Bitcoin Forum

http://www.youtube.com/watch?v=InwVM6s7WoY&feature=plcp

Guys seen this i think its a simple way of explaining Money

A longer more thorough explanation: http://www.youtube.com/watch?v=vowbrq_g5NM

All you people who think money is a medium of exchange don't know what money is and need to watch this.

http://www.youtube.com/watch?v=rC720Cl3N-0

Money is a debt note.
Banks take money and lend out 10:1 as debt.
You have to earn these debt notes back to pay down your debt.
Debt is slavery.
When you don't take on debt, the government does it for you, and taxes you in debt notes so there is no escape.
When there aren't enough debt notes the Fed has to print up more and this devalues saved debt notes forcing people to spend them into circulation. (velocity of money)

The system is going the way of Do-do because there aren't enough jobs to earn the debt notes back. My local stores are even sacking checkout clerks and replacing them with self service checkout machines. It's crazy.

The distinction here is the concept of money (it is a medium of exchange) versus the implementation of the concept (the money is based on or backed by debt).

Thanks for the links

Simply state, money is something that facilitate the monetary functions: unit of account, medium of exchange and store of value.

There has been a debate in Austrian school as to whether bitcoin can be money. The debate centered around Mises' regression theorem, which states that a monetary commodity can be traced back to its original non-monetary use in the market.

Of course the problem is bitcoin does not have a non-monetary use. So some took this as the proof that bitcoin must not be a legitimate form of money.

I find this argument rather disingenuous. I believe if Mises or Rothbard is still around, they would readily recognize the error in the regression theorem when they saw what happened to bitcoin in the market.

Bitcoin has proven that market will value monetary properties alone, regardless of non-monetary use. This does not detract from the brilliance of Mises, as he didn't have the privilege of watching the market valuing monetary properties without any non-monetary value. Yes it's a huge difference if you can see it happening right in front of your eyes.

So yeah cryptocurrency is here to stay and is the most revolutionary form of money to date.

Money does not have to be based on debt to be money. But..we have been trained to accept it as such.


I am no economist, but I can realize that if a piece of paper comes to me as a loan, or to a country as a loan (http://consumershock.org/bb-s-w.jpg), it is still a loan and more will have to be paid back than was received.
==

What is money in 1 minute: https://www.youtube.com/watch?v=5RJFG99z8GM

I'm not quite convinced that bitcoins value comes solely from appreciation by the market.
If you take a look at this nice graph (http://i704.photobucket.com/albums/ww47/monomeric/BitcoinBottom.jpg) i've made you can clearly see a fixed component to bitcoin price.
I would not believe that this is the effect of the bumpy growth of the bitcoin market.
It looks more as if bitcoin deflates at a steady rate over time.
You can see that it defines the bottom, which leads me to believe it is a separate component from the movement above it, like a transposition.

I agree that Mises or Rothbard would amend or rethink the Regression Theorem. Here is an interview where two Austrian economists discuss how the Regression Theorem applies to Bitcoin (http://www.economicpolicyjournal.com/2012/10/this-week-on-robert-wenzel-show.html).

But the other statement is not correct. You cannot assert that Bitcoin has only monetary properties. See Human Action Chapter 7 Section 1 and Chapter 12 Section 1. After all, some people like to acquire bitcoins to wear them and who are you to tell them they can't?

Lots of isms and related confusion, as usual. Money, just like anything else, "is" whatever you decide it to be. Different people will come up with different definitions, and that's perfectly fine unless they forget that these are arbitrary definitions, and start arguing about what something "really is."

Thanks for the info really useful mine was just a really basic understanding

Bitcoin definitely does challenge Mise's Regression theorem. In order to emerge as a "money", an asset must already have been demanded for non-monetary reasons. Bitcoin never had an initial non-monetary use.

There are three ways you can proceed with this.

1. Actually, it did have an initial non-monetary use... In its initial form Bitcoin was valued as a sign of geekiness, a demonstration of one's devotion to technology etc etc. From this initial non-monetary seed, a certain degree of moneyness began to attach itself to Bitcoin.

2. No, Bitcoin never had a non-monetary use. It's intrinsically worthless. It's a ponzi scheme. In the short term, people can irrationally bid up the price to some non-zero amount. But in the long term the rational of the regression theorem requires that the price of Bitcoin fall to zero.

