The Five Paradoxes of Bitcoin

[knybe]

I seriously find it hilarious that people on here think they will be able to just encroach on a country's currency while being incredibly open and obnoxious about it and the governments of the world will just be ok with it.

O Doyle Rules! O Doyle Rules! O Doyle Rules! O Doyle Rules! O Doyle Rules! O Doyle Rules!

yeah... pretty much ignore button'd you on that troll.

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[knybe]

this whole thread is swiftly degrading into a moron parade.

[AliceWonder]

It competes for the same goods, it's functionally equivalent to counterfeit money.  

No.
You clearly do not understand what counterfeit is.

[crumbs]

It competes for the same goods, it's functionally equivalent to counterfeit money.  

No.
You clearly do not understand what counterfeit is.

You clearly don't understand what "functionally equivalent" is

[AliceWonder]

It competes for the same goods, it's functionally equivalent to counterfeit money.  

No.
You clearly do not understand what counterfeit is.

You clearly don't understand what "functionally equivalent" is

I can not buy something with bitcoins because the other person believes them to be dollars.
That is the function of countefeit money. The other person has to believe they are fiat.

[RoadToHell]

Bitcoin does compete with world currencies.
It competes for the same goods, it's functionally equivalent to counterfeit money.  

What harm could there be in counterfeiters printing money?  
Doesn't it just mean that there will be more money for everyone, everyone gets rich as the cash flies off the presses?
Sure, there will be more dollars around, but no more "stuff" to buy with them -- more stuff didn't magically appear along with the new dollars.  *Nothing of value was made.*  

How is Bitcoin different from printing money?  What new "stuff to buy with it" did it bring?  Was it the electricity that was wasted in mining the coins?  No, that's gone, wasted by the miners contributing to entropy, the one that nature tends towards.  An underlying economy?  Nope.  A big nasty army to valuate bitcoins by threat of violence?  No again.  What then?  An algo & a protocol which could be copypasted to make identically useful "currencies"?  

How can you have over 500 posts in less than a month on a forum dedicated to something that you understand so poorly?

It competes for the same goods, it's functionally equivalent to counterfeit money.  

No.
You clearly do not understand what counterfeit is.

You clearly don't understand what "functionally equivalent" is

Counterfeit objects are produced by counterfeiters to deceive the targeted recipient into believing they have received a genuine object.  Someone selling "Gucci" knockoffs as the real deal is a counterfeiter.  Someone passing fake $20 notes as genuine is a counterfeiter.  The people that they give these things to are expecting specific objects and are given fakes.  Bitcoin does not look like any fiat currency.  People don't pretend that a bitcoin is identical to some other currency.  When you get a bitcoin, you are getting what you expect.

So bitcoin is NOT functionally equivalent to counterfeit money.

You may believe that bitcoin is worthless, or that it will collapse, or fade away, or any other unsavory fate.  That doesn't mean it is counterfeit.  Holy Crap.

[crumbs]

Bitcoin does compete with world currencies.
It competes for the same goods, it's functionally equivalent to counterfeit money.  

What harm could there be in counterfeiters printing money?  
Doesn't it just mean that there will be more money for everyone, everyone gets rich as the cash flies off the presses?
Sure, there will be more dollars around, but no more "stuff" to buy with them -- more stuff didn't magically appear along with the new dollars.  *Nothing of value was made.*  

How is Bitcoin different from printing money?  What new "stuff to buy with it" did it bring?  Was it the electricity that was wasted in mining the coins?  No, that's gone, wasted by the miners contributing to entropy, the one that nature tends towards.  An underlying economy?  Nope.  A big nasty army to valuate bitcoins by threat of violence?  No again.  What then?  An algo & a protocol which could be copypasted to make identically useful "currencies"?  

How can you have over 500 posts in less than a month on a forum dedicated to something that you understand so poorly?

It competes for the same goods, it's functionally equivalent to counterfeit money.  

No.
You clearly do not understand what counterfeit is.

