Bitcoin Forum
May 22, 2018, 01:33:05 AM *
News: Latest stable version of Bitcoin Core: 0.16.0  [Torrent]. (New!)
 
  Home Help Search Donate Login Register  
  Show Posts
Pages: « 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 [39] 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 ... 93 »
761  Economy / Economics / Re: The Tomato Soup Index - Inflation Sucks on: September 27, 2012, 02:13:46 AM
Nor does it prove anything. Because you could do EVEN BETTER THAN THAT in a deflationary currency by making similar investments.

You are begging the question. Accepting something as truth with no evidence. There are people and businesses on the other ends of those investments that must pay the price if investments provide a unilaterally better return in a deflationary economy. The rate of deflation *must* be taken into account to provide an accurate real interest rate, just as banks take into account inflation.

http://fskrealityguide.blogspot.com/2008/11/interest-rates-in-true-free-market.html

"Suppose the free market interest rate is 2%. I predict I can earn a 4% rate of return on my business. Therefore, it pays for me to borrow at 2% and invest in my business yielding 4%. Of course, I should include a margin of error in my calculation.

Suppose the free market interest rate is 6%. I predict I can earn a 4% rate of return on my business. Therefore, it does not pay for me to invest in that business. I'm better off doing something else."

The real interest rate will be interest + deflation, just like the real interest rate in a typical economy is interest - inflation.

Since bitcoin is a free market currency, the interest rate will be determined by how willing people are to borrow money vs. how much is available. If deflation is 5%, do you really think anyone trying to borrow money is going to pay 5% + the nominal interest rate? Or are they going to say "I'm better off doing something else"?

And of course the issue economists fear is what happens if the deflation rate makes a big leap one year? Say 8 or 10%? A whole lotta bankruptcies.

Quote
There's just no getting around the fact that when a government or central bank prints new money, it gives the recipients of that new money real purchasing power without  creating corresponding value. That purchasing power has to come from somewhere. And it does. It comes from everyone else holding that currency. Some people call that "inflation." Some call it "theft." (But I see that as sort of a "tomato" / "tomahto" thing.  Smiley)

You are right that the government/central bank unfairly favors certain institutions with new purchasing power without creating any new value. But you're ignoring the fact that Bitcoin does the same thing for wealthy holders. And it also comes from everyone else using bitcoins.

Say person A is a wealthy businessman who maintains a running personal savings of about 1000BTC. He spends a lot of it but brings the balance back up through his business venture.
Say everyone else has a total of 1000BTC that moves around the economy.

MV = PQ
M = money supply equals 2000 BTC
V = velocity of money, we'll just call it 1
P = price level, we'll call it 1
Q = quantity of real goods and services in the economy

2000*1 = 1*2000 (solving for Q) is our status quo

Now say wealthy businessman A wants to retire, but just for the sake of example spends no money whatsoever and removes his 1000BTC from the economy. So the velocity of money drops by half, and the price level drops by half (we'll completely ignore the unemployment implications and the fact that the businessman is unlikely to announce his plans to give the market perfect information to account for this collapse).

2000*0.5 = 0.5*2000

10 years later, new products, new people, new whatever has entered into the economy and it has doubled. To adjust for this, the price level has fallen further.

2000*0.5 = 0.25*4000

Now the wealthy businessman decides he's going to go on a spending spree and put his money back into the economy. Now:

2000*1 = 0.5*4000

He got to buy everything before the prices double to account for his money being put back in circulation. The market can't possibly adjust instantaneously. And everybody who saved a dime now has a nickel's worth.

How is this thematically any different from the current system?

Even if the economy stays even, even if removing his portion of the money causes no problems, he can still buy stuff for half price while everybody has been making half-wage and whatnot and cause a major upset in savings. Do you think the Bit Street elite don't get this? Do you really believe that increased purchasing power happens in a vacuum?
762  Alternate cryptocurrencies / Altcoin Discussion / Re: Decrits Proposal: Solution for an unbound, energy-related, stable value currency on: September 26, 2012, 09:24:23 PM
Share holders will have to remain online at all times.
What is the least uptime allowed? 99%? 95%? Noone can remain online 100% of time.

Just in a general sense. Depending on how the final consensus mechanism ends up working, they may actually only need to be online for very short periods of time when they have to create a transaction block or sign someone else's transaction block. But the best that will do is be something like "you must be monitoring the network at 6am GMT" etc., so it will usually just be more convenient to remain online, though not strictly necessary.

Shareholders will also be allowed to sign off of the network for extended periods, but this can't be an instant process as the rest of the network needs to come to a consensus on it. The total network reputation that is online cannot be allowed to go too low though, so there have to be limits on this. Some of this is detailed in the consciousness stream linked in the OP. There will be a system of penalty points that, when accrued, prevent you from gaining your share of the tx fee profits for a certain amount of time (like 1 point = 1 day that you must be signed into the network and perform your duties for the point to disappear). There will also be a kind of "three strike rule" where if you miss your required duties too many times or stay signed out of the network for too long within a 1 year period, you will be kicked out of the shareholders, lose your reputation, and be refunded only 75% of your share value (the rest will be destroyed).

These mechanics also tie in to what happens if there is a network split.
763  Bitcoin / Bitcoin Discussion / Re: Bitcoin - The First Five Questions on: September 26, 2012, 08:54:03 PM
It's not for sure that fees will be "huge" in future, for whatever reason. And fees are less, than a penny now. Grin
Actually, don't mind me, just send me tangible bitcoins please. Tongue

I didn't say they'd be huge, but they certainly won't be free. "Very low transaction fees" is all you have to say to not make a bald-faced lie.
764  Bitcoin / Bitcoin Discussion / Re: Bitcoin - The First Five Questions on: September 26, 2012, 08:13:28 PM
Well that's almost correct. Fees are near to zero. While transaction speed... well you don't really send anything at all with bitcoin.

