JorgeStolfi
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November 06, 2014, 10:46:15 AM |
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The primary purpose of money is a store of value, so that it can proxy for products and services in commerce. It must retain value over time to properly function. If it doesn't then the whole economy is badly distorted, made inefficient.
It is all a matter of degree. If you spend most of your income within a month, and invest the remainder, you will hardly notice an inflation of 5%/year. Yes, Brazil too had a bank account freeze, around 1990. That hurt a lot. But it was not so much a consequence of inflation, rather a very stupid attempt to curb it. Many people were hurt badly when the current unit (the Real) was devalued 50%, immediately after the president was re-elected. The Real was guaranteed to be "inflation-free", pegged to the dollar, and therefore bank savings were no longer corrected for inflation. Hoarding is simply the same as saving. Savings are what makes capitalism a viable economic model. Inflation is a stealth tax from those who have last use of new money (the poor, middle class) to the pockets of those who have first use of new money (the banks, wealthy, government).
Hoarding currency is a very stupid way of saving. Saving is a tax on workers: you work now, but instead of buying a car right away with your salary, you buy it only months or years later; in the meantime someone else uses that car. That may benefit capitalists, but what drives capitalism is productive investment in factories etc., and what makes the capitalist economy spin is spending, not saving. Inflation is a diffuse tax, whereby government takes from society an amount equal to the amount of currency that exists times the inflation rate. Each person pays that tax proportionally to the amount of currency that he has and how long he keeps it before spending it. Like any tax, inflation tax not inherently evil: a good government should give it back to society as public services and infrastructure. A bad government may waste it (for example by rescuing failed banks), or use it for evil ends, but that is a separate problem. But it is debatable whether inflation tax, as way to support the government, is more fair and effective than revenue tax, consumption tax, etc.. Experience seems to say it isn't: countries that abuse it generally have lousy economies. Anyway, it is not a simple, black on white issue.
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JorgeStolfi
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November 06, 2014, 10:47:47 AM |
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you cannot double zero...
Is this the kind of math that is supposed to make bitcoin work?
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ChartBuddy
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November 06, 2014, 11:00:23 AM |
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prophetx
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he who has the gold makes the rules
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November 06, 2014, 11:16:15 AM |
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lmao those are not respectable market cap... $100m? lmao..... this must be comedy hour on bitcointalk If you already have your mind set on what you want to believe that is your thing. I see a future where cryptocurrencies are used for all kinds of things, can be traded on p2p exchanges (a working algorithm for exchanging different cryptocurrencies that are based on blochchains exists) and there are different coins for different usage scenarios. An MMO could base its ingame currency on a cryptocurrency and in that community it makes sense to use it. Why would you want or need bitcoin for this, especially if you can easily exchange one for the other on exchanges. But you go on believing that bitcoin will reach world dominance. I simply find it a very narrow vision of the future keep on making assumptions in what other people write and putting in words and thoughts that are not there..... amazing how you can deduce all that from one simple statement ... makes you sound real bright
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nakaone
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November 06, 2014, 11:19:16 AM |
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THIS is what Bitcoin is. The ability of Random Matrix Math to solve the human greed factor. The flaw is not the money. It's US.
