Bitcoin Forum
December 09, 2016, 09:51:57 AM *
News: To be able to use the next phase of the beta forum software, please ensure that your email address is correct/functional.
 
   Home   Help Search Donate Login Register  
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 »
  Print  
Author Topic: Deflation and Bitcoin, the last word on this forum  (Read 128473 times)
Nefario
Hero Member
*****
Offline Offline

Activity: 602


GLBSE Support support@glbse.com


View Profile WWW
June 07, 2011, 12:01:10 PM
 #61

Nefario, did you lock this thread or was Guy Inkognito?

http://forum.bitcoin.org/index.php?topic=11582.msg163681#msg163681

I really want to reply on it.


Yes I locked.

Locked for reason.


PGP key id at pgp.mit.edu 0xA68F4B7C

To get help and support for GLBSE please email support@glbse.com
1481277117
Hero Member
*
Offline Offline

Posts: 1481277117

View Profile Personal Message (Offline)

Ignore
1481277117
Reply with quote  #2

1481277117
Report to moderator
1481277117
Hero Member
*
Offline Offline

Posts: 1481277117

View Profile Personal Message (Offline)

Ignore
1481277117
Reply with quote  #2

1481277117
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
Babylon
Sr. Member
****
Offline Offline

Activity: 336



View Profile
June 07, 2011, 04:57:47 PM
 #62


You are either new or joking. It looks like it's the former.

Yes, i'm new in this forum. I don't know why you get the impression that i'm joking.


alexk

No, we are not going to change bitcoin protocol just because you arrived. All those things you've talked about have been discussed over and over. You should either accept built-in deflation or leave bitcoin economy, that's my advice.

I don't think he is trying to change Bitcoins, I think he is looking to develop a new and better alternative.

Sedo
Newbie
*
Offline Offline

Activity: 23


View Profile
June 08, 2011, 01:52:15 PM
 #63

How will the Deflation affect the Investment behaviour?

Say you expect BTC to have a 5% higher Buying power within a year. When you lend somebody 1000 BTC for 1 year, then their business would need to have an expected ROI of at least 5% + (reasonable interest rate that factors in the your risks of loss, etc..) + (their own profits (they needs to earn something, right?) ). I dont know much about profit expectations in economy, but is this not a high threshold?

It might become a common scenario, that you wont find investments that meet these high requirements, so people who have bitcoin will just let them sit in their wallets and accept the 5% p.a. gain.

On the other hand if you have a business plan, which is not highly profitable, maybe just breaking even, then you wont find investors or if you do, run a high risk of not being able to pay the debts by the end of the year.

I am not judging it yet, I dont know if this is a good or a bad thing. Maybe it makes perfect sense to not start a business unless it seems really promising. Maybe it will lead to more reasonable usage of our ressources? I have no clue.

Thoughts anyone? Am I missing something?
Catallaxy
Newbie
*
Offline Offline

Activity: 10


View Profile
June 09, 2011, 03:03:40 AM
 #64

How will the Deflation affect the Investment behaviour?

No, it doesn't look to me like you're missing anything. I would say, maybe, loans would be made on large projects where return was great, such as energy plants. If the loan was denied, people could more easily save up the capital themselves to invest in a small project. This could encourage more small businesses, innovation and competition if people don't have to take out credit to start a business. There would probably be fewer people buying lattes on credit.

Business owners wouldn't get tricked by the ready availability of credit into misallocating resources on long-term projects like housing where there wasn't genuine demand represented by savings. So by the time all the people who should have gone into science got done building the houses out of the material that should have gone to say, solar panels, there would actually be people with money to buy the houses, instead of now where everyone is bankrupt, had no savings to begin with, or no longer has credit. Jesus Huerta de Soto explains this well: http://www.youtube.com/watch?v=uF9RG3hyBZU
jtimon
Legendary
*
Offline Offline

Activity: 1246


View Profile WWW
June 09, 2011, 03:16:42 PM
 #65


So a 10% deflation rate not only wouldn't be a problem but would in fact be good for the economy: amazing.
I'm starting to get as tired of your "deflation is good" dogma as I am of the keynesian "printing during a crisis is the only solution" one.

2 different forms of free-money: Freicoin (free of basic interest because it's perishable), Mutual credit (no interest because it's abundant)
Catallaxy
Newbie
*
Offline Offline

Activity: 10


View Profile
June 09, 2011, 03:38:53 PM
 #66

There ought to be a way to ignore people on these forums.
vrotaru
Jr. Member
*
Offline Offline

Activity: 35


View Profile
June 09, 2011, 04:47:14 PM
 #67


So a 10% deflation rate not only wouldn't be a problem but would in fact be good for the economy: amazing.
I'm starting to get as tired of your "deflation is good" dogma as I am of the keynesian "printing during a crisis is the only solution" one.


Are you saying that goods getting more affordable/abundant at a rate of 10% per year is a bad thing?

You see, the only reason there can be a 1/5/10 % price deflation in an economy with a stable money supply (and that what bitcoin aims to provide) is because there are more goods chasing the same amount of money. How bad can that be?

