USD vs BTC

[danherbias07]

if the state of bitcoin prices have remained stable and positive ride like today, I believe, over time, bitcoin will be positioned parallel to or exceeds USD. maybe today bitcoin is more common in the sum in the form usd, but someday, UDS will be sticking to the bitcoin. bitcoin will be growing over the times

Wait. There is gold which also got a large sum of value. But still it sticks to USD when it comes to ranging its price. We dont know that exactly and will US let that happen. We know they have their pride when it comes to being the strongest currency. There will be a fight with that.

[deisik]

In a thread filled with broken English and even more broken economic understanding, i should probably only take the time to reply to one.  So I picked yours  

Bitcoin is the most regulated and orderly currency ever conceived.  Every transaction - every newly issued token - is publicly auditable and verifiable.  Imagine if you asked fiat issuers to be so regulated and orderly.  Lol right?  No chance

Cherry-picking at its best (or worst)

I could just as well claim that everything in this world is regulated by the laws of nature and Bitcoin is not regulated any better or in a more orderly manner since it is basically the same laws that are regulating Bitcoin too. And so what? The question is about Bitcoin being regulated by governments, or degree thereof, and whether this regulation is possible in the manner as fiat is being regulated. It is not so much about Bitcoin itself and its public ledger, the blockchain, but about what people are allowed to do with their bitcoins and what they are prohibited from doing, which is what government regulation ultimately boils down to

You could indeed claim this, with regards to the laws of nature, and you'd be exactly right.  The Earth's orbit is regulated by gravity, weather by physics, sure.  

However the context here is more specific.  As you say: "What people are allowed to do with their bitcoins".  Well for one, they aren't allowed to issue them in private at no cost - fiat currencies are issued in private in arbitrary amount at no cost.  If you understand the phenomenon of "regulatory capture" you can see clearly how the precise and complete regulation of bitcoin issuance and transactions FAR FAR outweighs in efficacy any so-called regulation by e.g the office of the comptroller of currency or the federal reserve board.  Perhaps it is cherry picking to call a spade a spade.  If so, I am guilty as charged

Your argument is very shaky

Basically, you claim that algorithm that defines precisely how and in which amounts Bitcoin should be mined has precedence over government regulations in respect to Bitcoin. Obviously, this point I can't possibly agree with. Let's remain realists, and if the US or Chinese government outright bans Bitcoin with severe criminal prosecution of Bitcoin holders as well as traders, this ban will have more serious consequences on the Bitcoin price than any of "the precise and complete regulation(s) of bitcoin issuance". Ultimately, it is the price that matters, right? But if it hits the floor due to government interference, would the preciseness and completeness of Bitcoin issuance have any meaning then?

[Betwrong]

is bitcoin more popular than US Dollar ?

Obviously Bitcoin is not more popular than USD. The vast majority of the people still have no idea what Bitcoin is. I think the question is better be put this way: " Is bitcoin more popular than US Dollar among Bitcoin users?" And even to that question I think the answer is no.

[mrbigmugs]

if the state of bitcoin prices have remained stable and positive ride like today, I believe, over time, bitcoin will be positioned parallel to or exceeds USD. maybe today bitcoin is more common in the sum in the form usd, but someday, UDS will be sticking to the bitcoin. bitcoin will be growing over the times

to me i think there is no comparison between the two. because to me bitcoin is a digital currency but USD is a fiat currency but if we consider their popularity the we can see that i will chose bitcoin because it has a bright future.

[funkenstein]

You could indeed claim this, with regards to the laws of nature, and you'd be exactly right.  The Earth's orbit is regulated by gravity, weather by physics, sure. 

However the context here is more specific.  As you say: "What people are allowed to do with their bitcoins".  Well for one, they aren't allowed to issue them in private at no cost - fiat currencies are issued in private in arbitrary amount at no cost.  If you understand the phenomenon of "regulatory capture" you can see clearly how the precise and complete regulation of bitcoin issuance and transactions FAR FAR outweighs in efficacy any so-called regulation by e.g the office of the comptroller of currency or the federal reserve board.  Perhaps it is cherry picking to call a spade a spade.  If so, I am guilty as charged

You argument is very shaky

Basically, you claim that algorithm that defines precisely how and in which amounts Bitcoin should be mined has precedence over government regulations in respect to Bitcoin. Obviously, this point I can't possibly agree with. Let's remain realists and if the US or Chinese government outright bans Bitcoin with severe criminal prosecution of Bitcoin holders as well as traders, this ban will have more serious consequences on the Bitcoin price than any of "the precise and complete regulation(s) of bitcoin issuance". Ultimately, it is the price that matters, right? But if it hits the floor due to government interference, would the preciseness and completeness of Bitcoin issuance have any meaning then?