It's also not correct. Zero != not zero. And fees are only really low because of the mining subsidy. But evoorhees bending the truth whenever it suits him is nothing new or surprising. And sure whatever you say bro on the last sentence.
765  Bitcoin / Bitcoin Discussion / Re: Bitcoin - The First Five Questions on: September 26, 2012, 07:51:33 PM
lol @ zero transfer fees and instant transactions
766  Alternate cryptocurrencies / Altcoin Discussion / Re: What are people thinking? on: September 26, 2012, 07:48:38 PM
Feel free to critique the proposal in my sig.
767  Economy / Economics / Re: Bitcoin is a Zero-Sum Game - Long-term interest bearing instruments viable? on: September 26, 2012, 07:01:21 PM
Sorry, but that doesn't seem to answer my question. Obviously, "rewarding people for trading incentivizes them to trade in it." But again, why isn't mutually beneficial trade its own reward?  Why do you NEED to add an extra incentive to encourage more trades?

The value of an expanding currency has to go somewhere. In bitcoin, very little of it goes to miners as there is competition to spend more and more money to get a larger piece of the same pie and make the ROI as low as possible. This money that bitcoin mining wastes helps only the electric company, ATI (or ASIC manufs), and people previously holding bitcoin. So only two types of people using the network benefit: 1) miners (barely), 2) existing holders of currency. Under the decrits system, it is: 1) miners (who only mildly compete with each other, spending 5x the money on video cards will not bring 5x the return, it keeps the "hardware tax" low), 2) existing holders of currency (who also receive half of the "free" money based on their holdings), 3) people who trade. This opens up a whole new dimension of who benefits from using the currency while at the same time reducing the amount of hardware/electricity waste. There is no reason that people who do nothing productive in expanding the economy should see all the benefit of expanding the economy. Have you heard of Wall Street? Because that's exactly what they do.

The "meta" of rewarding trade with new currency (and unbounded mining) also counteracts Wall Street-like symptoms. If capital accumulation becomes the goal of the financial market rather than productivity and economic growth, the unbounded supply, a currency that "the people" can create, will devalue the power of that capital accumulation. It will stop greedy people in megacorp banks from causing the business cycle. Because of price stickiness it's very hard to see the effects of a recession, but in gasoline it was obvious in 2008. It dropped dramatically in half in price because the US dollar experienced a big slow in the velocity of money which caused deflation, even though it was not all that evident in most prices. It was certainly evident in unemployment, though. A fun and informative video: http://www.youtube.com/watch?v=qOP2V_np2c0 (note that this video is intentionally from a Marxist perspective on capitalism--I'm not promoting marxism, only stating the obvious that capitalism has no countermeasure for when it gets out of hand, and that this is a problem of the system of money, not so much capitalism itself)

You can call this devaluation theft, but it is the natural order of things when the greed of a few massively outweighs the benefit to society. Play too many games with the financial market, and people just create their own currency on the side anyway, effectively diminishing the power of the existing, forced currency. This happened in hundreds of communities during the great depression. What if the currency could have this property baked in?

Quote
And won't the extra trades that occur as a result of your incentive be trades that would not otherwise have been considered mutually beneficial? (And doesn't that tell you that those trades were not in fact wealth-creating?)

As I told Realpra, the answer to this is simple in that the odds of getting free money are not outweighed by the transaction fee. Such as if the transaction fee is 0.01 and the award is 100x the tx fee or 1 coin, then the odds being awarded that coin are 1 in 101 (but really half that as either the sender or receiver may be rewarded, so it's 1 in 101 only if you're trying to game the system and send to yourself). I haven't come up with the exact solution of how to do that, but it will likely have to do with hash comparisons or hamming distances or the like. It's essentially just based on "refunding" tx fees with new money.

Quote
I would think you'd need to argue that "hoarding" creates some kind of negative externality.

It does and I have. https://bitcointalk.org/index.php?topic=110708.0. Keynes said "saving causes recession because of lack of growth" hayek says, "you stupid son, saving causes an increase in non-consumption growth because banks use the money to loan." Since nobody needs to put money in bitcoin banks, and indeed it would be silly as there is no way you are getting a return on savings in a deflationary economy, nobody will "save" in the sense that it is used for non-consumption growth. So rather the ONLY kind of bitcoin growth will be when people holding bitcoin fall to the pressures of consumption at reduced prices. That's right, bitcoin can only grow via consumption (or lololol via speculation). If you have a better idea of how the economy works than Hayek's excessively intuitive logic, I'm all ears. But know that I will call you out on any begging the question fallacies.

Quote
It seems to me that the deflationary nature of Bitcoin IS encouraging people to save it, but I see that as a good thing.  Again, the larger fiat economy is still encouraging too much consumption and too much debt.

According to Hayek, there is a clear distinction we can make between saving and hoarding, and bitcoin is hoarding. Too much debt in fiat is the nature of a debt-based currency, one which Decrits would not be. "Overconsumption", if we could ever find a way of actually defining that, is probably more of a problem of government policy than the currency itself. Either way, you can't use what happens in fiat as an argument against an unbound free market currency. I can just as easily argue that bitcoin will forever be entrenched in a business cycle of slow recession with periodic economic booms as the deflationary pressure causes a rash of consumption. The money shouldn't be what encourages or discourages anything, it should be as neutral as possible. That's why price stability is important. If people want to consume and your free market currency penalizes consumption, then they will not use your currency.