People often suggest there is a greater "Math" behind why bitcoin is limited in supply. Basically it is a few lines of code in the protocol an the fact that the majority of miners and users follow that protocol. It is horribly trivial to change the supply of bitcoin to an arbitrary amount if there was enough backing by the community for it. Saying it is impossible to change is having a fundamental misunderstanding of how or why bitcoin works What you say may be true. But bitcoin's value proposition lies in those few lines of code. And that is why they will never be changed. Bitcoin was meant to be an e-payment method (decentralized, trutless, etc.). A fixed bitcoin supply is not necessary for that goal. Indeed, bitcoin is being used in that role, in spite of still having 10%/year inflation (and even higher in the past). And dollars and euros work fine as payment methods, in spite of their "horrendous" 1-2%/year inflation rate. Thus, the argument that "raising the emission limit would destroy the value of bitcoin" does not sound convincing. Hoarders would be very unhappy, of course. Miners, however, may someday find it advantageous, especially by the time they are expected do depend on transaction fees instead of block rewards. Block reward is steady and predictable, whereas fees depend on transaction volume -- which will probably shrink substantially if fees became mandatory. People who use bitcoin for payments may not care, or may prefer block rewards because they provides "free" transactions. It has been argued that, if some miners tried to change the protocol, the rest of the network would stick to the old one. However, this correction mechanism has never been tested, and it seems difficult to predict what would happen, in all possible scenarios. (After all, it was "proved", with the same certainty, that altcoins would die as soon as they were born.) What if those "some miners" had 70% of the hash rate? What if a large subset of the users became convinced that the change was necessary for the health of the network, or got some immediate benefit from it (such as no-fee transactions)? What if payment processors and merchants accepted only the "new" bitcoin? (By the way, some bitcoiners seem to be trying to convince people to adopt bitcoin by telling them that money sucks. I sense a problem with that marketing strategy: it seems that many people have used money sometime in their lives, and may even have enjoyed the experience -- unlikely as that may sound. ) you are a well respected academic in your field of study - but please do this place a favour and step a little bit back when you are speaking about fields of study which are not your profession. your understanding of economics is at best narrow minded and at worst simply wrong. this is partially true for this comment as well. I assume that 95-99% of this forum would not have heard of bitcoin if the emission would have been infinite from the beginning. satoshis incentive design for bitcoin is from an economics perspective the schumpeterian wet dream for raising awareness for an invention.
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oda.krell
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November 06, 2014, 11:19:48 AM |
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The last paragraph in my quote above is not mine, of course; it was inserted by @walsoraj. A weird sense of humor, or the desperation of a bag-holder? But it is true: I did sell all my BTC to invest in XRP, months ago. And I have been doubling my XRP holdings every day since then, as I did before with BTC. Vacuous truth is best truth!
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MrPiggles
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Decentralized Ascending Auctions on Blockchain
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November 06, 2014, 11:31:18 AM |
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blahblah troll blahblah
you are a well respected academic in your field of study - is he? How do we know this is the jorge stolfi we presume it is?
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MICRO
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CEO @ Stake.com and Primedice.com
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November 06, 2014, 11:31:49 AM |
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I like this slow creeping up to 350$ much more than huge jump and then crash . I think this price climb is worth more .
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btcney
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November 06, 2014, 11:36:20 AM |
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I like this slow creeping up to 350$ much more than huge jump and then crash . I think this price climb is worth more . Rally?
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_biO_
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November 06, 2014, 11:36:51 AM |
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Arguments on the network effect only work to a certain degree. An analogy would be to claim that something like Facebook or Google will be the sole existing service simply because it has the biggest network. Alt coins need to offer something pretty good to overcome the network effect of bitcoin. So far, they don't. And with sidechains on the horizon, it's possible "real" altcoins never will. The irony is that they don't. Or would you honestly claim that for Litecoin there is any real improvement. All it takes is regional acceptance on a larger level to make a coin relevant for people in that area. We can argue all we want about if, in the long term, these alts have merit but the reality is that they exist and some have quite respectable market caps for offering very little innovation. Litecoin offers a few small things: It's a bitcoin alternative (bitcoin obviously can't offer that), faster confirmations, more decentralized mining (at least at the moment) and probably some more things I don't know about. But that's simply not enough to dethrone bitcoin and never will be. Alts will have merit, most definitely. But they will be built as a sidechain pegged to bitcoin.
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nakaone
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November 06, 2014, 11:38:17 AM |
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what do you guys think of changetip?
I think we probably now have THE first power app - look at reddit etc. and imagine what is happening when we start spreading love on facebook etc.
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fonsie
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November 06, 2014, 11:39:56 AM |
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THIS is what Bitcoin is. The ability of Random Matrix Math to solve the human greed factor. The flaw is not the money. It's US.
