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Omega Weapon
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January 14, 2018, 06:34:11 PM |
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The real world worked with a currency like that for longer than the current system, and that was gold and silver, both are limited in quantity, you can extract more but there is a limit to how much you can extract every year, similar to the process of mining in bitcoin, so no, real economies could work with a model like this and in fact economies will thrive under it since the inflation will be way lower than right now. |
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NicG13
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January 14, 2018, 07:49:50 PM |
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That's why Bitcoin will be more like gold than a mainstream currency. Alternative inflationary cryptocurrencies will come to the fore to support economic growth at scale.
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Hydrogen
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January 14, 2018, 11:25:23 PM |
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...if they are to be used for REAL WORLD money transfer and usage!!! Simply the fact that they operate with a limited supply, makes it so... Do you know any fiat-currencies with a limited money supply? No, because that would be just too stupid, right? Well guess what, that's what 99% of the crypto"currencies" use. .... Remember there is something called a burden of proof that is important to science and logic. If someone wants to claim something is "stupid" they must provide evidence or some type of reasoning to support their views. You claim limited supply is "stupid". Well, what's "stupid" about it?  I would be very curious to hear your reasoning for this. On the flipside, one might say that currencies which can be printed without limit enable large deficits, wasteful and inefficient spending and poor budgeting practices. With unlimited supply, many governments assume if they make a mistake with the budget, they can simply print more money to fix whatever mistakes were made. Over the long term, this might explain how some nations have massive deficits which were accumulated through overprinting of fiat currencies, rather than fixing fundamental issues relating to inefficiencies, waste or fraud in state spending By contrast, a crypto currency with limited supply could force governments to make a better effort with spending responsibly and efficiently. There is less room for error when a government can't simply "print its way out of debt". I think those are the basic arguments. Somehow I doubt anyone will ever address or respond to them. Here's an interesting quote from your friend's piece: Assets or objects suitable for investment or speculation must by their nature contradict those conditions and is not fit to function as money in this context. I wonder if your friend realizes every fiat currency on earth is open to investment and speculation on forex markets? There'sa lot of money that can be made buying hyperinflated currencies like the zimbabwe dollar or venezuelan bolivar if they recover. |
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davis196
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January 15, 2018, 07:32:46 AM |
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Limited supply doesn`t matter, because we can divide bitcoin or any other currency into smaller parts.
If one bitcoin couldn`t be divided into smaller parts,limited supply might be a problem.By the way,i wonder how the blockchain would look like,if the bitcoin couldn`t be divided and we were sending and receiving only
16 million btc.This would exclude all the small spammy 0.0001 btc transactions that make the blockchain stuck.Anyway,i don`t want to read FUD articles,OP.
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jseverson
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January 15, 2018, 09:29:49 AM |
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...if they are to be used for REAL WORLD money transfer and usage!!! Simply the fact that they operate with a limited supply, makes it so... Do you know any fiat-currencies with a limited money supply? No, because that would be just too stupid, right? Well guess what, that's what 99% of the crypto"currencies" use. .... Remember there is something called a burden of proof that is important to science and logic. If someone wants to claim something is "stupid" they must provide evidence or some type of reasoning to support their views. You claim limited supply is "stupid". Well, what's "stupid" about it? I would be very curious to hear your reasoning for this.
