Bitcoin Forum

This banker from ING first applauds bitcoin , but then says that the flutations are the main hurdle for bitcoin to go mainstream.

In order to get much stability he urges bitcoin developers to develop algorithm  to get rid of the thing we love most, that is the 21 million cap and become infinitely inflationary like the Fed's toilet papers.

He lures, a developer to implement this algorithm would even get Nobel prize.

This is sad and bad..this idea has to be stopped right at the very beginning.

http://www.youtube.com/watch?v=79H4CVq__NM#t=20

The fed? Dude! Why the heck are you arguing with it! The fed is always right!

~~For those of you who can't tell, the above statement is sarcasm~~

Inflation is the last thing we need. In case anyone has looked at Dogecoin, the price has been on a continual downwards spiral since the beginning. I don't want to see BTC dropping from $640 down to $2. Plus the difficulty is so high, mining would cease instantly. There would be NO way to get an ROI with such a high difficulty, and so mining would cease nearly instantly and there would be huge issues.

If the devs listen to him, I'm dropping my BTC holdings into another coin, I'll be so mad I'll just drop it instantly.

There IS no Nobel Prize for this! Why the hell does Dogecoin not have one then! They used this before it was advice, and where is their golden plauqe?

Ignore this wish-wash banker and keep with what we have. Anything else will wreck Bitcoin, wreck cryptos, and allow the Fed to tighten their grip on us. Educate without being to complex!

A banker talking about bitcoin. I'm sure there's no conflict of interest or any agenda. *cough*


Message to those with broken or poor sarcasm detectors: there is sarcasm in this post.

I think we should be assuming that the big banks and hedge funds are working on an inflationary crypto. 

dont worry, even a Bitcoin doofus can see through the lies of the Banksters.
What he is proposing is antithical to its core principles.

... and the youtube video still has 2 upvotes  ;D

His mom and dad have internet too?  ;D

The deflationary thing is a fallacy. We will only have  less and less coins being generated until 2140, will be deflationary if and only if people keep interest on bitcoin and keep buying it at the same rate.

We can also end like doge, people losing interest and price falling way more than the increase in the supply of coins can explain.



 

Bitcoin is not deflationary, it has a pre-defined rate of inflation, till 2140.

I would divest immediately if something like this happened. The fact that they are even floating the idea shows they are either coming at it with an angle in mind or they don't know anything about the principles of bit coin. It is probably a combination of both.

Thankfully the Dogecoin tested this for us and it was a disaster

Bitcoin was not develop to make banks rich. It might not even existed, if it was not for the greedy bankers, exploiting hard working people, with high interest rates on loans and having them paying huge fees, for things costing them pennies.

Face it... They would rather not see crypto currency succeed, or they want it changed, to dance to their current income model. {Not a inch of their market share are negotiable}

Bitcoin's success is directly linked to their failure and greed.

On the contrary, Dogecoin has been a huge success, with many merchants accepting it only after 7 months of running along with its 'father' Litecoin, and its success is not over yet.

There are altcoins that have those algorithm's it pisses me off that because people know their ideas will fail on their own they insist on hijacking the Bitcoin name and currency itself, trying to take advantage of the success it's had.

Doge coin is desperately in need of a fix to the protocol. Until then no one outside of the hard core users will take it seriously. 

If you mean the infinite 10k rewards, there is nothing to fix, it's a feature.

Well said. Dogecoin was also the first thing that came to my mind when I read OP's post. If he doesn't like the way Bitcoin's protocol works, then he should either launch his own altcoin or use dogecoins instead. The latter seems like the perfect crypto for his needs.


I believe it was actually supposed to be deflationary in the long term, just like Bitcoin but there was a bug in the code that made it perpetually inflationary. There was quite a bit of discussion during the beginning of this year about whether or not the bug should be fixed, but ultimately it was decided to keep things as is.

Inflationary altcoins already exist, but I guess big banks are happy with their monopoly on money creation.