You clearly don't understand what "functionally equivalent" is

Counterfeit objects are produced by counterfeiters to deceive the targeted recipient into believing they have received a genuine object.  Someone selling "Gucci" knockoffs as the real deal is a counterfeiter.  Someone passing fake $20 notes as genuine is a counterfeiter.  The people that they give these things to are expecting specific objects and are given fakes.  Bitcoin does not look like any fiat currency.  People don't pretend that a bitcoin is identical to some other currency.  When you get a bitcoin, you are getting what you expect.

So bitcoin is NOT functionally equivalent to counterfeit money.

You may believe that bitcoin is worthless, or that it will collapse, or fade away, or any other unsavory fate.  That doesn't mean it is counterfeit.  Holy Crap.

Bitcoin is functionally equivalent to counterfeit money in the sense that it devalues real currencies, the ones with underlying economies, government backing, the ones accepted by gas stations & grocery stores.  If you're not very bright, i don't hold it against you, just ask me to explain, K?
 

[RoadToHell]

Bitcoin is functionally equivalent to counterfeit money in the sense that it devalues real currencies, the ones with underlying economies, government backing, the ones accepted by gas stations & grocery stores.  If you're not very bright, i don't hold it against you, just ask me to explain, K?
 

There are many things that cause devaluation in currencies.  Chief among them is governments printing more of the currency.  But I digress... Because something causes currency devaluation it does not follow that it is a counterfeit currency.  A poor national economy relative to other countries will cause a currency to devalue.  Is a poor national economy counterfeit money?  If one countries economy is taking off (China for instance) while many other countrys' economies are going down, the currency of the prosperous country will increase in value in relation to the others.  Does that make the prosperous country's currency counterfeit?  Yea, I guess you better explain.

[AliceWonder]

The value of any currency not backed by something tangible is only what people give it.

bitcoin does not devalue the dollar.
If you buy bitcoins to save instead of the dollar, it is because you have more confidence in bitcoin than the dollar. If lots of people do that, the value of the dollar I suppose could go down but that is the open market deciding the dollar isn't worth as much, and if it wasn't bitcoin it would be gold or real estate or even the peso.

Bitcoin though is a medium of exchange. I buy bitcoin with real dollar and use bitcoin to purchase item and seller then sells bitcoin for dollar.
How does that devalue the dollar?

It doesn't.

[jedunnigan]

Honestly, this argument is not going to go anywhere. Crumbs look up counterfeit--it's not simply about devaluing other currencies. It's about imitating them and passing them off as equals.

Bitcoin is not legally a currency so it couldn't be counterfeiting other currencies, simply by that definition. Period, end of story.

[crumbs]

Bitcoin is functionally equivalent to counterfeit money in the sense that it devalues real currencies, the ones with underlying economies, government backing, the ones accepted by gas stations & grocery stores.  If you're not very bright, i don't hold it against you, just ask me to explain, K?
 

There are many things that cause devaluation in currencies.  Chief among them is governments printing more of the currency.  

Lolz.  It's irrelevant if there are other things that devalue currencies -- my point is that Bitcoin is amongst those things.  
Would you ask "hey, Y U no liek mah counterfeit monyz? It ain't *the chief thing* that devalues currencies!"

But I digress... Because something causes currency devaluation it does not follow that it is a counterfeit currency.

Nobody said it was.  I said that it was functionally similar.  A Dutch boy's finger in the dike is functionally equivalent to a cork, at least as far as disinterested dyke is concerned.  Get it now?

A poor national economy relative to other countries will cause a currency to devalue.  Is a poor national economy counterfeit money?  If one countries economy is taking off (China for instance) while many other countrys' economies are going down, the currency of the prosperous country will increase in value in relation to the others.  Does that make the prosperous country's currency counterfeit?  Yea, I guess you better explain.

I'm a patient man.  I'll try again.  See the boldface text above?  Read it slowly.  Read it again.  then read all the way down to these words.  If you still don't get it, rinse & repeat.

[RoadToHell]

I'm a patient man.  I'll try again.  See the boldface text above?  Read it slowly.  Read it again.  then read all the way down to these words.  If you still don't get it, rinse & repeat.

