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Author Topic: Scaling bitcoin to world economy is unrealistic.  (Read 9797 times)
mobodick
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September 16, 2012, 03:43:33 PM
 #61

Yeah, but in the same 'technical' way fiat can also be kept alive...
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Fiat could be very strong in the hands of a trustworthy government - however with all the temptation in the world to print...

Bitcoin also could be very strong in the hands of a trustworthy government.
But:
1) show me a completely trustworthy government
Okay gahd; you JUST said that fiat and Bitcoin are equal on the technical side, I am trying to argue that in fact fiat is flawed relying on perfect government and then you attack me for believing in perfect government....... DUDE YOUR ARGUMENT WAS THAT FIAT IS SOUND TECHNICALLY, it's NOT MY argument.
No, i said that technically fiat also has technical stuff that make it function as currency.
So if current government screws fiat up i see no reason they could not screw up bitcoin. Just requies a different technique.
You spoke primarily about the (computer)technical qualities of bitcoin.
What i'm trying to say is that fiat does not suck because of its own technical flaws, it suck because some people have ammassed enourmous power within that system.
Nothing (technical or otherwise) about bitcoin will prevent people with masses of it from controling your world.
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Poor people can save all they want but they will be left behind by rich people that have the ability to save at a much faster (absolute) pace. So when (and this is just for illustration) a poor person saves 2 bitcoins a rich person can save 2000 bitcoins.
There is no such thing as "saving at a faster pace". You can EARN at a faster pace, but this requires creating wealth (or printing money).

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2. The elite cannot print bitcoin and so hoard less.
Whaa..?
If they cannot print and lend then the only way left for them to get more is by hoarding.
Again you cannot make money by looking at the money you already have... I honestly don't what you are thinking here.
With bitcoin you can.
Last year my bitcoin was worth $2, now it is worth almost 12.
The value of my stored bitcoin increased 6-fold within one year.
It's almost as good as a ponzi...
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This point of yours makes no sense whatsoever.
Makes perfect sense; today crony politicians print money and give to their donor companies. These companies are run by the crony elite and as such they get to own a greater percentage of the money supply while the poor just had their pensions inflated to oblivion.

Without the elite having the ability to print, the poor have a chance at saving and the elites can't get free money which makes them much less "elite" in the free market.

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Those are hardly facts and so your conclusion is shaky at best and a complete fantasy at worst.
1. Was inflation eats pensions and 2. was that bitcoins cannot be printed.... which one is NOT a fact?
If pensions are not inflation corrected then that means a stupid government, not stupid fiat.
You should primarily think about replacing the government instead of the currency system.
Look at me pointing to stupid governments and saying: "Well, thurs yer problem."
And your point 2 was, and i quote: "2. The elite cannot print bitcoin and so hoard less."
So you're right on the "The elite cannot print bitcoin" part but what makes this point having no sense is that you imply that it will lead to less hoarding.
And i still think that my point about that is still valid.
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If BTC was at 0% inflation/deflation then a poor dad saving up a steady amount for 10 years for his kids' college would be able to afford an exactly 11.7% more expensive education compared to same scenario with just 2% inflation.
But when the incentive is to not spend too much, who is going to take the risk of creating work for poor old father to build up his pension?
Who will be willing to spend their coins to loan coins so that he can start his risky wood-cutting imperium when all they have to do is sit there and see their value grow?

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Maybe you just don't understand how (any school of) economics works. "Hoarding at a faster pace", LOL.

Bitcoin is for the PEOPLE. Go away with your crazy theories about the early adopters - its nothing compared to Ben Bernankes 20% stake in the entire world economy.
Bitcoin is already not for 'the people' as there difference between many and few bitcoins will expand exponentially as value increases and coins will mostly move toward 'the strongest hands' (also known as 'not the people')
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hazek
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September 16, 2012, 03:51:37 PM
 #62

The world financial economy and the world tangible economy are 2 real different things. There is a reason if the USD economy is orders of magnitude bigger than the others. Just saying.

Anyway, I don't see why it couldn't happen in 100 years.

Apple shares grow 1000 times in 10 years.

Yeah, they were early adopters...
And that's why i'm critical of bitcoin when it comes to this.
This small community already owns almost half of the possible bitcoins.
And due to deflation everyone is much more greedy than normally.
How the hell will 99.99999% of the world (almost everyone) agree on using what's left (about half) of the total amount of bitcoin.
Wouldn't that create a much much worse imbalance then is already there in the world?


