Bitcoin Forum

As an engineer I learn about this Law some years ago, they call it the Conservation Law, and it applies for energy and for the mass... The law is simple:


And is the same for energy...

Now, after that intro lets move to the real question:

¿Why there is no economic conservation law?

This is a real problem because is really easy for the human to create money from nowhere, and the best example is a coin hard fork, when we saw the born of bitcoin cash, there was a crazy big amount of money created from nowhere. So, you think someday human will stop creating money from his imagination and create a Money conservation law?

Source: https://en.wikipedia.org/wiki/Conservation_of_mass

We have. But we using paper money (i.e. Bitcoin, USD, EUR, ...) for our economy. But it isn't a good system, I think. We need tokenized things rather as electronic or paper money. And we should issue only same amount i.e. Milk, what we have. Not more. And then we would be able to pay with tokenized Milk in a shop... We should support barter. If we have a such system we can't sell the future our children more. We will see, how many resources we can use.

A tree can't have money or gold, but a tree can have shadow, rawstoff, fruits, ... If we using barter, then a tree isn't more a resource, it will be a partner in our economy! We can then calculate with the truth economical power our living environment...

Please consider our projects (Vortexledger and Charm):
https://bitcointalk.org/index.php?topic=4392525.msg39128463#msg39128463 (https://bitcointalk.org/index.php?topic=4392525.msg39128463#msg39128463)

We must to stop they...... But we planning to restart they, as we have enough resources and interest...

You can create a coin from nowhere but that doesn't necessarily mean it will have any value. Some of the BTC forks were never worth a dime right?

But you can create value from nothing. Like any piece of software or data is just a bunch of arranges 1s and 0s which are worthless but if you arrange them just right they become valuable, be it Bitcoin or a videogame..

A newly created coin can be valuable like Grin, the software is valuable to a lot of people. A fork of Bitcoin can be valuable as seen in the hundreds of coins forked off Bitcoin before BCH existed..
The BCH fork could be valuable to some people, hold some value apart from bitcoin or be more valuable software than even Bitcoin to them, but little I'd imagine...
Crypto prices are all about how much people think they are valuable.. I bet that the use of Monero for example is more valuable than then use of Bitcoin to many people..

The BCH fork is important I think because instead of really trying to create new value it tried to take value away from the real Bitcoin. The new value it created was small because it is not really a valuable new software compared to many things that exist, but it split off some of Bitcoins value/marketcap to it right from the start..  

You may think you got a bunch of free money from BCH but it just kinda split the value of your keys..

If it wasn't for BCH your Bitcoin would probably have been more valuable than your combined BTC/BCH, not only because BCH took some of that value out of BTC but also created a bad image of BTC reducing it's value..
I may contend that the BCH fork REDUCED the value of all of our keys from all the negativity surrounding it..
I see it as entirely possible that had BCH never happened your same keys would be more valuable now in just BTC than your keys are worth now with the BTC and BCH combined..

The biggest problem is at this time in our Economy and life:

Electronic money or paper money (without a value behind) can be issued without any limit, but our living environment has limits and this limits decreased at this time quickly...
We was able to sell the future our children.

So we need money with valuables behind. As you explain.

A valuable + an issued money = economical element. Your example Grin, it is backed with Software. Well. But we can't eat Grin :D so it isn't a need for our life.

Living Environment we need for our life. It will have (maybe only some years already) more value as a software behind Grin. Sorry. To save our Living Environment is most important thing at this time,
and we calculate in our Economy with it through paper money. I am engineer also. I know, what OP asked.

Paper money not usable for our economy. Also Bitcoin was only a step for a better economy, I think.

Economics does have that law (not really a law), it's called Zero Sum Economy which basically states that in order for someone to have something more then someone else must have something less. There are many proponents of this idea and many that completely disagree with it, count me in the latter category. Reality is of course more nuanced but economists like to argue these philosophies quite a bit.

Economics changing. We need a change.

You spoking about two business man with no Living Environment. Then your Law is a truth.

