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601  Economy / Economics / Re: Inflation and Deflation of Price and Money Supply on: February 14, 2013, 10:56:27 PM
Please, the definition of inflation is not that controversial of a topic!

You've been around here for all of 2 months and feel qualified to say that? You should do some more reading.
602  Economy / Economics / Re: A saving driven economy vs A loan driven economy on: February 14, 2013, 10:55:33 PM
At least in my current model stated above, you will see there is a big difference, debt free money like gold can permanently become saving, since itself is the result of work, holding that money do not incur anyone else's debt, while debt money could never become saving, since it does not contain any work, holding that money always incur someone's debt, so it can only be used as a token of exchange

Unless there is no fractional reserve, gold is not debt free money. It functions very similarly. Without fractional reserve, a gold money supply cannot expand and contract as necessary for smooth economic operations. "Hard" currency may slow down government largesse, but it will also slow down innovation when new ventures cannot find capital.
603  Economy / Economics / Re: A saving driven economy vs A loan driven economy on: February 14, 2013, 05:55:10 AM
I have not looked from this aspect, but my point is that debt free money and debt money are very different

That depends. In the US at least, it really wouldn't make that much difference.

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When you earn money from a person, if that money is borrowed, the amount of your earning equals to the amount of debt he will have, he will get more debt. But if that money is his saving, the amount of your earning will just equals to the amount of saving he spent, he won't get debt. And since debt always incur an interest charge, the difference will become big after a long time

So, if government are spending debt free money, then your earning will only equal to the amount of saving they spent, but if they are spending borrowed money, then your earning will add to their debt and interest burden, eventually fire back towards you

But unfortunately, in today's system, government can never have debt free money, unless FED write off their debt.

Government debt and personal debt are two very different things. Government debt is fairly meaningless--it is more of just an account of how much the government has spent beyond what it has taxed. Sure, they owe "interest" on it, but any interest owed to the Fed (in the US example) is paid back to the treasury for a net of zero. In the case of interest owed to China, for example, China can do one of two things: spend that money buying US products and services, or buy US debt with its US dollars. It does earn interest on the latter and causes the US government to print more money to pay the interest, but using the money to buy products and services would likely cause the same inflation of the money supply as chinese US dollars are coming back in to the country. Buying products and services would probably boost the US economy, but it's likely only a temporary effect until price inflation kicks in.

One way or another, the US government has made the US dependent on the good of the rest of the world to keep using it as a reserve currency while allowing the US government to spend wantonly. But this situation goes far beyond monetary policy. It's not really a matter of debt vs not-debt currency, it's more a matter of government-controlled money and a bunch of wicked games being played with it.
604  Economy / Economics / Re: A saving driven economy vs A loan driven economy on: February 13, 2013, 06:23:13 AM
In the second scenario, if government really were given shells to spend, then there will be much less problem, but those politicians are fighting at house for lifting the debt limit, they are not in better shape than any average business, they can only borrow from FED

It sure seems like the monetary system would be a lot simpler if the politicians just printed the money they wanted to spend, as you suggest. From the taxation in general/taxation via inflation standpoint, the results are probably the same. However, then new money only enters society via government spending, and that seems to me to be a dangerous proposition. The theoretical benefit of the "Bretton Woods II"/fiat system of money is that, when it is not abused, new money should be getting into the hands of people who are creating and innovating...

But the system has been grossly distorted into one where new money gets into the hands of people who are finding ways to create and innovate themselves into more money (aka wall street and london). Was that an intended consequence? It's easy for hindsight to be 20/20, but I have some faith that the system had good intentions. The rapid advancement of technology has also made it much better for the banks and much worse for the rest of us. It is all too easily to manipulate the money supply nowadays.
605  Economy / Economics / Re: What happens with an ideal currency? on: February 13, 2013, 12:19:56 AM
Does this mean there are different economic effects for non-consumable commodities than there are for consumable ones?

