billyjoeallen
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Activity: 1106
Merit: 1007
Hide your women
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September 18, 2015, 06:13:38 PM |
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Bitcoin expert on Bloomberg: Increasing the block size limit will increase the supply of bitcoins and cause the price to fall, by the law of supply and demand. Oh, and in matters of bitcoin should trust only the opinion of people with Ph. D. Well, I can agree with that part. Ok, to play devil's advocate he's sort of right in a way that laymen will misinterpret and not understand. Recall the basic economics equation MV=PQ basically, money supply (M) multiplied by velocity (V) equals Price of goods (P) times quantity of goods (Q). Increasing block size means that bitcoin will have the POTENTIAL of greater velocity, which (if M remains constant or growing at a constant rate) means that (assuming quantity of goods remains constant) Price of goods goes up in BTC which means that the value of Bitcoin will fall. that's a lot of assumptions that I don't think are warranted. Q will likely go up massively as the utility of the network expands. For example: people will buy blockspace for timestamps, title records, etc. also microtransactions.
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HeXaN
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September 18, 2015, 06:20:02 PM |
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XT - 132 (29.5%) Core - 223 (49.8%) IDK - 93 (20.8%)
Core lost 50%!
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Andre#
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September 18, 2015, 06:21:44 PM |
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Bitcoin expert on Bloomberg: Increasing the block size limit will increase the supply of bitcoins and cause the price to fall, by the law of supply and demand. Oh, and in matters of bitcoin should trust only the opinion of people with Ph. D. Well, I can agree with that part. Anthem Blanchard (Anthem Vault CEO): "Increasing the number of transactions per block will lower the price of bitcoin (the currency, with a small b), because ultimately more transactions will go through. [...] We have to really understand why they [the Core developers] aren't on board, and that's not really clear, yet." Total bullshit, of course, except for the last part. Indeed, it isn't clear why the Core-devs want to limit the number of transactions to 2.7 per second, resulting in an artificial scarcity of transactions some time next year, effectively halting the growth of Bitcoin. They say that more transactions leads to centralization (implying that a crippled Bitcoin is better than a more centralized Bitcoin), but that is rather illogical. So yes, we do need to understand why the Core-devs try to enforce something illogical. I don't even want to say anything about James McQuivey (a principal analyst, really?), who confirms that more transactions leads to more bitcoins. Jeez... p.s. I have a Ph.D.
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bcdev
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Activity: 61
Merit: 10
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September 18, 2015, 06:34:39 PM |
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Bitcoin expert on Bloomberg: Increasing the block size limit will increase the supply of bitcoins and cause the price to fall, by the law of supply and demand. Oh, and in matters of bitcoin should trust only the opinion of people with Ph. D. Well, I can agree with that part. Did he really just call Gavin Andresen and Mike Hearn "outliers" and talked about their lack of phd? And his statement that higher TPS will lead to lower price... How much does he earn for talking such truths? [I assume he's right because he has phd, right?]
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Andre#
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September 18, 2015, 06:43:19 PM |
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Bitcoin expert on Bloomberg: Increasing the block size limit will increase the supply of bitcoins and cause the price to fall, by the law of supply and demand. Oh, and in matters of bitcoin should trust only the opinion of people with Ph. D. Well, I can agree with that part. Ok, to play devil's advocate he's sort of right in a way that laymen will misinterpret and not understand. Recall the basic economics equation MV=PQ basically, money supply (M) multiplied by velocity (V) equals Price of goods (P) times quantity of goods (Q). Increasing block size means that bitcoin will have the POTENTIAL of greater velocity, which (if M remains constant or growing at a constant rate) means that (assuming quantity of goods remains constant) Price of goods goes up in BTC which means that the value of Bitcoin will fall. that's a lot of assumptions that I don't think are warranted. Q will likely go up massively as the utility of the network expands. For example: people will buy blockspace for timestamps, title records, etc. also microtransactions. You assume the quantity of goods remains constant. In this case, you can make that assumption for a closed system where all goods need to be exchanged for BTC. But that's not how it is. Bitcoin competes usually with at least one other local currency. So Q changes with the amount of goods traded for BTC, i.e. it depends on the popularity of BTC. If transactions become scarce, the price of transactions will rise, and Bitcoin will be less attractive as a currency. Hence, the price of BTC will drop, as it will become less competitive compared to the alternative local fiat currency. Summarized, if the transactions are throttled, Bitcoin will become less attractive, and hence, cheaper.