But we have Living Environment. Today. Tomorrow maybe not. Because our Economics don't calculate with it, and we eating our Living Environment at this time. Because of wrong economical models, laws.

But if we understand the model we use today, we are talking about infinite money, more money printing gives it less value, but we can print more and more...

I think we need an economical model with finite money, another way money lose sense because we don't really have control about how many money is out there.

Maybe like BTC???

You hit the nail!

Bitcoin is a good example, but is not enough, i think we need an economy based in blockchain, we should be able to trace each penny like the way we can do it with blockchain. Because nowadays if i take $10Billion in cash and burn them, in theory, the bill value should go up because there are fewer bills, but how the banks will realize i burn that money. That's one of the main problems nowdays, the banks and govs don't know how many money is really out there.

Maybe Charm :)
It is a backed asset on the OByte Ledger, but we issued only a portion at this time. We would like to issue more, if we have enough "Cells".
"Cells" stores valuables. We would like to implement a well distributed, diversified "central" Bank for Charm...
We planning to use other Ledgers for Charm, i.e. "Curtly": https://bitcointalk.org/index.php?topic=1690476.msg52655143#msg52655143 (https://bitcointalk.org/index.php?topic=1690476.msg52655143#msg52655143)

Please see: https://bitcointalk.org/index.php?topic=4392525 (https://bitcointalk.org/index.php?topic=4392525)

Heh heh.  I studied all sorts of chemistry and physics in college, and I'm familiar with thermodynamics (though I've forgotten most of it, since I don't use it in my job).  There's no conservation of anything in economics, because money and society aren't regulated by any such hard-and-fast laws.  You can't violate the laws of thermodynamics--people have been trying to create perpetual motion machines for centuries, and no one can do it.  You can't create matter or energy out of nothing, and that's why the conservation of energy and matter are considered laws. 

But come on.  We're talking about governments and politics and money.  There's no real science involved in any of that.  Economics is fascinating to study, and for sure there's some mathematics involved but you don't find inviolable rules anywhere.

I get your point, but I do believe all of the bitcoin forks have produced coins that have at least some value.  There are always going to be people who think there's something to a BCH or Bitcoin Gold or whatever, and they'll trade it on exchanges.  There's no comparison to the laws of physics, though.  Not even close.

I disagree.

The problems with bitcoin, especially the four-week long backlog in Dec 2017, is the reason bitcoin's price started to drop from it's all time high. BCH is just another alt among about 1500 alts. None of them are "taking something away from bitcoin". On the contrary they are expanding the crypto universe because you can do things with alts (including BCH) that you can't do with bitcoin.

BCH for example allows you to buy stuff from mechants accepting Bitpay without huge fees. It was easy for Bitpay to add BCH as the protocol was the same (it's too hard for them to add other alts). So BCH actually helped in that mechants didn't abandon the crypto space entirely the way they would have done if bitcoin was the only crypto and the backlogs were getting worse and worse.

The conservation of mass law is a natural force of nature that cannot be changed nor manipulated. Human economy might seem like it is naturally controlled by supply and demand but it is in fact manipulated by how much bills banks made. This is why the global debt keeps on increasing because banks keep on printing money. By the end of it all, bills would've depreciated so much that the financial market would almost certainly crash. A global institution that manages the finite money of the world would be a nice idea, limiting the printing of bills to fit the world in itself. Of course, this would take astronomical resources to do since we are talking in a global scale, with differences currencies in the world. Is just an idea though.

There will not be a such rule will exists until the whole world will come under one's dictatorship,because different countries have different laws and if one support it means most will oppose so we are not going to get anything helpful for their people until diversity exist of ruling community.

This is a very interesting topic and many have a very perverse view of it. The law of conservation of mass and energy also works in economics. Here, goods and money work, which are related in much the same way as mass and energy. In physics, mass flows into energy and vice versa. In economics, goods flow into money and vice versa. If you simply create money, the economy will deteriorate, the goods will depreciate. Only if a product is created, that is, material values, can the money supply be increased. Cryptocurrency is a form of money supply. When buying cryptocurrency, people exchange it for regular money. The money supply is growing, but the volume of goods is not increasing. Therefore, if someone believes that Bitcoin can grow in value even up to one hundred thousand dollars, he is mistaken. Money, including cryptocurrency, must be provided with goods, otherwise the world economy will fall. The conclusion is obvious.

