What the Early Adoptors Don't want you to know

[harik]

Deflationary currency is bad because you owe more on your loans every day.    Economic activity stops because everyone waits until tomorrow to buy something when it's cheaper.   You keep getting paycuts at your job.   And the incredibly-ultra-rich have their billions worth more.

Is it really difficult to understand why deflation is a bad thing?

[kjj]

Deflationary currency is bad because you owe more on your loans every day.    Economic activity stops because everyone waits until tomorrow to buy something when it's cheaper.   You keep getting paycuts at your job.   And the incredibly-ultra-rich have their billions worth more.

Is it really difficult to understand why deflation is a bad thing?

Is it really difficult to understand why debt is a bad thing?

[NghtRppr]

Deflationary currency is bad because you owe more on your loans every day.

It's called interest. It's a feature of all loans. The rates would reflect deflation.

Economic activity stops because everyone waits until tomorrow to buy something when it's cheaper.

In general people will always have to eat, drink, wear clothes, get to work, educate their children, etc. Consumption will always exist. There's a time preference for now vs. later.

You keep getting paycuts at your job.

You get less pay but your pay is worth more and somehow this is a bad thing?

And the incredibly-ultra-rich have their billions worth more.

See above. Real value isn't going to change. When you have inflation, prices go up. When you have deflation, prices go down. Businesses can't charge as much as before but they can buy more with their money.

Prices tend to approach marginal cost of production, whatever the currency is worth.

[Seaco]

given that the user base is still small, and mostly formed by computer-related people, id say were still early (or maybe just on time) to the party! if youve been following the news, positive mass-media coverage is just starting to roll in. Our paper here in Chile had a very good articule, expressing high hopes for the system. So id expect more people jumping in, which means that even if this turns out to be a bubble, you could still make a nice profit out of this, even with a small investment (like buying 50btc instead of renewing your 2 year old TV  and keeping them until 2013-2014 )

[kjj]

I really wish that more people would try to read Keynes.  His book (the famous one) is incomprehensible gibberish.  Ozzy Osbourne makes more sense.

If more people had that sort of personal exposure to his writings, there would be fewer of these threads defending his ideas as sacred.

[bitcoin.monger]

Well, I would really like to know what Keynes has to say about early adoption of a new technology  in the famous book  Ozzy, well... completely different story     

[btcvc]

I'm sure you'd say the same thing about people that had the foresight to buy into Google's IPO.

By probably not LinkedIn.

[caveden]

It would be great if we had a ranking system for entire topics. Like, if enough people vote a topic to be "trollish" or plain bullshit, you don't even waste your time opening it.

[Vladimir]

I guess I'm an early adopter?

Everyone who uses Bitcoin anytime in 2011 is an early adopter. Probably 2012 also.

Check out how CPU mining early adopters look like now. This is exactly how GPU mining early adopters will look like in age of ASIC mining a year or two from now.

Now you have a choice. Either become a GPU age early adopter who would be teased about buying 2 BTC website logos or become a whining complainer about CPU age early adopters and their 10k BTC pizzas.

Think!

[blogospheroid]

I'd give it 3 months.  There is absolutely no reason it had to be set up this way.  If it was a market solution the amount of bitcoins in circulation would be determined by buy in via the us dollar then a floating exchange - the reason its done this way with a limited supply and then divisibility to encourage a reckless rush of speculators which will enrich the early adoptors, never be taken up by vendors because the price is speculator driven, and then crash.

Truth Cracker, There is no way I could think of to change this. Believe me, I tried really hard to think of some way other than the encoding as it is as of now. Every change I thought, brought in some centralization, which bitcoin avoids.

There is no way that you can enter the value "US Dollar" into this peer to peer network and have it recognised for what it actually is. That relies on the interface with the real world, which means centralization.

Lets run with your scenario. You have a client and I have a client. Someone pays you 10 USD and you generate 10 coins and give it to him. Someone pays me only 5 USD and I generate 10 coins and give him. Whose chain is the correct one?

Almost any system you think of will have downsides eg. Ripple is fair, but it didn't catch up because of the lack of benefit to early adopters.

You know both coding and economics. Try creating Bitcoin 2.0 as the coding is right there and available.

[makomk]

It's called interest. It's a feature of all loans. The rates would reflect deflation.

Of course, you'd have to pay interest on your loans on top of the increases in the amount you owe due to deflation which puts up the cost of borrowing quite a bit. Not to mention that Bitcoin would have to deflate by several orders of magnitude at some point if it were ever to support a substantial proportion of world trade, and there's no realistic way to pay back a loan that's increased by that much.

In general people will always have to eat, drink, wear clothes, get to work, educate their children, etc. Consumption will always exist. There's a time preference for now vs. later.

Yes, which is why most of the population doesn't actually benefit from deflation. The real problem is investment in research and development, capital expenditures, etc. There's no incentive to spend money on better ways to produce food and clothes, more effective means of transport, etc...

[truthcracker]

It would be great if we had a ranking system for entire topics. Like, if enough people vote a topic to be "trollish" or plain bullshit, you don't even waste your time opening it.

I just love early adopters trying to shut up debate about how they are fleecing new speculators by diverting the debate to the wonders of deflation.  You lot just hate it when we talk about it - you just like the guy at the start of the thread who's completely threatened by talking about deflation - not because its not worth talking about, but because it exposes the model of wealth transference from new to you.

[malditonuke]

Yes, which is why most of the population doesn't actually benefit from deflation. The real problem is investment in research and development, capital expenditures, etc. There's no incentive to spend money on better ways to produce food and clothes, more effective means of transport, etc...

For a fixed money supply, the rate of average price deflation depends on investment.  Let's say that investment drops to zero, and consumption = production.  There is no deflation at that point.