Quote
Bitcoin is thus helping to offset some of those destructive tendencies.

So you say. But I could just as easily argue that bitcoin will always be irrelevant because few, in the grand scheme of things, will use it. Bitcoin doesn't offset anything if people still universally use fiat.

Quote
It's just that success as a (direct) medium of exchange is much more reliant on network effects and will thus take longer to achieve.

And it will probably never achieve the network effect because people will get wise to the fact that they're buying into a pyramid. Rant about whether or not it's a pyramid scheme all you want, the fact of it all is that 50% of all the currency to ever be distributed will have been distributed in the next few months, and this may be stunting growth much more than you realize. *I* could sleep soundly at night, in the future, after having released Decrits knowing that there won't be hundreds of videos on Youtube calling it a pyramid or ponzi scheme.

Quote
But I'd note that it's already succeeding as a medium of exchange for certain niche markets (e.g., Silk Road) where its advantages over fiat make it particularly compelling.  

A black market being the only real source of growth in an economy is not exactly a ringing endorsement of that economy. It just means the benefits for the black market outweigh the downsides.
768  Alternate cryptocurrencies / Altcoin Discussion / Re: Qubic - Quorum-Based Coin on: September 26, 2012, 07:07:50 AM
It's enough to defend. Sybil attack is like 51% attack in Bitcoin world. Do we have a lot of problems with anyone 51%-attacking Bitcoin?

No, we don't have a lot of problems with anyone 51% attacking bitcoin because it costs a lot of money. IP addresses do not.

Quote
No need. Bitcoin ignore such an issue and works perfectly (I'm talking about bitcoin clients that retransmit transactions, who makes them doing this correctly?). If at some step this becomes a problem, than Paxos will be added to implementations.

:sigh: Bitcoin does not ignore byzantine fault tolerance. It's part of that whole distributed-consensus block chain thingy you might have heard of.
"If u asked 100 providers and more than 50 said "yes", than u should consider it's legit qubic. If u r not satisfied with numbers than just ask 1000 providers and keep asking as long as u wish." - This reeks of byzantine failure. I am not familiar with Paxos, but by a brief overview it looks like it is made for a centralized service with distributed fault tolerance, not a distributed network protocol.
769  Economy / Economics / Re: Bitcoin is a Zero-Sum Game - Long-term interest bearing instruments viable? on: September 25, 2012, 10:20:21 PM
Ahhh, good point. That was sort of in the back of my mind as I wrote that. It's not that new money can be printed into existence. It's that it's printed and loaned into existence at an interest rate determined by a central authority. So if we got rid of the central bank, and the government instead simply printed new money into existence to fully or partially fund itself, what effect, if any, would that have on prevailing interest rates? More thoughts later. Thanks!

It depends on the government's policy towards spending into existence more than they bring in in taxes. If they spend more than the increase in demand for new money due to growth, then real interest rates will fall. If they keep extra spending at around the rate of new growth, then interest rates should be mostly determined by the free market. But the goddamn genius part of governments spending new currency into existence is that THEY DON'T HAVE TO PAY INTEREST ON IT. Thus there is no incentive to create more than necessary as they don't need to worry about reducing the effective debt. Well, other than political corruption. But at least in a "democracy" we have some (little) choice in electing people to government, politicians who cause inflation or direct new money to poor causes can be voted out. We have no such choice in electing central bank chairmen.

Imagine how much lower the tax burden could be if, in the US at least, we didn't owe an entire year's worth of GDP in debt! The British empire did this for 700+ years with tally sticks. But then the Rothschilds got ahold of England. It makes so much more sense than the current system you have to wonder how fricken stupid or greedy people were to get us to where we are today.
770  Alternate cryptocurrencies / Altcoin Discussion / Re: Qubic - Quorum-Based Coin on: September 25, 2012, 09:13:00 PM
You claim a sybil attack can't be mounted easily, but the only defense you seem to have is that honest people will have more. One botnet could have thousands or hundreds of thousands of IP addresses. Once IPv6 is the norm, governments and ISPs will have easy access to billions of IP addresses. The trust system might work among providers that know and trust each other, but this does nothing for people trying to use the network. They will be inundated with all kinds of providers and have no clue as to which ones are trustworthy. Not to mention since each provider will likely have a different idea about who is trustworthy, trust can't be used to weigh votes on how many coins are created. So someone with tens of thousands of IPs can just say "I want 9999999" tens of thousands of times (good lord the data consumption) and destroy any value to the currency.

you gotta solve this too: http://en.wikipedia.org/wiki/Byzantine_generals

You might be interested in this: https://github.com/FellowTraveler/Open-Transactions/wiki
771  Economy / Economics / Re: Fascinating information on saving vs. consumption on: September 25, 2012, 08:56:34 PM
Let me get this out the way
Quote
Does bitcoin ring some kind of Marxist vibe for you?
LOL.  No. This forum distracts me from my subjective reality.
As a Vegetarian Buddhist, I couldn't be more Laissez-faire'ist. (I am only a moral vegetarian, in that I know I wouldn't be hungry either if my plane crashed in the Andes with no food and a few survivors.)  
I do hold the view that some 99.99% of people live life subjectively (myself included), we are almost hypnotise to avoid objective reality I could say my interest is: Bitcoin gives me some kind of reality vibe! (i.e. the possibility to live in the magic of creation not some closed deluded and pitiful religious construct of it)

Fair enough. But don't go around using the term "productive and unproductive labor" if you don't want Marxism being brought up.