And the only reason there are more goods is because people have found ways of producing them more efficiently, i.e. cheaper. Doesn't sound like a horror to me.
jtimon
Legendary
*
Offline Offline

Activity: 1246


View Profile WWW
June 09, 2011, 06:07:21 PM
 #68


So a 10% deflation rate not only wouldn't be a problem but would in fact be good for the economy: amazing.
I'm starting to get as tired of your "deflation is good" dogma as I am of the keynesian "printing during a crisis is the only solution" one.


Are you saying that goods getting more affordable/abundant at a rate of 10% per year is a bad thing?

You see, the only reason there can be a 1/5/10 % price deflation in an economy with a stable money supply (and that what bitcoin aims to provide) is because there are more goods chasing the same amount of money. How bad can that be?

And the only reason there are more goods is because people have found ways of producing them more efficiently, i.e. cheaper. Doesn't sound like a horror to me.

I get your point and I agree, but be careful, because some people can misunderstand your first sentence.
If prices drop because goods are more abundant (or their production becomes cheaper), better for society.
But a drop in prices is not necessarily good (just as a nominal increase in wages is not always good).

My extreme example of 10% deflation was directed for those who are saying that deflation is good from the financial perspective.
That kind of deflation rate is probably only possible due to credit contraction (destruction of the money created by banks) and with a monopoly on money.
Anyway, a deflation like that would have catastrophic effects for trade and investing. What upsets me is that some people deny this.

When the value of bitcoin becomes more stable than it is today, it won't have a deflation like that for two reasons:

1) Being free software, bitcoin will never have a monopoly on money.
2) Governments can't regulate fractional reserve effectively because people don't need banks to store bitcoins as much as they need them to store (and transact with) national currencies.
 
In summary, I'm not much concerned with bitcoin's future deflation, but that's far from saying that deflation is good.

2 different forms of free-money: Freicoin (free of basic interest because it's perishable), Mutual credit (no interest because it's abundant)
vrotaru
Jr. Member
*
Offline Offline

Activity: 35


View Profile
June 09, 2011, 06:36:33 PM
 #69

I get your point and I agree, but be careful, because some people can misunderstand your first sentence.
If prices drop because goods are more abundant (or their production becomes cheaper), better for society.
But a drop in prices is not necessarily good (just as a nominal increase in wages is not always good).

My extreme example of 10% deflation was directed for those who are saying that deflation is good from the financial perspective.
That kind of deflation rate is probably only possible due to credit contraction (destruction of the money created by banks) and with a monopoly on money.
Anyway, a deflation like that would have catastrophic effects for trade and investing. What upsets me is that some people deny this.


Great! Sure, deflation as topic of discussions is very prone to misunderstanding. As if price and money deflation was not enough there's confusion about painful and harmful effects of deflation. A post-bubble deflation is certainly painful. Does not necessarily make it (the deflation) harmful.

Also I do not think that a 10% deflation is such an extreme example. Take the case of 1920-1921 depression, when wholesale prices falling almost 40% from 1920 to 1921.

From:  http://books.google.com/books?id=190xVQDRtHAC&lpg=PP1&pg=PA111#v=onepage&q&f=false

A fascinating read the history of that depression. A few pages later: "Economy recovered despite of high rates..."
IntestingIdea
Newbie
*
Offline Offline

Activity: 1


View Profile
June 10, 2011, 01:14:41 AM
 #70

There is an interesting proposal for fixed fiat currencies written in July 2009, written by Cynicus Economicus. He discusses the question of deflation at some length, and provides some interesting arguments. I am aware that this is a subject of controversy, but this is well worth a read. It almost exactly mirrors the principles for Bitcoin, and was written in 2009:

http://cynicuseconomicus.blogspot.com/2009/07/reforming-money-fixed-fiat-currency.html

The introduction is a bit windy, but stick with it.

Trader Steve
Hero Member
*****
Offline Offline

Activity: 725


"How do you eat an elephant? One bit at a time..."


View Profile
June 10, 2011, 05:05:46 PM
 #71

See Also:

Bitcoin And The Virtue of Hoarding And Deflation - by Anthony Freeman
http://j.mp/ixg5sx
Andrew Vorobyov
Hero Member
*****
Offline Offline

Activity: 565



View Profile
June 11, 2011, 12:11:08 AM
 #72

Totally agree with Suggester...  These hurricanes on Bitcoin charts are not good for it.
I understand that we will definitely grow out of this things but they are HUGE obstacle for adoption by large businesses now...
No idiot will associate his business with such volatility.

I really don't understand why we can't have x% ( but fixed ) per year inflation or let it generate forever...

Of course it will drive away "get-rich-quick" guys... but who needs them anyway?

Only small percent of people see what BTC has to offer to the world others just wait to cash out their billions of USD...

Andrew Vorobyov
Hero Member
*****
Offline Offline

Activity: 565



View Profile
June 11, 2011, 12:50:45 AM
 #73

Ok, read full thread... people here need examples to understand things..