Ah, thanks!  I get it now.


It's functionally equivalent to a counterfeit currency because... you don't like it and you don't like the way it works.  The fact that it isn't counterfeit anything should not be considered.  Yes, that really clears it up for me.

The Dutch boy finger analogy is cute.  The problem with it is that, well, the point of sticking the finger in the dike was for it to act like a cork.  While the point of bitcoin is to facilitate the secure, electronic transfer of value.  As AliceWonder pointed out, bitcoins have value.  Kind of the exact opposite of a counterfeit money.  So we now all see that it is much more accurate to say that bitcoin is the functional equivalent of cash.

[EDIT]fixed link to counterfeit definition[/EDIT]

[crumbs]

The value of any currency not backed by something tangible is only what people give it.

bitcoin does not devalue the dollar.
If you buy bitcoins to save instead of the dollar, it is because you have more confidence in bitcoin than the dollar.

What happens to the dollar you bought the bitcoin with?  Does it get destroyed?  Or does the guy who sold you the bitcoin still have it to spend? 

If lots of people do that, the value of the dollar I suppose could go down but that is the open market deciding the dollar isn't worth as much, and if it wasn't bitcoin it would be gold or real estate or even the peso. [...]

Thanks for at least acknowledging the obvious.  Do we agree that Bitcoin, if it has value, drains that value directly from the currencies which already exist?   

[RoadToHell]

The value of any currency not backed by something tangible is only what people give it.

bitcoin does not devalue the dollar.
If you buy bitcoins to save instead of the dollar, it is because you have more confidence in bitcoin than the dollar.

What happens to the dollar you bought the bitcoin with?  Does it get destroyed?  Or does the guy who sold you the bitcoin still have it to spend? 

If lots of people do that, the value of the dollar I suppose could go down but that is the open market deciding the dollar isn't worth as much, and if it wasn't bitcoin it would be gold or real estate or even the peso. [...]

Thanks for at least acknowledging the obvious.  Do we agree that Bitcoin, if it has value, drains that value directly from the currencies which already exist?   

This part - "Do we agree that Bitcoin, if it has value, drains that value directly from the currencies which already exist?"  If this is true, it is showing the functionality of any successful currency.  So the contention about your "functionally equivalent" statement is with the word "counterfeit".  Your argument that use of bitcoin will cause other currencies to devalue has no basis in the concept of fraud, deceit, or other terms associated with the word "counterfeit."  Your statement that bitcoin is "functionally equivalent to counterfeit money" is way off base and can easily be made to be accurate by removing the word counterfeit.

[bytemaster]

There are only paradoxes among those who do not understand economics.

Every single example the OP posted is comprised of two assertions that both cannot be true at the same time... and they are not true.   

Hoarding is not a paradox, study Austrian Economics.  Hoarding is just a derogatory name for high demand.
There is no loyalty paradox, any developer who does not work to evolve bitcoin into the best currency possible will find that Bitcoin is outcompeted in the market by alt coins.   So there is no paradox, only short-term vs long-term payoff and potential miscalculations by developers.

There is no idealogical paradox, you presume they must remain unbiased.   At first glance it would appear as though some (if not all) of the scientific community has arrived at the conclusion that the world is round. There is nothing inherently wrong with that conclusion, in fact it's a reasonable one if you ask me; however, to maintain the integrity of the Scientific method, scientiests must remain unbiased against the theoretical and practical aspects of science.

The last 'paradox' is even more ridiculous, "Bitcoin strives to become the world reserve currency, but only shows its strength if it outcompetes all of the powers aligned against it".   This is two ways of saying the SAME THING because every other competitor on the market is persecuting bitcoin in an attempt to displace bitcoin. 

[crumbs]

I'm a patient man.  I'll try again.  See the boldface text above?  Read it slowly.  Read it again.  then read all the way down to these words.  If you still don't get it, rinse & repeat.

Ah, thanks!  I get it now.


