-Prussian War in Europe as well as the Civil War in the US, and the First World War in between these dates...

So what about globalization and its effects on the population growth rates? How are they interconnected, if at all?

You are downright wrong on this, bro. The fact that you say this pretty much proves than you know nothing (despite all your brass and gas) about economics, why and how exactly the society's real wealth gets increased over time. Even per capita with an ever growing population, notwithstanding whatever Malthusians would say...

In fact, the growing population is a requirement for the increase in wealth


The metric is pretty simple (I have already mentioned it), and it is directly related to the exponential growth of population during the last 60 years...

There's a cookie for you

In fact, I never said that a monetary system based on fiat is the only factor contributing to the increase in the well-being of the majority of population (which you yourself tacitly seem to agree with), or that it is such a factor at all. But I can think in reverse, wow. That is, even if it can't be said that fiat does somehow contribute to the wealth of society (personally, I think that it helps greatly), it can be said with surety that a monetary system based on gold (or any asset, for that matter), i.e. so-called "sound" money, absolutely does not, in no case...

Can you think in reverse too, lol?

World population grew a lot, but large part of the growth was in Africa and Asia.
A complete picture here:

https://upload.wikimedia.org/wikipedia/commons/thumb/1/11/World_population_%28UN%29.svg/800px-World_population_%28UN%29.svg.png

And it can be very easily and accessibly explained... Your take?

@deisik

you are not only a moron, you cherry pick and use strawmans like a boss.

population explosion because everyone got richer? lmao

https://www.oxfam.org/en/pressroom/pressreleases/2015-01-19/richest-1-will-own-more-all-rest-2016

you probaly believe in the millenia targets, no poverty till 2030 and santa clause :'(

Ok, yeah, so as I thought. Jewish illuminati tinfoil hat fodder. This nonsense invalidates all your other comments in this thread.

This doesn't prove he's wrong (whoever you're referring to, no quote). It only shows that the rich are getting richer faster. It says nothing about the richness of everyone else.

atleast read the first sentence of my link.


the reports that you can dl for free gives detailed information about dimension nd kind of inequality and that it is rising.

edit: even without reading the whole report you only need to look at numbers.
from year to year less people own more and more of the worlds economy.
now just compare increase in world gdp and net value of top 1-10%

Aha.  So by "richer" you meant "more numerous".  That's fine, a bit unusual of a definition but I was just curious.  Not like it relates to the topic anyway.   

Wait, my tacit agreement of what now?  Now we have "well-being".. is that another thing that means population?
 
Using a monetary system in which you are not constantly being robbed always will help, and always has helped, your economic well being.  Do you somehow disagree with this statement?  It's impossible to argue it.  However there is another step to "wealth of society", that is, defining a metric which we agree on of what that phrase means.. then we can see if individual's economic well being does or doesn't so contribute.      


 

I feel that you don't deny in general that people are actually better off today than they were centuries ago, or just before the First World War as a point of reference (say, 1913, when the Fed was established), but were rather doubtful about the ways to prove it. But it is up to you, of course...

You may think what you please

No doubt, it is impossible to argue this. But it is not what I actually said. I was precise in my words and terms while you are now distorting and misinterpreting them. Why the "sound" money cannot possibly contribute to the wealth of society I have pretty much explained in my second post in this thread. In practice, though, there were periods in human history when the "sound" money behaved more like fiat in a runaway mode, thereby it didn't just fail to contribute to the wealth of society (which is a given), but in fact robbed the society of its wealth...

If you somehow think that the "sound" money is totally free from the primary drawback that the fiat money is always credited as well as blamed with, you are way off base

Why should I care? I'm not very much interested in this issue since it is now evident that you are pretty much incompetent in the field, and the way you brazen it out doesn't in the least make me feel inclined to cast pearls here. Nevertheless, I have suggested that you try to coherently explain the exponential growth of population since 1950, but you apparently shrink from that. Most likely, you are afraid of making a fool of yourself by inadvertently confirming my point...

Or just failing to explain this phenomenon by mouthing some outright bullshit, lol

You'll find that human population growth has been FASTER than exponential from roughly the year 0 onward.  This is due to MANY factors, the most commonly sited are agriculture, technology, favorable growth conditions, and societal behaviors such as acceptance of large families.  The use of internal combustion engines in agriculture especially correlated with rapid growth in the last 100 years.  

