The complexity argument is one I can't argue against, though in reality it is more about many small ideas adding up to a bigger whole rather than something insanely more complex than say, for example, bitcoin.

Be more specific about which part's beneficence is unclear and I will be happy to explain. I can't do it all in one post because the issues I sought to resolve in bitcoin were discussed across many emails and many threads on these message boards, and I know no one will read a book on a message board.

As far as "strange ideas" there are no incumbents so your analogy is flawed. There is no limit to the amount of people who may purchase shares (it is the third sentence of that section). But, during periods of network expansion, it will be profitable for more people to purchase shares to the detriment of those who already own shares. The reputation system rewards the existing shareholders temporarily with a larger piece of the profit. Anyone interested in the currency's future should be happy to stick around and eventually reap the same reward. Additionally, an "evil entity" trying to weed out existing shareholders by reducing their profitability would have a much easier time of it if there were no probationary period. Unlike bitcoin's reward system, there is no need to be there first or before someone else, only to stay in for the long haul. It encourages the sustainability of the currency, not a pyramidal shape to the currency.

I'm not sure what the connection between "more power" and "less anonymity" is. Are you just saying as a consequence of bitcoin becoming ubiquitous that it will become a target for the government? If so, you don't need to throw more power at bitcoin to make its pseudonymity secure, you need to come up with better ways of being pseudonymous if what bitcoin currently provides is not enough.

Unfortunately, I consider bitcoin's hashing for security to be a very big flaw in bitcoin. The costs of new hardware to continue to compete against those who have the money to buy in bulk will likely become more and more difficult for the average joe when returns can only diminish, perhaps drastically, over time. Rather than earning transaction fees, they are fought for in a constant battle of computing hardware--where, just like lawyers in class action lawsuits, most of the winnings go to the ones selling you the hardware or the electricity.

To get a taste of how this could be done differently, see my signature.

The point has never been that early adopters should all run out now and invest immediately. The point is that there will rarely ever be a profitable opportunity for them to do so. Unless the money cartel starts churning, gets everyone hooked on bitcoins at low interest, then eventually calls in all the loans without recirculating the money. This is a far worse case and one that I think is guaranteed to happen if bitcoin insinuates itself into the world economy. There will be a new wall street and it will be just as effective as the old wall street, except that perhaps there will be new ownership. JP Morgan was a master at manipulating the economy before the advent of the central banking system in the US. Then he simply manipulated the government into central banking because it's a lot easier to keep the people happy if they can still put food on the table while their productivity is stolen.

I've been accused of being a labor theory of value proponent before and discussed it to death then, I don't feel like getting into it. Nor discussing the taint that Marx added to it. The LTV still requires an exchange of which there is none when discussing the point of a currency that accrues interest for doing nothing, so I also don't see how it even applies to the statement you quoted.

I don't particularly disagree or dispute any of the other points as they stand now (read: not the case in the future), but the Bitcoin economy is growing primarily on speculation. Without the massive hills and valleys, Bitcoin could have easily grown much faster and much harder. Instead, a large portion of the actual growth has been ways to separate bitcoin from it's volatility--e.g. BitPay.

It goes much deeper than that. We are where we are today because of the history of gold, a history spread out over at least 5,000 years that bitcoin has tried to emulate in about 4. Acquiring vast sums of money should not be about luck, but it was the case with gold and is the case with bitcoin. But--this is only one side of the issue. Gold gains great power not because of what you can buy with it, but what you can do by NOT spending it. I think most people would agree that the wealthy (or a combined group of the not so wealthy) lending money to invest in new business and infrastructure is a good thing because both sides benefit.

But when gold is withheld and made artificially scarce, those without gold become paupers. This is when the gold-bearers can swoop in and take back the productivity of years of labor essentially because of deflation. The paupers can't afford to keep their durable goods because they need to buy food. They can't pass on wealth to their children, so their children have to go through the same insanity. Combined with the ingenious idea of Rothschild FRB, this effect can be maximized. Combined with central banking and it is government-mandated theft.

Again, that's only part of it and honestly it is the part that bothers me less.

While I've avoided mentioning it because I don't want to sound like I'm advertising, the link in my sig explains how a cryptocurrency could be created that solves the economic issues I have with bitcoin, gold, and modern fiat. It isn't about the initial distribution, it is about the ability of the people to create money at cost (or below cost in the case of the wealthy causing undue deflation). But it's also much more than that, though I haven't delved into what I see as being the economic result of such a currency. But it's freedom, in a word. Feel free to post questions in that thread though and you can be sure I'll give a long-winded response.

I'm only playing devil's advocate for demurrage. It isn't my idea, and I have hotly debated it with jtimon and the others behind it in the past because I don't think it will be a successful idea and I think they're wasting their time.