It's functionally equivalent to a counterfeit currency because... you don't like it and you don't like the way it works.  The fact that it isn't

No, and i'm beginning to see this is going to take some time.
It is functionally equivalent because it dilutes the real currencies just like counterfeit currency.  
Introducing one billion dollars of counterfeit notes into an economy is functionally equivalent to introducing a number of bitcoins "worth" in total one billion dollars.

counterfeit[/b] anything should not be considered.  Yes, that really clears it up for me.

The Dutch boy finger analogy is cute.  The problem with it is that, well, the point of sticking the finger in the dike was for it to act like a cork.  While the point of bitcoin is to facilitate the secure, electronic transfer of value.

Now you're just being silly.  Bitcoin is a brilliant troll on money, electronic transfer of value was figured out a long time ago, it's called "wiring money."  Good morning

As AliceWonder pointed out, bitcoins have value.

ORLY?  Where did that value come from?  And where does it go when the price plummets?  What makes 1BTC worth ~30% less than it was worth a month ago?  And around ~15% more than it was a day ago?  Intrinsic value?

Kind of the exact opposite of a counterfeit money.

You mean Bitcoin is representative money, it's backed by tangibles?  Love curious factoids & trivia, do go on

So we now all see that it is much more accurate to say that bitcoin is the functional equivalent of cash.

You're all tangled up in your own thoughtlets, let me help you:

"Cash," as the entire world knows it today, is fiat.
"Fiat" is a type of currency that is valuated by decree, typically of a nation state.
"Bitcoin," according to wiki, is an artificial currency, and since you love quotes so much, here's one for you, enjoy :

"The Wikimedia Foundation, as a donor-driven organization, has a fiduciary duty to be responsible and prudent with its money. This has been interpreted to mean that we do not accept "artificial" currencies – that is, those not backed by the full faith and credit of an issuing government. We do, however, strive to provide as many methods of donating as possible and continue to monitor Bitcoin with interest and may revisit this position should circumstances change."
https://wikimediafoundation.org/wiki/FAQ/en#Why_does_the_Wikimedia_Foundation_not_currently_accept_Bitcoin.3F

[EDIT]fixed link to counterfeit definition[/EDIT]

Thank you

[crumbs]

The value of any currency not backed by something tangible is only what people give it.

bitcoin does not devalue the dollar.
If you buy bitcoins to save instead of the dollar, it is because you have more confidence in bitcoin than the dollar.

What happens to the dollar you bought the bitcoin with?  Does it get destroyed?  Or does the guy who sold you the bitcoin still have it to spend?  

If lots of people do that, the value of the dollar I suppose could go down but that is the open market deciding the dollar isn't worth as much, and if it wasn't bitcoin it would be gold or real estate or even the peso. [...]

Thanks for at least acknowledging the obvious.  Do we agree that Bitcoin, if it has value, drains that value directly from the currencies which already exist?  

This part - "Do we agree that Bitcoin, if it has value, drains that value directly from the currencies which already exist?"  If this is true, it is showing the functionality of any successful currency.

No. The only reason currencies are "successful" is because they are "backed by the full faith and credit of an issuing government."  That means that i have (oh, let's be trite ) the word of some real important guy that the paper's worth what he claims it is.

With Bitcoin   ... i have no word from a non-entity that the virtual money is worth the paper it is not printed on.  In other words, today your love, tomorrow ... wait, do i know you you?

So the contention about your "functionally equivalent" statement is with the word "counterfeit".  Your argument that use of bitcoin will cause other currencies to devalue has no basis in the concept of fraud, deceit, or other terms associated with the word "counterfeit."

If you hate the negative connotations, i understand.  Shall we settle on quasi currency?  Better?

Your statement that bitcoin is "functionally equivalent to counterfeit money" is way off base and can easily be made to be accurate by removing the word counterfeit.

Quasi currency it is, then.  I'm glad we got that out of the way

Edit: Sorry for the catty tone.

[Zangelbert Bingledack]

The developers, as probable holders of large sums of Bitcoin, are invested in the optimal success of the ecosystem. This ecosystem will thrive — and with it the value of the Bitcoin they hold will prosper — in direct proportion to it's usefulness and adoption as a payment platform. To that end, obviously an open standard and a bazaar model will have the most powerful effect.

