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Author Topic: How to debunk the "inflation argument"?  (Read 939 times)
bitbit
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April 09, 2013, 11:14:38 PM
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"While bitcoins are designed so that they cannot be hyperinflated in name, they certainly can be hyperinflated in substance. Already, there are numerous knockoffs such as litecoin, namecoin, and freicoin in place."

How would you debunk this argument?

http://mises.org/daily/6401/Bitcoin-Money-of-the-Future-or-OldFashioned-Bubble
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proudhon
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April 09, 2013, 11:24:25 PM
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"While bitcoins are designed so that they cannot be hyperinflated in name, they certainly can be hyperinflated in substance. Already, there are numerous knockoffs such as litecoin, namecoin, and freicoin in place."

How would you debunk this argument?

http://mises.org/daily/6401/Bitcoin-Money-of-the-Future-or-OldFashioned-Bubble

There can be as many things of the type "cryptocurrency" as can be imagined, but there cannot be more than the specified number of tokens of any sub-type of cryptocurrency.  In any event, there's no reason this criticism wouldn't militate against ordinary fiat, or gold, for that matter.  Since the type of thing ordinary fiat is is paper notes, and anyone can create any number of paper notes; but it's very difficult to print token notes qualitatively identical to, say, modern US dollars.  And gold is a type of metal, but it shouldn't be worrying to the value of gold that there are other things of that type -- metals -- that are more abundant than gold.

It just happens that history has given bitcoins a certain perceived value and it isn't possible to pass another cryptocurrency (a litecoin, say) off as a bitcoin.
bitbit
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April 09, 2013, 11:31:54 PM
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What's your take on the rest of the article?
bitbit
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April 09, 2013, 11:34:17 PM
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Since the type of thing ordinary fiat is is paper notes, and anyone can create any number of paper notes; but it's very difficult to print token notes qualitatively identical to, say, modern US dollars.

US dollars are not mere paper notes. They are in fact backed by debt.

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April 09, 2013, 11:35:13 PM
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Moreover, gold has a lot of advantages in comparison with other metals, while the bitcoin seems to be more or less similar to any other cryptocurrency.
proudhon
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April 09, 2013, 11:40:24 PM
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Moreover, gold has a lot of advantages in comparison with other metals, while the bitcoin seems to be more or less similar to any other cryptocurrency.

Good point.  I'll give you 10 billion proudhoncoins for 10 bitcoins.  Just for fun.  Yes?
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April 09, 2013, 11:44:28 PM
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When will they make Farm coins so I can trade you 3  Cow COins for 5 Chickens and a sheep Coin? >_>

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bitbit
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April 09, 2013, 11:54:55 PM
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Moreover, gold has a lot of advantages in comparison with other metals, while the bitcoin seems to be more or less similar to any other cryptocurrency.

Good point.  I'll give you 10 billion proudhoncoins for 10 bitcoins.  Just for fun.  Yes?

No. Since there is a bitcoin bubble now, driven by a lot of stupid people hoping to get rich, I'd rather have the bitcoins Smiley

People buy bitcoins because others buy bitcoins - not because they are inherently better than other cryptocurrencies or because they have any objective value as money. That's my view.
proudhon
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April 09, 2013, 11:58:26 PM
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Moreover, gold has a lot of advantages in comparison with other metals, while the bitcoin seems to be more or less similar to any other cryptocurrency.

Good point.  I'll give you 10 billion proudhoncoins for 10 bitcoins.  Just for fun.  Yes?

No. Since there is a bitcoin bubble now, driven by a lot of stupid people hoping to get rich, I'd rather have the bitcoins Smiley

People buy bitcoins because others buy bitcoins - not because they are inherently better than other cryptocurrencies or because they have any objective value as money. That's my view.

And people buy USD (with their labor and goods) because others buy USD - not because they are inherently better than other pieces of paper with printings on them or because they have any objective value as money.  No?
bitbit
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April 10, 2013, 12:02:38 AM
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USD is backed by debt and force. Otherwise I would agree - paper notes qua paper notes have no objective value as money.
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April 10, 2013, 12:03:52 AM
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Most pieces of paper are backed by nothing.
proudhon
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April 10, 2013, 12:25:42 AM
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USD is backed by debt and force. Otherwise I would agree - paper notes qua paper notes have no objective value as money.