Quote
Thanks for the heads up I did some reading on Hayek,s Free-Market Monetary System, and while it has merits over a central bank,( I stand to be corrected) it is in effect the system that existed prior to the Fed.

It is not the system that existed prior to the fed, that was still based on gold. A free market monetary system is not, it is "voluntary fiat" or whatever you'd like to call it.

Quote
Money is probably the single greatest form of cooperation that allowed us to evolve.

I agree.

Quote
When a prehistoric economy had excess food that commodity had the value of money, when that economy shrunk to nothing the money (food) still has the intrinsic value, therefore savings are key to our prosperity and innately they do not bear interest. Excess saving therefore lead to a diversity of human ingenuity art and insight through creativity. (As we evolve the interdependence would be defined as economy and it is based on savings).  A regression theory of triad.

I don't really think you can compare a food-based economy to a growth-based economy. We have, at least in many countries, considerably reduced the need for food as a primary incentive. Now we need to advance as a society. Bastiat is quite famous for debating how interest on capital is a good thing. But it is only a good thing, imo, when the money supply can't be manipulated and the interest can't be manipulated.

Quote
With FRB when the economy shrinks (there is drought in prehistoric times) or people stop cooperating - you get a run on the bank,( to get your stored food) and there isn't any, the theft is revealed.  At the level of commodity food money I prefer not to debate if there are benefits to FRB, because it is obvious the presumed reserves aren't there.  So FRB is dependent on under consumption and continued growth. It looks like to me this is where Hayek didn't regress his thinking enough, and Keynes intuitively understood the problem but couldn't identify the broken logic.  

From this perspective Central Bank is insurance, it pads the system ironing out the misallocation of individuals to the benifit of individual banks. I see FRB will eventually lead to a Central Bank because droughts or misallocated recourses don't happen everywhere at the same time, this is a natural evolution.

This is all well and good, but as I've stated before, FRB exists because the opportunity for it to exist is there. It effectively creates new money but it has the big catch of the money not actually existing. But it works because people are willing to pay the interest--there is demand to grow. If the free market can create currency, there is no need for FRB. Bitcoin doesn't allow for new currency, so I see FRB as a foregone conclusion.

Quote
Within a regression theory of triad ( or the economy), the creation of money supply is not necessary, it creates an elastic that counteracts the direct market feedback loop. (This leads to manipulation of the banks lending policies)

Except that the direct market feedback loop can be manipulated by those with exceptional wealth (or control of it) in a closed supply. So it's not so direct as it first seems. Central banks were created by the Rothschilds and Morgan, people who were heavily in tune with how to manipulate the supply of money. So the "regression theory of central banks" leads back to "wealthy manipulators". Something they were only capable of doing because gold is relatively fixed.

Quote
? help me understand. I have come to interoperate: you see a concentration of wealth in the hands of a few as destructive for the good of society, am I correct in assuming you feel, adding a mechanism to the money system could prevent this and therefore make for a more just system?

It is what Hayek has essentially said with regards to free market money.

Referring to Sweden's effort to stop minting gold coinage and the predicted rise in value of that coinage above the value of gold:

"I quote this only as illustration of what among the economists who understand their subject is now an undoubted fact, namely that the gold standard is a partly effective mechanism to make governments do what they ought to do in their control of money, and the only mechanism which has been tolerably effective in the case of a monopolist who can do with the money whatever he likes. Otherwise gold is not really necessary to secure a good currency. I think it is entirely possible for private enterprise to issue a token money which the public will learn to expect to preserve its value, provided both the issuer and the public understand that the demand for this money will depend on the issuer being forced to keep its value constant; because if he did not do so, the people would at once cease to use his money and shift to some other kind."

Quote
Problems I see in your perspective:
Allowing anyone to create money is in effect allowing them to steeling wealth - and the opposite would then be true if no one could create money, except if money was a direct result of labour expressed as a commodity food and everyone could create it, provided they had access to land. (land ownership is at the center of the problem I see, but that is another thread.)

Counterpoint: Allowing capital accumulation to get to a point where a large portion of currency is in the hands of the few, not allowing anyone to create currency is in effect allowing them to steal wealth. Because all they have to do is stop investing or stop spending and then the currency deflates--forcing unnecessary bankruptcies and theft of productivity because of the increased value of currency which is unilaterally more beneficial to the rich than the poor or middle classes. What have the uber wealthy done in recent years with capital accumulation? Play games. Credit default swaps, deca-trillions derivative markets, and other "unproductive labor" that squeezes the economic progress of society to the top. More money is used only to chase more money, not economic progress--to not only the detriment of society as a whole, but also its regression.

Should this unproductive money not be devalued? (See: Demurrage) It stalls progress and causes misery to the vast majority of people so that a few can increase their balance sheets. What is the human capital cost of thousands of intelligent minds going to work on Wall Street because "it's where the money is at" rather than aerospace, pharmaceuticals, or what have you?

Quote
(do you have evidence to suggest a manopoly is likely?)

See: history. Yes bitcoin is a free market currency and that makes all the difference in the world. It means it will fail. It might stick around through a few excessive deflation/inflationary boom cycles, but people will get tired of it and switch to something like Decrits. Cheesy

Quote
Just as creating money transfers wealth disproportionately to the receivers of new money, so the opposite is true wealth moves to the producers of goods and services in the absence of new money creation.

You've forgotten finance again. In a sane economy where half the money was not dropped in a helicopter over the Hamptons, financiers would have a hard time making deflationary loans. But when you have multiple people or groups with 500k+ bitcoins, they can loan at 0% interest down the road to expand the economy, then decide to stop lending or raise interest rates significantly and cause a credit crunch, and boom the wealthy get wealthier. If they don't do this, it's just as likely that the economy will never grow significantly because of the catch-22 of deflationary growth causing difficulty and bankruptcy in paying back loans for business. Either way, people aren't going to put up with this shit when it's optional.