Have you ever been fucking when it is dry there?

Deflation kills lending... no lending - things slow down... and can stop eventually...

Take human body and blood example...

The root of your anger for inflation lies in UNCONTROLLED money printing by governments and ABUSING power of money distribution between closed circles...

BTC introduces mechanism to eliminate this problems...

I don't even want to comment on "I need money to start x - go earn it!"...






Fakeman
Full Member
***
Offline Offline

Activity: 154



View Profile
June 11, 2011, 09:43:15 PM
 #74

How can you earn money in bitcoins, aside from mining? I wouldn't mind correcting OCR or identifying images (e.g. google image labeler) in my spare time if someone paid me. Quality control is easy enough to automate by cross checking the results as a lot of sites do already when they have volunteers do these things, and there could be extra bonuses for high accuracy. The 'employer' gets a database that can be used to train higher quality image recognition software, or perhaps they use the results directly for something. Also, potentially someone doing such a project could rent out GPU time from individuals or pools by paying out bitcoins at a rate a little better than mining currently gives.

16wEsax3GGvJmjiXCMQUWeHdgyDG5DXa2W
AntiVigilante
Member
**
Offline Offline

Activity: 98



View Profile
June 11, 2011, 11:46:19 PM
 #75

Ok, read full thread... people here need examples to understand things..

Have you ever been fucking when it is dry there?

Deflation kills lending... no lending - things slow down... and can stop eventually...

Take human body and blood example...

The root of your anger for inflation lies in UNCONTROLLED money printing by governments and ABUSING power of money distribution between closed circles...

BTC introduces mechanism to eliminate this problems...

I don't even want to comment on "I need money to start x - go earn it!"...

I'm lending. I expect BTCs back.

Proposal: http://forum.bitcoin.org/index.php?topic=11541.msg162881#msg162881
Inception: https://github.com/bitcoin/bitcoin/issues/296
Goal: http://forum.bitcoin.org/index.php?topic=12536.0
Means: Code, donations, and brutal criticism. I've got a thick skin. 1Gc3xCHAzwvTDnyMW3evBBr5qNRDN3DRpq
afterburner229
Jr. Member
*
Offline Offline

Activity: 42


View Profile
June 14, 2011, 12:15:28 PM
 #76

As I predicted earlier, bitcoin society has already started to freeze.

Not because built-in deflation mechanism,

but because of THE WRONG PARAMETERS of such a mechanism. THE WRONG PARAMETERS does normalize bitcoin society to be frozen @ equilibrium point ~ 10 000 people world-wide.

If you were selected ANOTHER TRUE PARAMETERS with the same built-in deflation, bitcoin society might grow & reach 1 000 000 peple w-w online daily.


AntiVigilante
Member
**
Offline Offline

Activity: 98



View Profile
June 14, 2011, 12:36:45 PM
 #77

As I predicted earlier, bitcoin society has already started to freeze.

Not because built-in deflation mechanism,

but because of THE WRONG PARAMETERS of such a mechanism. THE WRONG PARAMETERS does normalize bitcoin society to be frozen @ equilibrium point ~ 10 000 people world-wide.

If you were selected ANOTHER TRUE PARAMETERS with the same built-in deflation, bitcoin society might grow & reach 1 000 000 peple w-w online daily.

Don't project your failure to evolve on me. Kthx.

I'm already doing loans.

Proposal: http://forum.bitcoin.org/index.php?topic=11541.msg162881#msg162881
Inception: https://github.com/bitcoin/bitcoin/issues/296
Goal: http://forum.bitcoin.org/index.php?topic=12536.0
Means: Code, donations, and brutal criticism. I've got a thick skin. 1Gc3xCHAzwvTDnyMW3evBBr5qNRDN3DRpq
afterburner229
Jr. Member
*
Offline Offline

Activity: 42


View Profile
June 14, 2011, 01:36:55 PM
 #78

Don't project your failure to evolve on me. Kthx.

I'm already doing loans.

Let's wait for next difficulty change & see:

http://bitcoincharts.com/markets/
----------------------------------
Difficulty   567358
Estimated   847588 in 286 blks
----------------------------------
Vince Torres
Sr. Member
****
Offline Offline

Activity: 337


View Profile
June 14, 2011, 08:54:15 PM
 #79

The only thing deflation does is make the early adopters very, very rich people.

Namecoin.com .bit domain registrar. Register a new .bit domain for just $1!
BTC: 1LpKzg24NHmrxLZbnVphcstV3s7uA8cSnT
LTC: LWHswCFRPouCXTNiT8B9HUVnGrae9eojVg
MoonShadow
Legendary
*
Offline Offline

Activity: 1666



View Profile
June 14, 2011, 10:11:08 PM
 #80

The only thing deflation does is make the early adopters very, very rich people.

Maybe, maybe not.  We will yet see.  Regardless, this experiment is only two years old.  You are and early adopter, if you so choose to be.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
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 »
  Print  
 
Jump to:  

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!