I didn't make any claims about what it's backed by.  I doubt the man on the street has in his mind things like violent government force and debt backing when he buys USD.  Rather, I think most people do what they do with money, USD in this case, because other people do it.
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April 10, 2013, 12:27:40 AM
 #13

"While gold is designed so that it cannot be hyperinflated in name, it certainly can be hyperinflated in substance. Already, there are numerous knockoffs such as platinum, silver, and copper in place."

http://www.bitpools.com
Pool your bitcoins with others. Vote on solutions using the Bitcoin blockchain. Keep your bitcoins in your cold storage until you find a solution you like.
Links and Reviews of useful every day places to spend bitcoins: https://bitcointalk.org/index.php?topic=943143.0
bitbit
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April 10, 2013, 12:32:40 AM
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"While gold is designed so that it cannot be hyperinflated in name, it certainly can be hyperinflated in substance. Already, there are numerous knockoffs such as platinum, silver, and copper in place."

Gold is being durable, amalgamable, malleable, divisible, homogeneous, rare, easily recognizable...

Bitcoin and other cryptocurrencies are more or less clones. Different metals are not.

amincd
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April 10, 2013, 12:42:41 AM
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It's not inflation exactly. It's more like competition from almost identical forks, but the effect is similar to inflation, as it reduces the value of each coin, to the extent that the market for bitcoin-based cryptocurrency is fragmented across the forks.

It's possible that the network effect will prevent any bitcoin-variant from posing any significant competitive threat to bitcoin, especially if bitcoin is ready to adopt any feature that is found to be useful in a bitcoin variant, like hypothetically, faster block generation.
Elwar
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April 10, 2013, 12:45:43 AM
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"While gold is designed so that it cannot be hyperinflated in name, it certainly can be hyperinflated in substance. Already, there are numerous knockoffs such as platinum, silver, and copper in place."

Gold is being durable, amalgamable, malleable, divisible, homogeneous, rare, easily recognizable...
Platinum is being durable, amalgamable, malleable, divisible, homogeneous, rare, easily recognizable...

Silver is being durable, amalgamable, malleable, divisible, homogeneous, rare, easily recognizable...

Copper is being durable, amalgamable, malleable, divisible, homogeneous, rare, easily recognizable...


http://www.bitpools.com
Pool your bitcoins with others. Vote on solutions using the Bitcoin blockchain. Keep your bitcoins in your cold storage until you find a solution you like.
Links and Reviews of useful every day places to spend bitcoins: https://bitcointalk.org/index.php?topic=943143.0
proudhon
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April 10, 2013, 12:46:34 AM
 #17

"While gold is designed so that it cannot be hyperinflated in name, it certainly can be hyperinflated in substance. Already, there are numerous knockoffs such as platinum, silver, and copper in place."

Gold is being durable, amalgamable, malleable, divisible, homogeneous, rare, easily recognizable...

Bitcoin and other cryptocurrencies are more or less clones. Different metals are not.



Different metals have different properties.  Different cryptocurrencies have different properties.  Bitcoin has the property of having been the first.  That's apparently a big property for this sort of thing.  In any event, you and I both know bitcoin is in a massive bubble that will eventually pop and bring the price back down to the single digits or lower.  When that happens, my offer still stands, I'll give you 10 billion Proudhon coins for 10 bitcoins.
odolvlobo
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April 10, 2013, 12:50:00 AM
 #18

"While bitcoins are designed so that they cannot be hyperinflated in name, they certainly can be hyperinflated in substance. Already, there are numerous knockoffs such as litecoin, namecoin, and freicoin in place."

How would you debunk this argument?

http://mises.org/daily/6401/Bitcoin-Money-of-the-Future-or-OldFashioned-Bubble

Except for the term "hyper-inflation", I think this argument is valid. Bitcoin is also susceptible to inflation through fractional reserve banking.

I don't think bitcoin is susceptible to hyper-inflation because the alt currencies would become valueless first, removing surplus money supply until it is stable again.

Buy bitcoins with cash from somebody near you: LocalBitcoins
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pretendo
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April 10, 2013, 12:54:18 AM
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Currency competition is a good thing. Bitcoin won't by every random guy making their Retardcoin. Bitcoin has adoptions that others don't. A new currency comes along that offers things better than bitcoin? It will outcompete them, but not inflate them.

My attempt at adding to the bitcoin-using marketplace: https://bitcointalk.org/index.php?topic=171843.0
Like online video games? Check it out! I'm selling at a big discount
proudhon
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April 10, 2013, 12:57:15 AM
 #20

"While bitcoins are designed so that they cannot be hyperinflated in name, they certainly can be hyperinflated in substance. Already, there are numerous knockoffs such as litecoin, namecoin, and freicoin in place."

How would you debunk this argument?

http://mises.org/daily/6401/Bitcoin-Money-of-the-Future-or-OldFashioned-Bubble

Here, let's try this:

I just made 21 quadrillion of each of these: proudhon coins, ferklecoins, flapjackcoins, guitarcoins, carcoins, coincoins, moneycoins, and bitbitcoins.  

Therefore...[fill in the blank].
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