Please help me understand/explain to an economist friend of mine...
He argues that Bitcoins have no chance in global success because a this system be used to create credit.
Bitcoins cannot be used to leverage. --> You cannot use Bitcoins to create credit. ---> It can't replace existing credit already created by the current system.
For Bitcoins to be successful, it has to be able to replace the existing debt!
Please help me:
Where is he right/wrong?
He's wrong because I can owe you 100 bitcoins without having 100 bitcoins. Heck, I can owe you 25 million bitcoins even though 25 million bitcoins will never be in existence at the same time. Bingo... JoelKatz scores again. Bitcoins credit can exist just fine. I've made loans, and received loans, both with interest, and both paid back. Guess what... it worked! |
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Looks like it'll cost you 5bucks if you want to comment.. EDIT3: now it appears even that isn't working properly atm  lame. Do they accept Bitcoin?  |
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From some hoarding site: "There appears to be a strong genetic component to Obsessive Compulsive Disorder of the hoarding type. Modeling and conditioning may also play a role in the development of this disorder. OCD usually involves over-activity and/or under-activity of brain regions that underpin the observed behaviors. Hoarding worries and behaviors can begin in childhood, even as young as age five."  That photo is 'shopped. You can't actually swim in gold coins. |
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Can't find a registration anywhere lol! There is a login area on the lower right, but no registration link. Hmmmmmm  |
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WTF - Am I retarded or is there no way to become a member of dailypaul.com?? I can't find the registration page.... and I need to comment on the story!!
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Well-done Hazek. Twitter is abuzz with this. (Or is it more appropriate to say "atwit?") |
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Over time if someone is getting interest "rent", it has to come from somewhere and as evoorhees correctly said, Bitcoin is a limit asset.
In a properly functioning market, interest comes from future profits, and that's healthy. The fact that there is a limit to the number of bitcoins doesn't mean this dynamic doesn't work. 1) I loan you 10 btc for your business. Terms are you pay back 11 btc in a year. 2) You start your business, and earn back enough to pay the loan. 3) You pay the loan off, and all is well. There is no requirement for the money supply to be perpetually increasing for this to work. |
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Inflation encourages overspending and too much debt. Deflation encourages saving and too little debt.
One encourages saving, or the abstinence of consumption. The other encourages spending, or the abstinence of capital formation. If you believe that wealth and prosperity result from consumption, you will hate Bitcoin. If, on the other hand, you believe that wealth and prosperity result from production, you will love Bitcoin. Many will argue, "but you can't have production without consumption" and this is nonsense. I can go produce things without there being a buyer. Yet, I cannot consume things without there being a seller. Consumption is the effect - the result of - production, though unfortunately we live in a world in which people have come to believe the opposite. |
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I had similar thoughts when I initially learned about Bitcoin. Deflation is going to kill the economy, etc etc. But then, some people pointed out to me, perhaps inflation is artificially inflating the economy by encouraging bad investments and increasing debt-based ventures?
To me, the ideal currency would have a supply that inflates exactly according to GDP growth. Thus, it would neither inflate nor deflate pricing, and wouldn't over-encourage bad investments or too much saving. There's no perfect way to achieve such a system though. Bitcoin is interesting too, and would only result in effective deflation equal to the increase in GDP growth + deflation due to lost coins.
*shrug*
It definitely discourages investments, but it certainly won't stop investments entirely. People will just start weighing the opportunity cost of holding BTC vs other investments.
People should not be so scared of prices that change. From where did this notion that prices must be flat come from? Who suggested such a thing? Is it so hard to imagine that a world can work in harmony with prices which generally fall, instead of generally rise, over time? Is it so hard to imagine a world where an employee doesn't get wealthier over time by a nominal increase in his wage, but by a nominal fall in his costs? Indeed, such a world is different than what we know, as we all grew up in a highly inflationary world, but this is no reason to assume it ought to be so. It is okay for prices to fall. Do not be afraid. The more constant a money supply, the better, for it is by the stability of money which market participants navigate. There is no reason to think money supply must increase with GDP - instead of seeking stable prices (which runs counter to how markets operate), merely seek stable money, and you will find a happy economy. |
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Bitcoin is an asset with a limited supply. Thus, it is like almost every normal asset out there - lumber, corn, gold, oil, etc. None of these things can be "printed" out of thin air. They are scarce by their natural properties.
A monetary system could work with any of these commodities - markets will figure out how to price the borrowing of money. The idea that a money must be, by its nature, unlimited in supply, is a sophism (and a very dangerous one).
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Yeah I don't think you really get how bitcoin works yet.  Debit card acceptance would ruin the whole anonymity deal. The reason you can't buy Bitcoin with debit/credit card is not due to anonymity issues. Many people don't care about anonymity. The reason is that debit/credit cards can be charged back - the payment can be reversed even months later. Thus the person selling BTC will lose his money and be driven out of business. The first person who figures out a way to solve this problem - to accept debit/credit cards as payment for BTC without being scammed - will make millions (and it'll happen, I assure you). |
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There is also Paysius.com, an automated alternative to BitPay (with cheaper rates as well). |
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I have a man-crush on all the developers. THANK YOU GUYS FOR YOUR AMAZING WORK.
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That is absolutely hilarious!!!
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The pastebin link is not working for me... can someone paste it here in the thread?
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Long term, every debasement of Bitcoin's competitors increases the relative value of Bitcoin. However, this effect is not going to be witnessed amid the daily/weekly/monthly moves of Bitcoin's volatile market.
There is still too much "noise" in the Bitcoin price movements to see correlations between macro economic events on the world stage.
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BitInstant.com offers MtGox USD to Paypal instantly. 6% fee includes the paypal fee.
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Can I just say that the person who bought a pizza for 10,000 bitcoins is a numbnuts?
That is a very silly comment. Some day, in the future, some guy on a forum thread will say, "wow, solareclipse64236 was sooo stupid for buying that thing at $10/coin, didn't he know they would be worth $1,200 in only three years?!?" |
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All transactions clear eventually, but some get stuck in the nethervoid. There are a number of bitcoin-based bugs which cause this to happen, and over time we've found some of them and fixed, but we haven't fixed them all.
So, if a transaction ever get stuck, just please be patient and PM me if you feel something is really wrong. Bets always come through, but I apologize for any delays.
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I think if we could figure out how to dedicate all our 25 terahashes/sec to this challenge, it'd be solved before the creator even had time to say, "start!" |
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