How come the bank failure destroy the wealth???

[Etlase2]

Someone will pay the demurrage, but probably not the borrower. My point is that it makes no sense to include demurrage in the costs of borrowing like you did.
Not sure I understand your last sentence.

Whenever the borrower spends that money, the receiver is going to look at it and see "oh the payment is due tomorrow, the cost of my product must take this into account." I'm talking about a real-world scenario here, I don't know how Freicoin will do it. (and apparently you don't either... where's the release?)

This tells me nothing. Please, just say what you think I'm ignoring.

That there are financial systems in place (or would eventually be in place in a cryptocurrency) and you can't use an example of 2 fish and 2 Freicoins to prove a point as to how demurrage will affect an economy.

The question is if freicoin it's better than bitcoin and expocoin.

Well, I am biased by common sense and have little investment in BTC, but of course it will be better.

However, the two major problems I see with Freicoin are:

1) Unless you use a different manner for distributing the initial coins, mountains of wealth will still be placed in the hands of early adopters. See: speculative bubble, ad nauseum.
2) If you use a different manner of distributing coins (such as ease-in, ease-out described in some other threads), you have little hope of having it adopted now that bitcoin is already here.

This community has already been convinced that a pyramid is the only proper way to start a cryptocurrency. This is quite evidenced by my thread on your forums.

[johnyj]

There's no point on having money if there's only two people. They would just use IOUs.

The point of an island with only 2 people is to simplify the complexity, in a market based economy, everything for sell have a buyer, everything produced has a consumer. If a model can clearly illustrate the process between one producer and one consumer, then after multiply, it could suit economy of any size

Most of the macro economists are rather talking about general concepts instead of precise numbers, the demand curve is merely a concept instead of mathematics. But 1% and 100% are totally different things, so most of the macro economy theories today are not very convincing, what they think a big impact might be a small ripple in reality while what they ignored small parameters might generate devastating effect. For example, I think interest rate is rather unimportant compared to jobless rate, and the usefulness of BTC is much more important than the deflation nature of BTC, etc... If we take that approach, economy discussion will end up with a endless debate of "which one is more important", and developed into political practice

Back to the topic, "How come the bank failure destroy the wealth", this puzzle is still not solved  

The financial crisis seems to be too complex to understand, but if I could explain in an island with only 2 people how the bank failure destroyed the wealth, it will certainly help a lot, and it is not impossible either

I just had some new progress in thinking: Since fish and fruit are definitely not suitable for long term storage, a fish based economy will not be able to have lots of savings, everything produced are to be consumed quickly, no matter how high their productivity is, all their savings have to be consumed in one day, they can not increase their long term saving

What can be kept for long term are utilities/machines/tools/resouces etc, and in classical economics these are called capitals

[jtimon]

Someone will pay the demurrage, but probably not the borrower. My point is that it makes no sense to include demurrage in the costs of borrowing like you did.
Not sure I understand your last sentence.

Whenever the borrower spends that money, the receiver is going to look at it and see "oh the payment is due tomorrow, the cost of my product must take this into account."

And how do you think he will (should) take it into account?

I'm talking about a real-world scenario here, I don't know how Freicoin will do it. (and apparently you don't either... where's the release?)

maaku is working on a currency with 4% demurrage, but is not based in the bitcoin code, they're coding it from scratch.
There's two points where I highly disagree with him on the implementation, but I will support their currency anyway.
I haven't time right now to code the freicoin I want, but I think is not so hard.

This tells me nothing. Please, just say what you think I'm ignoring.

That there are financial systems in place (or would eventually be in place in a cryptocurrency) and you can't use an example of 2 fish and 2 Freicoins to prove a point as to how demurrage will affect an economy.

I'm not using an example with two fish and two freicoins. I've told you the effects on interest that demurrage would have compared to inflation.
Ask whatever you don't understand or, if you disagree, prove me wrong.

The question is if freicoin it's better than bitcoin and expocoin.

Well, I am biased by common sense and have little investment in BTC, but of course it will be better.

I guess you mean freicoin will be better than bitcoin.
What about expocoin? Do you think is equivalent to freicoin too?