People often suggest there is a greater "Math" behind why bitcoin is limited in supply. Basically it is a few lines of code in the protocol an the fact that the majority of miners and users follow that protocol. It is horribly trivial to change the supply of bitcoin to an arbitrary amount if there was enough backing by the community for it. Saying it is impossible to change is having a fundamental misunderstanding of how or why bitcoin works What you say may be true. But bitcoin's value proposition lies in those few lines of code. And that is why they will never be changed. Bitcoin was meant to be an e-payment method (decentralized, trutless, etc.). A fixed bitcoin supply is not necessary for that goal. Indeed, bitcoin is being used in that role, in spite of still having 10%/year inflation (and even higher in the past). And dollars and euros work fine as payment methods, in spite of their "horrendous" 1-2%/year inflation rate. Thus, the argument that "raising the emission limit would destroy the value of bitcoin" does not sound convincing. Hoarders would be very unhappy, of course. Miners, however, may someday find it advantageous, especially by the time they are expected do depend on transaction fees instead of block rewards. Block reward is steady and predictable, whereas fees depend on transaction volume -- which will probably shrink substantially if fees became mandatory. People who use bitcoin for payments may not care, or may prefer block rewards because they provides "free" transactions. It has been argued that, if some miners tried to change the protocol, the rest of the network would stick to the old one. However, this correction mechanism has never been tested, and it seems difficult to predict what would happen, in all possible scenarios. (After all, it was "proved", with the same certainty, that altcoins would die as soon as they were born.) What if those "some miners" had 70% of the hash rate? What if a large subset of the users became convinced that the change was necessary for the health of the network, or got some immediate benefit from it (such as no-fee transactions)? What if payment processors and merchants accepted only the "new" bitcoin? (By the way, some bitcoiners seem to be trying to convince people to adopt bitcoin by telling them that money sucks. I sense a problem with that marketing strategy: it seems that many people have used money sometime in their lives, and may even have enjoyed the experience -- unlikely as that may sound. ) LOL
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bitcodo
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November 06, 2014, 11:42:00 AM |
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spooderman
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November 06, 2014, 11:44:11 AM |
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There is a lot of troll feeding going on here.....
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Spaceman_Spiff
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November 06, 2014, 11:45:17 AM Last edit: November 06, 2014, 11:58:43 AM by Spaceman_Spiff |
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Bitcoin was meant to be an e-payment method (decentralized, trutless, etc.). A fixed bitcoin supply is not necessary for that goal. Indeed, bitcoin is being used in that role, in spite of still having 10%/year inflation (and even higher in the past). And dollars and euros work fine as payment methods, in spite of their "horrendous" 1-2%/year inflation rate. Thus, the argument that "raising the emission limit would destroy the value of bitcoin" does not sound convincing. Hoarders would be very unhappy, of course. Miners, however, may someday find it advantageous, especially by the time they are expected do depend on transaction fees instead of block rewards. Block reward is steady and predictable, whereas fees depend on transaction volume -- which will probably shrink substantially if fees became mandatory. People who use bitcoin for payments may not care, or may prefer block rewards because they provides "free" transactions. It has been argued that, if some miners tried to change the protocol, the rest of the network would stick to the old one. However, this correction mechanism has never been tested, and it seems difficult to predict what would happen, in all possible scenarios. (After all, it was "proved", with the same certainty, that altcoins would die as soon as they were born.) What if those "some miners" had 70% of the hash rate? What if a large subset of the users became convinced that the change was necessary for the health of the network, or got some immediate benefit from it (such as no-fee transactions)? What if payment processors and merchants accepted only the "new" bitcoin? (By the way, some bitcoiners seem to be trying to convince people to adopt bitcoin by telling them that money sucks. I sense a problem with that marketing strategy: it seems that many people have used money sometime in their lives, and may even have enjoyed the experience -- unlikely as that may sound. ) I have to side with Jorge here. It is unlikely that coin emission will change in recent times but it is not impossible. Ultimately you cannot enforce what rules people subscribe to. The mere existence of altcoins proves that multiple rule sets can concurrently exist. And no one should fool themselves that only one coin will ever be accepted by retailers. If it is trivial to integrate bitcoin, it is trivial to integrate other coins. The proposition that only bitcoin can and will survive comes from selfish motives. You only need to believe in that if you want its value to be extremely high. There is enough room for multiple cryptocurrencies and they can and will come and go as technology changes. Does it really matter if I pay something in btc, ltc, doge, nxt or ether? If the design and security of the protocol is sound (which I am not advocating here for many of the so called bitcoin 2.0 alts, the verdict is still open) and enough people use and accept it it is "good enough". Arguments on the network effect only work to a certain degree. An analogy would be to claim that something like Facebook or Google will be the sole existing service simply because it has the biggest network. You can both feel free to invest in Freicoin, I'll stick with bitcoin as is thank you very much.