On the flipside, one might say that currencies which can be printed without limit enable large deficits, wasteful and inefficient spending and poor budgeting practices. With unlimited supply, many governments assume if they make a mistake with the budget, they can simply print more money to fix whatever mistakes were made. Over the long term, this might explain how some nations have massive deficits which were accumulated through overprinting of fiat currencies, rather than fixing fundamental issues relating to inefficiencies, waste or fraud in state spending By contrast, a crypto currency with limited supply could force governments to make a better effort with spending responsibly and efficiently. There is less room for error when a government can't simply "print its way out of debt". I think those are the basic arguments. Somehow I doubt anyone will ever address or respond to them. Here's an interesting quote from your friend's piece: Assets or objects suitable for investment or speculation must by their nature contradict those conditions and is not fit to function as money in this context. I wonder if your friend realizes every fiat currency on earth is open to investment and speculation on forex markets? There'sa lot of money that can be made buying hyperinflated currencies like the zimbabwe dollar or venezuelan bolivar if they recover. He's probably comparing it to the way the current economy works. Fiat is inflationary by design, in part to spur spending. Bitcoin being deflationary can be a cause of concern, because it encourages HODLing rather than spending. If Bitcoin were the only currency available, few would want to spend, because what they spend today could be worth more tomorrow. The economy would be stagnant, and may lead to a collapse. I don't agree that it's stupid that Bitcoin is designed that way, but I do agree that it comes with certain complications. I have no idea how that could be addressed in the future, and I'm not even completely convinced Bitcoin will kill fiat anyway, but I don't think we'll even have to think about this problem in our lifetimes. |
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Omega Weapon
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January 19, 2018, 01:12:20 AM |
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...if they are to be used for REAL WORLD money transfer and usage!!! Simply the fact that they operate with a limited supply, makes it so... Do you know any fiat-currencies with a limited money supply? No, because that would be just too stupid, right? Well guess what, that's what 99% of the crypto"currencies" use. .... Remember there is something called a burden of proof that is important to science and logic. If someone wants to claim something is "stupid" they must provide evidence or some type of reasoning to support their views. You claim limited supply is "stupid". Well, what's "stupid" about it? I would be very curious to hear your reasoning for this.
On the flipside, one might say that currencies which can be printed without limit enable large deficits, wasteful and inefficient spending and poor budgeting practices. With unlimited supply, many governments assume if they make a mistake with the budget, they can simply print more money to fix whatever mistakes were made. Over the long term, this might explain how some nations have massive deficits which were accumulated through overprinting of fiat currencies, rather than fixing fundamental issues relating to inefficiencies, waste or fraud in state spending By contrast, a crypto currency with limited supply could force governments to make a better effort with spending responsibly and efficiently. There is less room for error when a government can't simply "print its way out of debt". I think those are the basic arguments. Somehow I doubt anyone will ever address or respond to them. Here's an interesting quote from your friend's piece: Assets or objects suitable for investment or speculation must by their nature contradict those conditions and is not fit to function as money in this context. I wonder if your friend realizes every fiat currency on earth is open to investment and speculation on forex markets? There'sa lot of money that can be made buying hyperinflated currencies like the zimbabwe dollar or venezuelan bolivar if they recover. He's probably comparing it to the way the current economy works. Fiat is inflationary by design, in part to spur spending. Bitcoin being deflationary can be a cause of concern, because it encourages HODLing rather than spending. If Bitcoin were the only currency available, few would want to spend, because what they spend today could be worth more tomorrow. The economy would be stagnant, and may lead to a collapse. I don't agree that it's stupid that Bitcoin is designed that way, but I do agree that it comes with certain complications. I have no idea how that could be addressed in the future, and I'm not even completely convinced Bitcoin will kill fiat anyway, but I don't think we'll even have to think about this problem in our lifetimes. A currency that encourages saving is a great currency, the economy will have to work differently instead of having a bunch of useless crap, business will have to make an effort to get our money so the quantity of products build will go down but the quality will go up as a result, many things are created just to last a certain amount of time before you need to replace it, in this economy quality will become more important and to me that is a good thing. |
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Hydrogen
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January 19, 2018, 04:26:22 AM |
