Your actually getting very close with your analogy.  Your car analogy is similar to one we use that money is like a Road and interest is like a wagon sitting in the road blocking traffic and collecting a toll, but a car is a close enough analog, the purpose of a road or car is transportation much as money is meant to facilitate commerce.  

But a real car requires materials and labor to make and it's decay is caused by usage (mostly) rather then time, so it is really not much different from a box-of-tissues or hamburger, your paying for production inputs that are now being consumed when the item is used (indeed that is the way we treat cars).  Money though is not created from resources nor is it used up by transactions like a physical commodity is so we do not need to worry about if their will or will not BE any money (we have the opposite problem of who will get seignorage instead), just if people will 'invest' in owning money in order to rent it.  But if the demurrage car already exists by Fiat creation and demurrage car is costing the person who holds it $50 a day regardless of if it's driven or not, so if your not going to be driving your car your going to loan it to someone for $50 a day.

So no one ever needs to 'invest' in cars in order for them to exist or for them to be available to borrows, and really investing means using resources for a productive asset with risk, their is no such thing as investing in money.  We do not believe people should be 'investing' in money to make more money, their will be plenty of incentive to rent money without a positive interest rate because the incentive to lend is the Difference between the interest rate and the demurrage rate.

As for chopping down the forest, we want people to make the sustainable harvest which maximizes total production over an unbound time horizon.  Most natural resources can yield small amounts indefinitely if not over-harvested, a good example would be a fishery.  If some new asset class is available that offers a higher rate of return then the sustainable rate of harvesting then yes their would still be every incentive to over-harvest IF such investment opportunities exist.

But when money alone is not such an asset it will cause the rate of return on nearly ALL investments to decline because the competitive rate-of-return on capitol will never fall below interest rates.  Thus we would expect returns to fall to very low levels and entrepreneurs drive down prices and capitol investments return just above 0% returns, natural regeneration is generally well in the double digit returns so it would never be wise to destroy a perpetual source of wealth (nature) for a smaller source (capitol).

Silk Roads money either being seized by Feds or moved to thwart seizure seems like the likeliest explanation.

LightRider:  All value is subjective under ANY system, even knowing/cataloging everything on Earth dose not assign value to it, for that we still need subjective human judgment, and yes humans will make errors in judgment that is inevitable under ANY system.  Simply saying you will 'computerize' things doesn't eliminate error, it's plain old Garbage In, Garbage Out.

Answer me in a simple yes or no, are you reading anything I am linking?  If you are unable or unwilling to do so then please say so as I would then know that this conversation is pointless.  So far none of your responses lead me to believe you have read any of my links.  I am trying to have an honest debate here and I've seen the Zeitgeist movie so you as an apologist for it are obligated to read the counter argument material I present.

Desik:  Your premise is wrong, 'coins from the US mint' are legal tender YES because of whats stamped on them, but the METAL IS NOT legal tender.  The only thing that is legal tender is the DOLLAR and it is irrelevant as to What material the mint puts that stamp onto, they could stamp a lead disk with a million dollar mark and that would be a million dollars and you could pay a million dollar tax bill with it.  The printing presses put lots of zero's on pieces of paper no (other then Rand Paul) thinks that paper is legal tender, it's only the stamp that has legal status.

What you can NOT do is give the IRS a lump of unstamped gold as payment in taxes, you can only give them something that bears the stamp of the mint and they will demand X amount of dollar stamps regardless of what they are on.  Sure if you wanted to give them valuable metal with stamps on it then they will accept them so long as you have X total stamps, the value of the metal will be ignored because your debt is in stamps not metal.

I am describing how interest rates ARE the distortion your describing.  Hard money is unlike real assets because it can not decay, where as all man make things do, this creates an asymmetry between money and the things we trade for money. 

Ownership of the natural world IS an issue, nature is the ultimate source of all wealth so monopolization of it will indeed result in grotesque inequality.  But under a Hard money system it will result in grotesque inequality AND environmental destruction, where as under soft money you would just have inequality and due to the lack of interest payments inequality should be lessened.

