IF bitcoin is widely used as currency, even for bank accounts, I doubt there would be deflation.

I don't wanna go into a whole discussion about money supply and money creation again, but a constant monetary base ( = the 21 million coins) doesn't mean there is no (monetary) inflation.

for comparison, USD money supplies:


if you look at M1 (which is an even wider defined money supply than monetary base) up until 2008 when everything went to hell in a handbasket, you can see that the money supply of USD central bank money was constant, yet, there was PLENTY of inflation, price and monetary.

same thing can happen in a bitcoin economy.

god, I hope the exchanges offer short selling by then.

jesus. is there anything this argument doesn't solve?



has been done many times in history, just in the other direction.

17 is about the number of $-cents a bitcoin is worth and should be traded at, so multiply that by 100 for the bitcoin-mania, and there you go 

why does windows even allow access to the MBR, even with administrator rights?

let's revisit that claim when the 250kBTC thief is caught.

am I missing something or is this law, applied to bitcoin, only relevant to bitcoin exchanges?

so what's the big deal? did you really expect govts will let you move big money into a bitcoin exchange without identification?

I think that only the 1000 EUR limit applies, since transferring funds to a bitcoin exchange is a wire transaction.
I guess they have no limit on stuff like paysafecards because you could buy them in bulk and circumvent the limit.

IIUC it doesnt require identification for a bitcoin-to-bitcoin transaction.

you don't understand bitcoin technology!! bitcoin is decentralized!
why don't you read satoshi's paper and you'll see that faith can never be lost.

"bitcoin codes": addressed above, post #66
withdrawals/cheques: if there are more withdrawals than reserves and the bank can't lend money from other banks (it usually can), the bank is insolvent.

this is part of what happened in 2008. illiquid outstanding loans/assets, interbank lending dried up and bank runs started to happen, until govts stepped in.

transferring money to kenya is a killer app for whom?
obama and his uncle?

killer app: jargon of marketing teams, has been used to refer to any computer program that is so necessary or desirable that it proves the core value of some larger technology

I don't know what you're confusing, I only guessed. you're confusing _something_ because you're drawing the wrong conclusion.


value relative to what? to USD? to goods?
doesn't matter at all for banking.

I'm sorry, I don't know how else to explain it. you're getting it wrong. I think you're confusing "central bank money/21 million coins" with money. bank deposits are money (by any reasonable) definition, the bank doesn't need to have all the "bitcoin codes" in order to have deposits on its books. they simply owe someone 1000 BTC.

I can sign a contract today I owe you 1000 BTC without having ANY coins. if I was a bank and those deposits were in a checking account under your name, that would be considered part of the money supply.

yes

there is no need to make it even more complicated and introduce interest rates in your scenario.
if my post wasnt intelligible read this: http://en.wikipedia.org/wiki/Fractional-reserve_banking#Example_of_deposit_multiplication

replace "central bank money" with "21 million coins" there and you'll have what a bitcoin bank can do.

this is fractional reserve banking with a reserve rate of 0 %, so in a strict sense you're right, it is "no reserve banking".

the are many different measurements of money supply. the money supply you're thinking about is the 21 million coins, aka the "monetary base". you're right that bank lending does not increase the monetary base.
but bank lending doesnt increase the monetary base of current fiat monetary systems either.

so if someone says "banks create/print money" he is talking about a definition of money supply that includes bank deposits (usually M1 - M3 definitions).
the answer to that is: bitcoin banks would, too.

no difference.

right, but there are possibilities for future development that are quite interesting...that might be a good idea for scalability anyway:

a hierarchial bitcoin network

most currency ist spent locally, there is really no need that the transaction between me and my supermarkt is flooded to australia, as long as my local bitcoins are convertible to bitcoins of other areas (be it geographically, or "areas of use").
a tree of bitcoin networks? those could still work independently.
the hierarchy has to be self-organizing without a central authority, so it's a challenge to design.

there are still also 100 btc in the account of the depositor whose money was used for lending. -> 200 btc in bank deposits.
no BTC were created on the bitcoin network of course. but in the same case with USD no USD were created by the central bank either.

in both cases, it's just two people who have a deposit of 100 each at the bank ( = 200), even though there was only 100 in the beginning.

this is entirely related to the definition of money: not only central bank money (equivalent to "money on the bitcoin network) is money, but bank deposits, too.
even 2 year govt bonds are considered money by some definitions(aggregates). so if you buy a 2 year govt bond for 1000$, you give 1000$ to the govt and you are holding 1000$ worth of bonds - both of which are considered money and the money supply increases by 1000$ to 2000$.

there really is no "printing of money" at commercial banks, neither with bitcoin nor with USD.

this kind of "money multiplying" is encouraged by central banks and the FDIC, so it might be less in a bitcoin economy. but that's another story, and who knows for sure. it could exist though, so this is no difference from the current system.

thanks for proving my point.

that's a myth, perpetrated by youtube videos and conspiracy theorists.

they don't just add digits, what is referred to as money creation by commercial bank is that money they lend out usually ends up as deposits at the same or another bank.
bank account balances are considered money, so if you depoit 100$ and they lend out 100$ to someone who puts it in his bank account, there are 200$.

the same thing could happen with bitcoins. bank account balances of a fractional reserve banking are nothing else than claims you have against the bank. but they are considered "money" by most definitions, so the base money supply is multiplied.

whoever this doug casey guy is, it might be wise to consider outside voices for once, instead of just dismissing them as "old", "doesn't get it", "bitcoin is something entirely different, you can't compare it to anything!".

not just referring to you...the entire forum has this attitude.