I'm not at all convinced an inflationary currency can be competitive without some sort of (coercive probably) immediate incentive for people to use it.
Well, it doesn't really have to be coercive. Bad money will chase good money out of the market, because while the vendor would prefer to receive his funds in the good money, if the customer is only offering the bad money, then the vendor will take that with a risk premium added on. This is why dimes made of real silver still exist, but never circulate. That and inflation has made the silver content worth over $3 apiece. In a truly free marketplace, Bitcoin would never have been more than a transfer mechanism with websites like eGold operating unmolested. Of course, if eGold was still around, Bitcoin would likely never have been created. It's the lack of a free market in money that drives the demand for Bitcoin to begin with. If the governments of the world really want to destroy Bitcoin, all they have to do is (credibily) return to the Gold standard. I don't forsee that happening, however. |
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You used to be able to buy a car for 500 USD. Today that would get you a mediocre bike. Now that's what I call a sound currency.
Just three years ago, I paid $510 for a brand new alluminum alloy Trek 700. Now they run about, what, $800 for the same bike? |
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Swift,
Here's another aspect:
Lets imagine that there are no transaction fees in 2040. At that time, there should be strong Bitcoin banks and other financial institutions. These institution will have every reason to run miner to keep the integrity of their own transactions and to make sure that deposits are safe from attack. If I'm not mistaken, miners can pick and choose which transactions to include in a block. I believe Mt Gox runs miners to speed verification of transaction. Mining helps bitcoin financial institutions even without transaction fees or rewards from new blocks; The incentive already exists.
Yes! Finally someone who gets it! I've been trying to highlight this for months. Many of the intelligent forum members don't equate mining to a strong bank vault or other security measures. I pointed this out in another thread (or maybe this one, can't remember), and it doesn't just apply to bankers. It also applies to financial investment firms, because they can choose to accept their OWN transactions into the block without a fee, thus significantly reducing their cost overhead for investing in stocks and other such things that I don't have a head for.  I have pointed this theme out in other threads as the "Wal-Mart" perspective. When the day comes that either Wal-MArt or one of it's major competitors starts accepting bitcoins, Wal-mart (and competitors) will have an outsized interest in timely processing of free transactions (for themselves not their competitors) so Wal-Mart might fund a mining cluster (they already have partially funded a datacenter) while smaller competitors such as Target would likely contract out to a major mining company to process their customers' transactions for free, so that they don't have to wait for free transactions to process on the open network nor ask their customers to pay a transaction fee. Wal-Mart doesn't need a 'financial institution', they are the financial institution. |
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Yes! That's exactly why I am seeking clarification from Silk Road, Bitcoin and anyone involved in the illegal drug market today. No one appears to be stepping forward, at least not yet, to give us an idea of where SR, etc. stand on the moral and ethical issues I and others have raised.
We are not Silk Road. Try talking to them. Bitcoin is not related to Silk Road, beyond being an enabling technology. None of us take any responsibility for what they are doing, nor are we responsible for trying to defend their position on anything. Dear creighto, Thank you for that clarification. Although I do not understand what you mean by "enabling technology?" So what is your role with Bitcoin? Do you speak for the organization? No, I speak only for myself. I represent the owners of this forum in a limited fashion, but that is as far as it goes. There is no bitcoin "organization". If there were, this project would fail. |
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Yes! That's exactly why I am seeking clarification from Silk Road, Bitcoin and anyone involved in the illegal drug market today. No one appears to be stepping forward, at least not yet, to give us an idea of where SR, etc. stand on the moral and ethical issues I and others have raised.