However, the two major problems I see with Freicoin are:

1) Unless you use a different manner for distributing the initial coins, mountains of wealth will still be placed in the hands of early adopters. See: speculative bubble, ad nauseum.

There's a difference in how both system reward early adopters. With freicoin, speculators are losing freicoins with time. They cannot sit in their coins forever.

2) If you use a different manner of distributing coins (such as ease-in, ease-out described in some other threads), you have little hope of having it adopted now that bitcoin is already here.

I don't think that a decentralized system can warranty stable prices (actually I don't think a centralized system can do it neither) and I have read many proposals in this forum.
If it appears, I think it have many possibilities of being more used than bitcoin. I don't think that anything special must be done to reward early adopters.
But it's just the way it is. If very few people want the coin and later on many people want them, it's price is going to rise. You have inflation at the beginning of the coin, so they can lose money by speculating too.

This community has already been convinced that a pyramid is the only proper way to start a cryptocurrency. This is quite evidenced by my thread on your forums.

I don't see how a fixed supply is a pyramid, but not all people in the forums agree with the fixed monetary base.
For example, Sepp thinks an elastic supply is completely necessary. I'm not completely against an elastic supply, to be honest I doubt if its is desirable or not.
My point is that without a technical feasible solution we don't really need to discuss its desirability.

[jtimon]

There's no point on having money if there's only two people. They would just use IOUs.

The point of an island with only 2 people is to simplify the complexity, in a market based economy, everything for sell have a buyer, everything produced has a consumer. If a model can clearly illustrate the process between one producer and one consumer, then after multiply, it could suit economy of any size

I understand that you want a simple example to help you see things clearer. But 2 persons is too few if you want to think about money. Because with two people money is not even necessary. With 2 people having cash doesn't even make sense.

Most of the macro economists are rather talking about general concepts instead of precise numbers, the demand curve is merely a concept instead of mathematics. But 1% and 100% are totally different things, so most of the macro economy theories today are not very convincing, what they think a big impact might be a small ripple in reality while what they ignored small parameters might generate devastating effect. For example, I think interest rate is rather unimportant compared to jobless rate, and the usefulness of BTC is much more important than the deflation nature of BTC, etc... If we take that approach, economy discussion will end up with a endless debate of "which one is more important", and developed into political practice

Interest and deflation are profoundly related to unemployment.

Back to the topic, "How come the bank failure destroy the wealth", this puzzle is still not solved  

Sorry about that. I was just answering your questions.
But I've already answered to that question. Is not that wealth is destroyed. Is that wealth creation stops or slows down.
The reason is that investments depend on the financial market. If Bernanke wasn't printed like crazy we would have had deflation, which discourages real capital investments.

The financial crisis seems to be too complex to understand, but if I could explain in an island with only 2 people how the bank failure destroyed the wealth, it will certainly help a lot, and it is not impossible either

I can help you with your example, but you really need more than two people. You're already using more than two people by referring to an abstract impersonal market.

I just had some new progress in thinking: Since fish and fruit are definitely not suitable for long term storage, a fish based economy will not be able to have lots of savings, everything produced are to be consumed quickly, no matter how high their productivity is, all their savings have to be consumed in one day, they can not increase their long term saving

They can save by lending the fish to other people who can use their time in investments (say the construction of a boat).
But saving is not a goal in itself. You save to consume later, not just for the shake of saving.

What can be kept for long term are utilities/machines/tools/resouces etc, and in classical economics these are called capitals

Yes, they use to be more durable. Even (real) capitals deteriorate, but that fact is often ignored.
They're more durable, let's say they're everlasting. What's your point here?

[Etlase2]

And how do you think he will (should) take it into account?

By raising the price, I thought that was obvious.

maaku is working on a currency with 4% demurrage, but is not based in the bitcoin code, they're coding it from scratch.
There's two points where I highly disagree with him on the implementation, but I will support their currency anyway.

I haven't kept up to date, but last I saw he wanted to have demurrage at 1% for the first 4 or 5 years or whatever as well. I'll get back to this later in my reply.