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He's probably comparing it to the way the current economy works. Fiat is inflationary by design, in part to spur spending. Bitcoin being deflationary can be a cause of concern, because it encourages HODLing rather than spending. If Bitcoin were the only currency available, few would want to spend, because what they spend today could be worth more tomorrow. The economy would be stagnant, and may lead to a collapse. I don't agree that it's stupid that Bitcoin is designed that way, but I do agree that it comes with certain complications. .... That's an interesting analysis. I think a good place to start breaking that down would be to check if spending were significantly different during eras when a gold standard were in place. The concept of inflationary currencies spurring spending is an urban myth. In many instances what we need isn't higher spending, its smarter spending or greater efficiency and cost effective solutions in how currency is spent. There is also an interesting relationship between HODL and stability. A case could be made for a capital gains tax and relatively high commissions in the US stock market being an incentive to encourage HODL. When bitcoin markets were structured more along HODL lines than the rampant speculation we see now, its price was much more stable. There's another angle here where investments banks with leverage contribute towards economic and financial instability and need to be bailed out of their bad investments. HODL and long term strategies tend to be more reliable and stable than short term high spending or leverage plans. Banks which HODL via utilizing stable long term planning, typically never need to be bailed out. One of the reasons leverage and high spending plans are encouraged involves short term thinking and high risk attempts at profiteering. This contributes towards the 2008 economic crisis and many other negative implications society faces. It doesn't make much sense to criticize long term HODL, which tends to be more stable and reliable than the short term, high risk, ventures which politicians and investment banks favor. If you want another angle to this, look at budget deficits. Looking at the european union or united states deficit, would they conclude: "we need higher spending"? Eh. I don't think so. This idea which politicians and investment bankers push, which says we must tax and spend our way out of debt. I wish more would question that perspective. |
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krishnapramod
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January 19, 2018, 06:01:19 AM |
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From a store-of-value perspective, a deflationary cryptocurrency is always far better than an inflationary one, but a capped monetary model would definitely cause fluctuations in price, it's like two contradictory things happening, retaining purchasing power and unstable purchasing power. It encourages hoarding/saving and limits spending, not eliminates it, but restricts its usage as a medium of exchange. On a small scale, we already have seen how Bitcoin is being used as medium of exchange/cross-border transactions in economies wrecked by inflation. Bitcoin has all the three attributes of money, functioning more as a store-of-value now, but until it gets adopted on a large scale we wouldn't know whether it would be serving all the three purposes and its impact on economic growth. A few cryptocurrencies are working on in-built mechanisms to achieve a price-stable equilibrium, but again we haven't seen how a decentralized deflationary censorship-resistant monetary model is going to have an impact in the long-term, too early to point out it as a flaw.
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michkima
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January 19, 2018, 06:31:36 AM |
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The real world worked with a currency like that for longer than the current system, and that was gold and silver, both are limited in quantity, you can extract more but there is a limit to how much you can extract every year, similar to the process of mining in bitcoin, so no, real economies could work with a model like this and in fact economies will thrive under it since the inflation will be way lower than right now. I agree with this, actually gold and silver are the main assets actually backing your fiat. Gold and silver are very rare nowadays as we have excavated so much of it and it is far too difficult to get them. Just like how bitcoins are. This is the reason why Bitcoins will still be a good alternative as it has the same concept and that it is something we can trust to be true. |
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Albert211994
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January 19, 2018, 06:35:14 AM |
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That is what cryptocurrency is avoiding, unlimited inflation because of unlimited supply. Any fiat currency continues to inflate because the government keeps printing those fiat without anything backing it up. |
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serjent05
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January 19, 2018, 06:47:48 AM |
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Limited supply doesn`t matter, because we can divide bitcoin or any other currency into smaller parts.
If one bitcoin couldn`t be divided into smaller parts,limited supply might be a problem.By the way,i wonder how the blockchain would look like,if the bitcoin couldn`t be divided and we were sending and receiving only
16 million btc.This would exclude all the small spammy 0.0001 btc transactions that make the blockchain stuck.Anyway,i don`t want to read FUD articles,OP.