We are not Silk Road. Try talking to them. Bitcoin is not related to Silk Road, beyond being an enabling technology. None of us take any responsibility for what they are doing, nor are we responsible for trying to defend their position on anything. |
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I found the offending article... "According to the Bitcoin FAQ, new coins are generated by a network node which spends its time trying to find solutions to a certain mathematical problem. Each time one of its nodes finds an answer — and can demonstrate proof of work — it creates a new block of the currency. The reward for ‘solving a block’ is automatically adjusted so that in the first four years of the Bitcoin network, 10.5m bitcoins will be created. The amount is then halved every four years, and the total number of bitcoins created is meant to be limited to 21m by 2040. In fact, Bitcoin’s curators seem more concerned about creating a deflationary spiral than inflation. In that sense, it’s kind of the opposite mindset to the Federal Reserve." http://ftalphaville.ft.com/blog/2011/06/06/585756/virtual-money-from-real-central-bank-mistrust/ |
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Swift,
Here's another aspect:
Lets imagine that there are no transaction fees in 2040. At that time, there should be strong Bitcoin banks and other financial institutions. These institution will have every reason to run miner to keep the integrity of their own transactions and to make sure that deposits are safe from attack. If I'm not mistaken, miners can pick and choose which transactions to include in a block. I believe Mt Gox runs miners to speed verification of transaction. Mining helps bitcoin financial institutions even without transaction fees or rewards from new blocks; The incentive already exists.
Yes! Finally someone who gets it! I've been trying to highlight this for months. Many of the intelligent forum members don't equate mining to a strong bank vault or other security measures. |
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Actually, I am more concerned about the 2038 problem. And I'm not concerned about it all that much.
Yeah, really. At least the 2038 is a real problem. A real change - not a problem I don't know, I'm known for keeping my computer way past it's prime. I might still have a 32 bit cpu in 2038. |
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Actually, I am more concerned about the 2038 problem. And I'm not concerned about it all that much.
Yeah, really. At least the 2038 is a real problem. |
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The problem is people are hoarding coins.
The TOTAL volume at mtg today was 681 coins. 681.
mtg must not be MtGox, because there are single trades that exceed that number. |
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I contest your numbers are accurate, as I think that users that want to get their transactions processed will pay more than otherwise, but I'm not willing to do the math to see what that would be.
You're making a wild-ass guess there. The irony of this statement is only exceeded by the wild ass guess that followed. |
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I would guess that Silk Road is overloaded from all the publicity it's gotten recently.
Does it even exist? I've never been able to find it. I think it might be some joke they are playing on the politicians ... it just sounds too far-fetched to be possible. It did at one time. |
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Please. Enough circle jerking. That doesn't help this problem.
Sure, the program is elegant but the creator obvious he isn't an economist. Without inflation the network will become insecure. I'm not worried about the ramifications of a deflationary currency with respect to anything besides hash. Hash secures the network.
This is pretty much a fact at this point. There's no way around it. At some time bitcoins will begin to devalue after hitting a peak. People will wonder why. It's because miners were punished by removing inflation. This is an inescapable conclusion.
I'm sorry people are having trouble understanding this.
It's not the rest of us having trouble understanding. |
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Hahaha, and their primary concern is that you won't be able to go to court  Americans.. Don't paint us all with that brush. |
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I am in Seattle.
Seems like you must already hate yourself. |
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but creighto, at least you'll have your guns, ammo, and silver to disinfect your milk.
just recall that 'if it sounds too good to be true, it probably is'.
I'm hoping for the best, but still prepared for the worst. |
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While I share the belief that bitcoin or something very like it will play a major role in the future, I think the road there is going to be a lot rougher.
I imagine we will see a huge boom then a bust, after that those who stick around will build the meaning full economy that will allow bitcoin or its successor to dominate.
I don't care about the busts. I am riding this pig wherever it takes me. If it tanks, I'll have a helluva story to tell. I'm sick of half measures. I'm swinging for the fences and If I strike out, so be it. I won't be some mediocre drone living a life of quiet desperation. I believe in bitcoin and I'm going for broke, knowing the risks. I'm with you. Want to camp together if this shit burns? I'm game, but I'm not going to get in the barrel! |
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I'll keep one dream secret, you Australian f**kers will take it. ^_^
If you can buy the World Cup with Bitcoin, would it still be a game worth watching? |
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Consider putting up ads for this on other market sites, including sites not Bitcoin related such as Craigslist; and sites that you wouldn't ordinarily use, such as Silk Road. There is no logical reason that you couldn't sell a legitimate product on an anonymous marketplace.
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What are you going to do with your Bitcoin wealth once your coins hit upwards of $10,000 a pop?
Pay of my debts, all denominated in nearly worthless FRN's, and then retire to the first libertarian seastead if the 'launch loop' isn't yet ready to take me to my ranch on the Moon. |
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