3. The regression theorem is wrong.

I would say a little of everything.. :)

I think it did have an initial non-monetary use, specifically it was valued as a collectible. I don't think that guy that was prepared to barter 1 pizza for 10k BTC did so because he though bitcoins were money and he could get the same or more value out of them at a later point but I think it's much more likely he though they were cool and rare and wanted to hold some and thought the price of a pizza is fair while disregarding whether or not he will ever be able to find another person who would accept them for something else.

This argument is explained a bit more thoroughly here: https://bitcointalk.org/index.php?topic=116951.msg1256337#msg1256337 and in the post following that one.

Sorry, but what exactly is the algorithm of your graph's 'fixed component'?

y=x^c where c is a constant and unequal to 1.
That's why it kindof stumped me.

Even before the pizza guy there was a market being made here:

http://newlibertystandard.wetpaint.com/page/2009+Exchange+Rate

"During 2009 my exchange rate was calculated by dividing $1.00 by the average amount of electricity required to run a computer with high CPU for a year, 1331.5 kWh, multiplied by the the average residential cost of electricity in the United States for the previous year, $0.1136, divided by 12 months divided by the number of bitcoins generated by my computer over the past 30 days."

Not sure how much was transacted. But it's an odd way to calculate price.

Yeah but that's really the cost of manufacturing not really a valuation by a market..

A unit of weight equaling 371 4/16th grains (24.057 grams) of pure silver, Like pre 1964 Morgan and Peace 1 Dollars Coin's .  ;D

4. The world is changing.

4. Bitcoin isn't money. It's something new which is better than money.

There you go. Now we no longer need to have pointless semantic arguments and can actually talk about something relevant, like what kinds of things can we do now with Bitcoin that we couldn't do before when all we had was money.

If something facilitates delayed reciprocal altruism it is money.

I don't know what that means.

Can't you say that Bitcoin's non-monetary value stems from it's relationship to the proof-of-work antispam scheme that first inspired it?  Satoshi saw that proof-of-work tokens could eventually become money, and decided to cut to the chase.


Also, this article is relevant to the subject at hand:

Halloween and Its Candy Economy

Mises Daily: Saturday, October 31, 2009 by Jeffrey A. Tucker
http://mises.org/daily/3834

There's an audio version out there somewhere.  All I can find is the text, though.

How does the regression theorem apply to prison 'money', eg. cigarettes, booze, drugs (not sure what is used these days)?

Bitcoin is similar to prison money, in that the Western states have gradually outlawed a freely traded digital money product and implemented a type of fiscal prison planet arrangement, whereby digital transactions are monitored and scrutinised with all the power of the state apparatus and every citizen is a suspect, presumed guilty. bitcoin monetisation is somewhat a natural reaction of the 'prisoners' seeking to trade with more monetary freedom. TSR being the obvious example as supposedly one of the biggest uses of bitcoin.

Arguing about the where, hows and whys of bitcoin being used as money without recognising the circumstances of our time, that has given birth to bitcoin, is discounting the context as surely as discounting the context of prisoners being incarcerated as having nothing to do with them monetising cigarettes.

Very, very good insight.

IMHO, the regression theorem is wrong.  It was a good rule in the past, but it is not set in stone.
I think it just describes the fact that people won't accept something as money that can be printed/created to infinity straight away.
Once they get used to commodity money, you can slowly transition to fiat money in small increments without them denouncing the system, like slowly boiling a frog.
Bitcoin does not have this problem because the inflation rate is fixed, and there is no central authority to decide otherwise.

More like one-sided paranoia FUD...

I recognize your manipulative attempt to discredit great insight by calling it names without actually presenting any argument. I reject it and observe that your behavior is dishonest and malintentioned.

I couldn't agree more.

The main issue people need to move past is corporealness of goods. News flash, in the digital age we discovered a whole new type of goods called digital goods that are not corporeal but which are still tangible as in they exist and aren't merely a figment of someone imagination. And just like thousands of years ago people wanted to wear some shiny physical goods, so too they may desire to wear or otherwise value a digital good. And it just so happens that bitcoins as digital goods have perfect properties to be used as money and not just for the digital equivalent of wearing, which a small community of people, I'd argue, demonstrated were willing to do. Regression theorem is correct and applies to bitcoins perfectly fine as soon as you compare the two in the context of reality in which we live today instead of the theory based upon a reality of our past.