A specific precedence, yes, that is my argument.  Precedence in terms of efficacy.  Public, precise, and verifiable specification actually works in regulating the money supply.  A selection of people in private with no possible oversight - won't work effectively.  The difference is akin to replacing the voltage regulator in your car with a group of bickering robots all who would benefit from charging their own batteries with the voltage passing through.  Which is a better regulator? 

As to the other topic you bring up..  can you think of an example where prohibition DECREASED the price of something?  The only example I can come up with is the 500 rupee note in India, and that isn't quite fair because prior to the prohibition the prohibiters were accepting the things in trade for e.g. tax receipts.  The psychologists among us might also point out that prohibition could even further increase the already increasing adoption rate. 

Another problem with prohibition of public coins is that it is even more impossible to carry out than prohibition of scheduled drugs (which can't even be kept out of prisons).  Public coins can be stored in anything, from inside your own head to steganographed in facebook photos to hidden in the text of this post.  Such a prohibition would be akin to saying "you can't speak swahili" - solely a carte blanche for facists to prosecute anyone they like - meanwhile of course the fascists doing so will be taking bribes in bitcoin.  Regulatory capture again. 

[Lomperd1]

is bitcoin more popular than US Dollar ?

Obviously Bitcoin is not more popular than USD. The vast majority of the people still have no idea what Bitcoin is. I think the question is better be put this way: " Is bitcoin more popular than US Dollar among Bitcoin users?" And even to that question I think the answer is no.

Nope, the dollar is way bigger and the bitcoin is growing but the dollar stays a lot bigger and also way more used too.

[Dapallo]

The dollar will still win it over and over again, its simply too strong and the bitcoin first needs to grow a lot more before it can really compare itself even to the dollar.

[deisik]

You could indeed claim this, with regards to the laws of nature, and you'd be exactly right.  The Earth's orbit is regulated by gravity, weather by physics, sure. 

However the context here is more specific.  As you say: "What people are allowed to do with their bitcoins".  Well for one, they aren't allowed to issue them in private at no cost - fiat currencies are issued in private in arbitrary amount at no cost.  If you understand the phenomenon of "regulatory capture" you can see clearly how the precise and complete regulation of bitcoin issuance and transactions FAR FAR outweighs in efficacy any so-called regulation by e.g the office of the comptroller of currency or the federal reserve board.  Perhaps it is cherry picking to call a spade a spade.  If so, I am guilty as charged

You argument is very shaky

Basically, you claim that algorithm that defines precisely how and in which amounts Bitcoin should be mined has precedence over government regulations in respect to Bitcoin. Obviously, this point I can't possibly agree with. Let's remain realists and if the US or Chinese government outright bans Bitcoin with severe criminal prosecution of Bitcoin holders as well as traders, this ban will have more serious consequences on the Bitcoin price than any of "the precise and complete regulation(s) of bitcoin issuance". Ultimately, it is the price that matters, right? But if it hits the floor due to government interference, would the preciseness and completeness of Bitcoin issuance have any meaning then?

A specific precedence, yes, that is my argument.  Precedence in terms of efficacy.  Public, precise, and verifiable specification actually works in regulating the money supply.  A selection of people in private with no possible oversight - won't work effectively.  The difference is akin to replacing the voltage regulator in your car with a group of bickering robots all who would benefit from charging their own batteries with the voltage passing through.  Which is a better regulator?

I don't remember you come up with anything of substance in the discussion of fixed (as defined by an algo) versus adjustable (through a sort of a feedback loop) money supply. So we are basically back to that topic. If that is your point, than no, these regulations, which essentially come down to firmly setting how many coins are mined on a daily basis, can't possibly be more efficient than dynamic money supply if done properly. If this is not what you wanted to say, please clarify what you mean by efficacy and what exactly it refers to...