I looked over a lot of altcoins and found this information online. I would like to ask your opinion, The Next Cryptocurrency Investment (http://"https://www.ddmarkets.com/the-next-cryptocurrency-investment-mazacoin/") It also has MTGox leaked data.

This would just be a trap. Then they would say, hey look Bitcoin is worthless, we told you it wasn't a good idea. That is how it would end up.

Any PoS coin is already inflationary in nature, why not use Peercoin instead of ruining Bitcoin?

Not necessarily. There are some PoS coins like Nxt which aren't inflationary since proof-of-stake block rewards come from network transaction fees.

This can be done in 5 minutes. You can create a fed coin with no cap but instead a fixed block discovery reward or perhaps one which even increases over time. Let it out into the wild and watch it fail.

but now we have stablecoin-scam  ;)

Bitcoin is inflationary as well, till all coins are mined....or am i missing sth.? ???

It isn't inflationary since the same number of coins is set to be issued regardless of the total amount in circulation, an inflationary model would imply that 4% of the current number of coins in circulation would be issued over the next year.

I thought inflation was just any increase in coin supply. Bitcoin is technically supposed to be neither inflationary nor deflationary once fully mined but will be very slightly deflationary in practice because it is inevitable that every year, some people will lose their coins.

the coin supply DOES increase.  every 10 minutes.

Yup, but not once it is fully mined in 2140. It is currently in it's inflationary phase.

The problem with inflationary models is you effectively issue new coins to reward people who are working on the network, the number of coins is determined by the number of coins in circulations (a.k.a 5%/10%/3%) thus demand needs to expand accordingly. Ask yourself what would happen if everyone on the planet adopted such a coin and there were no new people so there is zero demand but new coins are still being issued? And most importantly why would anyone expose himself to additional risk?

Advocates of inflation claim that it discourages hoarding and speculators (e.g. why would I buy a car today if my money will be worth a lot more the next year?) as well as a more stable price. All of the cons of inflationary systems outweigh the pros by a whole lot, this is why inflationary currencies crash constantly while gold is still strong thousands of years down the road.

Prices would simply rise in proportion to the inflation rate assuming zero population change and identical demand (these assumptions are pretty unrealistic when it comes to cryptos though). If you had 100 coins and 100 people last year and 101 coins and the same 100 people this year (i.e. you introduced 1 coin into the system) and demand for the coin stayed the same, then each person would now have an extra 1 percent added to their balance. A coin would be worth 1 percent less so nothing would be lost and their net worth (as measured in coins) would stay the same, and something that cost 1 coin this year would then cost 1.01 coins next year.

After many years, your hamburger bought using coins could be worth twice as much coins, but it wouldn't be an issue if you earned twice as much coins due to inflation during that same time.

As you might have already guessed, the coin that I am thinking of is Peercoin. Peercoin doesn't discourage hoarding. In fact, it does the exact opposite. It promotes hoarding because only those who hoard their coins and thus support the network would benefit from the proof-of-stake minting.

I disagree with incorporating inflation into Bitcoin however and I think it would be a stupid idea to change Bitcoin's protocol just to please the existing inflationary system, but as a fan of Peercoin which uses an inflationary model, I do also think that inflationary currencies can work.

Note: Also, to keep things simple, I'm ignoring the contribution of transaction fees here.

Edit: Some minor rewording.

So by holding Peercoins you hold a liability to contribute to the Peercoin network otherwise you are punished by having your coins devalued as opposed to Bitcoin where you hold no liabilities because you are already paying your fees to support the network.

I know a guy here from the dorms that bought Bitcoin, when he cashed out they frozed his bank account. I know another guy also from here that deposited money in Bitstamp and got the account frozen. It seems ING fucks you over so much. If I ever cash out some Bitcoin i'll be sure to do it in a smaller, local bank that isn't under the control of the powers that be.