Of course. There are a lot of people that think a currency that mimics a consumable is a better way for a currency to operate. See: demurrage, freicoin. I think it's a bad idea because it will fall on its ass in the face of any competition (people won't want it), and the only evidence it works is that a tiny town in europe used it during the great depression to prosper. But there were hundreds of other "side" currencies during the depression without demurrage that had significantly positive impacts on the areas that used them.
606  Economy / Economics / Re: Inflation and Deflation of Price and Money Supply on: February 13, 2013, 12:02:36 AM
2. Money Supply Inflation refers to the "fall in the purchasing value of money" part of that definition

Didn't we already go over this? Money supply inflation means there is more money in the money supply than previously. Supply on its own has nothing to do with value (in a vacuum, admittedly), it is only a quantity; only when it is combined with demand can you determine a value or price.

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Therefore, I can not agree that inflation "means the same thing as increase", as it conflicts with the "fall in the purchasing value of money" part of that definition.

So you are using the "keynesian" economic definition to make an argument? Huh I thought this thread was about avoiding that. The gist of what people who dislike the contemporary meaning of inflation is that it is talking about an effect rather than a cause, something you have unfortunately not grasped in your posts, and really have fallen into the very trap for which the term is disliked.

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We can get to that once your interpretation of the word inflation is understood.

I am capable and willing to use my brain to derive the meaning of the word inflation from the context. Around here, that is generally frowned upon because of something a monetarist once said that was misattributed to an austrian.
607  Economy / Economics / Re: What happens with an ideal currency? on: February 12, 2013, 08:35:59 AM
Yes. Were you under the impression that bitcoin wants anything to do with a stable price? This is the basis for all of the deflation talk.
608  Economy / Economics / Re: Inflation and Deflation of Price and Money Supply on: February 12, 2013, 05:42:30 AM
Here come the Keynesians...  Cheesy

More like, someone who actually understands economics. Unsurprising based on your other definitions if that's your definition of keynesian.

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Money Supply Inflation refers to the devaluation of a currency due to the increase of the Money supply. Whereas, an increase in the Money Supply is exactly that, "when the total money supply increases". The former is an effect of the latter, and I wasn't referring to the latter.

Do you know what the word "inflate" means? Do you not realize that it means the same thing as increase? You are doing the exact same thing you accuse keynesians of doing. "THIS is what I mean, not THAT." I'm sorry but that makes you look like a total tool.

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In any real economy, there is no guarantee that demand exists (maybe in the keynesian paradise, but that's about it). However, there is a guarantee that the Money Supply will increase.

I assume you mean demand for new money, and I never said there was guarantee for new demand, only that if the supply is increasing with demand, there is not necessarily any change in value. It is very basic supply and demand which also applies to currency.

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Sure, they can offset when they're equal, but that doesn't mean inflation due to an increase in the Money Supply doesn't exist.

So I will argue that Money Supply Inflation does mean a change in the value.

Here you go again disagreeing with yourself. If you are going to create your own definitions for things, you ought to be very careful with the words you choose. You cannot say "A does not always follow B" then say "A follows B" as your statement of logic.

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Keyword "essentially". It happens, sure, but on a scale so small that it's negligible. The details here aren't a huge issue, I'll edit that to be more specific. Though, I think most other people get it...  Undecided

Again, just pointing out that if you are making definitions, you have to be careful so as not to cause the same problems you blame keynesians for. And, if you want to get technical with real-world economic definitions (unimportant, I know), money supply inflation/deflation generally refer to currency in circulation. How, when, where, or why currency enters or leaves circulation is irrelevant to that definition. It is very relevant to the discussion, though, which is why you need to be specific and precise when talking about economic effects and their causes. Not making things even more hazy with wishy-washy redefinitions.

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That statement was regarding the exchange of FX for BTC ie demand for BTC that is greater, not faster. That one can be clarified, as well.

But you are making statements about things that have little to do with each other, and seriously confusing terms and/or economic cause and effect.

"That being said, there is a SET DECREASE in the generation rate of BTC, so you have sort of a "deflationary effect" in the value, as long as more exchange occurs for BTC at a rate which is faster than that set generation rate."

Read the bold part alone and the cause and (incorrect) effect are already there. The generation rate has nothing to do with the definition of money supply deflation. If you mention value anywhere in money supply definitions, you are defining them incorrectly, because the supply cares not for its value. Value comes from the combination of supply and demand.

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You're right, demand can increase the value of a currency... but someone has to have a supply for that demand... and god forbid the two got together to have an "exchange" *gasp*! They would have unknowingly increased the value of both items!