Quote
For Bitcoin to crash there must be an imbalance of payments, i.e. the majority of money must be converted from Bitcoin to fiat,

No, the bitcoin wealthy could buy businesses and durable goods as well. Assuming the world economy somehow manages to get through the massive amounts of stumbles along the way to make this possible.

Quote
I dont fear that scenario as to truly control the wealth you need to control the key sustaining commodities in the word, while this is happening now. I believe we will see a change in understanding, resulting for the converging tipping points, environmental, ideological (political) and economical, we should expect a new renascence even a defining of a new "geological age".

I don't know why you're so optimistic that it won't happen again even though the setup is primed and ready with the new elite.

Here's another fake quote, "from" Albert Einstein, for you: Only two things are infinite, the universe and human stupidity, and I'm not sure about the former.

Quote
And a new Bitcoin based on my earlier presented distribution rate. would solve the early adopter problem presuming Bitcoin is going to grow to have billions of members.  

Aaaand the initial distribution is not "the" problem, only one problem. It doesn't fix the long-term effects of a closed currency, no matter how you might hope and wish it will be different this time.
772  Economy / Economics / Re: Bitcoin is a Zero-Sum Game - Long-term interest bearing instruments viable? on: September 25, 2012, 07:38:20 PM
But creditors are not spending real wealth because they are not buying anything while debtors in general ARE consuming something of value. It would make sense just fine that they are punished unless they are very careful not to waste stuff we all need.

Do you not absorb anything? Are you just going to keep going round and round?

DEBTORS does not equal CONSUMERS. Get it out of your head that this has anything to do with credit cards. This is about economic growth. Not only new growth, but also existing value brought over from fiat.

Quote
This particular part of your counter is an appeal to the emotion of fairness. You are not substantiating it by also explaining why creditors and debtors should be treated equally. (feel free to do so though)

If you never try to make up a type of fallacious argument again, the world will be a better place. I also did not say that they should be treated equally, I said ONE IS NOT FAVORED OVER THE OTHER. See the difference? I explained further in the post why deflation is not good for debtors--it will cause them to go bankrupt. This will stunt economic growth as even viable industries will fail. I'm sorry if I don't spell out each and every argument within one sentence. Inflation isn't good for creditors because, presumably in a non-debt based currency/society, most people will be creditors via interest earned on savings. Inflation/central banking steals a good portion of that.

Quote
2. The whole ordeal sounds like a massive card house/gambling business that SHOULD have been allowed to fail.

Sure sounds like the current situation on Wall Street today.

Quote
It was saved by JP Morgan at A LOSS to him. Likely he did it anyway because the house of cards falling would have cost him MORE.

Where do you see this as a loss? Morgan purchased massive equity in banks and trusts and organized the deflated stock market buy up. Remember when Citigroup shares were $550 a piece and then suddenly $10 a piece a few years ago? These are the times when Morgan propped up the economy. If you're referring to the "$21 million loss" referenced in the wiki article, that is a reference to his existing stock holdings. Did you not read far enough to see this tidbit?

"The committee issued a scathing report on the banking trade, and found that the officers of J.P. Morgan & Co. also sat on the boards of directors of 112 corporations with a market capitalization of $22.5 billion (the total capitalization of the New York Stock Exchange was then estimated at $26.5 billion)."

Quote
Now when used as an analogy for a very basic premise (stable = good) it is unfortunate that you have the facts somewhat backward.

It's unfortunate that you claim I have my facts backward when you don't get it.

Quote
The mess was saved due partly also to deregulation pushed by JP, basically a lowering of the bar for the gamblers. I personally speculate the mess came apart in the great depression.

<insert lulwut pear> I have no idea what the hell you're talking about.

Quote
Now both credit holding manipulators actually lost money in your analogy here (the other being a botched copper cornering attempt starting the ordeal) so I don't see it as supporting your case for stable average prices in ANY way.

I hope you don't play chess. The whole crisis would have never happened if the supply of money was not illiquid. But it was, and people in New York buying food from the fall harvest caused drops in liquidity every year.

Quote
This is a new premise to back the other one. Here you are making the premise that stable average prices lead to a perfect level of general investment.
A premise based on the first premise almost.

It is similar, yes. The interest rate will change in a free market to adjust to the need for money, and no other factors need come into play.

Quote
Another counter is that if menu costs were a serious detriment to anything people would display prices in a third medium - like dollar prices today paid with BTC.

LOL because BTC is stable.

Quote
If market competition reduce prices to their correct level there is also no illusion cost so I don't see it supporting your premise.

"You can lead a horse to water but you can't make it drink."

Quote
So your answer is "I don't"? How is BTC crashing from $32 to $2 due to a localized bubble stable?

That's BTC's problem.

Quote
So you didn't answer my question because bubble collapses are not going to ensure stable prices.

Make a currency ripe for bubbles and bubbles are what you get. In the Decrits proposal, the more people that mine the more money is created, so any upward pressure on the price will be quickly deflated. Since everybody knows this, it is in the best interests of people holding currency to sell while it is above its cost to produce, further reducing the possibility of a bubble.

Quote
The only sustainable way to lower prices I see is to remove currency from circulation which will require theft, taxes or selling real assets (which central banks don't have enough of to manipulate prices down again).

Or you could actually read what I said about arbitration.