It is not a thing which exists all by itself

As to the other topic you bring up..  can you think of an example where prohibition DECREASED the price of something?  The only example I can come up with is the 500 rupee note in India, and that isn't quite fair because prior to the prohibition the prohibiters were accepting the things in trade for e.g. tax receipts.  The psychologists among us might also point out that prohibition could even further increase the already increasing adoption rate

Do you really believe that a universal Bitcoin ban will spur the prices up? The psychologists among us cannot even agree whether the recent price hike is due to real adoption or just price manipulation by rogue Chinese miners

[cellard]

if the state of bitcoin prices have remained stable and positive ride like today, I believe, over time, bitcoin will be positioned parallel to or exceeds USD. maybe today bitcoin is more common in the sum in the form usd, but someday, UDS will be sticking to the bitcoin. bitcoin will be growing over the times

to me i think there is no comparison between the two. because to me bitcoin is a digital currency but USD is a fiat currency but if we consider their popularity the we can see that i will chose bitcoin because it has a bright future.

Both USD and BTC are digital currencies... this is what people often forget. It's not like paper money makes for any relevant amount of the USD supply, all money is digital, cash is a small % used to move that digital money around, and soon all money will be digital since they will remove physical coins and dollar bills, same goes for euro and all the other fiat coins in the world, so what we are looking at is an scenario where we will have only 2 options:

1) centralized government electronic money
2) decentralized electronic money (bitcoin)

[deisik]

if the state of bitcoin prices have remained stable and positive ride like today, I believe, over time, bitcoin will be positioned parallel to or exceeds USD. maybe today bitcoin is more common in the sum in the form usd, but someday, UDS will be sticking to the bitcoin. bitcoin will be growing over the times

to me i think there is no comparison between the two. because to me bitcoin is a digital currency but USD is a fiat currency but if we consider their popularity the we can see that i will chose bitcoin because it has a bright future.

Both USD and BTC are digital currencies... this is what people often forget. It's not like paper money makes for any relevant amount of the USD supply, all money is digital, cash is a small % used to move that digital money around, and soon all money will be digital since they will remove physical coins and dollar bills, same goes for euro and all the other fiat coins in the world, so what we are looking at is an scenario where we will have only 2 options:

1) centralized government electronic money
2) decentralized electronic money (bitcoin)

These options are not mutually exclusive

Strictly speaking, what you consider as centralized government money (fiat) is no less decentralized than Bitcoin itself. The way in which fiat money is created (e.g. through bank loans) can hardly be called centralized by any means. Commercial banks operate in this respect very much like Bitcoin miners and create new money out of thin air just like the miners do. Regarding transferring funds, digital fiat transfers, for example, instant payments are also processed in a pretty much decentralized manner through instant payment notifications (i.e. not involving a central bank or government)

[agamasrori]

The dollar will still win it over and over again, its simply too strong and the bitcoin first needs to grow a lot more before it can really compare itself even to the dollar.

The amount of bitcoin transaction is increase quickly. So many service and goods that we can buy with bitcoin. In china bitcoin is used for move the wealth to outside of country. Some fiat is already close to worthless, I think we only need to wait until USD become worthless. Thats my opinion.

[nobody911]

is bitcoin more popular than US Dollar ?

They are not the same type of goods, can not be categorically compared. Bitcoin can only be regarded as a digital commodity, it is in a baby, only 8 years old. The dollar has a long history, and its position is now no money can shake. Bitcoin as an investment product is very popular, the more stable bitcoin, it is closer to the value of the storage tool, and eventually become a currency. By then, bitcoin will usher in a new era, which may need to wait 5 to 10 years.

[funkenstein]

A specific precedence, yes, that is my argument.  Precedence in terms of efficacy.  Public, precise, and verifiable specification actually works in regulating the money supply.  A selection of people in private with no possible oversight - won't work effectively.  The difference is akin to replacing the voltage regulator in your car with a group of bickering robots all who would benefit from charging their own batteries with the voltage passing through.  Which is a better regulator?

I don't remember you come up with anything of substance in the discussion of fixed (as defined by an algo) versus adjustable (through a sort of a feedback loop) money supply. So we are basically back to that topic. If that is your point, than no, these regulations, which essentially come down to firmly setting how many coins are mined on a daily basis, can't possibly be more efficient than dynamic money supply if done properly. If this is not what you wanted to say, please clarify what you mean by efficacy and what exactly it refers to...