Nice non-sequitur huh?  As you yourself CORRECTLY pointed out earlier in the thread, what we have been using for exchange commodities means little with regard to e.g. slavery or other societal conditions, which includes those that influence population growth.  You're not really trying to imply now that people's being robbed via exchange commodity fraud has led to population growth are you?  

      

Are you kidding or what? The human population was roughly constant most of its history (and most here means 99.999...% of the time of its existence), even dramatically declining in the case of some natural disasters like worldwide pandemics (say, the Plague of Justinian of the 6th century), up to a point of the so-called bottleneck (https://en.wikipedia.org/wiki/Population_bottleneck). Do you (fail to) see the flat line from year 1050 till 1500 in the chart that I posted earlier? Is this what you call exponential, lol?


The rate of the population growth that started in the second half of the 20th century is unprecedented and has no match in the entire human history

Still wanna talk about the exponential growth from year 0 (https://en.wikipedia.org/wiki/World_population_estimates#Before_1950)?

So you agree that the use of machinery allowed to produce more foods and goods by the same hands, right?

If you assume that fiat is a means to rob population, then I obviously can't agree with this assumption in the first place. Thereby, your conclusion presented as a question makes no sense to me...

I think you may want to stop juggling with words and facts

Why?   Is the creation of money not theft?  Would you not print millions if you had the legal permission?

It all depends. As I have explained it earlier, the ultimate idea of money is to provide a handy and universal tool for measuring the value of goods against each other. If the number of goods produced in the economy increases, then you have to create more money so that to keep the reference point of the scale the same (which you set when you bootstrap the money). Conversely, if the number of goods decreases, you have to destroy some fraction of money. The fiat money (namely, the credit money) fulfills this function automatically through a positive feedback loop...

That is, increased production triggers creation of new money (so-called endogenous money), and vice versa

If you decided to interfere with this process either way, you would in fact be stealing from either producers (by excessively restricting the money supply) or consumers (by excessively expanding it). And sometimes it is actually useful and beneficial to forcefully change the money supply for a number of reasons beyond just the level of production in the economy...

For example, if you want to stimulate the economy, cool it down, or change the unemployment rate (yes, you can)

http://www.subdude-site.com/WebPages_Local/Blog/topics/environment/worldPopGrowth_charts/images_worldPopulation/worldPopulationGraph_year10000BCto2000AD_logplot_oceanworld-tamu-edu_439x423.gif

That plot appears to have been made from the "Hyde 2007" data in your link, though also mostly agrees with "McEvedy & Jones" from your link.  No I never wanted to talk about your population growth as it is a complete nonsequitur.  Seriously: this has nothing at all to do with exchange commodities.  What is your point here?  


But while we're here let me help you out with basic literacy.  "Exponential" means that the slope of a function is proportional to the value of the function.  Full stop.  df/dx = k*x.  That's what an exponential is.  Logarithms are an absolutely essential part of basic math as is understanding what exactly the number "e" is.  Until you are very familiar with these concepts I would recommend avoiding use of the word "exponential".

When you plot a pure exponential function on a linear scale you see that at the far right it shoots upwards.  It doesn't "go exponential" there.  It always is exponential.

Yes, every set of data you have in your wikipedia article shows exponential and greater than exponential growth from e.g. year 0 to 1500.  







 

Gee u know it is over when the experts start rolling out wikipedia links :'(

Btw i think op has me on ignore or he just cant find any wikipedia counter argument. ( just make your own wikipage and link it ) :-\

LOLK!  As you explained earlier, fiat money ELIMINATES any reference point of the scale.  "Dimensionless" you called it.  Production of tokens is not tied to any physical unit or good, therefore every token is unverifiable as is the total supply.    

Your claim that "if the number of goods increases we have to create more exchange commodities" is laughable.  When apple makes more iphones do they issues more shares of Apple thus robbing all shareholders?  Are you afraid that prices will go down when there is a supply glut?  Guess what, that is called price discovery in a marketplace and is important in a functioning economy.  Issuing new dimensionless exchange commodities thus thwarting market forces and robbing existing holders is always and without fail unmitigated disaster.    

    

I would like you to show the correct plot made at full range of the variable (that is, time), starting at least 100,000 years ago (the estimated age of humanity, or, rather, its lower bound) and the Y-axis at 1 (Mitochondrial Eve), that is, not 1 million (as is in this plot) but just 1 (first human). I'm afraid the resulting plot will have nothing to do with the exponential function (y=a^x), just a wild, irrelevant approximation. Only if you put the origin at around year 1800 you will get something similar to it, in form and essence...