At first yes you are right, those of us right now holding a good chunk of coins would become quite a bit wealthier as new value is transferred into bitcoins but in the long run it would lessen this imbalance because there is no vehicle by which we can maintain this wealth other than saving or producing something of value. When we start spending and buying goods and services which are our real ends and not money.. Then our wallets will slowly start to shrink while other people, mainly those who produce something of value, will add to their wallets and since no one can be robbed through monetary inflation everyone would benefit.

It's a paradigm shift. There's going to be a huge transfer of value from those who hold a bad money to those who hold a good but that's a good thing because a good money encourages the best behaviors one can hope if ones goal is to live in a prosperous and free society.

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mobodick
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September 16, 2012, 03:53:11 PM
 #63

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So bitcoin will not solve our global social problem of skewed economic relations, it will accumulate even more wealth in an even smaller number of pockets.
Isn't that they way it's always been ever since the first caveman used a weapon to bring down dinner or picked all the berries in an area, but only shared them in exchange for services.  Technology is not going to supercede our nature.

No it's from when mankind first started farming and ownership of land became important.  Before that as hunter-gathers your only possessions were what you could carry.  Mankind lived under a form of anarco-socialism for most of its history.  Mankind has only lived under capitalism for a blink of an eye and with the current credit-crunch and banking crises things may be changing again?
Bullshit.
Mankind stems from monkeys and all monkeys (including humans) have a strong social hierarchy.
Strongest monkey gets the best food and fucks the most females.
There is nothing 'anarco' or 'socialistic' about the human situation.

If you want anarchy then look at how lions survive as family groups.
Humans don't work that way.


Deny over 200,000 years of mankind living as hunter gathers then.  Anyway I don't think you really know what anarcho-socialism really means  Roll Eyes  http://en.wikipedia.org/wiki/Social_anarchism

I'm not denying it, i'm just saying that people were always in a social hierarchy and especially in the hunter-gatherer situation that hierarchy of power dictated anything of value.
There was no anarchy and struggles for power were common.
There is no freedom if you're the bitch of the group.
You see the past as way to rosy. Reality in that time was harsh and lawless.
It was completely driven by physical dominance.
Humans dominating nature.
Stronger humans dominating weaker ones.
No fucking socialism.
Social anarchism is an artefact of modern society. No part of it goes further than a few hundred years.
Hunter gatherers lived hundreds of thousands of year ago.
They had no concept of socio-economics.
Strongest takes all and a group is stronger than an individual.
That was the system.

You are right insofar that humans only became aware of this situation when they settled and started to accumulate possesion.

hazek
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September 16, 2012, 03:55:18 PM
 #64

So we will never see an equal distribution of bitcoin.

Why on Earth would we want that?

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mobodick
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September 16, 2012, 03:59:25 PM
 #65

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I consider information to be a physical quantity.
I guess that's why you should be careful with your passwords around pickpockets right? /sarcasm (dripping)
If you mean that it's hard to pick someones brain i agree.
It is just hard.
But a memorized password it is still a physical expression of some information and can theoretically be picked.
Scientists can already, for instance, see the actual processed output of the visual cortex (http://www.youtube.com/watch?v=FLb9EIiSyG8).
Why do you think the information in a password cannot be extracted from your brain in the future?
As far as i understand it it won't be long before we can do such things.
Etlase2
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September 16, 2012, 03:59:38 PM
 #66

At first yes you are right, those of us right now holding a good chunk of coins would become quite a bit wealthier as new value is transferred into bitcoins but in the long run it would lessen this imbalance because there is no vehicle by which we can maintain this wealth other than saving or producing something of value. When we start spending and buying goods and services which are our real ends and not money.. Then our wallets will slowly start to shrink while other people, mainly those who produce something of value, will add to their wallets and since no one can be robbed through monetary inflation everyone would benefit.

It's a paradigm shift. There's going to be a huge transfer of value from those who hold a bad money to those who hold a good but that's a good thing because a good money encourages the best behaviors one can hope if ones goal is to live in a prosperous and free society.

