Can someone smart teach me the concept of fiat currency vs. virtual currency?

[deisik]

Well true on currency's local purpose, although that is starting to change a bit with internet.

In this aspect Bitcoin is not very much different from what you get with Visa or MasterCard...

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[1714886356]

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[AnonyMint]

Well true on currency's local purpose, although that is starting to change a bit with internet.

In this aspect Bitcoin is not very much different from what you get with Visa or MasterCard...

And a lot less hassle too.

BTC currently mainly has a use to do illegal or banned things or just to spend it for the thrill of it. Money transfers are less expensive, but not if you factor the FX losses and price volatility.

Oh one thing is BTC can't be charged back, so that enables some new applications.

[AnonyMint]

<Bitcoin> is limited in quantity because, in a decentralized currency, no one can set an inflation rate.  So once all 21 million Bitcoins are mined, there is no inflation

This is also not true for obvious reasons. Inflation is determined not only by the amount of money in circulation but also by the velocity of circulation, i.e. the frequency at which one unit of currency changes hands within a given time period. Increasing the velocity of money would in effect be equal to additional emission of currency into circulation, which can bring about inflation even if the amount of money remains constant. As simple as that...

And don't forget productivity too.

[deisik]

This is also not true for obvious reasons. Inflation is determined not only by the amount of money in circulation but also by the velocity of circulation, i.e. the frequency at which one unit of currency changes hands within a given time period. Increasing the velocity of money would in effect be equal to additional emission of currency into circulation, which can bring about inflation even if the amount of money remains constant. As simple as that...

And don't forget productivity too.

Right, if productivity falls things usually become more expensive because less is done with the same cost (and vice versa). Though this is not strictly a monetary phenomenon and more difficult to grasp...  

[AnonyMint]

This is also not true for obvious reasons. Inflation is determined not only by the amount of money in circulation but also by the velocity of circulation, i.e. the frequency at which one unit of currency changes hands within a given time period. Increasing the velocity of money would in effect be equal to additional emission of currency into circulation, which can bring about inflation even if the amount of money remains constant. As simple as that...

And don't forget productivity too.

Right, if productivity falls things usually become more expensive because less is done with the same cost (and vice versa). Though this is not strictly a monetary phenomenon and more difficult to grasp...  

It can increase too.

[cryptoanarchist]

http://www.youtube.com/watch?v=8Bfe6CgYbH8

 

[deisik]

Right, if productivity falls things usually become more expensive because less is done with the same cost (and vice versa). Though this is not strictly a monetary phenomenon and more difficult to grasp...  

It can increase too.

As far as I remember, we were talking about forces possibly driving Bitcoin inflation up, not down...

[AnonyMint]

http://www.youtube.com/watch?v=8Bfe6CgYbH8

 

http://www.youtube.com/watch?v=S9s_dStcpqU#t=50

[AnonyMint]

Right, if productivity falls things usually become more expensive because less is done with the same cost (and vice versa). Though this is not strictly a monetary phenomenon and more difficult to grasp...  

It can increase too.

As far as I remember, we were talking about forces possibly driving Bitcoin inflation up, not down...

Productivity of altcoin programmers?

[deisik]

As far as I remember, we were talking about forces possibly driving Bitcoin inflation up, not down...

Productivity of altcoin programmers?

We're heading right into particulars!
Personally, I don't think that even increased Bitcoins supply could presently affect its price significantly or in any predictable way. So your question remains a moot point...

[AnonyMint]

As far as I remember, we were talking about forces possibly driving Bitcoin inflation up, not down...

Productivity of altcoin programmers?

We're heading right into particulars!
Personally, I don't think that even increased Bitcoins supply could presently affect its price significantly or in any predictable way. So your question remains a moot point...

So far...stay tuned