You distort facts so that they suit your ends

I'm afraid that you don't understand what you are talking about. And don't have a faintest idea what I talk about either. The reference point is not about dimension, it is about the baseline where you start counting at, and usually it is at 0. But in the case of fiat you are free to set it arbitrarily as you see most convenient, so that the prices for the majority of goods wouldn't be in either millions or millionths...

You can think of it as the least denomination of a currency with which you can still buy something (say, a matchbox)

And I have to repeat another question which you seem to have decided to deliberately ignore:

I see that you don't have a clue about how fiat (credit) money works. Fiat money is not a commodity, to begin with. It doesn't have nor is it required to have any value of its own...

Only a transactional utility, which is a bonus

You still didn't answer why we see the surge in the rate of population growth since 1950. Until then I see no sense in explaining what it has to do with the wealth of society ("people have become much richer") and how it is related to a monetary system. If something exists, it exists independently of whether you are aware of it or not...

Besides, I have to quote your post which doesn't quite look like you never wanted to talk about the population growth (and it is not mine):


Just in case, you'd better stop making a clown of yourself

How comes every industry nation has declining population growth?
How comes we only see 10 kids per family in 3rd world countries?

We had several population growth since inception of humanity on planet earth and all of them were based on technological or social breakthroughs. 100.000 years before any1 though of fiat money.
( and yes, it was/is expontential growth )

Just take the tiger and dragon states for perfect examples. ( i.e. china & thailand )

Didnt you even had basic history in school?

I'm curious how are going to fit into an exponential growth two pandemics (6-7th centuries and 14th century) that each killed half of the world population back then and which required two centuries for the humanity to recover from them to its previous numbers? Should I remind you that the exponential function is a monotonically increasing one? I assume that losing half of the world population on a few occasions is enough to make the exponential function inappropriate for an approximation of the human population growth in the given time period...

But you are free to think otherwise, I don't mind

Get your facts straight, dude

https://mogreenstats.files.wordpress.com/2013/08/us-urban-rural-chart.jpg


Yes, this is the question I want to hear the answer to as well (though the answer is pretty simple)

Checkmate. You just showed you have no clue what you are talking about and are just a google/wikipedia warrior.
I will tell you the reason for a rising population in the US: Immigration.
Since ~1970 the birthrate is just barely around 2.0.ä or less, without immigration the population in the us would be declining.

In every other industry nation without ridic immigration of Mexicans and other South Americans their exist a declining birth rate and population.


Please stop trying to be smart because you are not.
There was a reason i wrote about tiger and dragon states while talking about ridicilous population growth in the 3rd world amid wars, famines etc. and nearly zero economic structres. ( its the opposite of what you are stating btw )

Lol, you said that every industrial nation has declining population growth, right? This is what you asked exactly, and got an exact answer that this is surely not the case. Besides, the total majority of the US population are immigrants and descendants of European immigrants and African slaves, clown

Yes because the US was founded by europeans what a wonder. Lmao

Very nice how you try to slowly change the topic.

We were talking about fiat money as the reason for people to become richer and through that have higher fertility and increase the population.
I showed you that you were plain wrong with your google and wikipedia shit.


Immigration from poor nations to rich nations is the only reason why we have around 0-1% population growth with an average birthrate of 1.5.

Too bad facts and numbers dont lie.


Oh i guess you never read a study about immigration in the us right?
http://www.pewhispanic.org/2015/09/28/modern-immigration-wave-brings-59-million-to-u-s-driving-population-growth-and-change-through-2065/

Yes, of course. 

Since we're doing nonsequitur queries heres a few for you too: 

What procedure would you use to fit a set of data to an exponential curve, in other words determining the best values of A and B such that a dataset P_i(t_i) most closely matched the function P(t) = A*e^(Bt) ?  What criteria would you use to say the fit was "good"?  What criteria would lead you to describe the data as growing faster or slowly than an exponential? 

What fraction of the total bitcoin supply will 1 bitcoin be in 20 years? 

What fraction of the total USD supply will 500 dollars be in 20 years? 

Counterfeitable money didn't cause population increase and lack of pirates didn't cause global warming.  Seems dead obvious to me there but hey a lot of people like to get on the correlation is always causation bandwagon so what do I know right? 

Hmm transactional utility without value?   Interesting. 