You cannot observe my behaviour as dishonest or malintentioned simply because it is not.
You may, however, feel that way and that would sadden me because you would miss the point.
Moreover, you accuse me of not presenting arguments while you yourself present none in the post i was reacting to.
So maybe you can start by explaining why you think marcus_of_augustus's post was insightfull and then i will explain why it is one-sided paranoia FUD.

That is not the definition used in economics.
A tangible good has its properties set in its physical presence.
If you consider pure information (like bitcoins racing around the globe) you cannot call that tangible, ever.

I can and I do. I don't care what is used in economics because if it's useless to me if it can't help me describe reality. The reality is we have tangible digital goods. Clearly, otherwise I don't know why people spend hours mining for some digital gold in a game which they then trade for some other digital good, why sometimes some people try to steal these digital goods, or why people get pissy if you copy their digital song or movie that isn't even scarce.

Information is tangible. You can read it, listen to it, you can change it, you can store it, you can exchange it. If these action aren't enough for something to be tangible than that definition of tangible is useless and needs to be changed to fit the reality we actually live in.

Information also has other properties that make it intangible.
My point is that information needs a separate word to describe it sensibly.
Using paradigms that apply to physical things is broken.
Is something tangible if it can be copied?
The fact that information can have value doesnt make it tangible.
So people can mine for the value without bitcoin ever being tangible.
You seem to suggest that only tangible things can have a value. This is not so.
Modern society teaches us that even non-existent things can have a value.
Ever bought something that is more expensive because it is branded? Pure virtual added value. Just the thought of owning something of that brand makes people overvalue the tangible part of the product.

Yes. If something can be copied it must be tangible. You can't copy the big red dragon I just imagined but you can copy the song I just sang.


Like?


Never said it did.


Seems or actually is are two different things. I did not and do not think only tangible things can have value. That's your own imagination.

Dude, you're clueless.
I cannot copy any song you sing, i can only copy some information about the song. Again the information is intangible. A container containing the information is tangible tho.
Your red dragon is exactly like an mp3. It is information stored in some medium. The mp3 on your harddrive and the red dragon in your brain. And just like you can copy your mp3 you can also copy the information about your dragon and store it in another medium. One of the things that makes information intangible is that it requires a medium of sorts to be contained. So for information to be usefull it needs a tangible substrate. But the information is not depenant on that particular instance of tagibility. It can be copied or transfered to another tangible carrier. The information is independent of the tangible carrier.

You say that you can copy tangible things but that is not true.
You can only copy information and apply that to some other tangible thing.
So you can take the information of how to build your house and send it to me and i could build another house just like yours.
But you cannot copy your actual house and simply send me the copy.
That is because your house is tangible and the information about how to build is isnt.

And you did suggest that information is tangible because people value it.
You came with the example of miners. Because they value bitcoin it must be tangible.
Your exact words were: "...The reality is we have tangible digital goods. Clearly, otherwise I don't know why people spend hours mining for some digital gold...".
So here you directly state that it is somehow clear that bitcoin is tangible because people mine for it.
I don't know what you think i'm imagining here.

I assume you understand what the word 'tangible' means.
So please tell me what aspect of bitcoin makes it tangible?
And why would you insist on applying such an inadequate description to something like information anyway? Why not find a more appropriate word that covers the intricacies of informational transfers in a better way?
Whats the point of calling it tangible when it's not?

Dude, you are out of your depth ... still waiting for your explanation of why my comments were "one-sided paranoia FUD ..."?

At this point, it seems you have chosen the tangential reasoning path to cover up your slandering.

I agree with this observation of character.

You never asked for an explanation ...

Your post has a tone of being hunted by the 'government', everyone in a big prison, making it paranoia.
Then you only talk about them against you, which is one-sided.
And it is FUD because you use this one sided paranoia to motivate your point.
I mean you say things like: "in that the Western states have gradually outlawed a freely traded digital money product and implemented a type of fiscal prison planet arrangement,".

How is this not FUD? Where in the west is bitcoin outlawed? WTH are you talking about?