Most of the "new value" you mention is actually "old value" to a "new currency". And you are right, no one can be robbed through monetary inflation (then again, this is totally untrue, $30 to $2 anyone???)--they will be robbed via monetary deflation.

mobodick
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September 16, 2012, 04:00:57 PM
 #67

If value rises, then it would be idiotic to spend it beyond nessesity.
Risky investments will be a lot less interesting and that is how money flows out of pockets.
Much much less coin will flow out of the pockets of the few into the pockets of the many than is currently happening.
The fact that value is a multiplication on the number of coins means that if value rises by one unit then someone with 10 BTC will get 10 times as much value as someone with 1 BTC.

The process of value growth of bitcoin intrinsically magnifies the difference of value per coin in an exponential way.
If you show this to be false then you may have a point.
Otherwise you're just having a fantasy.

There is no point in arguing bitcoin economics with people like DeathAndTaxes, Realpra, or evoorhees. They are heavily invested in this system and it is in their best interests to make sure that the wool stays pulled down.

Aah, ok, thanks for the heads-up.
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September 16, 2012, 04:01:46 PM
 #68

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So bitcoin will not solve our global social problem of skewed economic relations, it will accumulate even more wealth in an even smaller number of pockets.
Isn't that they way it's always been ever since the first caveman used a weapon to bring down dinner or picked all the berries in an area, but only shared them in exchange for services.  Technology is not going to supercede our nature.

No it's from when mankind first started farming and ownership of land became important.  Before that as hunter-gathers your only possessions were what you could carry. Mankind lived under a form of anarco-socialism for most of its history. Mankind has only lived under capitalism for a blink of an eye and with the current credit-crunch and banking crises things may be changing again?
Bullshit.
Mankind stems from monkeys and all monkeys (including humans) have a strong social hierarchy.
Strongest monkey gets the best food and fucks the most females.
There is nothing 'anarco' or 'socialistic' about the human situation.

If you want anarchy then look at how lions survive as family groups.
Humans don't work that way.


Deny over 200,000 years of mankind living as hunter gathers then.  Anyway I don't think you really know what anarcho-socialism really means  Roll Eyes  http://en.wikipedia.org/wiki/Social_anarchism

I'm not denying it, i'm just saying that people were always in a social hierarchy and especially in the hunter-gatherer situation that hierarchy of power dictated anything of value.
There was no anarchy and struggles for power were common.
There is no freedom if you're the bitch of the group.
You see the past as way to rosy. Reality in that time was harsh and lawless.
It was completely driven by physical dominance.
Humans dominating nature.
Stronger humans dominating weaker ones.
No fucking socialism.
Social anarchism is an artefact of modern society. No part of it goes further than a few hundred years.
Hunter gatherers lived hundreds of thousands of year ago.
They had no concept of socio-economics.
Strongest takes all and a group is stronger than an individual.
That was the system.

You are right insofar that humans only became aware of this situation when they settled and started to accumulate possesion.



Humans lived as hunter-gathers until less than 5,000 years ago.  There was no wars or power struggles other than those that exist in extended family life.  Just because you don't like the word "socialism" and you don't know what Anarcho-Socialism really means you can't argue with the basic human condition for most of its existence.

Edit:  Anyway this is off-topic and I did say "a form of Anarcho-Socialism".

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September 16, 2012, 04:02:37 PM
 #69

I think Bitcoin is intended to replace currency online, but not offline currency.

mobodick
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September 16, 2012, 04:03:42 PM
 #70


I'm sorry, but this only discusses the scalability of the technical process that makes up bitcoin.
It does not, however, discuss the scalability of bitcoin as a currency used in a social system like i set out to discuss in this thread.
It is completely off-topic.
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September 16, 2012, 04:04:18 PM
 #71

At first yes you are right, those of us right now holding a good chunk of coins would become quite a bit wealthier as new value is transferred into bitcoins but in the long run it would lessen this imbalance because there is no vehicle by which we can maintain this wealth other than saving or producing something of value. When we start spending and buying goods and services which are our real ends and not money.. Then our wallets will slowly start to shrink while other people, mainly those who produce something of value, will add to their wallets and since no one can be robbed through monetary inflation everyone would benefit.

It's a paradigm shift. There's going to be a huge transfer of value from those who hold a bad money to those who hold a good but that's a good thing because a good money encourages the best behaviors one can hope if ones goal is to live in a prosperous and free society.