I am not an economist and I sometimes find the study of economics to be boring as many of the concepts many are still believing did falter in real life especially when we talk about complicated ecosystems where many laws (sometimes opposing each other) are applied or at play. I also do not agree with the Zero Sum Economy concept all because the bottomline in that is a win-loss equation can be okay when in fact we can have a win-win formula where both sides of the transactions can be receiving and adding real value. In real life, when an employee is receiving his salary it does not mean that the employer has lost any value at all because both sides are actually receiving something of value in return for something contributed.

In the past, money was mostly equated with gold or maybe even silver which means that money got the value that it is carrying but as time goes on greed entered into the picture and so the value backing money in circulation became diluted which eventually lead us to the current fiat money we are using...and many of these are not backed by anything but by the promises of the government.

With the coming of cryptocurrency, there are those who see a good opportunity to create value out of nothing and we saw this with many forks and of course introduction of different versions of Bitcoin. Can we say that they are created out of thin air? I think only time can tell with that as adoption can be a big factor that can also be putting value into something meaning that we can ascribe value into something we feel has many use-cases and a bright future ahead.

I doubt this apply to our fraudulent economy that is heavily manipulated to enrich the very few and enslave others. This law you quoted is one of the laws of Thermodynamics. Our supply, distribution and demand are not balance.

With the caveat that even in physics it only applies to a closed system which our economic system most definitely is not.

If there's a lot of money and everyone has it, it will be senseless or useless since people can buy anything instantly. So conservation law is essential for us to value money more than anything. But people are greedy and money control us humans. We will not stop creating money from nowhere because we want to own anything.

But if we want to conserve money for the economy then people should work or look forward on the economic conservation law.

Exactly. We aren't talking about one system but multiple systems that can interchange by sharing goods.

If we add water to a container it will eventually overflow, and it's the same in economics but you can keep adding when another person keeps sucking it out through a tube and another warms up the container from the bottom to boil the water and make it evaporate. This is how economy works you don't have a single closed system unless in extreme cases like isolated villages in the jungle or something.

Also, fiat money is unlike energy and matter. It doesn't have physical properties and its value is agreed upon. You can't discuss upon the weight of 1 kg of steel or 1 W of power, but you can discuss whether something is worth 1 paper bill or two.

Also if you print more money, you don't generate new wealth. All that you do is make every dollar bill worth a little less. There's not really a conservation law for economies because wealth generation generally increases over time as inefficiency is reduced and new technology means more can be produced. This is how new wealth is generated, not by the printing of more money. You need something to underpin that money.

Whatever, the current system is f**ked up and is set so that the ultra-rich benefit whilst everyone else stagnates. This is why we need bitcoin and a decentralised system. Fiat is too easy for governments to manipulate.

I think it's mostly because we are able to create value out of thin air. Singing for example.
Masterfully sang song definitely is worth something, not much resource was used to create such commodity due to the fact of abstract concepts like, musical harmony, beauty, positive emotional reactions etc. Thus similar mechanism must be used to express the value desired ergo money out of thin air. It's an abstract based on mutual agreement otherwise it would be hard to value anything.    

… decades of practice and dedication to learning. What's your time worth? You did say "masterfully". :)

Well yes but ever heard of natural talents? Besides it's not like time is so hardcore, down to earth idea, right?
Another abstract concept that we sometimes describe as "special" dimension and sometimes we disregard it completely, so go figure.
You can't argue we are able to make stuff that has value, out of things that are dirt cheap, literally. Picking on words much? :)
 

heh, I was just ribbin' ya, I understood your point, as a musician though I couldn't let that example go by without comment

I'm glad you did because thanks to you, I realised something crucial for the discussion.
It is in fact all about TIME. We uniformly value our time in life, feels so short and uncertain.
That's why we where forced to invent money, because we can't give time as rewards, life time that is.
If something so fleeting and unrealistic as time is here in abundance, yet has extreme value for us, it's replacement will have similar characteristics. Ergo money of thin air - economy with conservation law will be a faulty ideology.