And please show me my tangential reasoning about the definition of the word 'tangible'.
Tangible is a word with a certain meaning. It does not cover information and information is not tangible. It is a simple fact of definition.

How do you know i'm not faking..

Note how mobodick does not actually address any of the arguments -- he merely attempts to discredit what was said by making strange associations between his perception of the tone of the argument and some form of conspiracy theory that nobody mentioned (until mobodick did).

This is a standard disinformation tactic to discredit ideas without actually refuting them.

I don't need to know whether you're faking or not.  I only need to see your behavior to understand that you're managing your anxiety by acting out.

Wait what?
I clearly explained my reasoning for each of the words involved.
What argument am i not addressing?

And maybe you can answer where the hell in the west bitcoin is outlawed because that was the basis of marcus's argument and it is simply not true?

Aah, yes, the anxiety. That's it!
It's not as if there are blatant flaws in peoples ideas here.
One sais that we live on a prison planet because he thinks bitcoins are outlawed and the other is redefining perfectly good words like tangible to mean intangible.
But sure, it must be some anxiety of mine.
 ::)

He didn't say that.


Sorry, you're wrong about this too -- contrary to popular belief, the word "tangible" never meant what you erroneously think it means.  Please, educate yourself on the origins of the word "tangible" so you can stop misusing it:

http://www.runtogold.com/2012/11/why-bitcoin-is-tangible-digging-into-the-guts-of-bitcoin/

Your interlocutor is not redefining "tangible" to embrace intangibles -- on the contrary, it is you who erroneously believes that the definition of "tangible" excludes objects that don't exhibit corporealness.

Yes he did: "in that the Western states have gradually outlawed a freely traded digital money product and implemented a type of fiscal prison planet arrangement,".

So let me ask it again.

What freely traded digital money product has been gradually outlawed in the west?

Do you want like, the whole list?  Or would an example like E-Gold suffice?

Right.
An article about why bitcoin is tangible that has at its heart the argument, and i quote:
" The irony is that Mr. Turk’s error in logic because it is GoldMoney Goldgrams which are of limited tangibility, which can be arbitrarily changed like with removal of the payment system resulting in extremely reduced liquidity, and Bitcoins that are tangible."

This is seriously how the writer explains why bitcoin is tangible after spending a couple of paragraphs setting up this high point of the article.

The writer seem to divide tangible from intangible on a base of real vs informational/abstract. But then he goes on to say numbers and math are real and tangible:
"As already established Bitcoin is clearly a tangible asset because it is real and definite being fashioned from numbers."
Sure, and i have 5 googolplexes in my pants.. :P

I see it differently in that i say that any human constructs like math are just an informational patterns and that intangible just means 'intrinsically informational'.
And the difference between tangible and intangible is whether the information is intrinsic to something physical. Information acquires (temporary) tangibility by modifying the states of something that already is tangible.

Information is certainly part of our reality but it is not tangible.
Information is a superset of tangibility and so information has properties that tangible goods do not posses.
Bitcoin is a bit special because it is informationally limited to imitate some properties of tangible assets.

E-gold was just a wild west HYP shithole. The owners got convicted for "conspiracy to engage in money laundering and conspiracy to operate an unlicensed money-transmitting business".
They were not convicted for running an alternative currency.
Now the government just forces them to not do business with criminals through KYC guidelines and charges were even dropped and they can continue business.

So it is more like criminals are gradually outlawed and alternative currencies can just exist as long as they don't deal with criminals.
And that is exactly what i want our governments to do so they're doing a fine job.

Yes, we know you believe that "tangible" means "physical" (key words of your reply highlighted).   The link shows you how this belief of yours is wrong.  Merely telling us again "Well, I say tangibility requires physicality" is not an argument, nor is it a refutation to the argument that were presented to you -- it is just denial that wastes everyone's time.

As such, and pursuant to taking the conversation back to the topic, can you please stop making noise in this thread?

Yeah, well, if you can point me where that article clearly describes why bitcoin is tangible then i'll be happy to leave.
All i see is a lot of describing left and right that never comes together to answer the actual question.

Maybe you know where the exact distinction between tangible and intangible lies?
In other words, what is your definition of tangibility (in your own words and without links please) ?

You should have left about five comments ago then.


