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MPT next time use me I will send PP for anything you want online.
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I think the title of your post is misleading/rubbish. 'Volatility', as far as you can determine it by year over year changes has been much lower for big mac than for bitcoin.
+1 compare apples to apples. Find anything that moves like that over hours not years and you might be on to something. |
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When money/debt is destroyed, and not replenished with fresh debt, that is deflation. So its built right in the financial system. However you are correct that its not a good thing for the economy when money becomes increasingly scarce. With fiat money, in those cases governments at least have the option to create new money. So I struggle to see how bitcoin is an improvement over this. Maybe I should have said that defaltion is possible but leads to depression. It creates a situation where less and less money is in circulation. Read Milton freedmen and Anna Schwarts on the causes of the great depression. Read Richard Duncan The new great depression, read Steve Keen economics debunked. Ask japan about the limits of debt expansion. The problem of double lending increases the gap between principle which is created and interest which is not. The two pools in money as debt with P and P+1 is correct but for more complicated reason than presented. http://www.youtube.com/watch?v=iquemUNNYY8http://www.youtube.com/watch?v=THelXGcKQd0 |
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That is what I have been telling all of the bulls around here, this is the kind of shit that happens when the market is manipulated. If I buy coins at 27 and it goes to 21 I cant sell at 22 or 23 or 26. I have seen so many post that say that the rapid price rise is healthy for BTC. IT is not. That is what happens when you treat a currency like a commodity. BTC is worthless unless you can use it as money for it to be used as money it needs to be stable.
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Things that today cost roughly the same:
BITCOIN $27.35
FaceBook $28.32
Silver $29.80
One of these things is worthless, and it is not Bitcoin. You have got to be kidding. BTC is the least valuable of the three. |
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This creates a system where total debt must always rise, but there are limits to the expansion of debt.
You mean the debt as a number expressed in an inflationary currency? thats not a problem (and its not even true *) and there is no limit because the actual value of the debt, if adjusted for inflation, doesnt have to keep rising. It will only rise as long as the economy grows. Besides, we can create fiat money without interest. Or at least governments used to be able to do that. If you want to advocate for that, you can have reasonable arguments either way, but abolishing fiat money for something that can not adjust itself to economic realities is just silly. * the interest can be paid back with actual economic growth without the money ever being created. [/quote Whether you factor in inflation or not the total debt must always grow. Our current system requires ever growing debt. Money is destroyed when people pay off or default on debt. This system doesnt allow for deflation. And yes if the economy is growing than previous debt plus interest could be paid back, but the only way for the economy to grow is to raise total debt. So it makes the problem even worse. The gap between P and P+I gets even larger. Look at a graph of total US debt from 71-today. "*the interest can be paid back with actual economic growth without the money ever being created." The only way to pay back P +I is if the payments to principle are made back available to the debtor as wages. In this way they can use the same dollars they paid to principle to pay toward interest. But there is nothing that says the the banks have to make the money back available to the debtor. There is also the problem of double lending from secondary lenders. |
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Spoken like someone who has no idea how the global economy is structured. Deflation is fine if money was real and not debt based. It doesnt matter if money is debt based or not. If I sell a car for dollar or bitcoins, in both cases the money serves as a delayed trade, allowing me to trade the value of the car for something else later. As such you could say bitcoins represent debt just as well. The real difference is that fiat money can be created based on debt, bitcoins can not. And whats happening now? Not enough credit (ie money) is being created and thats a serious problem for the economy. How exactly do you think bitcoin would solve this? All money is and always has been an IOU. When you buy a car with bitcoin you are not leveraged you actually have the bitcoin. When you take out a car loan you are paying with something you dont have and that doesn't exist until you borrow it into existence. You cant borrow bitcoins into existence. So yes all money is a debt (I prefer a promise) but our fiat system is debt based on a promise. That in and of it's self is not a problem. The problem arises when a loan is taken out the money springs into existence out of thin air, but only the principle is created. The interest due on the principle is never created. This creates a system where total debt must always rise, but there are limits to the expansion of debt. I believe we have reached that limit. So yes it does matter if it is debt based or not. |
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Okay I get that but bitpay takes ownership of the coin right? So if they take a coin valued at 20 and it drop to 2. You have an issue.
Not if they sell the coin at Gox immediately. The point is it doesnt matter who you pass the buck to. Someone is going to get fucked. Whether it is the store, bitpay, or the customer. Everyone is at the mercy of price instability. If the price changes from the time you buy the coin to the time you make it to the store you lose, if the prices changes before the store transfers to bit pay they lose, same thing for bitpay. |
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Thanks. We will be selling them soon.  |
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Okay I get that but bitpay takes ownership of the coin right? So if they take a coin valued at 20 and it drop to 2. You have an issue.
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There is nothing stopping a business from accepting yen or euro if they are willing. They are only required to accept legal tender if it is presented. Bitcoin is just another currency from a merchant's view.
exactly. That is why they wont take it. It is just another currency that is not as good as what they have at the moment. Business like to know what to expect and you cant do that with BTC. Markets and merchants dont like volatility. |
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I made an account last night and got verified. I was going to send then they said it would be feb 21 before I got the coins. I am not willing to risk that the price collapses between now and then. So I am glad I didnt send a payment. But like I said these are the kinds of problem that arise when the price is f!@#ed
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This is a common topic, but I always see it phrased in reference to the customer. As a business owner who sell merchandise I can tell you that it is not an issue about why customers would like to use it. The issue is if merchants would be willing to accept it. The answer is NO. I wont and they wont, because there is no price stability.
If not already, can't BitPay resolve the price stability aspect? Immediately after a purchase, the bitcoins are in BitPays possession, crediting the merchant with the exact exchange rate. At the end of the daily billing cycle, the exchanged currency is deposited into the merchant's bank account, sans the 0.99% fee. How hard can it be to set up such a system if not already implemented by BitPay? ~Bruno K~ They cant do it with the wild price fluctuations. This is the problem that coinbase is having right now, they are having to cancel orders. I had a discussion about this the other day about SR. The way that they protect against instability is to offer hedged accounts. I personally believe that if it were to be tested it would fail if their was a repeat of 2011 crash I doubt that they would be able to cover the losses. (just speculation on my part). Same issue with bitpay. Every one is at the mercy of the price. |
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For the bulls read the comments.
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These are the kinds of problems that arise when the price is f!@#ed.
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You didnt include nzbsrus that is the number one reason people buy coins from me off ebay.
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This is a common topic, but I always see it phrased in reference to the customer. As a business owner who sell merchandise I can tell you that it is not an issue about why customers would like to use it. The issue is if merchants would be willing to accept it. The answer is NO. I wont and they wont, because there is no price stability.
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I dont know who you are directing this comment to, If me. Ya when I say print money that is just to keep things simple. They dont print they just add digits on balance sheets. The important aspect is money isn't "printed" into existence it is borrowed into existence
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