Hmm, not a commodity, yet I go to the market and buy it just like I do all other commodities.  Interesting.

Tell us more. 
   

 

Thereby you agree that using machinery, or, in a broader sense, technological innovations make people richer and wealthier overall (since they get more output with less or the same amount of effort), right?

I meant that money's own value is transactional utility only. Though this is still no more than a beneficial side effect of a particular implementation of the concept of money, a bonus, as I said...

What else did you fail to understand?

It is no more than your opinion. Mine, apparently, differs from yours. I can prove my point if and when I consider it necessary, but ultimately it is irrelevant, since you are not the author of this topic while I am. Thereby it is not up to you to decide what should be discussed here and what not. I hope you will honor this "pecking order"...

Otherwise, you may want to go elsewhere


I guess you (since I am not interested in that) should use the least squares method, if you are talking about approximation of some data by an exponential curve, y=Ae^(Bx). And I leave it to you to decide on the other things as well...

Since I'm not interested in them either

You just think that you understand everything (in respect to this discussion about the wealth of society and the growth of population), but you don't. I remember that I already said this, but since it evidently didn't get through, lol, I repeat it once again that I never said nor implied that fiat did or can contribute directly to the population growth...

But because you lack the ability of thinking in reverse, you can't possibly understand where exactly you fail

( btw exponential growth starts way before 1950 )
It starts exactly at this post deisik.
Now you are not only a stupid wikipedia warrior but also a liar.

I disagree with the topic statement. Bitcoins economic model is no more flawed than gold or silver.

Greetings.  Well actually I know far too little about wealth of society, which is kinda why I'm here.  Perhaps expose some of my ignorance and maybe pick up a few new ideas no?   Stranger things have happened.  

But since we got some formalities out of the way maybe this could become a more interesting discussion.  

First thing that should be said is that there is no economic model behind bitcoin.  At least not necessarily.  Just like there is no economic model behind 79 protons.  Or "corn".  They are just things for us to use as we wish, with certain properties.  Properties that are useful for certain uses.  An economic model implies a household; whether one can sustain things like food, shelter, clothing, water, and other things one might need or want to keep up in life.  Economic models are often in flux, as one adds new activities, needs, desires.. and problems arise.  There are necessarily many such models simultaneously overlapping.  Individuals, families, and larger corporations.. all the way up to Gaia herself.  

As to the "societal wealth" thing I can tell you my opinion about it fwiw.  Population size seems really not a good metric at all.  On top of the list for me would be survivability, that is: health of the ecosystem and preparedness for shock.  Biodiversity.  Also involved is education.  How much of your population can play Bach pieces in multiple keys on multiple instruments?  That is wealthy.  How many people really feel the funk?  That is wealthy.  How many George Clinton shows did people get to see this year?  How many nights did they sleep out under the stars?  These things constitute a wealthy society in my mind much more than having 10 kids.  

The ability to pursue happiness.  It's a vague phrase but it was chosen well and can get the point across, that we don't have to agree on exactly what it is but we do agree that people should be able to do it as they see fit, and that their ability to do so could be called wealth.  

The "grand experiment" of dimensionless token sheistery is an anathema to societal wealth.  Infrastructure is decayed.  Resources are depleted.  Educational systems have become frayed and broken.  Corruption and fraud are at the core of everything it touches.  How can one pursue happiness if one is beholden to the counterfeiters to no limit?  The amazing thing is how well people have done despite its perniciousness.            


In other news, I'd love to learn to think in reverse.  Please help.  It's a cryptographers dream. 
    

Not necessarily.  It depends how they are used.  If it is truly more output in a long term sense, then yes.  But one must keep in mind the story of the Lorax.  In the end everyone was poorer overall.  Not because of the technology but because of the idiocy. 

This is debatable, but when I wrote about Bitcoin economic model being flawed, I actually meant that it is flawed where fiat shines. As to the Bitcoin vs gold argument, personally, I'm in favor of Bitcoin to a degree (in what concerns their models, at least). Gold (as money) can in fact suffer from the same major flaw that fiat is being constantly ashamed with, i.e. hyperinflation...

Yes, it can happen, and what is more interesting, it did happen

Strictly speaking, what I meant is more correctly called monetary model, i.e. a detailed description of the concept of Bitcoin as money (e.g. how new coins are injected into the system and in what volume). But since Bitcoin is said to change the ways of life of people economically (and even beyond), I used that term...