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billyjoeallen
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Activity: 1106
Merit: 1007
Hide your women
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September 18, 2015, 06:48:39 PM Last edit: September 18, 2015, 07:29:27 PM by billyjoeallen |
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if the transactions are throttled, Bitcoin will become less attractive, and hence, cheaper.
on second thought, if Q increases, Velocity increases and M is increasing at a rate of 3600 coins per day, then P also has to increase which would make the value of BTC plummet. Now as you say, this equation really only works in a closed system, so what is the only item that can ONLY be purchased with BTC? Blockspace. Obviously the cost of blockspace will go down dramatically as supply increases, but that is what will make bitcoin more valuable in dollar terms. increased utility. If you can buy more blockspace with your BTC, Q increases more or less exactly to the proportion of velocity (V) increasing. So the equation remains in balance. So I actually agree with you. Bitcoin buys one thing directly: the ability to write on the block chain. What we are really investing in is shares of the blockchain. As the blockchain size increases, it becomes more valuable in the greater economy, assuming the quality of the information it contains remains constant. That is a pretty big assumption however and I think quality will likely go down a little, but NOT IN PROPORTION to INCREASED SIZE. It costs BTC to spam the network. Spam is prevalent only where it is very cheap or free. There will be spam, but not nearly as much proportionally to (for example) my email inbox. Factor in certain miners not including dust xactions and spam becomes only a miner (heh) nuisance. Now miners may gripe that they are bearing a disproportional burden in policing spam, and that's true but only in BTC terms. We the users will pay them more fiat for BTC that can do more writing on the blockchain, so they will actually profit more in fiat terms.
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Andre#
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September 18, 2015, 06:55:58 PM |
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Bitcoin expert on Bloomberg: Increasing the block size limit will increase the supply of bitcoins and cause the price to fall, by the law of supply and demand. Oh, and in matters of bitcoin should trust only the opinion of people with Ph. D. Well, I can agree with that part. Ok, to play devil's advocate he's sort of right in a way that laymen will misinterpret and not understand. Recall the basic economics equation MV=PQ basically, money supply (M) multiplied by velocity (V) equals Price of goods (P) times quantity of goods (Q). Increasing block size means that bitcoin will have the POTENTIAL of greater velocity, which (if M remains constant or growing at a constant rate) means that (assuming quantity of goods remains constant) Price of goods goes up in BTC which means that the value of Bitcoin will fall. that's a lot of assumptions that I don't think are warranted. Q will likely go up massively as the utility of the network expands. For example: people will buy blockspace for timestamps, title records, etc. also microtransactions. You assume the quantity of goods remains constant. In this case, you can make that assumption for a closed system where all goods need to be exchanged for BTC. But that's not how it is. Bitcoin competes usually with at least one other local currency. So Q changes with the amount of goods traded for BTC, i.e. it depends on the popularity of BTC. If transactions become scarce, the price of transactions will rise, and Bitcoin will be less attractive as a currency. Hence, the price of BTC will drop, as it will become less competitive compared to the alternative local fiat currency. Summarized, if the transactions are throttled, Bitcoin will become less attractive, and hence, cheaper. I believe I said exactly that. Did you even read all of what I wrote? Yes, I completely agree with you. Indeed, I misread the last part.
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Monopoly
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September 18, 2015, 06:57:10 PM |
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Bitcoin has stabilized permanently.
Crashing from $1200 to $10 is impossible indiscriminately ......... so Btc needs some times to rest For finishing it's mission ..........
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ChartBuddy
Legendary
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Activity: 2170
Merit: 1776
1CBuddyxy4FerT3hzMmi1Jz48ESzRw1ZzZ
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September 18, 2015, 07:02:39 PM |
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Terwa
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September 18, 2015, 07:28:29 PM |
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Feri22
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September 18, 2015, 07:52:41 PM |
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Bitcoin has stabilized permanently.
Crashing from $1200 to $10 is impossible indiscriminately ......... so Btc needs some times to rest For finishing it's mission .......... What is the mission?
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gentlemand
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Activity: 2590
Merit: 3013
Welt Am Draht
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September 18, 2015, 08:00:27 PM |
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He had a bigger hit with a song about his favourite bitch or something. No idea why he's named Bitcoin though.
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ChartBuddy
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Activity: 2170
Merit: 1776
1CBuddyxy4FerT3hzMmi1Jz48ESzRw1ZzZ
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September 18, 2015, 08:02:36 PM |
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samsonn25
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September 18, 2015, 08:11:55 PM |
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LMAO
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lemmyK
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September 18, 2015, 08:17:02 PM |
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hamasJonasGahrStøre
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Fatman3001
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Merit: 1013
Make Bitcoin glow with ENIAC
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September 18, 2015, 08:43:24 PM |
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hamasJonasGahrStøre It's a bird! It's a plane! It's Jonas Gahr Støre!
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ChartBuddy
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Activity: 2170
Merit: 1776
1CBuddyxy4FerT3hzMmi1Jz48ESzRw1ZzZ
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September 18, 2015, 09:02:37 PM |
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Terwa
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September 18, 2015, 09:03:11 PM |
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LMAO
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ChartBuddy
Legendary
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Activity: 2170
Merit: 1776
1CBuddyxy4FerT3hzMmi1Jz48ESzRw1ZzZ
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September 18, 2015, 10:02:46 PM |
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