It is not a thing which exists all by itself

Thanks for your reply.  Yes I should be more clear about efficacy of regulation, I refer to the ability to regulate the money supply.  If you look through documents describing what various regulators with names like Comptroller of Currency and Federal Reserve Board are supposed to be regulating, it is precisely this.  And how well do they do?  Well the outlook is grim as there's no way for us to even measure.  Clearly the supply rises exponentially as issuers take their profits and support projects they approve of but by how much?  All we can do is look at increases in housing prices and make our own inferences.  With bitcoin we know *exactly*  and every person can precisely verify that the money supply is regulated according to specification.  This difference is clear and we can make the obvious statement that bitcoin supply is far more regulated than privately issued coins, do you agree? 

By the way what do you mean by feedback loop?  Do you refer to the difficulty adjustment?  A supply which is adjustable at no cost by people who have personal reasons to adjust it will without a doubt adjust.  Put yourself in the shoes of a private currency issuer and ask how you would manage it. If you are going to argue that this is anything other than catastrophic to the economy as a whole, I'd be very interested to hear how you figure. 

As to the other topic you bring up..  can you think of an example where prohibition DECREASED the price of something?  The only example I can come up with is the 500 rupee note in India, and that isn't quite fair because prior to the prohibition the prohibiters were accepting the things in trade for e.g. tax receipts.  The psychologists among us might also point out that prohibition could even further increase the already increasing adoption rate

Do you really believe that a universal Bitcoin ban will spur the prices up? The psychologists among us cannot even agree whether the recent price hike is due to real adoption or just price manipulation by rogue Chinese miners

Yes, I believe the prices would go up.  Also the spreads.  Just like gold in India now.  Or alcohol in 1920s Chicago.  This would just be a blanket funneling of assets into the hands of criminals, just like all other prohibition of goods.  What on earth would "manipulation by rogue Chinese miners" mean?  Bitcoin doesn't care about your passport or what language you speak..  a miner is a miner..  and manipulation is just like any other market - performed by market makers.

Cheers --     

[deisik]

A specific precedence, yes, that is my argument.  Precedence in terms of efficacy.  Public, precise, and verifiable specification actually works in regulating the money supply.  A selection of people in private with no possible oversight - won't work effectively.  The difference is akin to replacing the voltage regulator in your car with a group of bickering robots all who would benefit from charging their own batteries with the voltage passing through.  Which is a better regulator?

I don't remember you come up with anything of substance in the discussion of fixed (as defined by an algo) versus adjustable (through a sort of a feedback loop) money supply. So we are basically back to that topic. If that is your point, than no, these regulations, which essentially come down to firmly setting how many coins are mined on a daily basis, can't possibly be more efficient than dynamic money supply if done properly. If this is not what you wanted to say, please clarify what you mean by efficacy and what exactly it refers to...

It is not a thing which exists all by itself

Thanks for your reply.  Yes I should be more clear about efficacy of regulation, I refer to the ability to regulate the money supply.  If you look through documents describing what various regulators with names like Comptroller of Currency and Federal Reserve Board are supposed to be regulating, it is precisely this.  And how well do they do?  Well the outlook is grim as there's no way for us to even measure.  Clearly the supply rises exponentially as issuers take their profits and support projects they approve of but by how much?  All we can do is look at increases in housing prices and make our own inferences.  With bitcoin we know *exactly*  and every person can precisely verify that the money supply is regulated according to specification.  This difference is clear and we can make the obvious statement that bitcoin supply is far more regulated than privately issued coins, do you agree?

Well, you just clarified what I had been suspecting

Namely, that regulation of fiat money supply sucks due to corrupt money regulators and that kind of thing. I won't argue this point (for the sake of simplicity, not because I agree with it). Let's assume that you are right, I mean in respect to fiat regulation. But we are still hanging around that former topic about fixed versus dynamic money supply. Now, Bitcoin with its totally predetermined money supply becomes the only currency out there. So could it possibly be any better than another scheme which takes into account the size of the economy (which either expands or contracts but never remains the same) through a feedback loop mechanism (that's what I mean)? I guess in the latter case it will be Bitcoin's turn to suck heavily

[funkenstein]

Namely, that regulation of fiat money supply sucks due to corrupt money regulators and that kind of thing. I won't argue this point (for the sake of simplicity, not because I agree with it). Let's assume that you are right, I mean in respect to fiat regulation. But we are still hanging around that former topic about fixed versus dynamic money supply. Now, Bitcoin with its totally predetermined money supply becomes the only currency out there. So could it possibly be any better than another scheme which takes into account the size of the economy (which either expands or contracts but never remains the same) through a feedback loop mechanism (that's what I mean)? I guess in the latter case it will be Bitcoin's turn to suck heavily

Hehe well I'm all ears in regards to some kind of feedback loop mechanism based on "size of economy".  The idea seems to be a nonstarter but perhaps we can work on it and give it wings. 