 Tongue

You are not defining money-value deflation (whoops, that's price), so why then do you talk about exchange or value. You are making your definitions quite unclear, the exact opposite of your intended premise.

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So yes exchanging does increase value,

No, it doesn't.



If money is spent faster (increase V), without an increase in total goods and services in the economy (Q), the price level (P) actually goes up, a/k/a price inflation. Greater or faster, it does not matter, increasing the amount of money spent (exchanged for goods and services) over a set period of time can increase prices. *gasp* Believe it or not, price inflation can happen without an increase in the money supply.

Now if more goods and services become available for bitcoin, thus increasing its desirability, then the demand for bitcoins will likely increase, thus causing price deflation as the supply is inelastic. It is NOT the exchange itself that causes (price) deflation.

And if you want to redefine the word "exchange" to mean specifically "exchanging for other currency", be my guest, I'm sure it will be a useful add to the bitcoinomist's dictionary. But it still doesn't cause price deflation unless people want BTC more than fiat. Which, unless you are a tool, is not guaranteed.
609  Economy / Economics / Re: Inflation and Deflation of Price and Money Supply on: February 11, 2013, 11:35:05 PM
MoneySupply-Inflation is when the value of Bitcoin decreases when the total supply of Bitcoin increases. In our current state, this is at a generation rate of 25 BTC every 10 minutes.

After just bashing the "keynesian" definition of inflation, you segue right into your own piss-poor definition. Money supply inflation is when the total money supply increases. No more, no less. It does not necessarily mean a change in the value, because if the money supply increases at the exact same rate as the increase in demand, there is no change in value.

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MoneySupply-Deflation will essentially never occur. It is when the value of Bitcoin increases when the total supply of Bitcoin decreases. This may happen, say, when someone loses their private key and all the BTC associated with it are lost.

First you say it will never occur, then you say well it could and does happen.

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That being said, there is a SET DECREASE in the generation rate of BTC, so you have sort of a "deflationary effect" in the value, as long as more exchange occurs for BTC at a rate which is faster than that set generation rate.

The set decrease in the generation rate would be called "money supply disinflation" if you want to, god forbid, use another modern economics term. And exchanging money for services at a faster rate than the generation rate has no deflationary effect, only the demand for currency itself affects its value. If the velocity of money increases to account for increasing exchange, there need not be any change in value.

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When all 21 million coins are produced, the MoneySupply will be neutral, and the value will continue to increase (prices will decrease, consequently), as long as people continue to exchange in BTC.

Again, exchanging does not increase value, demand for more currency will.
610  Economy / Economics / Re: What happens with an ideal currency? on: February 11, 2013, 11:03:26 PM
You missed the part where he wasn't talking about Bitcoin and asked what happens when producers produce more X in response to higher demand, Merralea.

To answer the actual question, Anth0n, the result would likely be price stability over the long-term. Assuming X requires a fairly constant cost to produce and is not consumable and does not decay. Production of new currency will happen when there are more goods and services available to buy with that new currency, because an increase in demand for the same amount currency will mean that the currency is worth more than it costs to produce.

It is pretty much the basis for the idea of Decrits, linked in my sig.
611  Bitcoin / Bitcoin Discussion / Re: Stores Can Now Charge You Extra Just for Using a Credit Card on: January 31, 2013, 05:03:57 AM
What I'm irked about is how could there possibly be state laws preventing adding a surcharge - the laws were probably enacted due to some perception of providing consumer protection against misleading advertised prices or such. What it does, however, is hide and legitimize the secret taxing of commerce by banks. Why should I subsidize other's use of a fee-requiring payment method in higher prices when I pay cash?

Lawmakers are bought and paid for and/or rarely the brightest of the bunch. It's much easier to look at this as a huge mistake when you are a frequenter of these forums. But really, they could have just forced businesses to put on their mc/visa accepted here window signs that there is a fee for using them, and be required to have them up and visible if doing so. Sure people might not see it the first few times, but they will definitely learn.

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Also, the perception is that businesses likely won't reduce the price of everything in their store by 1.5% if they enact such a fee.

Probably not, price stickiness and all. However, fiat has that tendency to inflate, so I think it would eventually start having an impact when/if more businesses start charging a fee.