Unfair ownership of land is not a monetary problem, people have 'owned' land in the meaningful sense of monopolizing resources since the dawn of time.  Eliminating money doesn't solve this problem.  Fortunately Gesell ALSO has a solution to the land problem.  Again I urge you to READ what I have been linking too.  Gesell realized the monopolization of land was similarities to the liquidity problem with money, both are examples of RENT SEEKING.  Both problems are corrected by making the assets 'soft', in the case of land this means property taxes that are equal to the rent value of the UNIMPROVED land, the resulting revenue then being equally distributed to all.  In essence ALL of us would own the Earth equally and rent it too each other as both land-lords and tenants.

Here is the relevant section https://www.community-exchange.org/docs/Gesell/en/neo/part2/1.htm

Your continuing to equate the problems of HARD money with ALL possible forms of money, Hard money has been the norm through most of human history so this is an easy mistake to make.   But if Environmental preservation through economics is what you care about then you should be familiar with the concept of the Discount Rate http://www.iearesearch.com/papers/discounting.pdf

In a cost-benefit analysis this is the rate by which we value future benefits vs today's costs or benefits given up today.  A high rate means we are considering the future to be of low value the further in the future the less it's value, a low rate means we consider the future to be closer in value to the present.  So in any environmental preservation act we would want the discount rate used to be as LOW as possible.

The Private market uses the national interest rate AS the discount rate.  An owner of some environmental resource, say a forest will either cut the forest down or not based on interest rates because when interest rates exceed the sustainable value production of nature an individual will become wealthier by liquidating nature and earning interest on the money.  So if you want to preserve the environment you should want to see the lowest interest rate possible.

Straw-man much?  First I did not say interest is 'Banned' that is the Islamic Banking solution, it tries to block interest by directly regulating the financial marketplace, this will always fail, either the market will subvert the rules (Catholic ban on Usury) or you will grind the economy to a halt.  I'm describing money which by it's nature causes nominal interest rates to reach zero.  No additional intervention or interference in the financial market place is then required.  Second where on Earth do you get the notion that non-monetary assets can not be rented if interest rates are zero, do you seriously think this follows or are you just being cute?

My Post is directed at LightRider and concerns His beliefs regarding the Zeitgeist movement and Venus Projects. 

Your question clearly shows do not comprehend what I am saying, a person holding money is receiving a subsidy of liquidity, they can monetize that subsidy by lending.  This is not a difficult concept, a subsidy can come in the form of a privilege and can then be rented out for a payment.  But Regardless of if a person keeps the subsidy in it's original form or sells it they are still receiving the benefit of the subsidy.  A person who is a borrower of money at interest is getting liquidity but paying for it, thus their is no subsidy to them.

As for the difference between Wealth and Money I am quite familiar with the difference and fail to see how it is remotely relevant to what I have said as I never said or implied that wealth and money are the same.  Your so called explanation is neither needed nor welcome as you will simply be cluttering the thread, I have debated much smarter Austrians then yourself who have the decency to actually quote me.

Were in an upward trend in available coins on Gox that goes back to the start of December, Depth took a hit recently but if it returns to it's prior accumulation rate it will be 4-5 days for it to return to the ~40K level that it was at just prior to the recent buy.

Dollar depth looks to have maxed out at 35 million and has been staying near that level, with brief downward spikes before even the beginning of December.  This clearly indicates the upward phase is over and the best that can be hoped for is stabilization, but we will likely see downward pressure from China for at least another month.