First of all we'd have to have some metric of what we are trying to do.  Why would giving miners / issuers more or less return for their work at a given time be helpful?  Changing the absolute number of tokens in existence changes nothing - just like a stock split changes nothing.  However changing the distribution (who has what fraction of the total) could in theory make a difference..  but to what end?  Would the goal be a more even distribution?  A distribution that favors people with a certain ability?  These are possibilities.  For your idea to move we need to state clearly the quantity we are trying to maximize or minimize with our variable money supply.  Who needs to get these dynamically issued tokens and in order to do what?  It seems to me this could only cause problems, but I'm open to suggestion. 

Then, we need to figure out some way for the relevant quantities to be verifiable and public.  Without this we are back to the stone ages of rule-by-counterfeit and deceit.  If you want to have the mining reward go up if there are more birds, for example, then you need a public verifiable method of counting the birds.  I don't see this as being possible.  If you want token issuance tied to agricultural production, then you need a way for the public to verify agricultural production.  Even absent any reason for doing this, how could we do this? 

To paraphrase: 1) why would we want to adjust the mining / issuance schedule?   2)  How could such adjustment be verifiable? 

 

     

[deisik]

Namely, that regulation of fiat money supply sucks due to corrupt money regulators and that kind of thing. I won't argue this point (for the sake of simplicity, not because I agree with it). Let's assume that you are right, I mean in respect to fiat regulation. But we are still hanging around that former topic about fixed versus dynamic money supply. Now, Bitcoin with its totally predetermined money supply becomes the only currency out there. So could it possibly be any better than another scheme which takes into account the size of the economy (which either expands or contracts but never remains the same) through a feedback loop mechanism (that's what I mean)? I guess in the latter case it will be Bitcoin's turn to suck heavily

Hehe well I'm all ears in regards to some kind of feedback loop mechanism based on "size of economy".  The idea seems to be a nonstarter but perhaps we can work on it and give it wings

There is nothing new under the moon

You talk about corrupt regulators, but you seem not to understand that most money in the economy is created endogenously, i.e. not through printing it (figuratively speaking) by a central bank or government ("corrupt regulators"), though they can certainly do it, for example, through so-called quantitative easings. Money is created through loans that commercial banks give in pretty much the same decentralized manner as bitcoins are mined. And this is the feedback loop mechanism that I'm talking about and which Bitcoin pathetically lacks. When the economy expands, producers take loans to expand their production (that would mean an increase in real wealth), and this leads to more money being created by banks. When the economy shrinks, producers either go belly up and their loans are written off with equipment auctioned, or they themselves liquidate part of their business to pay back the loans (that would mean a decrease in real wealth). Thus money gets destroyed, again fully endogenously, according to the needs of the economy. Just in case, I already know what question you are going to ask which as you think will challenge this mechanism (people always think that they know something which others don't)

To paraphrase: 1) why would we want to adjust the mining / issuance schedule?   2)  How could such adjustment be verifiable?     

I'm not talking about Bitcoin or any other coin which uses some algo for determining the required amount of money. I guess it cannot be done algorithmically in any imaginable way. Something like that Gosplan had tried to do in the former Soviet Union but failed miserably

[funkenstein]

Money is created through loans that commercial banks give in pretty much the same decentralized manner as bitcoins are mined.

This doesn't make any sense to me, sorry.  We need to have something before we can loan it out.  Money is not "created through loans", it is issued (at no cost in the case of fiat) and THEN - loaned out to people lower in the interest rate apartheid food chain.  Money given to people (or created and loaned) at the discretion of the issuers or the next people down the chain is by no means the same decentralized manner as public coin.  Private coin is an unverifiable hierarchy of secrecy at each step.  How do we figure this is much the same as a public verifiable system with no preferred decision makers? 
 