Quote
Could it be that monetary inflationists only care about stable prices when it allows them to GET money and value aaaand... not so much when they theoretically should go out and spend it to lower prices?
That's not ad hominem btw that's occams razor - simplest explanation: "I want free stuff" - like ALL human beings.

No, it's not an ad hominem, it would be a strawman. Gotta work on that. Ad hominem - attacking the person in lieu of the argument; strawman - attacking an argument that the person did not make in lieu of the actual argument. Anyone who doesn't spend/receive money in an expanding Decrits economy suffers some opportunity cost--they won't receive any of the new money given to transaction activity.
773  Alternate cryptocurrencies / Altcoin Discussion / Re: Qubic - Quorum-Based Coin on: September 25, 2012, 02:39:34 PM
The same with already existing qubics. It's necessary to ask some providers if this particular qubic exists. If u asked 100 providers and more than 50 said "yes", than u should consider it's legit qubic. If u r not satisfied with numbers than just ask 1000 providers and keep asking as long as u wish.

You've got a lot of work ahead of you if you think this can be used as a way to bring consensus. In a decentralized system, there has to be a way for everyone to eventually come to an agreement on what has happened.

Quote
As every provider itself marks other providers trusted and choses appropriate weights and noone else knows this information, Sybil attack doesn't seem to be an issue.

No one else knows this information including people who want to transact on the network. Determining who to trust will be impossible and sybil attacks will be easy.
774  Economy / Economics / Re: Bitcoin is a Zero-Sum Game - Long-term interest bearing instruments viable? on: September 25, 2012, 02:22:48 PM
But isn't trade (like virtue) its own reward? Voluntary exchanges occur when both parties perceive themselves as benefiting from the exchange. That's why you can be reasonably confident that a voluntary exchange is in fact creating new value.  So, why do you need to artificially incentivize more trades via inflation?

Because assuming the supply is expanding because there is more demand for the currency (and not because of reduced cost of producing the currency due to hardware efficiency gains or whatnot), rewarding people for trading incentivizes them to trade in it, not just hoard it. As in, legitimate existing businesses will want to take the currency, and people will want to spend it. It means you don't have to be digital-currency-wealthy to benefit from using it when the market expands. It's also "free" money that gets its value from reducing the value of fiat rather than paying for it in excessive hardware and electricity costs. It changes the objective from "buy and hold until a good fiat exchange opportunity arises" to "buy and use".

Quote
But aren't artificially-low interest rates one of the main objections to an inflationary currency?  If we switched to a sound currency like Bitcoin, of course interest rates would rise. But they'd rise to their correct level, i.e. the level that reflects the voluntary preferences of market participants.

No... artificially low interest rates are due to the central bank issuing new money to banks at low interest rates. It has everything to do with a centrally planned economy and nothing whatsoever to do with the money supply being unbound. It is fake market vs. free market, not inflation vs. deflation. There is little that is sound about bitcoin, and I have no idea why you think interest rates would rise in a deflationary economy, except for the incredibly unsound idea that no one will want to lend at negative interest so long-term interest instruments will be excessively scarce. You say "of course" yet this thread is 12 pages of people arguing about how long-term interest bearing instruments may or may not be viable. Again, you can't just add 3% on to the real interest rate and expect businesses to just hum along as if nothing has changed.

And 3% is only the best-case scenario where a large portion of the world has adopted bitcoin. Prior to that, deflation periods will be much, much heavier as the only way to expand the market is to increase the amount of deflation. Businesses who take loans in BTC will be punished for doing so because they expand the market and the demand for money making it much harder to repay the loan. But taking loans in BTC is the best way to get businesses to want BTC in exchange so that they can pay those loans back! It is a catch-22.
775  Economy / Economics / Re: Bitcoin is a Zero-Sum Game - Long-term interest bearing instruments viable? on: September 25, 2012, 01:58:51 PM
Okay so basically its fancy talk for the money printing required to keep prices stable in a growing economy.

There is nothing in that equation about printing money. It compares the demand for money to the price level. It applies to stable, inflationary, and deflationary economies.

Quote
Lets go one level deeper: Why are stable prices good? What is the facts and basis behind this premise?

Stable prices do not favor creditors (deflationary does) nor debtors (inflationary does--to the extent inflation goes beyond the baked in rate). Stable prices do not favor those who hold wealth in real assets (inflationary does) nor money (deflationary does). Assuming stable prices are achieved, that means the the supply of money isn't being manipulated by central bank inflation or those who control vast amounts of wealth (see panic of 1907 and how handsomely JP Morgan profited off of others' misery--and odds are good he caused it). Stable prices do not encourage over-investment to recoup inflationary losses nor under-investment because holding currency is the safest bet. It reduces or eliminates menu costs and the money illusion.

Quote
Money "demand" assumes that stable prices is a good thing, but that seems very loaded/biased to me.

Money demand doesn't assume anything, it allows you to solve for one of the variables if you have the others or it allows you to predict what the change might be if one or more of those variables change. Just like the equation of exchange (MV = PQ).

Quote
Say it IS a good thing, how do you LOWER prices again if the economy contracts?

Ahh the meaningless "gotcha!" moment. How do I lower prices from when bitcoin was at its $32 high? The simple answer is: I don't. No currency is immune to a loss of faith or demand. But, when you're in the unique situation where everyone has a good idea of how much it costs to produce new currency, and the currency is obviously undervalued, it opens up the opportunity for arbitrage. People will buy it just like any other asset they believe is undervalued. There are ways of making it return to stability quicker such as destroying transaction fees, but all this does is punish the people who still use the currency even more.

Quote
If stable=good, why is it okay for each individual commodity to fluctuate in price and what is the point of average stable prices if each individual ware changes in price all the time?