I agree that a currency offering perfect information is a huge, unbelievable boon, but it can't overcome the faults of the other economic properties of bitcoin. And, if you ask my biased opinion, I would say that Decrits would have a significantly better chance of being the currency that people will use for trade. And there is no reason it couldn't facilitate the storage of wealth, either. You just aren't going to earn interest for doing so in a steady state economy (though you will in an expanding one), but nor will you lose value. Since it would have all the same valuable properties of a cryptocurrency, new people to the cryptocurrency market may fear being left holding the bag for bitcoin and avoid it altogether. Pure speculation though, of course.

wtf wtf? Why are you here if you think that there isn't something wrong with fiat? What is it that you think is wrong with it? Do the trace amounts of cocaine on bills bother you immensely? Can you manage to form complete sentences without help?

An atrociously asinine argument. But I'd expect nothing less from someone who will quote one sentence and attack that instead of comprehending the bigger picture. You don't get it, won't get it, refuse to get it because it's not in your best interest and doesn't fit the little picture of the world that you've painted for yourself.

Well, if we want to just play a game: if the money supply is M and then everyone's money doubles to M*2, then inflation has had absolutely no effect other than forcing everyone to update pricing.
If governments said "there will be X dollars created for each citizen" and paid out government employees in new money each year up to the amount of the increase in population (and the rest was brought in by taxes--and FRB was outlawed), then inflation would have virtually no effect on pricing or saving. Or hell, even if the government just created the money period, even if they create inflation, the new money goes to the bottom/middle of the chain (gov't employees and contractors), rather than supporting the trickle down reagonomics that has worked oh so well, we'd actually have something closer to keynesian economics I think. When the lower rungs get money, they spend it (or invest via saving) and the upper rungs benefit by being the employers and producers, when the upper rungs get money, they get million dollar bonuses and such.

I don't deny that there are leeches and there are producers in a society, and producers absolutely should be rewarded, but they will be rewarded without having the economic system simply slap them in the face with free money, as the current system provides and is the reality of why everyone on these boards thinks inflation is a terrible idea. Also because of the FDIC, and now the bank bailouts, and every other attempt that governments have made to intervene, the bankers are well aware that they can do whatever-the-fuck-they-please with this government given gift of creating money and they have no real risk. The middle class takes the risk by being forced to invest all of their money at the behest of bankers or render it effectively worthless in 10 or 15 years.

What a proper system should do is keep a relatively stable value of money so that the middle class can hedge their bets with both non-invested savings as well as invested savings, looking to achieve the "steady state" where overproduction and consumption is NOT encouraged because of the dwindling value of the currency. Because of how sick and twisted things have gotten, the bankers ARE the producers. Just look at all the megacorps that exist nowadays. Producing and banking are one in the same. Controlled by the same people. This is a terrible thing for society.

Investing would do a hell of a lot more to stabilize a currency than holding money. Money needs to circulate to be useful. I fail to see how holding money promotes trade; this is the exact opposite of what any bit of common sense would suggest. And it doesn't increase the value of the economy, it artificially increases the market cap on the exchange. This is not the same thing. And this was incredibly evident when all it took was maybe 100k BTC to take the price from $32 to $10. You mention the word interest again as if something useful was done, but nothing was. Again this is the same mechanism that banks use with FRB. Doing nothing to get something. That you think this is any different is the typical bitcoiner mentality and it is wrong. The only risk you take by holding BTC is that people get sick of this game, not any real investment risk. It is a stock, but no corporation that produces anything is behind this stock. Stocks don't do anything useful after they have purchased equity in a company (except perhaps give you voting power, but that is irrelevant here), and bitcoin doesn't even have that.

People are born into poverty because we haven't figured out how to stop those with the gold to stop stealing our productivity from us. For all the advancements we've made, we are still only one step away from a feudalist society, and those in power want to keep it that way. Just like those with lots of bitcoins have no issues with earning non-productive interest, because they'd rather be the ones with gold than the ones actually fixing the problem. Your third sentence is a total strawman, so I won't even bother with it.

I am well aware of this. If I were an honest person, which I try to be, it would behoove me to explain to people why bitcoin is not the answer and to shoot down those that unintentionally or intentionally try to promote a system that is dishonest, which I believe it to be. Can you fault me for that, even if you disagree? I am the one wasting time with absolutely no potential beneficial repercussions for myself here. I don't want any more slaves.

I am not ignoring the fact that people don't want their savings to devalue, it is not the topic of this thread. Inflation doesn't inherently cause savings to devalue--unfair, unequitably distributed inflation does. I am also not arguing that bitcoin needs to be fixed, I am arguing that it is flawed. It is flawed in a very similar way to keynesian fiat currency--it has a mechanism for unfair, unproductive profit that is ripe for abuse. This is how people become slaves to debt or to an elite. You can talk all you want about how bitcoin will become the next gold or whatever and I won't disagree that the possibility exists, but I will vehemently argue against anyone who thinks bitcoin will become a true, alternative currency that will be any better than the ones we currently have.