To make things easier for them

But using (as well as developing and building) more and more sophisticated machinery requires yet more specialization, i.e. what is otherwise called division of labor. Given that, the growing division of labor necessarily requires more skilled hands in greater numbers, i.e., on one hand, it requires the growth of population, and, on the other hand, provides means for this growth through a qualitative increase in productivity, right?

So what about the importance of the population growth now?

You say that fiat shines where bitcoin doesn't and then go on about how the injection of new coins is the problem. You're a silly little troll you know that?

so you mean that we need a inflationary system, but not as a bad as fiat, but more on the deflazionary side, a bit of both basically?

weren't the analysts suggesting that a better economy should be more inflazionary? but i think that they are only looking at their portfolio when saying so...

I don't quite understand what you refer to. Please explain yourself

No, we don't need either inflationary or deflationary system per se. We need a system that could work as both according to the requirements of the real economy (the credit money is quite close to that), and, at the same, protected from the arbitrariness and abuse by a group people (usually called banksters) pursuing their own interests to the detriment of society. The latter part seems to be the most tricky one...

And no, Bitcoin doesn't cut it either

Isnt Ripple a coin with infinite supply?

It is irrelevant, since no cryprocurrency as of now is actually used as money. It is like counting your chicks before they are banged, wtf

Don't shoot the messenger

This is a good point about population feeding back into ability to specialize.  I'll be sure to bring it up with the Malthusians and various other "blame all problems on too many people" proponents, thanks :)  And my apologies: carrying capacity and population growth is indeed a worthy topic that should be given some airtime whenever it comes up, no matter how off topic it might seem. 

The division of labor is indeed an important factor in increasing the wealth of society. Many have heard about it, and some even seem to understand how it is related to the population growth. But there is another factor which most don't even suspect about that does dramatically change the wealth of society and actually explains for the exponential growth of population as well as aggregate wealth of society:


As I said, this is outright wrong. Why? Because the whole shebang (as you call it) can be and is actually expanded multifold

??!!??? 
Life is irrelevant to humans how?  Remember we ARE a bunch of animals and plants.

Animals, Mammals, Primates, in particular humans, require and are part of a large web of interconnected life forms.  Have you ever heard of e.g. food?  It's not exactly irrelevant to your economy.     


Compared to what would happen if sanity were considered and failures were allowed to fail instead of being propped up with "lets issue tokens to avoid market forces".   

Sure lets look at the construction and use of the roads.  You asked for a qualifier.  That's good.  Because a blanket assertion that "roads are good" would sure look bad especially after what appeared to be claiming that life is irrelevant.  Roads can suck and be way to expensive to maintain, destroy arable land, and make property more worthless.  Or they can be hugely important to commerce and getting people what they need to pursue happiness.  The difference needs to be decided by the people who use them and by the people who pay for them.  Not by:  "Oh roads.  They are good.  Here let's print some tokens and build them in the most inefficient and short lasting way".  Look at the construction and use of the computers and the internet.  Look at railroads.  Yes people are progressing and building things but we they are held back by the heavy weight of continuous theft and malinvestment.   


Great example.  NPK fertilizers are not solely responsible, but certainly part of the system that has reduced the once great heart of agriculture in north america to near desert status (actually deserts show remarkably higher biodiversity).  Desertification is par for the course around the globe at this time.  Why?  In part because those farmers using fiat are being constantly robbed.  To stay afloat they need to deplete the resources maximally, even then of course they won't stay afloat.  It is impossible to stay afloat if you imagine a fiat currency to in any way represent wealth.  So it's:  chop the trees all down now.  We need to pay for air conditioning of open air decks in las vegas and trillion dollar wars so cut it all down.   


Forgive me but I've seen no evidence that you are literate here.  Literacy rates are lower than ever.  I estimate them at 2%.  By literacy I don't mean "can read stop signs and twitter", I mean a minimum of 1000 pages printed material per month.  Competence in at least two languages.  Basic shit that any college would have required a century ago.  "Oh a higher percentage are going to college now we are so literate!"  <-- you must be kidding us!  Too funny. 

The great thing is that while it might be entertaining and educational to argue these topics here, it is in no way necessary to convince anyone.  There isn't any policy change or vote required to turn the corner of history and get out of the dark ages.  We already are doing it. 