I gave you a link that defines tangibility in a philosophically rigorous way (presumably, you can infer from my behavior that I agree with said definition).

Either you didn't read it (in which case there's no guarantee you'll read anything I say) or you didn't give a shit (in which case there's no guarantee you'll be able to sustain a conversation with me).

So, if you want to discuss this like a rational adult with me, you'll have to make do with what you already have.

Ever tried to open a digital bank account (they are just about all digital now) without ID?

There is no such thing as digital cash because it was outlawed ... did you really not notice what they did? Berlusconi (even as corrupt as he was) called our current banking system "fiscal facism".

The answer to your question is, ALL digital money products have been regulated, tracked, monitored and traced to the point where you cannot truly call it money. Without an ID you basically cannot freelytrade any digital money products (except bitcoin) .... i.e. freely traded digital money products have been gradually outlawed, wittingly or unwittingly, who knows? In any case, there is no need for all the conspiracy name-calling and ranting because you do not have access to all the information I might have.

Basically, stop acting like a jerk and you might learn a few things. Right now I can't be bothered to reply to you again.

The writer equals information to corporality because they get fuzzy at the quantum level.
But economy (and bitcoin) do not interact at the quantum level. They interact at the macro level.
You can only include the quantum level into economics if, and only if, the economics considers the actual quantum effects.
Otherwise it's just mombo jumbo.
On the level at which human economics takes place there is a distinction between matter and information. Denying it is silly.
I mean, the guy claims that numbers are supremely tangible because they are based on pure logical proof.
In what way (even from a philosophical perspective) does pure logical proof incept something with the property of tangibility?
How is algebra (as he claims) something tangible instead of an idealized abstraction?

And even if we assume he is correct then tangible would just be another word for everything (or nothing if we follow through on his ideas about wuantum mechanics).
What else is there in the universe than matter and information? (important question)
If you call both tangible then absolutely everything is tangible, even the patterns of information that rerpresents the spaghetti moster in someones head.
I mean, why have an extra word for 'everything'?

So we have this guy that says that because matter blurs with information at the quantum level you should consider both information and matter to be tangible.
Sure, but what else is left in the universe to be intangible?

There is no room for it simply because at the core of his argument is that everything is tangible.
So why make the distinction at all?

Well, according to the writer something is simply intangible if you can't capitalize on the contents. So if you don't understand some information (for instance a number sequence) then that is intangible. His specific example was of a goldfish that doesn't perceive number hence the numbers are intangible for the fish.
The problem with this is of course that it makes the word 'tangible' free to be defined by the user.
Whether something is tangible or not becomes a matter of individual position.
What is tangible for you can be intangible for me, or so the writer claims.

Another way to look at this is to consider the writers claim that "anything real or definite is tangible".
We know from physics that absolutely nothing in the universe is definite, even more so at the quantum level.
So if you would define tangibility this way you would end up with the answer that nothing in the universe is tangible.
And indeed, what is real? At the quantum level information forms reality. But the laws governing this mechanism are not rooted in our everyday logic at all. Things that exist in multiple places at the same time, particles that are located at exactly the same spacetime coordinates as others, matter that behaves like waves and interferes, stuff like that.
And the reason that you see this strange behavior is because information can interact directly with the information that expresses matter.
So it's pretty strange for the writer to propose that both information and matter are tangible because they are real and definite and pointing to things like planck numbers to support the relation when at the planck scope of the world things seem less real than ever conceived by humans.

So the word 'real' and 'definite' have no meaning at the quantum level. Even time becomes flexible. The assertion "anything real or definite is tangible" is therefore firmly rooted in our macro-perception of the universe. You would have trouble defining even the notion of 'is' at the quantum level when stuff oscillates in time.
O.t.o.h. at our scale of the universe (tangible) matter is pretty much separated from any information we may want to transport through it. That is why we invented words like tangibility in the first place. To describe this divide between matter (which we have come to understand as physical informational systems) and abstract informational systems built on top of the possibilities offered by the aggregate of states of the physical system.

Anyway, i dont feel like discussing this guy anymore, he's boring and moreover, he cannot defend his writings.
So that is why i asked what YOU think is the definition of tangible?