Well said and agreed.

But what you don't get is that inflation does not necessarily equal Keynes, just like deflation does not necessarily equal Austrian. And the god awful majority of you didn't know your ass from Austrian economics until you heard of bitcoin.

No, I'll buy food with the currency I actually have, because everyone will have a choice to either use the currency that sucks but is available, or the currency-like commodity that has a small set of rabid supporters who don't want to invest their money (or claim that they're investing in saving) and claim that consumption is teh debil.

Whatever though folks, enough of this revolving door of narrow arguments and inability to see bigger pictures, et al. Enjoy coveting your pet rocks.

In the currency that pays you for not trading. GREAT ANSWER

You are just a font of amazing new definitions. I wish I could redefine everything to fit my point of view, it would make life so much easier.

No, but the intent of the economy as a whole does.

Sorry that should say low time preference, but the point remains: interest rates will be very high and there will be little economic growth if everyone has a low time preference (read Menger! an Austrian!). Unless of course you have some solution for how the everyman will acquire bitcoins when half of them will have been mined in a few months?

I will give you the distinction between capital and money; however, the point remains that there is little incentive for money to become capital, and thus little economic growth. You are the one that is claiming that delaying consumption spurs economic growth, but that has to be traded off the form of high-risk, innovative pursuits according to Rostow, whom you quoted almost verbatim.

it's also a complete non sequitur to the discussion, but maybe if it's bolded and in a bigger font it will mean something more

oh back to proselytizing again, gotcha

If you're quoting Rostow or something unclescrooge, you're quite misguided. Big surprise there.

http://en.wikipedia.org/wiki/Rostow's_stages_of_growth


Explain to me how non-productive capital pursues innovation or accelerates the rate of growth in the economy. Or are we just going to say that capital sitting in a wallet accruing deflationary interest at little to no risk is productive again? Innovative, even?

Alternatively, please link me to your sources or the book you wrote explaining your statement.

Are you hard of reading? I said "earning interest for doing nothing", that is quite different from what you claimed I said.

And how does saving with the intent to destroy more goods later than less goods now solve anything? Hint: it doesn't. You are just trying to rationalize again. "lol maybe if i leave off half the equation he won't notice!"

I am not going to argue with the inane definition of investment that you've created to suit your own purposes. If you want to treat bitcoin itself as an investment, fine, but then it is a currency-like commodity, not a currency. And then you have the same issues of lack of production that a lack of putting money to use will incur.

Earning interest for doing nothing is exactly what banks do when they print money, but you want to suck on that same teat because you believe you're entitled and you must rationalize this in some other way.

:shrug: It depends on a lot of different things. If BTC remains the "cryptocurrency gold" then a new currency may not affect it much, and it will stay a store of value. If the new currency is the cat's meow and most people want it over BTC, then they will trade for it and the value of BTC will drop. This is the same scenario that if everyone decided they no longer wanted the dollar for BTC, the dollar's value would drop in a similar manner. I think a currency that emulates the economic properties of gold is a mistake and is doomed to lose out to something more like decrits, but that of course remains to be seen.

Ah I figured there were reasons. Carry on then.

Why pay out on a loss? Put that 10% in the winners column and save extra transactions imo. Also, a 10% cut seems a bit steep for an automated gambling game, maybe 5-7%?

How do you produce without investment? It is investment, after all, that is the problem that the OP has brought up. Saving is clearly not investing by any stretch of the imagination when it comes to bitcoin. In a typical fiat economy, saving is investing because banks are putting your money into investments. Here, that is not the case. It is not encouraging spending that we're looking for, it is encouraging investment. If investments are sane (which they are not when the people who control money printing leverage themselves a thousand times over), then production and spending will follow in a similar, sane manner.

Investment - Production - Consumption

I mentioned in the other thread where I was rabidly attacked by Realpra that regardless of consumer debt, government debt exists and forces us to work harder and longer and produce more than necessary because we are tied down by that debt, regardless if we have any of our own debt. It is a vicious circle that can only be escaped by getting rid of the notion of a currency based out of debt. So yes, bitcoin solves that problem--somewhat. Lopsided distribution based on luck still leaves an awful lot to be desired. The great majority of bitcoins can only enter the economy via debt. This is the same problem with gold and goldsmiths and moneylenders and what have you. Rather than any particular economic merit, it is only the luck of the mine that makes you rich. It is a silly concept that spawned thousands of years of servitude, and one that has no business being echoed by something touted as the future of money.