Bitcoin Forum
September 29, 2016, 08:23:59 AM *
News: Due to DDoS attacks, there may be periodic downtime.
 
   Home   Help Search Donate Login Register  
Pages: [1] 2 »  All
  Print  
Author Topic: Bitcoin Deflation will cause a Meltdown OMG!  (Read 6673 times)
kiba
Legendary
*
Offline Offline

Activity: 980


View Profile
November 10, 2010, 12:01:45 AM
 #1

http://undergroundeconomist.tumblr.com/post/1528511369

I say bollocks due to time preference theory.

Regardless of deflation or inflation, there will be a need to buy food OR DIE.

1475137439
Hero Member
*
Offline Offline

Posts: 1475137439

View Profile Personal Message (Offline)

Ignore
1475137439
Reply with quote  #2

1475137439
Report to moderator
Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1475137439
Hero Member
*
Offline Offline

Posts: 1475137439

View Profile Personal Message (Offline)

Ignore
1475137439
Reply with quote  #2

1475137439
Report to moderator
1475137439
Hero Member
*
Offline Offline

Posts: 1475137439

View Profile Personal Message (Offline)

Ignore
1475137439
Reply with quote  #2

1475137439
Report to moderator
sirius
Bitcoiner
Staff
Sr. Member
****
Offline Offline

Activity: 429



View Profile
November 10, 2010, 12:30:31 AM
 #2

I say bollocks due to time preference theory.

I agree. People usually want to enjoy life and spend their money before they die.

I like economics. You can always prove by either buying or short selling that your predictions are not just trolling.

Identifi - Decentralized address book with trust ratings
I'm not a forum admin - please contact theymos instead.
Macho
Full Member
***
Offline Offline

Activity: 125



View Profile
November 10, 2010, 05:09:46 AM
 #3

It is bollocks only if there are going to be goods and services available that people desire for bitcoins.

What is happening now is just a bubble and a result of speculation just as I have said in the other thread, if this is not changed it is going to burst, make bitcoin almost worthless, make a bunch of people angry and bitcoin will eventually die.

This is not good situation, we need to encourage/create *useful and valuable* services, these are going to be the backing of bitcoin then ... and no, casino games, ponzi schemes and buying bitcoin for the sake of making profit is not useful nor valuable Wink

Those who hold large amounts of bitcoins would do well investing in such services as that's going to make their coins much more valuable and actually sellable because right now if they tried to sell, they would find very quickly that they simply can't and most of the coins are just worthless and the price on mt. gox meaningless.
FreeMoney
Legendary
*
Offline Offline

Activity: 1246


Strength in numbers


View Profile WWW
November 10, 2010, 05:14:35 AM
 #4

It is bollocks only if there are going to be goods and services available that people desire for bitcoins.

What is happening now is just a bubble and a result of speculation just as I have said in the other thread, if this is not changed it is going to burst, make bitcoin almost worthless, make a bunch of people angry and eventually die.

This is not good situation, we need to encourage/create *useful and valuable* services, these are going to be the backing of bitcoin then ... and no, casino games, ponzi schemes and buying bitcoin for the sake of making profit is not useful nor valuable Wink

Those who hold large amounts of bitcoins would do well investing in such services as that's going to make their coins much more valuable and actually sellable because right now if they tried to sell, they would find very quickly that they simply can't and most of the coins are just worthless and the price on mt. gox meaningless.

No one is going to die from bitcoin, dude.

The offers on mtgox are legit you can accept them and it goes through instantly. They are not guaranteed to be there forever if that's what you are talking about.

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
kiba
Legendary
*
Offline Offline

Activity: 980


View Profile
November 10, 2010, 05:17:03 AM
 #5

It is becoming an annoyance if Macho keep polluting economic threads with his anti-speculation worldviews, anti-gambling worldviews.

I propose we should move all Macho anti-speculation posts into his own little thread.

grondilu
Legendary
*
Offline Offline

Activity: 1134


View Profile
November 10, 2010, 05:21:46 AM
 #6

http://undergroundeconomist.tumblr.com/post/1528511369

Regardless of deflation or inflation, there will be a need to buy food OR DIE.

Most of what is said here could ne said about any fixed aggregate money, such as gold.

I guess this guy also thinks gold is useless and will never be used as money.

Macho
Full Member
***
Offline Offline

Activity: 125



View Profile
November 10, 2010, 05:22:41 AM
 #7

No one is going to die from bitcoin, dude.