And this is the feedback loop mechanism that I'm talking about and which Bitcoin pathetically lacks.

Well some of us consider it a feature not a bug.  The inability to counterfeit it annoys those who think that certain individuals should be able to counterfeit all moneys, perhaps thinking that certain individuals are more knowledgeable and might know when and where it is needed.  Others of us prefer that which cannot be counterfeit by anyone.  I for one enjoy seeing the competition between these in the marketplace.  Gresham's law as a spectator sport

When the economy expands, producers take loans to expand their production (that would mean an increase in real wealth), and this leads to more money being created by banks. When the economy shrinks, producers either go belly up and their loans are written off with equipment auctioned, or they themselves liquidate part of their business to pay back the loans (that would mean a decrease in real wealth). Thus money gets destroyed, again fully endogenously, according to the needs of the economy. Just in case, I already know what question you are going to ask which as you think will challenge this mechanism (people always think that they know something which others don't)

In this case you know something I don't because I'm not sure the question you refer to.  One such question might be: what do you mean precisely by "the economy expands"?  Some indexes like some ways to calculate a fiat GDP also are dependent on how much new fiat is being issued, hence - the feedback, which leads to these indices losing their utility at some point in the fiat "business cycle" you began describing. A perhaps still more interesting question would be what is "real wealth".  I doubt any two people would agree on the answer to that one   Thankfully businesses and individuals now can choose whether they wish to be at the mercy of those deciding "whether the economy is doing well" (and whether they will have their economic tokens destroyed) - or they could use a public verifiable system that nobody can interfere with.  My bet is that more and more people will choose the latter.   

To paraphrase: 1) why would we want to adjust the mining / issuance schedule?   2)  How could such adjustment be verifiable?     

I'm not talking about Bitcoin or any other coin which uses some algo for determining the required amount of money. I guess it cannot be done algorithmically in any imaginable way. Something like that Gosplan had tried to do in the former Soviet Union but failed miserably

It might be worth asking how some potentially worthwhile system couldn't be specified (aka done algorithmically).  Anyway thanks for pointing me to Gosplan material, interesting reading.  cheers - 

[deisik]

Money is created through loans that commercial banks give in pretty much the same decentralized manner as bitcoins are mined.

This doesn't make any sense to me, sorry.  We need to have something before we can loan it out.  Money is not "created through loans", it is issued (at no cost in the case of fiat) and THEN - loaned out to people lower in the interest rate apartheid food chain.  Money given to people (or created and loaned) at the discretion of the issuers or the next people down the chain is by no means the same decentralized manner as public coin.  Private coin is an unverifiable hierarchy of secrecy at each step.  How do we figure this is much the same as a public verifiable system with no preferred decision makers?

Banks only need borrowers which should meet a bank's criteria for loaning to them

If you don't of course mean by something borrowers, it pretty much proves that you don't fully understand how modern monetary system works  (otherwise I don't quite understand myself what you meant to say). You won't believe me but I met a guy here who pretended to be a banker himself and who tried to ridicule me at first but he was in for a pretty rude awakening when confronted with what real bankers (for example, the former governor of the Bank of England) say themselves. After that I haven't heard a word from him, whether he is a real banker and not a plumber in some obscure bank office. And yes, money created in this way (through loans) is not very different from how bitcoins are mined in respect to centralization or lack thereof

Well some of us consider it a feature not a bug.  The inability to counterfeit it annoys those who think that certain individuals should be able to counterfeit all moneys, perhaps thinking that certain individuals are more knowledgeable and might know when and where it is needed.  Others of us prefer that which cannot be counterfeit by anyone.  I for one enjoy seeing the competition between these in the marketplace.  Gresham's law as a spectator sport

You are still to challenge my point in the discussion of fixed vs floating (adjustable) money supply in the case of expanding (contracting) economy. Counterfeiting is inconsequential to the issue in question

When the economy expands, producers take loans to expand their production (that would mean an increase in real wealth), and this leads to more money being created by banks. When the economy shrinks, producers either go belly up and their loans are written off with equipment auctioned, or they themselves liquidate part of their business to pay back the loans (that would mean a decrease in real wealth). Thus money gets destroyed, again fully endogenously, according to the needs of the economy. Just in case, I already know what question you are going to ask which as you think will challenge this mechanism (people always think that they know something which others don't)

In this case you know something I don't because I'm not sure the question you refer to.  One such question might be: what do you mean precisely by "the economy expands"?  Some indexes like some ways to calculate a fiat GDP also are dependent on how much new fiat is being issued, hence - the feedback, which leads to these indices losing their utility at some point in the fiat "business cycle" you began describing. A perhaps still more interesting question would be what is "real wealth"

The increase in the quantity of goods produced and volume of services rendered in proportion with increasing demand for them

To paraphrase: 1) why would we want to adjust the mining / issuance schedule?   2)  How could such adjustment be verifiable?      