LightRider:  I'm not going to defend Capitalism to you, it is a horribly brutal system.  But your Zeitgeist movement is hopelessly misguided in it's diagnosis of what the central flaw in Capitalism IS.  Zeitgeist argues that Fractional Reserve Banking is the means by which Capitalism exploits the working classes, but this is incorrect.  The central problem with Capitalism, indeed the CORE of Capitalism is INTEREST on Money.  Without Interest their would be no profit to even leverage (aka multiply) by fractional lending because the lender isn't able to enrich themselves through the interest, where as WITH interest but without Fractional Reserves the borrower is still going to be paying interest, their will just be less total borrowers and less borrowable funds because the lender must hold more capitol.  Now consider that the reduced amount of loanable funds in a Full reserve environment will raise interest rates considerably, such that the lenders may actually make just as much profit from interest, they will just make more from a smaller group of borrowers.  Thus we can see that Full Reserve lending rules do not solve the problem of interest, indeed the Zeitgeist movement is completely ignorant of where Interest comes from or how to stop it.

Capitol means money and Capitalism is a system in which you can make money from money alone.  The reason we can do this is that money is LIQUID and HARD.  Liquid means that it can be converted to any other asset with ease, and HARD means that as a token (in the past a non rusting metal) it can be held without nominal loss indefinably unlike any real good which decays with time.  Liquidity has a value, it is like a Joker up your sleeve, it can become anything, fix any unforeseen problem, take advantage of any unforeseen opportunity, we are always on the cusp of the unforeseen future so this wild-card nature of Money is a value over-time that the holder of a Hard money is reaping by just holding money.  It is an unearned subsidy to everyone who holds money, a subsidy that the public in it's willingness to use anything as money and not use inefficient Barter is providing, but the benefit is privatized in that it accrues to holders of money alone.  When a money holder sells the liquidity of money we call this Interest and it is an unearned transfer of wealth from the public to private hands.  The solution is to make money SOFT in direct proportion to it's liquidity, this sterilizes the money of it's unearned profit and returns the public liquidity to all users of money rather then just it's holders.

Marx was completely ignorant of the interest problem and instead blamed Free-Markets and Private Property and lead the political left on a hundred year wild-goose-chase trying to destroy these two institutions.  Fortunately we in the West only got the milder Socialist institutions that Marx advocated like Universal Public Education and Elderly Pensions which have been unparallelled successes, but where ever Free-Markets have been replaced by central planning their has been devastation.  And the Venus project is just central planning with a techno-makeover.

The correct solution is an economy that is still a Free-market but without the evil of interest payments (aka Capitalism) that insidiously suck up the wealth of the working class.  This is the 'Natural' economic order that Silvio Gesell advocates, an economy which is anti-Capitalist AND anti-Communist, a true third way that rejects the evils in each of the two Titanic ideologies of the 20th Century.  The Great tragedy of the 20th Century is that everyone things of these two ideologies as the only options and that they are monolithic.  Capitalism has convinced everyone that one must have Interest on Money in order to have Markets in which individuals choose what and how much to produce and what to sell it for, but their is no link what so ever.  And Communist has convinced us that we must have the elimination of private property to end exploitation of the working class, again this is a false dichotomy.

I urge you to read Gesell's works they are 100 years old but still relevant.  https://www.community-exchange.org/docs/Gesell/en/neo/

I'd wait until we see their source code before jumping on board.  I certainly hope they have a solution though because a pure PoS system is something that would really help crypto-currency get out of the bubble-nature it is in now.

If one wants a non expending money supply with a PoS system it is a simple matter to combine the Demurrage feature in Freicoin with a PoS reward such that the two cancel out.  Effectively your demurrage is refunded when the user sighs a block.  The rate of positive 'interest' from a PoS reward system can be more then, less then or equal to the demurrage rate such that the net rate of interest can be any desired quantity including zero. 

Personally I do NOT think a fixed supply of coins is desirable, coin supplies should grow (or shrink) with the demand such that they maintain equal purchasing power over long periods of time.

When Hash rates peak and show a decline THAT is your unambiguous signal to GTFO, you will likely have already lost your shirt but a peak in hashing is the signal that mining has hit the wall in profitability and miners are consuming as much electricity as they are earning from mining, that means consistent daily selling pressure of 3600 coins per day which will do to prices what you see in Blitz's graph.  