The offers on mtgox are legit you can accept them and it goes through instantly. They are not guaranteed to be there forever if that's what you are talking about.


I'm not saying anybody is going to die LOL I was saying bitcoin is going to die as a result of massive lost of confidence when the bubble bursts.

I'm also not saying the offers are not legit, I'm saying there is no demand for bitcoin ... just look how shallow the market is, you would sell few thousand bitcoins at most and then the price starts to plummet. If anybody holds near 100,000 bitcoins I would say that most of them can not be sold and are therefore worthless ... but that's a tip, it may be 100,000 or 200,000 ... who knows. But the price is definitively inflated, don't you think? It is hard to say how much but it's clear from the fact that there is hardly $1,000,000 worth of assets in bitcoin economy heh Smiley
matonis
Sr. Member
****
Offline Offline

Activity: 301



View Profile WWW
November 10, 2010, 06:26:29 AM
 #8

Agreed, the article is bollocks. The greatest threat to the current bitcoin economy is probably a parallel (or forked) bitcoin economy where large block issuers align themselves somehow to issue bitcoin which is convertible to a predetermined amount of gold from the outset. This will bridge the link to the physical world via 24/7 convertibility (using exchangers and even gold ATMs now in some places).  Additionally, it would benefit from the relative stability of gold that everyone understands.

By delinking the medium of exchange function from the store of value function,this strategy would also exploit the "scarcity" token feature of bitcoin in a positive way (because, yes scarcity is different on the Internet). Prepare for parallel bitcoin economies.

Founding Director, Bitcoin Foundation
I also cover the bitcoin economy for Forbes, American Banker, PaymentsSource, and CoinDesk.
grondilu
Legendary
*
Offline Offline

Activity: 1134


View Profile
November 10, 2010, 06:42:41 AM
 #9

Agreed, the article is bollocks. The greatest threat to the current bitcoin economy is probably a parallel (or forked) bitcoin economy where large block issuers align themselves somehow to issue bitcoin which is convertible to a predetermined amount of gold from the outset. This will bridge the link to the physical world via 24/7 convertibility (using exchangers and even gold ATMs now in some places).  Additionally, it would benefit from the relative stability of gold that everyone understands.

By delinking the medium of exchange function from the store of value function,this strategy would also exploit the "scarcity" token feature of bitcoin in a positive way (because, yes scarcity is different on the Internet). Prepare for parallel bitcoin economies.

That's what I have been thinking from the beginning.  The main use of bitcoin will be to exchange gold.

I doubt however that it would require a fork of bitcoin.  It's much easier to use the mainstream bitcoin block chain.


I mean, say I own 1 Kg of gold.  If I trust bitcoin to be in a fixed amount, then I can ensure the convertibility of 1kg of gold into the whole bitcoin stocks.

That would price a gram of gold to 21,000 BTC.

If someone thinks the same but owns 10 Kg, the price of the gram will be 2,100 BTC.

Eventually, the price of gold will be the total amount of bitcoins, divided by the maximum amount of gold owned by someone who is willing to use bitcoin as an exchange tool for his gold.

I confess that I'm not so sure about that right now.  I still have to think this more thorously.  But it's my opinion right now.
matonis
Sr. Member
****
Offline Offline

Activity: 301



View Profile WWW
November 10, 2010, 06:53:09 AM
 #10

The reason that I think a fork may be required is that there are already so many bitcoin issued without a value injection (other than gen time and power). We wouldn't value paper dollars based on the amount of paper and ink utilized. Bitcoin is not "legal tender" fiat by decree.

I am referring to a stable rate of x bitcoin to x grams (just like the Chinese Yuan to the USD or other dollar pegs). This would allow bitcoin valuation to take place in an expression other than USD and one would not need to go through the USD for valuation and/or two-way convertibility. A pegged link would then allow bitcoin to also take on the "unit of account" function of money in addition to the "medium of exchange" function.


Founding Director, Bitcoin Foundation
I also cover the bitcoin economy for Forbes, American Banker, PaymentsSource, and CoinDesk.
grondilu
Legendary
*
Offline Offline

Activity: 1134


View Profile
November 10, 2010, 07:00:41 AM
 #11

The reason that I think a fork may be required is that there are already so many bitcoin issued without a value injection (other than gen time and power). We wouldn't value paper dollars based on the amount of paper and ink utilized. Bitcoin is not "legal tender" fiat by decree.