OK, well it depends on other factors.  For example if you have a farm with 100 cows that live comfortably on your acreage, you have a certain amount of wealth from your operation.  Now imagine 100 of you live there.  Each one will have access to less of the wealth.  It's not a huge stretch to move this example to the whole planet considering constant solar influx.

Clearly homeless populations are likely to go up with larger populations.  I think you will find that a certain level of poverty is correlated with population density.  But yeah, these examples are too simple and one should consider exactly what might be meant by the whole shebang and multifold growth. 

Aha, OK gotcha thanks I see your point now.  Yeah, they are relevant in that they help us stay alive (survivability), barring that, not so much.  A pile of food in the larder does indeed become irrelevant after the inhabitants capable of eating said food all died off.  Well not to the bacteria in there or the people who come and find it but that's a different story.   


Well my apologies if I misspoke.  Certainly different infrastructures are decaying and growing simultaneously..  for example railroad in north america and bitcoin infrastrucure worldwide.  My point was not to claim any one type or other was increasing or decreasing but that in general the use of counterfeitable currencies in the construction and maintenance of said infrastructure can only be a detriment to its long term survival. 



Topsoil, hardwood, fish stocks, helium, groundwater reservoirs, glaciers, natural gas to name seven. 

I didn't mean the trees in Vegas were being chopped, haha, sorry.  I meant that the trees in the Amazon are being chopped and traded for fiat..  while others are printing fiat and it gets spent air conditioning Vegas - a process which leads to depreciating the value of the tokens which were given in exchange for the trees.  You see how that goes. 

 

You don't get it, fundamentally. But you should necessarily agree that if you don't understand this (as you didn't understand why population growth is so much important for the division of labor) then all your ideas and notions about fiat money (dimensionless token sheistery, exchange commodity fraud, and all other derogatory names you used or abstained from using) can be as much misguided or just downright false (reverse thinking, yeah)...

This story is not so much about money as it is about ignorance, wow

Well hey, why don't you educate me then?   What is missing from the simple example I gave?  I tried to make it very simple.. sure I can think of some things about life that are not exactly imitable by farms of spherical cows.  Which ones do you have in mind?  Or is it something else entirely I am missing?  I'm sure you will agree that in some instances, e.g. cancer, population growth is not the greatest marker of long term health.   

You should necessarily agree that even if you have lost hope in this dwarf in ever leaving ignorance, there might be a forum reader somewhere that could benefit from your current expenditure of energy here.  Otherwise..  why bother?  Lets hear it :)   

An expansion of knowledge is missing in your example. It means that a deeper insight into things allows to qualitatively expand the resource base of humanity, not just by more fully utilizing existing resources in regular ways but by including into the pool of available and accessible resources things that previously were either not useful altogether (or even unknown to us at all, as many things still are), or useful only in a small, limited number of ways. For example, electricity existed since the beginning of times, but we could make use of it only a hundred years ago. Oil has been known since the dawn of humanity, but it was only after and due to the break-throughs in chemistry that it has become the resource as valuable and indispensable as we know it today...

Quoting Carl Menger on the subject:


The explosive expansion of knowledge is the primary engine that has been driving the wealth of society to entirely new levels during the last few centuries

I like this :)  Mostly all of it.  The part about assuming barbarism and misery were the way things were is hardly the view of most historians like e.g. Plato or Bible however, and there are those who claim there is still some barbarism and misery out there as well.  But yeah:  bring on the explosion of knowledge!  And since we have allowed ourselves to stray to other issues not necessarily related to the "economic model of bitcoin"..  perhaps we should not leave aside the issue of education, as brought up once in thread.  I know of not a single professor, colleague, or author who does not complain about the declining standards thereof.  A trend we had better be prepared to fight tooth and nail rather than brush aside and claim is nothing due to college attendance. 

Indeed, right you are.  Wait a minute, weren't you going to argue that perhaps some people should be trusted with the power to create infinite fiat tokens at the expense of all other participants?  I guess not.  Selfish, greedy and shortsighted:  not equipped to deal with counterfeitables.  Too easy to cheat.    

Well not "if BTC was money"..   it is already,  but if the people cutting them used hard currency instead of counterfeitable, so they could save up and not have to keep cutting.


Nothing at all makes them less crooked.  But they are limited.  Only 21million.  If you hold 1 BTC you have a fixed percentage.  Fiat crooks control infinity percent of fiat.  It's a big difference.  Holding one funbuck means..  nothing at all.    