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However, people must know that their use of a credit card makes all goods more expensive for everybody, and only serves to enrichen the bankers with an unpublished tariff on doing business coaxed with ad campaigns that credit cards should be used "everywhere you want to be".

Strongly agreed.
612  Bitcoin / Bitcoin Discussion / Re: Stores Can Now Charge You Extra Just for Using a Credit Card on: January 29, 2013, 11:40:36 PM
I feel this has a weird relation back to Bitcoin since this fee is applied to credit cards and not debit cards, meaning it is only affecting people that are spending money they don't have.  Something that you can't do (yet?) with Bitcoin.

Many people use credit cards because of cash back every month, and pay their balances off. They're essentially just getting back some of the bs fees. Debit cards can also be run as credit cards and are charged the same visa/mc fees. My credit union pays 3% interest on up to $10k as long as you use your debit card 10 or 12 times a month without using the pin. If you use the pin, it's a debit tx and they don't make money.
613  Bitcoin / Bitcoin Discussion / Re: New blog post: Hiding Bitcoins in Your Brain on: January 28, 2013, 05:27:36 AM
Why the focus on brain wallets? Deterministic wallets, imo, make much more sense. There would have to be a standardized system though, or people would have to remember which one they used to create it. But ask for some personal details to add lots of entropy against any unknown brute-force attacker, then ask for 3-5 names of people significant to your past but extremely difficult to guess or research (first kiss type questions), then ask for a 4-word passphrase from randomly selected words from a dictionary, or perhaps from a generated list, and then make them type it a dozen times. Hash it up and use it as a seed. Should get at least 100 bits against an unknown brute force attacker, and perhaps 80 or 90 against someone who knows you and is trying to get your money. That should be good enough for your average user for at least a decade.
614  Bitcoin / Development & Technical Discussion / Re: Speeding up signature verification on: January 13, 2013, 04:09:38 PM
Why wont GPUs help much? Surely checking signatures in parallel would be an improvement?

It's not a matter of parallel vs. not parallel, it has to do with the fact that GPUs are terrible at point multiplication, the difficult part of signature verification. A regular CPU far outclasses them at it, and for much less energy.
615  Alternate cryptocurrencies / Altcoin Discussion / Re: Memcoin Protocol (A CPU/GPU-oriented, very memory hard chain) on: November 04, 2012, 05:49:29 AM
Yeah, if "announcing" counts for making a post on a mailing list that gets 10 or 20 posts per year...
616  Bitcoin / Development & Technical Discussion / Re: P2PTradeX: P2P Trading between cryptocurrencies on: November 03, 2012, 01:05:03 PM
Without fees, how can you possibly solve spam? This is an ongoing and unanswered problem with email. Though the problem has been reduced by centralized filtering software. Wink
617  Alternate cryptocurrencies / Altcoin Discussion / Re: A fair and strong Bitcoin fork design exploration, "Faircoin" on: November 02, 2012, 01:00:48 AM
Those silly, dishonorable martians!!
618  Bitcoin / Development & Technical Discussion / Re: SHA-256 broken, collisions found... Bitcoin then? on: November 01, 2012, 08:36:58 PM
Ah that's true, my bad.
619  Bitcoin / Development & Technical Discussion / Re: SHA-256 broken, collisions found... Bitcoin then? on: November 01, 2012, 08:29:54 PM
as long as SHA-3 ASICs don't exist and SHA-256 ASICs do, no one will use SHA-3. So there would be a softer transition from SHA-256 to SHA-3,

There would be no difference between this and simply making a cut off point at some point down the road, IMO, as you say yourself no one will use SHA3. It is pointless and adds unnecessary complexity.
620  Bitcoin / Development & Technical Discussion / Re: SHA-256 broken, collisions found... Bitcoin then? on: November 01, 2012, 07:48:32 PM
found this from a quick search: http://www.ecrypt.eu.org/hash2011/proceedings/hash2011_07.pdf

They actually set up FPGAs to test, and Keccak is actually 5-6x faster than SHA2. I don't feel like reading the paper in-depth, so I don't know how much data they were testing or how this might apply to GPUs, but slightly interesting nonetheless.

And as far as ASICs go, again things just boil down to which algorithm is faster (in whichever manner you mine) deciding who will mine with which algorithm, it won't do anything to ease the way into SHA3.
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