There is a huge difference between creating money out of thin air (what the central banks are doing) and a hard fork on another coin. Just to give an example when there is new money printed by the central banks there is nothing backing it, nobody asked for it in general public, and it does affect everyone that has the same currency, they are not printing dollar 2.0 they are printing dollars that you already have but more of it so your dollar worth less.

When you hard fork it is requested by some people who supported the fork, it is backed by the miners (or stakers) and it doesn't affect the bitcoin people, bitcoin cash only affects bitcoin cash holders, it can worth zero or a trillion and it wouldn't change anything in bitcoin itself.

True, except you need to consider that many that would be on that new fork are now NOT on the original fork. So in a practical sense it does have the effect of dilution, just not as clearly as printing dollars. And we can also assume some folks would be on both forks, further minimizing the dilution effect.

I agree, that's a good way to look at it. When I made the original comment I was thinking about not only time but also tangible resources that must be used in order to support someone that is working a creative or R&D endeavor. That's the cost of IP. Food, education, lost opportunities, failed attempts, etc. So what to someone seems to be a creation out of thin air with no resources used actually has a whole world of quantifiable costs behind it.

This is the law of conservation of energy and it says that everything in this world is interconnected, nothing can arise from anywhere, nor can it disappear anywhere, under certain conditions, the substance goes into energy and vice versa.
In economics, this can be applied to goods and money. Money goes into goods and vice versa. Also, the goods can be exchanged for another product, which is called barter, and money can be exchanged for other money. Cryptocurrency refers more to money than to goods, since it itself does not have consumer value.

You can't really apply laws to random things, but I do see you point here.

During the first Bitcoin cash fork, most people speculated that during the fork, one bcash and one Bitcoin would roughly equal the price of a single Bitcoin pre fork, but this obviously didn't happen.

This is a good example, there is the law of conservation applied in economics.

This is quite hard to implement especially in a decentralized and uncontrolled environment such as cryptocurrency or Bitcoin. Fork is there as a possibility right from the very beginning. If it was not, then it would not have happened. But since it is there, it will surely happen especially if there is a huge disagreement among the developers and core team of Bitcoin. But I would be supporting a Conservation Law even in cryptocurrency if ever it can be implemented. Those who would like to create a fork out of the original network would have to create a separate project altogether rather than just fork it lazily from the existing brand.

Discussing conservation of mass and conservation law discussing physics which is a branch of natural science, while discussing about money is discussing economics which is a branch of social science.
Natural Sciences can be learned & observed with the five senses. While social science is more complex because humans as their subjects have different characteristics.

Not everyone can make money, especially fiat money, as an exchange for fiat money payments must be generally accepted, easy to store and carry, durable, recognized and guaranteed by the government, the value is stable and not easily falsified.

Meanwhile, when discussing bitcoin and cryptocurrency which is likened to the law of eternity, in my opinion is not the right thing because of different disciplines. If the amount of bitcoin is considered mass, the reaction refers to demand and supply, but this decentralized bitcoin system is different from the law of eternity that applies to closed systems.

That's a good explanation of things, and it showcases the difference in the science and how laws can't apply to everything. Merited!

It would be impossible to implement in a decentralized system, there are simply way too many factors that you need to think about and apply for the law of conservation to work in this instance, this with the quantity of random forks that happen every week, means that you can't apply the law of conservation to this particular instance.

This is wrong, researchers use scientific method. Your sense can deceive you.

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The mentioned law works on a closed system, while earth constantly bombarded with energy outside the system, i.e., the sun.

Plants absorb energy, bearing fruits and eaten by herbivores... and food chain continues. That's why living things able to grow and prosper here on earth.

Humans utilize the "free and unlimited" energy for productive activities and trade. Therefore, some say that the economy is always growing.