OK, have fun on your new inflatochain.  I'll be sticking the the one with the hard cap.  But think of it this way - even if you are on an inflating chain..  like doge or something, fedcoin, whatever, you are still using a public coin.  The money supply is public.  Compare that to the counterfeitables:  infinitely counterfeitable at any moment, representative of nothing.  Money supply always invisible.  IKR?  Srsly, there are still people out there who will trade goods and services for the stuff!!   lol right?

Are you really that dumb (nonsequitur or no nonsequitur, lol)? After all, the state can just come after you, take all your wealth and even your life (you were financing terrorism, put up armed resistance and police returned fire). Why this is not likely to happen (unless you are really financing terrorism or do some other nasty things)? Since no one is going to come after you just because they can...

Ultimately, it all boils down to the same thing, i.e. mutual dependence between individuals in a society

Hmm, well uh,  we don't need to wear "I'm the state" hats to rob folks, but yeah sometimes it helps,  If some individuals have chosen to use noncounterfeitable tokens for mutually dependent organization in their society, and we want to rob them, we will have to do just that - go door to door.  No more creating billion dollar bank accounts by flipping single bits.     

Unless you somehow manage to get out of the reach of those "We the People" types (who are essentially the same types who print money), your "noncounterfeitable tokens" can become as useless and as easily as the counterfeitable ones (to you personally). In fact, even more easily, for your own insignificance and the insignificance of those "noncounterfeitable tokens"...

So, eventually, this all amounts to how smart you are in general and how well you can outsmart the "bad guys" in particular

And if you think that the "genuine" tokens somehow make you smarter (than the "bad guys" with a big gun out there), while the fake ones... well, less so, then you are in for a rude awakening

Well this is a very important point thanks.  When we are staring the Eagle in the face, the unknown, the hostile universe, our exchange commodities aren't gonna help us.  We can't eat public coin just like we can't eat fiat.  Nor will it necessarily appease any man or other beast. 


I'd like to hear more about this.  In general the false dichotomy of "bad guys" and "good guys"  is not always so useful, but if your goal is not being robbed - then using a tool which makes it harder for bad guys to rob you seems like a good idea.  Wouldn't you say?   

How do you know that Bitcoin (since you obviously refer to it in your appeal) is actually such a tool? We don't even know who is behind creating it in the first place, lol...

We can only guess what real ends its maker(s) can be pursuing

ftfy

I had my wallet stolen the other day, but my keys were backed up and encrypted so.. hey lost nothing except the wallet. 

After moving the funds to a new wallet I also knew with 100% certainty that nobody had secretly diluted the supply leaving me with less value. 

Well here's one I can answer :)  We know that Bitcoin is such a tool because we can look at it and see everything about it.  It is public.  All transactions - all blocks and network communications - are public and plain text.  Just take a look and see!  

As to who is behind it, that's only important historically and in terms of whatever stash they might have, which could be as much as 8% of all [current] coins it is said.  Who is behind arabic numerals, and what was their motivation?  Who was the first to refine gold?  Anyway, in this case you can go read Satoshi and draw your own conclusion.    

Just a few days ago you were talking bullshit. Later you seem to have accepted that you had been talking bullshit. What makes you think that now you started talking sense?

All blocks are public, i.e. for everyone to see, right?

I am posting here to ask the OP if he has read this essay that I recommended and if not then why not?

Yeah. Where did you find Bitcoin's economic model? Don't just go around saying this kind of shit, if you have no proof to back it up. Also, what did they leave out of the economic model?

Obviously, I didn't. But since you posted the link again... well, it piqued my curiosity and I looked through it (here (http://litru.ru/book/?p=227262)'s a more readable version, by the way)


No, I don't read belles-lettres and fiction these days (short version: waste of time)

First, who's apologizing for Bitcoin? You reference "bitcoin apologists"...

Second, you don't offer any details on what these people are forgetting, care to elaborate a lot on your point?


I think you created this thread to boost your post count with the Bit-x campaign.

You may want to read the thread before asking

Bitcoin is the future of money. Bitcoin will replace fiat.

Yes all blocks are public.  Bitcoin is a public coin.  The money supply, all (on-chain) transactions, all coinbase transactions - detalis of all relevant algorithms - current address of every existing satoshi - are publicly available.  This is not "an economic model" nor something to be debated: it's just how the thing works. 

Merry Christmas to you!  :D   

Most models behind most projects in its prime are usually flawed. Bitcoin is only 6-7 years old.