Most of the "new value" you mention is actually "old value" to a "new currency". And you are right, no one can be robbed through monetary inflation (then again, this is totally untrue, $30 to $2 anyone???)--they will be robbed via monetary deflation.

There is no monetary deflation in Bitcoin - except of course if you lose your coins. But how can losing bitcoins be theft?

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September 16, 2012, 04:06:42 PM
 #72

I think Bitcoin is intended to replace currency online, but not offline currency.

I'm sorry, but reason and a calm answer are out of place on this thread.
mobodick
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September 16, 2012, 04:07:50 PM
 #73

Owning bitcoin still requires something physical and that can be taken from you and you lose control over your coins.

Say WHAT?! The Feds still can't read minds. Two people that trust each other can still trade bitcoins by word of mouth.
Yes, and with current progress of technology, how long do you think that will last?
One of the new cool things being done lately is taking high resolution real-time cat scans where you can see every neuron in your brain as it processes information.
There are also big steps being taken towards our complete uderstanding of how information is transfered  processed in the brain (which, for instance, alows for eye protheses and such) so if i'm honest it's just a matter of time before we have tools to read peoples minds.

edit: Two people can trade bitcoin all they want, but if no bitcoin is transfered through the chain (which requires lots of physical stuff) then the are effectively trading IOU's, not bitcoin.
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September 16, 2012, 04:11:27 PM
 #74

Yes, and with current progress of technology, how long do you think that will last?

By that reasoning, buggy-whip factories should have gone out of business as soon as word of the internal combustion engine got out.

Business is conducted on what is, not what might be.
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September 16, 2012, 04:13:54 PM
 #75

There is no monetary deflation in Bitcoin - except of course if you lose your coins. But how can losing bitcoins be theft?

You got me. I award you one internet point.

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Most of the "new value" you mention is actually "old value" to a "new currency". And you are right, no one can be robbed through monetary inflation--they will be robbed via monetary deflation.

Now respond to that post or I will remove your internet point. Smiley

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September 16, 2012, 04:15:29 PM
 #76

I am only going by what you said:


Since I realized the potential of Bitcoin I have been blessing my stars, not because I got to get in early and maybe will become wealthy, but because of what it will do to the world.

Just because you rationalize it doesn't mean you didn't say it.
I meant that as early in a 50-100 years time-frame. I am by no means an early adopter sitting on 400.000 btc like some are.

If Bitcoin is a ponzi, or whatever you believe, I would loose a lot and talking Bitcoin up on a forum would do diddly for me.

I am a blood donor too, is it really so hard to believe that I actually care about other people and genuinely think BTC would help them out?

Right, "facts" being "what I and people who agree with me post on a message board backed by nothing but our own opinions".
Dude: (1.02^1+1.02^2+....+1.02^10)/10 IS, by the laws of mathematics, 1.117 or 11.7% more value to a college fund.

But I guess not believing in math and the positivist principle (our other debate) fits perfectly with disbelief in cryptocurrency.

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 author=mobodick
But when the incentive is to not spend too much, who is going to take the risk of creating work for poor old father to build up his pension?
People have invested since WAY before fiat currencies and inflation. People are investing BTC NOW on GLBSE. People are working at mtgox NOW.

So to answer your question: "Historically speaking, going back infinite years or just 1; someone".

You are the one that cannot explain why people will NOT invest/spend BTC or other deflationary currency or why they are doing it now contrary to your theories.

There is no point in arguing bitcoin economics with people like DeathAndTaxes, Realpra, or evoorhees.
Add me to your list. That's good company.
Thanks Cheesy

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Etlase2
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September 16, 2012, 04:24:55 PM
 #77

I meant that as early in a 50-100 years time-frame. I am by no means an early adopter sitting on 400.000 btc like some are.

:shrug: what you said is open to interpretation, what I said was open to interpretation ("heavily")

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If Bitcoin is a ponzi, or whatever you believe, I would loose a lot and talking Bitcoin up on a forum would not do diddly for me.

I don't think bitcoin is ponzi. I think bitcoin has brought a lot of good things into the world. But the pyramid structure of the currency is not one of them.

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I am a blood donor too, is it really so hard to believe that I actually care about other people and genuinely think BTC would help them out?