Transaction fees do negatively impact your account. Virtually every cryptocurrency rewards those who support the network and imposes penalties on those who do not. Even once Bitcoin is fully mined, transaction fees will be awarded to miners, giving them a higher percentage of the total coin supply - increasing their wealth and diminishing the wealth of those who do not choose to mine (Remember, the best way to gauge wealth is to think of it as a percentage of the total market cap).

The inflationary nature of Peercoin is just one way of managing this. Nxt is similar in that it is also proof-of-stake but it is not inflationary. It has a total cap of 1 billion coins. In practical terms, the two models (one inflationary and the other not) differ by very little.

ING is either retarded or shows conflict of interest at its finest. Maybe even both... ;D

That guy should read the message in the Genesis Block. I'm afraid he's about to loose his job.

Agreed, that is a very weak attempt to entice the bitcoin devs to sellout.  the whole video is meant to get that single message across.  This has been the same old attempt to fud Bitcoin just with subtle manipulation.  Makes me wonder how many others have sold out so they can rub elbows with the elite crowd show off a Nobel piece prize.

The developers are not going to sell out bitcoin for a Nobel prize. 
It would obviously create a fork that no one would follow and leave the devs in poverty (devs are paid in BTC). I think we are forgetting that these ideas about taking over or destroying bitcoin have been discussed for years. So far no one has shown me an idea with any chance at all of working.

No one owns bitcoin, no one has control of the network, and there is no one to corrupt.   

This mother-fucker!
Take that noble prize and shove it up your ass next to Kissinger's

It's interesting to note that if a central bank wanted to be able to adjust the bitcoin money supply in an attempt to smooth the economic cycles, they would already be able to do this.  They would first need to procure a large sum of bitcoins and hold them as reserves.  Then, when they feel the economy is depressed, they would lend out these reserves at low interest rates to expand the money supply.  When they feel the economy has recovered, they would raise the interest rates on these reserves to reduce the money supply.  The difference between this mechanism, and the current central banking system, is that the one I just described enforces discipline.  

It is also interesting to note that the central banking system would get one final kick at the "fiat can" even if we moved to a bitcoin monetary system.  Historically, a central bank holds government bonds on the "assets" side of its balance sheet, and an equal amount of fiat on the "liabilities" side.  One method the Fed uses to increase the money supply is to purchase treasury bonds with newly-created fiat.  The Fed could use this same process of money creation (with an act of Congress), but instead of purchasing treasury bonds, they could procure bitcoins.  The asset side of their balance sheet would start to fill up with real bitcoins while the liability side would fill up with dollars.  This would drive up the USD/BTC exchange rate and result in the Fed owning a huge sum of bitcoins for essentially zero cost.  But in actuality, the cost would be huge: they would be "selling out" the legitimacy of their fiat system.

We would be witnessing the final act of fiat.  

That is interesting. I would not call that a takeover, (nor did you) in that scenario they are simply participating. Personally I don't mind if banks want to play with us. But they get no advantage other than they have money to leverage.

Really guys...and gals....why all the hatred? Who, with half brain, would listen to a banker?! Really...give BTC devs little bit more credit. They are smart bunch. But even if banksters managed t get under lead dev's skin, changing BTC in way that bankster wants, would require hard fork. There and than we would show them (banksters, devs, whoever would be at that time on "that" side of the fence) that we are not getting behind it and fork would fail. You, BTC users have last word on in anyway, and THAT is real strength of BTC.

Well, it's not exactly only good stuff that comes from a deflationary currency. In fact, it may just be as bad as a highly inflationary currency. Just think about how people won't want to spend money when their money was worth more the next day! (Yes I know, people are spending their bitcoin - but they're enthusiasts. We have to remain on the level of a nation's economy and use the psychology that applies to the regular person using a currency)

OK, here is some psychology. From the standpoint of the consumer, they each have a vested interest in staying alive. As such, they require food, clothing, shelter, transportation, and energy. Every day. These are non- negotiable non-deferable expenses.

The economy will not grind to a halt just because the money in use is deflationary.

Don't make me trot out the cell phone counter-example...

Is that Ribéry's  uglier brother?