Each individual ware does not change in price all the time. This is known as sticky prices, and it causes problems up and down the economy when the value of the currency does not remain stable. But it's OK for each individual commodity to fluctuate because that is simply supply and demand, the basis for all pricing. Stable, inflationary, or deflationary doesn't change that. If technology and productivity increases allow for a reduction in price (the common computer hardware example), everyone's purchasing power increases and is wealthier as a result.

Quote
I know of very secure investments which pay 1-3.5% in REAL interest rates for something that "lasts forever". A bigger and more informed investor with the right "ins" may well know of something even better.

"Hey, I knows a guy! He can hook you up real good" said the spider to the fly. Don't forget that high interest rates are bad for business and therefore bad for economic growth. Future productive opportunities for your money are diminished. Also, "1-3.5" real interest equates to "-2 to 0.5" nominal interest in a deflationary economy at 3%.

Quote
The fact that many interest rates today are negative in real terms should tell you that its fucked up in real terms.

It just tells you that a central bank is controlling the interest rate rather than the free market. "Force" more debt on people and businesses and hope it fixes the problem. Roll Eyes Roll Eyes Roll Eyes Roll Eyes
776  Alternate cryptocurrencies / Altcoin Discussion / Re: Qubic - Quorum-Based Coin on: September 25, 2012, 08:50:33 AM
From what I gather this is somewhat based off of the Chaumian-style digital cash.

1. How does the system prevent sybil attacks without proof of work?
2. How is consensus reached on how many and what coins exist?
3. What the hell does "Coins "look" like real coins" mean?
4. How long do you expect it to take consensus to be reached to prevent double spending?
777  Economy / Economics / Re: Bitcoin is a Zero-Sum Game - Long-term interest bearing instruments viable? on: September 25, 2012, 12:53:28 AM
You are the one constantly talking about the market running out of loans, credit, investment or money.

"Demand for money" - what does that even mean... no SERIOUSLY; explain it to me, I don't get it.

I have never used nor implied any "running out" of loans etc. only that a deflationary currency makes loaning a dangerous affair for both parties. So, paradoxically, a deflationary currency might make for high-interest and presumably short-term only loans. Not the type of loan you can do capital investment with--more akin to loan sharking.

I will, against all better judgment, assume that your question is genuine and your insulting strawman was a misunderstanding.

https://en.wikipedia.org/wiki/Demand_for_money - The demand for money is the desired holding of financial assets in the form of money: that is, cash or bank deposits.



where Md is the nominal amount of money demanded, P is the price level, R is the nominal interest rate, Y is real output, and L(.) is real money demand.

L(R,Y) is called liquidity preference which is a Keynesian idea, but Austrians have time preference which can be substituted and the situation works out roughly the same.

Keeping a stable price level P means that whenever output is increased, the demand for money Md will increase in the same fashion, or prices will not be stable--they will have to decrease. Because the money supply is so restricted in bitcoin, this will generally be the case. When the central bank increases the supply of money, P rises then Md rises. They can't happen at the same time because the money supply is narrowly focused to private banks. This is where the "theft" comes in because the prices increase before any of us have any say in the matter or see any benefit to new money. When the supply of money can meet new demand quickly, prices do not decrease. When money is not given to sacrosanct institutions first, but equitably across the economy, Md and P can move at the same rate, if necessary (or L() can cancel it out).

Because distributing the new money equally is the same as moving the comma, think about it. Give everyone 10 times as much money and its exactly the same as moving the comma once to the left.

It is not, because you have forgotten the cost factor to mining. Miners are held in check by the potential of inflating prices by overproducing and making mining unprofitable. "Cash-hoarders" are held in check by miners because miners create new money that will presumably put to use, stifling deflation. If the demand for money gets too high, interest rates should increase as well, also prompting cash-hoarders to stop hoarding and invest at interest. It is a balance from all angles that can't be manipulated. There is also, at least in my proposal, a large chunk of the new money that goes straight to trade, which is why I chose my words carefully and said "equitably" instead of "equally". Trade is where new value is realized and it should be rewarded in kind.

Quote
Quote
It is really rather simple: if you pay a 0.01 fee on a transaction, the odds of you being awarded 1 coin for that transaction is made to be no less than 1 in 101. Transaction fees are required under this model, as they will eventually be under bitcoin.
Well Bitcoin needs those fees for a reason and not to control price levels or something.

The fees aren't there to control price levels. Roll Eyes

Quote
Anyway if you pay 0.01 as fee and on average win the same all you are doing is subsidizing miners and allowing them to charger higher fees perpetually. This would either lead to a NEW wasteful banker-class or over consumption of CPU time.

The miners don't have anything to do with the fees. Mining isn't required at all. When the demand for money is in line with the supply, mining stops. No electricity usage at all.

Quote
0.1-0.5% is a horrible investment, no one should accept that.

Well there you go! There was some heated discussion a year or so ago on how deflation might somehow be prone to negative interest rates. CD rates nowadays are around 1%. Admittedly, that is with central bank theft of interest rates, but even when they were not manipulating as much, the best, safe interest rate in a typical 2-3% inflationary economy is going to be 2-3%. Riskier investments can lead to around a solid 5%, but they tank when the economy as a whole tanks (see everybody's IRAs, 401ks, etc. over the last few years). If deflation is 3%, 3% must be taken off of the interest rate. CDs can't pay you 1% if deflation is 3%, that would be a real 4% interest rate. Right now you're looking at -2% with inflation on a real return from a CD, how do we get from real -2% to real +4% just by using deflation? Magic? 6% better interest doesn't just come out of nowhere.