When people foam at the mouth to obvious concerns like the OP and are incapable of rationally discussing that hey, maybe there IS something wrong with this scenario, then yes, I find it hard to believe. Because if you were generally interested in the well being of people, you would be able to rationally discuss these issues.

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Dude: (1.02^1+1.02^2+....+1.02^10)/10 IS, by the laws of mathematics, 1.117 or 11.7% more value to a college fund.

Proving that increasing the money supply increases the money supply does not prove either:

1) That inflating the money supply is bad (there are many better arguments)
or
2) That a fixed currency is good

Haven't we gone over some basic logic syllogisms before?

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But I guess not believing in math and the positivist principle (our other debate) fits perfectly with disbelief in cryptocurrency.

Why must you resort to a strawman? I have a link for a freakin alternative cryptocurrency in my sig, how could I possibly disbelieve in cryptocurrency?

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September 16, 2012, 04:27:10 PM
 #78

mobodick, I haven't read this entire thread.

But as far as your OP goes: you point out the one problem I have with bitcoin. It may be more or less of a problem than I realize, but it is a problem.
mobodick
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September 16, 2012, 04:37:09 PM
 #79

The world financial economy and the world tangible economy are 2 real different things. There is a reason if the USD economy is orders of magnitude bigger than the others. Just saying.

Anyway, I don't see why it couldn't happen in 100 years.

Apple shares grow 1000 times in 10 years.

Yeah, they were early adopters...
And that's why i'm critical of bitcoin when it comes to this.
This small community already owns almost half of the possible bitcoins.
And due to deflation everyone is much more greedy than normally.
How the hell will 99.99999% of the world (almost everyone) agree on using what's left (about half) of the total amount of bitcoin.
Wouldn't that create a much much worse imbalance then is already there in the world?


At first yes you are right, those of us right now holding a good chunk of coins would become quite a bit wealthier as new value is transferred into bitcoins but in the long run it would lessen this imbalance because there is no vehicle by which we can maintain this wealth other than saving or producing something of value. When we start spending and buying goods and services which are our real ends and not money..  
Well, that would be true if it were not for the fact that by the time bitcoin is heavily used worldwide it would value at some incredible amount.
With my current humble bitcoin wallet i could then live off of, say, 0.0001 percent of my bitcoins for the rest of my life. I would have to put insignificant amounts of it into the economy to sustain myself.
So maybe you're right that there is an equalizing force that will affect bitcoin, but such a process would be slooow.
Meanwhile there are other forces that are much stronger than that that will move coins towards the 'collectors'. A lot of it will be in the form of:"You want to lend money? Sure, it'll be 20% per week. You no like it? Tough luck buster, there are no regulations to protect you and I have the moneys."

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Then our wallets will slowly start to shrink while other people, mainly those who produce something of value, will add to their wallets and since no one can be robbed through monetary inflation everyone would benefit.
Sure, if you keep assuming that government induced inflation is the only way to reduce general wealth.

Quote


It's a paradigm shift. There's going to be a huge transfer of value from those who hold a bad money to those who hold a good but that's a good thing because a good money encourages the best behaviors one can hope if ones goal is to live in a prosperous and free society.

It's a pretty big and fundamentally ideological assumption that everyone has the same goal that you have in mind.
Wake up and smell the coffee.
It is not how humans work and bitcoin will not change that.
You think noone will feel greedy in a bitcoin society?
You think noone will try to make a quick buck on somebody elses account?
You think whishes for you to live in a free society?
Think again.

Most of the problems concerning money are social problems, not monetary problems.
It's just that the social problems tend to express themselfs as monetary problems.
But fixing it from the monetary perspective is like applying adhesive bandage to a broken bone.
...
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September 16, 2012, 04:42:55 PM
 #80

The OP question is indeed very important. I have some doubts, too.

Either the time will prove the Bitcoin idea as wrong and noone will care (and current early adopters will loose).
Or it will prove as fundamental and great idea - but then it will be STOLEN.

You may ask how one could stole Bitcoin. Simply. Setup alternative currency and offer you multi-million user base (Apple users, US tax payers, etc.) an easy way how to cooperate in new virtual currency based on similar ideas, but INCOMPATIBLE with current Bitcoin.

Check the IQ distribution curve. There is not enough geek to fight with average Joe.

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