The only conflict of interest is one of short term gain, of potential for someone to choose to try to short change the future of the ecosystem for a very short term and limited scope profit.

I disagree. Here is an example: The Bitcoin core devs are approached by a collection of nation-states that have an ultimatum: add KYC features to transactions or we will outlaw Bitcoin. They promise to utilize the technical prowess of their collective intelligence agencies to filter network calls to the blockchain and fragment the network.

Here's the problem: core devs want Bitcoin to thrive and prosper, and even if Bitcoin can operate without the need for approval by regulators, it will stymie the growth of Bitcoin thus lowering its value... perhaps sending it into an unprecedented downward spiral. Do they risk losing all this money they made or do they hold true to the Nakamoto architecture? That's one hell of a conflict of interest.

If this happened, people would figure out what was going on and distrust the compromised devs. Even if they were threatened not to tell anyone, people would figure it out by their silence and finally by actually looking at the code. If the manipulators were persistent enough, it would just result in all the devs (new devs) being completely pseudonymous, but with reputation, similar to Dread Pirate Roberts. It would slow down development for a while, but not stop it.

[AliceWonder]

crumbs - counterfeit money is money that is designed to fool people into believing it is the currency it is not. It is deception. It does not devalue fiat unless the fiat is easy to counterfeit. What it does is steal fiat from the last person to possess it when it is discovered to be fraudulent,

Bitcoin is not even close to counterfeit. It is not pretending to be something else, its purpose is not fraud, and the last person stuck with it is only sh*t out of luck if the currency crashes (true with any currency, confederate dollars weren't worth anything after the U.S. civil war for example)

By your incorrect assumptions of what counterfeit is, anything people invest in to hedge against the dollar serves the same purpose as counterfeit. That just is not true.

Please look it up.

[jedunnigan]

There are only paradoxes among those who do not understand economics.

Every single example the OP posted is comprised of two assertions that both cannot be true at the same time... and they are not true.  

Thanks for the informative post.

They are definitely not paradoxes--someone mentioned that earlier. My bad.

There is no loyalty paradox, any developer who does not work to evolve bitcoin into the best currency possible will find that Bitcoin is outcompeted in the market by alt coins.   So there is no paradox, only short-term vs long-term payoff and potential miscalculations by developers.

I'll reference my last post: changes can be made to the protocol that would not drive users away from Bitcoin but could be motivated by self interest. It may not be a paradox, but it certainly is a reality.

At first glance it would appear as though some (if not all) of the scientific community has arrived at the conclusion that the world is round. There is nothing inherently wrong with that conclusion, in fact it's a reasonable one if you ask me; however, to maintain the integrity of the Scientific method, scientiests must remain unbiased against the theoretical and practical aspects of science.

Hmm, I'm not sure that example fits. In the case of the scientific method, modus operandi is fairly straightforward. There is consensus on the rules. Opinions on legal and economic theories are neither standard nor universally applicable, thus they open the gateway for bias in their respective worldviews.

So for a core dev to be the most effective, they must not be bias in their understanding of them and how they may apply to the Bitcoin protocol.

The last 'paradox' is even more ridiculous, "Bitcoin strives to become the world reserve currency, but only shows its strength if it outcompetes all of the powers aligned against it".   This is two ways of saying the SAME THING because every other competitor on the market is persecuting bitcoin in an attempt to displace bitcoin.  

See, you've taken the quote and changed and didn't even mention the substance. Let's look at the important part: "Bitcoin 'strives' for official and normal prominence... [but] It may turn out...[it is] in no need of any official confirmation."

Might not be a paradox... but it certainly isn't redundant or ridiculous if you ask me. We are all entitled to our opinions, of course.

If this happened, people would figure out what was going on and distrust the compromised devs. Even if they were threatened not to tell anyone, people would figure it out by their silence and finally by actually looking at the code. If the manipulators were persistent enough, it would just result in all the devs (new devs) being completely pseudonymous, but with reputation, similar to Dread Pirate Roberts. It would slow down development for a while, but not stop it.

Very good point.