I'm not talking about Bitcoin or any other coin which uses some algo for determining the required amount of money. I guess it cannot be done algorithmically in any imaginable way. Something like that Gosplan had tried to do in the former Soviet Union but failed miserably

It might be worth asking how some potentially worthwhile system couldn't be specified (aka done algorithmically).  Anyway thanks for pointing me to Gosplan material, interesting reading.  cheers -  

You may also want to read what Nassim Taleb said about that specifically. He explained it pretty coherently why such a system is set to fail inevitably (in short, the Butterfly Effect)

[NEWGOODOUBLE]

The dollar will still win it over and over again, its simply too strong and the bitcoin first needs to grow a lot more before it can really compare itself even to the dollar.

True, even to be able to match the fiat though it would be very difficult for bitcoin. to be equivalent to fiat. bitcoin take very long to continue to grow due to the current fiat far stronger than bitcoin

[funkenstein]

Banks only need borrowers which should meet a bank's criteria for loaning to them

If you don't of course mean by something borrowers, it pretty much proves that you don't fully understand how modern monetary system works  (otherwise I don't quite understand myself what you meant to say). You won't believe me but I met a guy here who pretended to be a banker himself and who tried to ridicule me at first but he was in for a pretty rude awakening when confronted with what real bankers (for example, the former governor of the Bank of England) say themselves. After that I haven't heard a word from him, whether he is a real banker and not a plumber in some obscure bank office. And yes, money created in this way (through loans) is not very different from how bitcoins are mined in respect to centralization or lack thereof.

My credentials might or might not impress you but that is hardly the point of such a conversation as this is it   The main differences I like to point out:

1)  Public vs. Private

Public coins (like bitcoin) are created publicly.  Everyone can see how much and when, and verify the totals.  Private coins like the dollar, pound, and yuan are issued in private.  Who gets to know how much, and when, and in which accounts specifically is always an EXTREMELY carefully guarded secret and is NEVER verifiable by the public. 

2)  Discretionary vs. Deterministically

As you say: "meet a bank's criteria for loaning to them".  Of course you mean meeting the criteria of employees of a bank who have the job of selecting who gets to have money and at what rate.  One person might want to approve a loan for a forestry project.  Another might prefer a school.  Dress properly and speak with the right accent of course when you apply.  Bitcoin isn't really like that is it? 

When people say money is "created through loans" what they are trying to say is that newly issued currency is often immediately loaned out.  It is often loaned out to lenders.  But not always.  M0 paper for example isn't usually associated with a loan when it is minted.  How many M1 accounts are created with no required payments?  Again a bit of empathy in this field goes a long way.  Put yourself in others positions and ask how you would run the operation. 

You are still to challenge my point in the discussion of fixed vs floating (adjustable) money supply in the case of expanding (contracting) economy. Counterfeiting is inconsequential to the issue in question

Counterfeiting is my word for an "adjustable money supply".  An effective counterfeiter is one who competes in minting (see e.g. Newton and the Counterfeiter) It's exactly the same thing, lets call it issuance.  There is the question of public vs. private issuance, but I know of no public currency which allows for discretionary issuance.  It would be easy to make such a thing, basically one could just build bitcoin with a separate clause "any coinbase signed with the following keys can create as many coins as they like at any time".  Do you  think such a project would be worthwhile? 

But hey you already know my opinion.  A floating (adjustable) money supply has but one purpose - to confiscate the wealth of the people using it.  Claims otherwise often made by those in the employ of the counterfeiters are usually tedious, comical, and easy to spot.  I'm sure you are familiar with the relevant quotes on the topic from e.g. Henry Ford, Herr Rothschild, John Calhoun, Louis T. McFadden, and various others.  Thanks I will check out more Taleb