I agree that it's not a takeover, and I don't mind if the banks want to get involved this way either.  In fact, it would increase demand to hold bitcoins.  

The beauty (that you alluded to) is that they will reap exactly what they sow with this model.  If their stimulus efforts are truly positive, then their operations should be self-financing.  If they decide instead to bailout too-big-too-fail institutions--and if those bailout funds get eaten up in banker bonuses--then they will eventually run of money (this time permanently).  

I'm of the same opinion I just like it when people cut threw the bull and tell it how it is.  I'm just wondering what the plans for BTC are at this time with all the high expectations and wild accusations.  I likely read to much into it but I think the general assessment is fair.

It certainly won't grind to a halt, but expenses would potentially be postponed as long as possible. I'm also not claiming to be an expert on that field, there'll be far more people who can give you very good arguments how deflation is a bad thing, as well. The same applies to debts/credit. Yeah, debts can be a very serious thing, but they also allow people to gain access to things they couldn't afford otherwise. They now can use these resources to effectively bootstrap themselves out of their financial powerlessness.

People (the MSM) say that bitcoin is deflationary because holders of bitcoin generally think that the value of their coins will increase in the future, preventing them from wanting to spend their bitcoin. This is similar to how the masses act with their fiat when their fiat currency is expected to gain value in the future (putting off purchases)

Inflationary an deflationary only apply to the bitcoin price, not about if there will be more or less coins in the future, or if it will be finite or not.

What determines if it will be deflarionary or not is the demand, and the numbers of coins have nothing to do with the demand.

Let them keep trying to destroy the bitcoin network.
They will accomplish nothing in the end.

Inflation related to increase in money supply is new term for me( I'm ignorant in formal economics).

But bitcoin don't have monetary deflation, because the number of coins avaliable is growing every day, and only by 2140 will stop to increase, long enough for most of us be dead. So for us bitcoin is a inflationary currency at the moment.

Bitcoin don't have by itself inflationay price nature, since its determined by the demand, not by the numbers of coins.

Who invented the bitcoin = deflationary currency nonsense?

Deflation is surely what any sane person would want: work hard for a short amount of time, save a lot and then your money just increases in value all the time and you then don't have to do anything - oh but then if everyone thought the same there would be no productive members of society left  :o

It could be good to have Bitcoin very stable when it becomes used primarily for shopping etc. That's easy to do. Simply determine the base price of Bitcoin with an algorithm that takes a weighted average of a basket of ordinary fiat currencies. And then let Bitcoin be traded with that base price as a foundation. The competition would then be to offer bitcoins for a price lower than the base price and as high as possible. A too low price and the trader would lose money. A too high price and some competitor would outcompete the trader. That would keep the price of Bitcoin very stable. Where is my Nobel Prize? :D

The supply of bitcoins can perhaps be made to grow with a linear ramp up function instead of the deflationary curve of today. People who own a lot of bitcoins would become angry (no longer expected deflation) while people who want to use Bitcoin for buying and selling would become happy (endless future supply of bitcoins at a stable rate and valuation).

i think a lot of people in this thread seem to wrongly interpret what the banker really wants in the bitcoin protocol..

He does not demand something like a categorical change in bitcoin protocol like INFLATION/DEFLATION,in other words be bitcoin or become like dogecoin..


But what the banker really puts forward is to make the protocol easily adaptable so that tomorrow if people wanted a 700 billion btc bailout, there should be a possibility to do so..

If a nation wanted a raise to  16 trillion btc debt ceiling, there should be a mechanism to do so..

In short destroy bitcoin for what it stands for...

You mean like a Mt. Gox bailout? Not sure how 700 billion or 16 trillion BTC is possible.

modify the bitcoin protocol and get nobel prize

Bitcoin is inflating at a decreasing rate as specified by the protocol, agreed to by everyone using the service, and, as many others point out this is one of the core properties which draws people to its use.

agreed. is pretty pathetic of ING. i don't bank there but if i did i would dump them.