And this is assuming a nice, gradual, 3% year after year, with no one but the wealthy bitcoin holders who may or may not be manipulating the supply to keep that stability. If one year happens to be 6%, do you realize what that means to a business's profit margins? Bankruptcy. Many businesses run on very tight margins of only a few percent. An unexpected upswing in the deflation rate will simply bankrupt them. This is why economists are afraid of deflation.

I don't know if any economist has tried to define what a "good" (real) interest rate is in a stable economy, but it's gotta be somewhere in the range of 0.5-2%. If it goes higher than that, that's a sign that there isn't enough money to meet the demand for money, and economic progress will be retarded because businesses can't afford loans (which are going to be at a higher rate because of the bank's cut, of course). The higher the REAL interest rate, the worse it is for business. This is why the central bank tries to manipulate this situation by lowering interest rates to bring us out of a recession. The problem is, since the consumer level doesn't see any new money and is in fact penalized for this by reduced value in savings, there is less incentive to save and less purchasing power for a given amount of money. It doesn't fix the root of the problem and just puts everyone in greater debt. It is idiocy based on Keynes and it doesn't work.
778  Economy / Economics / Re: Fascinating information on saving vs. consumption on: September 24, 2012, 09:44:52 PM
The gold standard is a form of fractional reserve banking; fractional reserve banking is theft.

FRB being theft is pretty debatable. It allows people who store their wealth in banks to earn interest rates. Central-banking interest rates is absolutely, unequivocally theft. Instead of free market competition, nobody earns anything now on saving money, and they in fact lose value because of these uncompetitive interest rates and the inflation caused thereof.

Quote
Ok I'll stop harping on but by definition this is the (Cantillon effect), the problem with fractional reserve banking; the gold standard and fiat. (the gold standard just adds physical limits)

Again, this is a problem of a centrally controlled economy, not FRB. While FRB started out under false pretenses, that is hardly the case now and in a competitive market people would earn competitive interest. However, FRB does have its own problems such as bank runs, but I don't think that it is the root of all economic woe. FRB does compound the problem of low interest rates from a central bank and quantitative easing because it maximizes the "Cantillon effect" if you want to keep calling it that. Again, the problem still lies in central banking. And if a way to do FRB in Bitcoin can be accepted by the general population, it is going to happen there too. It benefits everyone but large holders of bitcoin.

Quote
They were financiers, using newly created money (fractional reserves) I can't see this happening with Bitcoin because of the concept inherent in Productive and unproductive labour

I'm sorry, but this is a bullshit rationalization with no evidence whatsoever. "It happened before, but it won't happen again just because!" ? Does bitcoin ring some kind of Marxist vibe for you?

Quote
I understand the problem, I think the economic situation today is a result of the Old Powers. We have a paradigm shift with Bitcoin, just like the financiers of the industrial revolution had a paradigm shift and took power away for the land owners (commodity backed money).  This time it is going to be for good.

Was it you I asked about what made you so sure that the New powers will be any better than the old? Because in a fixed supply of currency, the new power certainly isn't going to be democratic in any way, shape, or form. It may take time (then again, probably not with the big bitcoin players that already exist), but as bitcoins accumulate in certain hands, they will gain power exponentially instead of linearly, at least assuming a closed system. The reality is that bitcoin will probably crash when people see the manipulation and they will flock to another another currency, but in the mean time a lot of wealth will be transferred.
779  Economy / Economics / Re: Bitcoin is a Zero-Sum Game - Long-term interest bearing instruments viable? on: September 24, 2012, 08:54:51 PM
Inflation usually refers to an inflation in the money supply. Prices in said economy are irrelevant to the concept of monetary inflation.

No, it does not.

http://en.wikipedia.org/wiki/Inflation - In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time
http://www.thefreedictionary.com/inflation - 2.  A persistent increase in the level of consumer prices or a persistent decline in the purchasing power of money, caused by an increase in available currency and credit beyond the proportion of available goods and services.
https://en.wikipedia.org/wiki/Austrian_School#Inflation - Mises argues that inflation only results when the supply of money outpaces demand for money

Mises may have waxed poetic about how calling rising prices inflation confuses the issue with monetary supply increases, but AFAIK he is the only austrian that gave a shit about the distinction. For everyone else in the world, the meaning is clear: rising prices associated with an increase in the supply of money beyond the available goods and services or whatever exact definition you want to pick.

Quote
I think this is your problem right here; you think money is a necessary commodity or something that society can somehow "run out of". This is simply not the case, its a system of IOUs and there can NEVER be scarcity because you can always "rip an IOU in two" so you have twice the amount of tokens to go around.
This ESPECIALLY goes for Bitcoin which is digital and infinitely divisible.

Oh hey look, you putting ideas in my mouth that never fucking came out of it. The very definition of strawman and intelligence insulting. "OHH U THINK HERP A DERP BITCOINS WILL RUN OUT AND IT WILL FAIL"

FUCK OFF
780  Economy / Economics / Re: Bitcoin is a Zero-Sum Game - Long-term interest bearing instruments viable? on: September 24, 2012, 08:19:07 PM
No it wasn't.  Pointing out that people aren't likely to accept a bland assertion from you on the very point of debate is hardly an appeal to popularity.

Like providing links and information to basic economic theory will do anything to change your minds. Roll Eyes Bitcoinomics is rampant around here and it is pretty obvious that people will believe whatever they want to believe as long as they think it's good for them and someone smarter than they can come up with some perfume-laden shit as ammo to repeat. It smells an awful lot like political positions.
Pages: « 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 [39] 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 ... 93 »
Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!