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Author Topic: Why does Bitcoin subsidize saving?  (Read 8315 times)
Etlase2
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August 31, 2012, 12:36:05 PM
 #61

oh back to proselytizing again, gotcha

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According to NIST and ECRYPT II, the cryptographic algorithms used in Bitcoin are expected to be strong until at least 2030. (After that, it will not be too difficult to transition to different algorithms.)
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kjj
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August 31, 2012, 12:37:11 PM
 #62

Money is not riches, it's representation of riches.

Money is not riches, it's representation of riches.

Money is not riches, it's representation of riches.

Put another way, money is not wealth.  Money is what you use to purchase wealth.

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Etlase2
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August 31, 2012, 12:38:45 PM
 #63

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

unclescrooge
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August 31, 2012, 12:41:59 PM
 #64

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

yes it is central to the discussion. Letting money sit in a wallet is not the same as letting real capital (let's say a machine) in a garage.
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August 31, 2012, 12:43:36 PM
 #65

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.
It is astonishing to me that you would consider earning money to be "doing nothing" but destroying goods to be something worth encouraging.

Are you hard of reading? I said "earning interest for doing nothing", that is quite different from what you claimed I said.
You earn the interest for earning money. "Saving" means earning money.

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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!"
Your future intent does not affect the consequences of your actions.

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August 31, 2012, 12:46:00 PM
 #66

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

Ok.  It is already bold, I can't make it bolder.  How about red?

Money is not riches, it's representation of riches.

Your posts make it clear that you do not understand this distinction.  Here is a recent example:

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?

Capital does not sit in wallets.

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Etlase2
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August 31, 2012, 01:08:40 PM
 #67

You earn the interest for earning money. "Saving" means earning money.
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.

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Your future intent does not affect the consequences of your actions.
No, but the intent of the economy as a whole does.

Quote from: me
the expected outcome on encouraging a high time preference is that either: 1) investment dwindles and there are very few "goal-oriented jobs" and people without money suffer (though this may be somewhat specific to bitcoin and the lack for need of a banking system); or 2) consumption rates will eventually equalize and it will just be older people that consume more now that money will have no meaning sooner rather than later.
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?

Quote from: unclescrooge
yes it is central to the discussion. Letting money sit in a wallet is not the same as letting real capital (let's say a machine) in a garage.
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.

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August 31, 2012, 01:22:33 PM
 #68

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?

Trade.

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Etlase2
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August 31, 2012, 01:26:15 PM
 #69

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?

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

unclescrooge
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August 31, 2012, 01:32:19 PM
 #70

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?

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

So even if you're starving you won't buy food but you'll keep your money because it doesn't lose value with time passing?
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August 31, 2012, 01:37:27 PM
 #71

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?

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

Flip it around.  The dollar is inflationary.  Every time you sell something, you could have gotten more dollars by waiting until tomorrow.

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Etlase2
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August 31, 2012, 01:48:32 PM
 #72

So even if you're starving you won't buy food but you'll keep your money because it doesn't lose value with time passing?
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.

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August 31, 2012, 02:03:39 PM
 #73

So even if you're starving you won't buy food but you'll keep your money because it doesn't lose value with time passing?
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.

Sorry dude, this is a hotbed of rabid anti-Keynesians.  We get it that you prefer that your money inflate, we simply disagree, and we have our reasons.  You have a high bar to pass if you want to convince us, and reductio ad absurdum isn't going to be enough.

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Etlase2
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August 31, 2012, 02:28:16 PM
 #74

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.

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August 31, 2012, 02:36:06 PM
 #75

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.
What you don't get (or are deliberately ignoring) is that people don't want their savings to devalue over time. You are loudly arguing that Bitcoin needs to be "fixed" to stop offering people what they want because people shouldn't want it.

A lot of vested interests are doing very well right now because everybody else has limited choices with regards to storing deferred consumption so I'm not surprised to see people desperately trying to hamper the idea that alternatives are possible from spreading.
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August 31, 2012, 02:36:30 PM
 #76

Flip it around.  The dollar is inflationary.  Every time you sell something, you could have gotten more dollars by waiting until tomorrow.
Kjj, that is a beautiful point. I hadn't even thought of this!

Every "deflationist"/"austrian economist"/what-ever should memorize that one.

In both scenarios, inflation/deflation, what pays best is simply the highest possible interest rate at the lowest risk/investment possible.

Only in deflationary economies no government gets to manipulate the market.


As for Etlase2 I think he is an economist student or something, I just argued with him in another thread which derailed in similar fashion as this one.
Pity him and the other economists.

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kjj
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August 31, 2012, 02:41:07 PM
 #77

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.

Meh.  Bitcoin was designed to gradually stop inflating.  As a result, it attracts the interest of people that don't like inflation, people that don't like seeing their savings erode over time.

I personally don't believe any sort of economist much more than I believe witch doctors. * At least Austrians tend to promote smaller government.

* Except Steve Keen, to some extent.  He does some really good work of the "trying to understand what is happening" variety, which I sadly see as very lacking among economists in general.

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Etlase2
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August 31, 2012, 02:49:24 PM
 #78

What you don't get (or are deliberately ignoring) is that people don't want their savings to devalue over time. You are loudly arguing that Bitcoin needs to be "fixed" to stop offering people what they want because people shouldn't want it.
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.

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A lot of vested interests are doing very well right now because everybody else has limited choices with regards to storing deferred consumption so I'm not surprised to see people desperately trying to hamper the idea that alternatives are possible from spreading.
Well said and agreed.

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August 31, 2012, 03:28:34 PM
 #79

You earn the interest for earning money. "Saving" means earning money.
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.
It has nothing to do with definitions. Saving money consists of earning it and then not doing anything else with it.

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August 31, 2012, 10:03:49 PM
 #80

Inflation doesn't inherently cause savings to devalue--unfair, unequitably distributed inflation does.

Define "equitable distribution."

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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.

Holding Bitcoins doesn't guarantee profit.  It is a risky act that helps to stabilize the currency, promote trade, and increase the value of the economy.  The "profit" gained by doing so (or loss perhaps) can be considered the interest earned by the original resources used to purchase the Bitcoins to begin with, invested in the Bitcoin economy as a whole.

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This is how people become slaves to debt or to an elite.

People become slaves to debt by being born into poverty.  Bitcoin doesn't cause this, and has no obligation to prevent it.  It is, in fact, encouraged by the "democratic" per capita demurrage schemes you are promoting, which subsidize the creation of consumers at the expense of savers.

You are free to start an altchain at any time.  You are not a slave to Bitcoin.

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