Now their will still a long way from seeing mining profitability fully squeezed out, at least on the ongoing electricity costs, but I suspect we will be getting close to the 'can never repay hardware costs' point fairly soon and that will hugely slow the growth in hash rates.

A number of replies are coming from people who feel the need to disprove something I'm not arguing.  I pointed out that their is NO CRYPTOGRAPHIC SECURITY FEATURE that controls the scarcity of BTC, THAT IS ALL!  Joel was spouting BS when he implied their was and while peons on this forum will say that blithely a hundred times a day I find it detestable that someone who knows how to program makes the same mistake.



As for what would actually happen in a fork, it has nothing to do with what a 'majority' dose.  It will come down to what the Exchanges Do, if they act in concert and choose one chain as the one which will be exchanged for all the USD they hold then that chain will live and the others will die as miners will move to mine coins that can be exchanged for money to pay for their overhead costs.  Sure some die-hard loyalists might keep 'original' BTC limping along with a pittance of the hash-power it once had but if that chain isn't showing a rising value because their are no exchanges for it or what exchanges do exist don't have the millions to create a high price then their would be zero interests, and the 'new' BTC network would have EVERY incentive to making denial of service attack on the old network to remove competition.

The point is BTC scarcity is supported only because the controlling entities of BTC wish it to stay with the original protocol, it is basically under human control, no different from any Fiat currency.  When the people in control want scarcity to end it will, yes their will be much wailing and gnashing of teeth just as when Fiat currency is debased but it's not got some magical cryptography guaranteeing scarcity, just people.

For the last time jonnyj, you need to stop polluting this forum with your posts, they are just terrible.

We can't be at a stable price when mining is still profitable, squeeze out all the mining profitability and then we can talk.

Actually BTC DOSE have a Central Banker, it is just a mindless unresponsive piece of code that is executing a programmed exponentially decreasing mining schedule that Satoshi created years ago.  Yet a bunch of silly libertarians have convinced themselves that living under the economic dictates of a mindless machine central banker is better then under that of any human.  How anyone claiming to be a believer in individual liberty and the free market would submit to a system which ignores the market, ignores all economic activity and ignores all human wishes is beyond absurd, it show that the so-called libertarian in America is a stooge and knows nor cares for anything resembling liberty.

He is in fact a slave at heart and yearns only for the tyrannical.

Actually yes it dose have thouse people in the Treasury department and the Federal Reserve, the former collects taxes in the Dollar and the later holds bonds and other assets.  As I said you may not believe them or trust them but they exist and are backing the US dollar, you can't simply say that your doubt in these agencies means the dollar is not backed. 

That is paramount to saying that because you doubt the bravery of a nations army that the nation is undefended.

JK you of all people are not allowed to repeat such idiocy, YOU KNOW THE CODE, Cryptography has ZERO do do we keeping BTC scarce, their is only a simple IF statement in a line of code that either accepts or rejects a block as valid based on the mining quantity that is standing between a finite supply of BTC and unlimited debasement.  The mining pools and exchanges have not chosen to edit that line of code on their software, but that choice is all to is guaranteeing BTC rarity, you can argue about how hard/unlikely/self-defeating it would be for them to do that, but it is NOT a cryptographically secured part of the Protocol.

In a sense yes the 'universal' nature of the dollar isn't establishing a value either, BUT nominal price stickiness and size of the US economy create a lot of stability in the value of the dollar, not to mention a central bank which acts to keep inflation (price inflation) to low levels (yes you can have as much or as little faith in them as you like).  I've never said that the 'backing' of the US dollar is perfect, heck it might not even be considered 'good', you can disparage the quality of the backing as much as you like but you can't say it's not backed.

It simply HAS a backing is all I'm saying, their exists a structure that tries to guarantee a future exchange value, BTC doesn't have any kind of guarantee it just has an exchange market that can go to incredible extremes (bubbles or total collapse) with no brakes on it.  If their were even something like a group of people with large wealth that were publicly pledging they wouldn't let BTC drop below some floor price that would be a backing but we don't even have that.