Asking for ID doesnt equal outlawed.
Big difference there.
Remember that the internet was born not so long ago.
Something like a global cach system for the internet is a big thing and needs to develop.
Of course we should prevent such a system from being corrupted by the big banking operations but calling our system 'fiscal facism' is a bit too much. In general the world has not seen more prosperous times at these population densities. Ever. So it cannot be all bad.
A lot of this ID-ing is to protect society. The real problem is maybe that such a system can also be easily abused. But i'm not sure a 'free' money system will solve anything. In fact, if you take a good look, there is on average a bigger chance of being screwed over in bitcoinland than in fiatland. So free (as in speech) money is not a solution for an essentially societal problem.
The problems would just come along with the power that gets absorbed by the growing economy.
By the time bitcoin is a general way of payment you can be sure that the same people that screwed up fiat will be sitting there holding coin and thinking of new ways of screwing over others.

In the end it's about power and control and these things don't get eradicated by bitcoin. Bitcoin will be very efficient at applying power and control, maybe even more so than fiat.


What do you mean by 'freely? free as in beer or free as in speech?
Thing is, lots of these cache alternatives were scammy. Even bitcoin attracts a bulk of scams. So regulation does have positive sides. I, for one, don't want to be confronted with 'buyer beware' on every single transaction so i don't mind a certain degree of regulation and i dont think most people would mind.
I'm just for a separation of banking and state because the banking sector has too much influence in the financial world of normal people.
But i don't think there is a global demand for a currency where a large part of the users sees freedom as the freedom to take something from others. And without any regulations this is exacty what is happening.
So i think it is unproductive to just see it black and white, them against us, regulations against freedom.
I mean, it's laws that give people the opportunity to express a lot of freedoms by implicitly forbidding certain freedoms.
It's two sides of the same coin. It is (or should be, anyway) up to us to decide on the freedoms, but it will always be a group effort that goes against some individuals views. It will never be perfect because perfection implies absolute personal freedom. That is not atainable so we will have to make do with limited but more widespread freedoms.
And that is why its important to discuss this balance of freedoms and to show when you don't agree.
But change must come from that, not from some digital currency.
The problem is a societal one and can only be solved at that level.

Money is different from currency. Currency circulates because enough people believe there's value

Still waiting to hear your actual arguments about the context of bitcoin's arrival being ... "paranoia one-sided FUD".

The core of the argument is that context is important (as it is for prison 'money') ... I don't see you have even come close to addressing that point?

... or are you just full of FUD?

Money is a tool to keep track of information.

Yep, I find it useful to think of money as a value information technology.

Sure, context is important. I'm not arguing that. I'm arguing that it is pointless to state such things if you define a very selective context. You also don't show any proof of the context you describe leading directly to the development of bitcoin.

You stated that in the west every citizen is suspect and presumed guilty.
But that is simply not true and i know because i live in a western country.
So i can only see that as FUD because you signyfy a danger and point a finger but it is just not there (or maybe just not everywhere).

Sorry to be the one to break this to you but since at least the mid-90's the AML and KYC laws that have been rolled out into banking (and then massively expanded under guise of "anti-terrorism") have used the pretext "if you've done nothing wrong you've got nothing to hide".  An expression that is precisely based on a presumption of guilt. The Western banking system is now one giant dragnet for State data mining of financial transactions, there is now no longer any financial privacy. There is no presumption of innocence, we are all suspects.

Thus as I say, ever tried to open a bank account without ID? A free society does not require ID before allowing citizens to participate in the economy ... starving, no ID? ... too bad, need shelter for the night?, no ID? .... too bad.

Money is future value.  Currency is current value.

Bitcoin is a currency.  It has current value, which fluctuates over time.

If and when a real economy grows up around Bitcoin, it will attain monetary value.



He didn't say Bitcoin was outlawed.  He said "digital money" was outlawed.  Look at e-gold.  It was a "digital money product" that was shut down.  Look at Liberty Dollars.  It wasn't even digital.  It was real, precious metal money.  It was shut down and its founders accused of engaging in "domestic terrorism" under the ludicrous theory (http://www.fbi.gov/charlotte/press-releases/2011/defendant-convicted-of-minting-his-own-currency) that the mere existence of alternatives to the Federal Reserve threaten the "legitimacy of our democratic form of government".