I am referring to a stable rate of x bitcoin to x grams (just like the Chinese Yuan to the USD or other dollar pegs). This would allow bitcoin valuation to take place in an expression other than USD and one would not need to go through the USD for valuation and/or two-way convertibility. A pegged link would then allow bitcoin to also take on the "unit of account" function of money in addition to the "medium of exchange" function.

I think we don't need value injection.  Right now bitcoins are generated without any relation to gold, but it doesn't mean a fixed rate can not be reached in the future.

I personnaly like to compare bitcoin to silver.  There is no "official" price of gold in silver.  Those two metals are not convertible into one another.  And yet, there is a more or less constant ratio in price.  It's only due to their relative constant scarcity.

Same would apply to bitcoin, imo.  Even if bitcoin is generated with no value injection, as you say, it is anyway in fixed amount, and therefore can be used as the unit of account you are hoping for.
matonis
Sr. Member
****
Offline Offline

Activity: 301



View Profile WWW
November 10, 2010, 07:33:22 AM
 #12

Grondilu, we are in agreement, especially regarding your comment on token representation.  My point is that a pegged rate to gold will provide bitcoin with stable value representation (and put an end to the crying deflationistas and inflationistas). A floating rate to gold is what exists now but you still have to go through someone like Mt. Gox where the quoted exchange rate is dollar-based to get the expression in USD. I understand the irony here because a gold peg seemingly would overlay a centralized structure from those providing the gold-backing, but it doesn't have to be centralized if the bitcoin forks grow with the injected amount of gold.  The gold peg can be software-established in the same way that the 21 million threshold is established. This would therefore be distributed because it is a distributed system of bitcoin exchangers worldwide providing the backing at generation.

I will remain open about the forked block in bitcoin being unnecessary, but I don't see how a stable bitcoin is feasible without parallel bitcoin economies having the option to provide the convertibility function.

Founding Director, Bitcoin Foundation
I also cover the bitcoin economy for Forbes, American Banker, PaymentsSource, and CoinDesk.
grondilu
Legendary
*
Offline Offline

Activity: 1134


View Profile
November 10, 2010, 07:37:43 AM
 #13

Grondilu, we are in agreement, especially regarding your comment on token representation.  My point is that a pegged rate to gold will provide bitcoin with stable value representation (and put an end to the crying deflationistas and inflationistas). A floating rate to gold is what exists now but you still have to go through someone like Mt. Gox where the quoted exchange rate is dollar-based to get the expression in USD. I understand the irony here because a gold peg seemingly would overlay a centralized structure from those providing the gold-backing, but it doesn't have to be centralized if the bitcoin forks grow with the injected amount of gold.  The gold peg can be software-established in the same way that the 21 million threshold is established. This would therefore be distributed because it is a distributed system of bitcoin exchangers worldwide providing the backing at generation.

I will remain open about the forked block in bitcoin being unnecessary, but I don't see how a stable bitcoin is feasible without parallel bitcoin economies having the option to provide the convertibility function.

Well, I have just started an auction for a 1g gold on the marketplace forum.  Direct bitcoin to gold market.  Not mtgox nor dollars involved.

http://bitcointalk.org/index.php?topic=1730.0
FreeMoney
Legendary
*
Offline Offline

Activity: 1246


Strength in numbers


View Profile WWW
November 10, 2010, 08:08:40 AM
 #14

Grondilu, we are in agreement, especially regarding your comment on token representation.  My point is that a pegged rate to gold will provide bitcoin with stable value representation (and put an end to the crying deflationistas and inflationistas). A floating rate to gold is what exists now but you still have to go through someone like Mt. Gox where the quoted exchange rate is dollar-based to get the expression in USD. I understand the irony here because a gold peg seemingly would overlay a centralized structure from those providing the gold-backing, but it doesn't have to be centralized if the bitcoin forks grow with the injected amount of gold.  The gold peg can be software-established in the same way that the 21 million threshold is established. This would therefore be distributed because it is a distributed system of bitcoin exchangers worldwide providing the backing at generation.

I will remain open about the forked block in bitcoin being unnecessary, but I don't see how a stable bitcoin is feasible without parallel bitcoin economies having the option to provide the convertibility function.

If it doesn't float, there has to be a peg? And who picks the peg price?