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mooncake
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November 06, 2014, 11:47:09 AM |
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what do you guys think of changetip?
I think we probably now have THE first power app - look at reddit etc. and imagine what is happening when we start spreading love on facebook etc.
The concept is awesome. If it can be more user-friendly, it has the potential to become the first bitcoin killer app. We will know that has happened when it goes viral over social and mainstream media.
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JorgeStolfi
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November 06, 2014, 11:47:25 AM |
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I assume that 95-99% of this forum would not have heard of bitcoin if the emission would have been infinite from the beginning. satoshis incentive design for bitcoin is from an economics perspective the schumpeterian wet dream for raising awareness for an invention.
For all I know, computer types were first attracted to bitcoin for the pleasure of helping to test a smart solution to an old technical problem. Then libertarians got interested because they saw in bitcoin a way to build an economy independent of government and banks. Then drug users and sellers adopted it as a way to pay for drugs without the DEA knowledge (so they thought). At some point, others noticed the value going up like crazy, and bought into it as a get-filthy-rich-quick scheme. I suspect that a majority of the people in this forum are from the latter group. The finite supply of bitcoins is important only for that group, because it is part of the argument that "proves" that the price will be astronomical one day. But it is not essential, even to them; that argument would have been only a little less convincing if the supply was programmed to increase 5%/year, forever. So much so, that they are not bothered by the current 5-10% inflation rate.
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Spaceman_Spiff
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November 06, 2014, 11:57:59 AM |
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If you started 350 days ago I really can't be arsed to calculate it, but either way you're clearly full of shit even if you only started with 0.01 btc or a few satoshis.
Which obviously means he has 0BTC. Pretty easy to double 0BTC everyday now ain't it. Yeah, but is it possible to sell 0 btc to buy 0 xrp? Pretty sure that just makes him full of shit, if he's claiming to have something and double it daily but really has zero, it's not clever semantics, it's bullshit. Well I thought it was funny.... I assume that 95-99% of this forum would not have heard of bitcoin if the emission would have been infinite from the beginning. satoshis incentive design for bitcoin is from an economics perspective the schumpeterian wet dream for raising awareness for an invention.
For all I know, computer types were first attracted to bitcoin for the pleasure of helping to test a smart solution to an old technical problem. Then libertarians got interested because they saw in bitcoin a way to build an economy independent of government and banks. Then drug users and sellers adopted it as a way to pay for drugs without the DEA knowledge (so they thought). At some point, others noticed the value going up like crazy, and bought into it as a get-filthy-rich-quick scheme. I suspect that a majority of the people in this forum are from the latter group. The finite supply of bitcoins is important only for that group, because it is part of the argument that "proves" that the price will be astronomical one day. But it is not essential, even to them; that argument would have been only a little less convincing if the supply was programmed to increase 5%/year, forever. So much so, that they are not bothered by the current 5-10% inflation rate. If you see the quote about bank bailouts in the genesis block, then clearly satoshi has political/ economical motives. I strongly disagree about the finite supply being only important for the late speculators as well.
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fonsie
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November 06, 2014, 11:59:00 AM |
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I assume that 95-99% of this forum would not have heard of bitcoin if the emission would have been infinite from the beginning. satoshis incentive design for bitcoin is from an economics perspective the schumpeterian wet dream for raising awareness for an invention.
For all I know, computer types were first attracted to bitcoin for the pleasure of helping to test a smart solution to an old technical problem. Then libertarians got interested because they saw in bitcoin a way to build an economy independent of government and banks. Then drug users and sellers adopted it as a way to pay for drugs without the DEA knowledge (so they thought). At some point, others noticed the value going up like crazy, and bought into it as a get-filthy-rich-quick scheme. I suspect that a majority of the people in this forum are from the latter group. The finite supply of bitcoins is important only for that group, because it is part of the argument that "proves" that the price will be astronomical one day. But it is not essential, even to them; that argument would have been only a little less convincing if the supply was programmed to increase 5%/year, forever. So much so, that they are not bothered by the current 5-10% inflation rate. It seems you were too late for the get-filthy-rich-quick scheme party and are now butthurt, but hey, you can still have an academic interest.
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ChartBuddy
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November 06, 2014, 12:00:23 PM |
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