So if there is ever "too much" deflation, then investment will die down and drive down the rate of price deflation.

[malditonuke]

It would be great if we had a ranking system for entire topics. Like, if enough people vote a topic to be "trollish" or plain bullshit, you don't even waste your time opening it.

I just love early adopters trying to shut up debate about how they are fleecing new speculators by diverting the debate to the wonders of deflation.  You lot just hate it when we talk about it - you just like the guy at the start of the thread who's completely threatened by talking about deflation - not because its not worth talking about, but because it exposes the model of wealth transference from new to you.

http://www.youtube.com/watch?v=5hfYJsQAhl0

[Clipse]

It would be great if we had a ranking system for entire topics. Like, if enough people vote a topic to be "trollish" or plain bullshit, you don't even waste your time opening it.

I just love early adopters trying to shut up debate about how they are fleecing new speculators by diverting the debate to the wonders of deflation.  You lot just hate it when we talk about it - you just like the guy at the start of the thread who's completely threatened by talking about deflation - not because its not worth talking about, but because it exposes the model of wealth transference from new to you.

Where there is money to be made, there will allways be some backseat driver.

I hope you learned that in economics, everyone simply cannot gain the same wealth and prosperity. There is no equal gains in economics.

[truthcracker]

What the hell is a Nebbie?  or a Nebie?

Also, how can anyone possibly look at these forums and pretend that deflation is a big secret that we are trying to hide from the masses?  You can hardly swing a cat in here without hitting a dozen threads on the subject, including the one and only sticky topic in the Economics forum.

Why are people trying to suppress the point that the system is unfairly designed?

 

The facts are plastered all over these forums, as are all of the opinions for and against the system as designed.  I still don't see how you can continue to claim that there is some sort of suppression going on.  You are free to post your opinion that the system is unfair.  Other people are equally free to disagree with your view, and to post their rebuttals.  Is that what you mean by suppression?  Are we suppressing you by posting our disagreements?

Yes I can see that.  i went straight to the economic forum post and the first one was basically everyone shut up about deflation, this is the final word, anyone who asks you about it - just tell them this is your answer.... I started thinking.... why?  I quote the post in my kick off thread.

It is mostly because we are sick of having to read a dozen of these threads every day.  You don't need to trust me when I say that it has all been said here before (and many times).  You can check for yourself.

Personally, I would love to hear a novel argument against the design.  But that never happens.  Instead we get hundreds of people, none of whom ever bother searching or even just clicking on any of the many other topics on the issue, and they always end up posting what amounts to the same three tired arguments over and over again.

#1 - Deflation will benefit other people more than it will benefit me.
#2 - Inflation causes prosperity, deflation causes ruin.
#3 - We will run out of money.

By the way, I have no power or authority on these forums.  When I saw "we", I mean the people that disagree with the deflation = evilz theory, not the board moderators, but considering the sticky, I suspect there is some overlap.

How about this for a novel argument - bitcoins has the seeds of its own destruction - instread of a level playing feild where everyone is encouraged to expand the concept to the real economy the early adopters use their wealth to pump up and hype the idea to speculators, dooming the concept and enriching themselves.  Is that plain enough for you?

[truthcracker]

It would be great if we had a ranking system for entire topics. Like, if enough people vote a topic to be "trollish" or plain bullshit, you don't even waste your time opening it.

I just love early adopters trying to shut up debate about how they are fleecing new speculators by diverting the debate to the wonders of deflation.  You lot just hate it when we talk about it - you just like the guy at the start of the thread who's completely threatened by talking about deflation - not because its not worth talking about, but because it exposes the model of wealth transference from new to you.

Where there is money to be made, there will allways be some backseat driver.

I hope you learned that in economics, everyone simply cannot gain the same wealth and prosperity. There is no equal gains in economics.

And where there are backseat drivers there will be community pointing out what's going on to the passengers, and other people just shrugging their shoulders and wishing they were the backseat drivers.

[malditonuke]

How about this for a novel argument - bitcoins has the seeds of its own destruction - instread of a level playing feild where everyone is encouraged to expand the concept to the real economy the early adopters use their wealth to pump up and hype the idea to speculators, dooming the concept and enriching themselves.  Is that plain enough for you?

The only thing plain about your argument is just plain dumb.

[freezed]

How about this for a novel argument - bitcoins has the seeds of its own destruction - instread of a level playing feild where everyone is encouraged to expand the concept to the real economy the early adopters use their wealth to pump up and hype the idea to speculators, dooming the concept and enriching themselves.  Is that plain enough for you?

The only thing plain about your argument is just plain dumb.

Without argument,your reply is more dumb..Truth craker has some solid points..There is too much speculation ongoing and it may likely crash and burst the system..

[malditonuke]

How about this for a novel argument - bitcoins has the seeds of its own destruction - instread of a level playing feild where everyone is encouraged to expand the concept to the real economy the early adopters use their wealth to pump up and hype the idea to speculators, dooming the concept and enriching themselves.  Is that plain enough for you?

The only thing plain about your argument is just plain dumb.

Without argument,your reply is more dumb..Truth craker has some solid points..There is too much speculation ongoing and it may likely crash and burst the system..

what solid points?

1 "bitcoins has the seeds of its own destruction"

that's bitcarrots


2 "instread of a level playing feild where everyone is encouraged to expand the concept to the real economy"

... instead of explaining something where everyone is encouraged to understand the concept to their real minds


3 "the early adopters use their wealth to pump up and hype the idea to speculators"

people told people.  OMG no way!?!?!


4 "dooming the concept"

doomed! doomed!  we're always doomed.


5  "enriching themselves"

increase in purchasing power = evil ...  got it.