 

Play Bitcoin Poker at sealswithclubs.eu. We're active and open to everyone.
grondilu
Legendary
*
Offline Offline

Activity: 1134


View Profile
November 10, 2010, 08:14:21 AM
 #15

If it doesn't float, there has to be a peg? And who picks the peg price?
 

It has to float.  At least a bit.  Because the total amount of bitcoins can not be perfectly controlled.  Nor can be the total amount of gold.

Wallets can be destroyed.  Gold can be lost (in the ocean for instance).

Therefore it's better to let the market fix the price of gold.  But it will likely be more or less constant.
Anonymous
Guest

November 10, 2010, 08:56:44 AM
 #16

Anyone can start their own block chain and genesis block. The question is would people adopt it or not.

Im of the opinion that this is going to happen as soon as bitcoin becomes popular and the people realise they can setup their own currency. There might be endless crappy wanna be bitcoin chains in existence at that point each with their own rules. After all why struggle to generate on the existing network when you can be your own bitmagnate lol. There may even be proprietary ones that companies set up and promise to back at a certain rate.

I may be wrong of course.
 
grondilu
Legendary
*
Offline Offline

Activity: 1134


View Profile
November 10, 2010, 09:03:20 AM
 #17

Anyone can start their own block chain and genesis block. The question is would people adopt it or not.

Im of the opinion that this is going to happen as soon as bitcoin becomes popular and the people realise they can setup their own currency. There might be endless crappy wanna be bitcoin chains in existence at that point each with their own rules. After all why struggle to generate on the existing network when you can be your own bitmagnate lol. There may even be proprietary ones that companies set up and promise to back at a certain rate.
 

Agreed.  This will happen.  I wouldn't be surprised if big companies such as Google or Apple started their own block chain.  In this perspective, cryptocurrencies could be used as a replacement for equities.  I think it would be a great improvment for equity market, and more generally for capitalism.

Also, some people will want different versions of cryptocurrencies.  For instance one with a non-fixed aggregate.

The market will have to decide which of all these currency will have more value.  Personnaly, I'll stick to bitcoins.  But I may buy a few GoogleCoin if this appears.
Macho
Full Member
***
Offline Offline

Activity: 125



View Profile
November 10, 2010, 10:06:33 AM
 #18

Anyone can start their own block chain and genesis block. The question is would people adopt it or not.

Im of the opinion that this is going to happen as soon as bitcoin becomes popular and the people realise they can setup their own currency. There might be endless crappy wanna be bitcoin chains in existence at that point each with their own rules. After all why struggle to generate on the existing network when you can be your own bitmagnate lol. There may even be proprietary ones that companies set up and promise to back at a certain rate.

I may be wrong of course.

The possible problem with this is that if parallel currencies are created on the same principles as bitcoin then the currency with the most hashing power can easily overtake the currency with lower one if they collectively decide to do so. So the big one can "eat up" all of the smaller currencies.

I don't know if people would be capable or willing to cooperate to such an end but it is a possibility.
Anonymous
Guest

November 10, 2010, 11:44:14 AM
 #19

Anyone can start their own block chain and genesis block. The question is would people adopt it or not.

Im of the opinion that this is going to happen as soon as bitcoin becomes popular and the people realise they can setup their own currency. There might be endless crappy wanna be bitcoin chains in existence at that point each with their own rules. After all why struggle to generate on the existing network when you can be your own bitmagnate lol. There may even be proprietary ones that companies set up and promise to back at a certain rate.

I may be wrong of course.

The possible problem with this is that if parallel currencies are created on the same principles as bitcoin then the currency with the most hashing power can easily overtake the currency with lower one if they collectively decide to do so. So the big one can "eat up" all of the smaller currencies.

I don't know if people would be capable or willing to cooperate to such an end but it is a possibility.

No that is impossible. With a separate genesis block the chains would be separate entities.
ShadowOfHarbringer
Legendary
*
Offline Offline

Activity: 1470


Bringing Legendary Har® to you since 1952


View Profile
November 10, 2010, 11:47:33 AM
 #20

The possible problem with this is that if parallel currencies are created on the same principles as bitcoin then the currency with the most hashing power can easily overtake the currency with lower one if they collectively decide to do so. So the big one can "eat up" all of the smaller currencies.

I don't know if people would be capable or willing to cooperate to such an end but it is a possibility.

Not possible. Different chains can never collide or join together.
This is pure FUD.

Pages: [1] 2 »  All
  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!