It does matter but it depends on what is the purpose of that cryptocurrency and what they aim to be in the future. But I think Bitcoin aim is to be a deflationary currency that will appreciate in value overtime just like gold. With that i believe it is not flawed since it meets it purpose. It might be flawed to some minds but to those who understand the actual purpose of cryptocurrency, it is just perfect. |
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dinofelis
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January 19, 2018, 06:58:28 AM |
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You are obviously right. But the "currency" narrative of bitcoin was only to get it going, to give it a sense of economic utility. It is in fact a highly speculative asset, which is, as you say, in contradiction with the notion of currency. By definition, a currency is to be gain-neutral, because it is supposed to be a space and time translation of economic value. That's its whole utility: that you shouldn't worry about the value it carries, because it is the same, in and out. This is what Nash defined as "ideal money". Most fiat currencies, however, are not ideal money, because they have some inflation built into them. Nevertheless, if this inflation is predictable and constant, that's a good substitute for ideal money ; it is what Nash called "asymptotic ideal money". There are idiots who say that Nash is Satoshi, but Nash would never have built a stupid monetary system built on collectibles with high initial inflation - unless he was a bastard tricking people into his pyramid game, of course. As some wrote, gold, a near-collectible, has had the function of money some times. But most of the time in history, money has been a trust-based asset, with only a remote link to gold, simply because the monetary theory based upon collectibles doesn't work. Yes, it has value ! But it is so volatile, that it cannot fluidify commercial relationships. Exactly like bitcoin. Bitcoin COULD have had an almost ideal behaviour, simply by programming its difficulty along a technology slope, so that each coin mined did cost about the same amount of value. That would have regulated the coin issuing so that it would behave something like Tether. If the value rises, people mine more coins because it is profitable ; if the value falls, people stop mining them, and they become scarce. If ever Nash would have been Satoshi, he would have done a thing like that. The difficulty-adjustment to a finite amount of coins is what turns it into a speculative asset which prevents it from being a currency ever. |
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Omega Weapon
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January 29, 2018, 10:37:15 PM |
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The real world worked with a currency like that for longer than the current system, and that was gold and silver, both are limited in quantity, you can extract more but there is a limit to how much you can extract every year, similar to the process of mining in bitcoin, so no, real economies could work with a model like this and in fact economies will thrive under it since the inflation will be way lower than right now. I agree with this, actually gold and silver are the main assets actually backing your fiat. Gold and silver are very rare nowadays as we have excavated so much of it and it is far too difficult to get them. Just like how bitcoins are. This is the reason why Bitcoins will still be a good alternative as it has the same concept and that it is something we can trust to be true. In fact the current problem with fiat is that is not backed with anything, paper currency could work if it was tied to gold and governments could not print more of it until they got more gold, but the problem is that if they did that they will have to be fiscally responsible something they seem to be allergic, do not forget that fiat means command so fiat currency only has value because governments say so. |
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inillo
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January 29, 2018, 11:22:16 PM |
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Several flaws on your theory here, that even a "member" of this club can spot. - Cryptos are used in "real" transactions in many places in the world. - There are many cryptos that are not only a store of value, but actually do something. Ethereum has the smart contracts, NEO, NEM, ... - There are utility tokens and dividend tokens. But, hey,... just don hodl  |
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amishmanish
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January 30, 2018, 05:19:48 AM |
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The article is fine with a lot of assumption but I don't understand your misleading headline. It is not talking about flaws in the system but is proposing a solution where "everybody can work in their own sweet time to earn currencies". His basic argument is that work = money. This sounds promising but at the end, if anybody and everybody can mine according to their willingness or capacity, without any entry barriers, then that would be the answer to all problems. In reality, the present system is the same. You can still earn according to your willingness and capacity. Giving away free money without the underlying understanding or work is never possible. People who are earning bitcoin aren't just doing it by mining. They are doing it through trading, selling goods and services over internet, making art and selling it. There are people over at Steemit who are earning cryptos by blogging and contributing the community in general. The system still works. It allows anyone to earn according to their time and investment. The basic premise that Bitcoin doesn't allow this because apparently only miners earn the reward is flawed. The currency once mined comes into circulation in the market. The circulated currency is now up for grabs according to your participation in the market. Those miners cannot just hoard all the bitcoin. How are they supposed to fund their businesses and running costs? Whats amazing is that there is a system of checks in-built to keep the transaction rules in consensus. That is enabled by running a full-node which anybody can do. I don't see how a system can be secure and effective for exchange without a third party and still offer the same power to normal users and small businesses over decision making. |
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selen
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January 30, 2018, 10:52:29 AM |
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limited supply is not a flaw, and that does not limit growth in value. the good thing it does is inflation control, manipulations with printing money, corruption
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