Hi,
I have an Economics Degree From Sydney University and also hold a MCSE - I run an IT company.
The reason all the early adopters - read people with a shit load of bit coins, don't want to talk about the fact bitcoins is designed for deflation is because what it really means is this.
1 They mine themselves millions of bitcoins at the start for almost nothing
2 As speculators and Nebbies pile in on the action bitcoin goes up and up
3 The longer they can keep it going the more their bitcoins are worth.
See below a post ENCOURAGING Nebies not to question this fact, they then lock the topic.
Some freemarket - this is not the implementation of an idea I support - wait for bitcoins II or III or a similar idea which is more fairly distributed - the only way they are going to get money for free is from YOU when you buy THEIR bitcoins. And who's going to buy them from you?
HERE is the original post.........
There has been a huge amount of tatter by the masses about how bitcoin is deflationary, how it's the next satan, and will end the world etc. I myself was interviewed by a freelance reporter (read, unemployed jouralism major) and he just wouldn't stop banging on about deflation, even after I'd said it doesn't matter. Throw in the recent threads on hackernews and Quora posts, it's getting really annoying to the point of distraction.
So I'm going to lay it down here, and I don't want to hear another peep about it.
Firstly this is the bitcoin project, it is primarily about bitcoin the software, the services around etc. One aspect of bitcoin is that it is deflationary.
The arguments are always about whether deflation is a good thing or not, so this is actually not a bitcoin issue (it's just something that effects bitcoin, because it's deflationary).
Firstly I must point out that economics is a SOCIAL SCIENCE, this means that there are many contradicting theories, it's not math, so there are many MANY things which tend to be plain wrong. Social sciences are the fields of scholarship that study society.
Hard science like math, physics, some biology and chemistry are ....well...hard. 1+1=2, gravity stops us floating away, take away our oxigen and we tend to die. These things are provable, you can run test after test and get the same result.
This is not so with economics where there are no tests, just some (often poor quality) data, and theories trying to explain that data. And from these theories predictions are made. It's very very shakey ground.
Who thinks what about Deflation
There are two schools of thought on deflation and inflation.
Keynesian economics, which favors government intervention and money supply inflation. This not surprisingly is the most popular school of thought with world governments (if someone told you to just print money and spend it you'd like them too).
This school not only supports inflation, but believes it to be essential to growth.
Then there is the Austrian school, which is is for a free market, against government intervention, and generally think inflation is bad and deflation is good. Again unsurprisingly these people are not popular in government circles around the world.
For more about why they think deflation is good see these links.
http://mises.org/daily/1241http://blog.mises.org/3362/inflation-or-deflation/http://mises.org/daily/4623This is an argument between these two theories of economics, not bitcoin. At best bitcoin could be thought of as a modern experiment in deflation.
If you think deflation is just the devil, then fine, don't use bitcoin, just watch, you'll see soon enough whether it causes the bitcoin economy to stall, and you'll be in the position to gloat or eat your words. If deflation doesn't bother you then forget about it and continue living your life and spending your bitcoin.
But let me be clear, no more pointless natter about deflation worries. If you're a bitcoiner don't allow yourself to be drawn into a discussion about deflation, point them to this thread and say thats all you've got to say about it.
Nefario.