I'm not using an example with two fish and two freicoins. I've told you the effects on interest that demurrage would have compared to inflation.
Ask whatever you don't understand or, if you disagree, prove me wrong.

Yes, you've told me and you ask me to prove you wrong. How can I possibly prove you wrong? I am either supposed to assume that you are smarter than every financial mind that has ever existed and have finally found a solution to the ills of the world's currencies, or I am supposed to pretend I am smarter than every financial mind that has ever existed and can prove you wrong. I don't really have a way out here.

I guess you mean freicoin will be better than bitcoin.
What about expocoin? Do you think is equivalent to freicoin too?

I don't think expocoin is equivalent, but I think it is better in one way over how fiat works because of how the money is distributed. However, it has no way of adjusting to economic conditions, so that will ultimately lead it to many of the same problems as fiat.

There's a difference in how both system reward early adopters. With freicoin, speculators are losing freicoins with time. They cannot sit in their coins forever.

It would be better than bitcoin, but it's still a transfer of wealth and it still doesn't solve the speculative bubble that will happen when a small number of people grab a large portion of the supply before it has a chance to distribute. It will undoubtedly ease the bubble though. And perhaps with people that are not brainwashed by what satoshi has said about how a currency must work (lol @ the advertisements in the middle of threads quoting satoshi's feelings on the central bank and such--very third reich-esque), they will voluntarily make an effort to have a stable currency before manipulating it for profit. I won't bet on it though, especially if maaku is at the head. 1% demurrage to encourage early adoption is the same line of thinking that encourages hoarding and speculative bubbles.

I don't think that a decentralized system can warranty stable prices (actually I don't think a centralized system can do it neither) and I have read many proposals in this forum.
If it appears, I think it have many possibilities of being more used than bitcoin. I don't think that anything special must be done to reward early adopters.
But it's just the way it is. If very few people want the coin and later on many people want them, it's price is going to rise. You have inflation at the beginning of the coin, so they can lose money by speculating too.

If you can separate yourself from thinking a fixed supply of money is the only way, you should read the newest version of my proposal. I believe I am quite close to achieving a stable exchange rate. It is light years ahead of the last version. And it is based purely on the economy and market forces, not a strict set of rules.

I don't see how a fixed supply is a pyramid, but not all people in the forums agree with the fixed monetary base.
For example, Sepp thinks an elastic supply is completely necessary. I'm not completely against an elastic supply, to be honest I doubt if its is desirable or not.
My point is that without a technical feasible solution we don't really need to discuss its desirability.

It's a pyramid if the early adopters spent comparatively nothing while the later adopters do all the labor for a pittance. If Freicoin has a similar distribution to bitcoin, it is going to be a pyramid. Being able to use Freedom money should not entail forking over your life savings and waiting for the next batch of suckers to come along to prop you up.

Again, see my proposal for technically feasible solution that solves a myriad of other problems with using the block chain to secure transactions.

[jtimon]

And how do you think he will (should) take it into account?

By raising the price, I thought that was obvious.

But rise the price compared to what? For example, say he charges 4 btc or 5 frc. Fair enough.
But the price won't be risen over time because the demurrage is constant. Therefore it doesn't rise the costs of borrowing in the way you earlier suggested.

maaku is working on a currency with 4% demurrage, but is not based in the bitcoin code, they're coding it from scratch.
There's two points where I highly disagree with him on the implementation, but I will support their currency anyway.

I haven't kept up to date, but last I saw he wanted to have demurrage at 1% for the first 4 or 5 years or whatever as well. I'll get back to this later in my reply.

I don't remember that maaku said that but I'm also against that. First, I don't think that you should do anything special to attract early adopters.
Second, if you think that a demurrage rate is convenient, it is from the beginning. And finally, web services have already to adapt their deposits to demurrage and a variable demurrage only gives them more work.

I'm not using an example with two fish and two freicoins. I've told you the effects on interest that demurrage would have compared to inflation.
Ask whatever you don't understand or, if you disagree, prove me wrong.

Yes, you've told me and you ask me to prove you wrong. How can I possibly prove you wrong? I am either supposed to assume that you are smarter than every financial mind that has ever existed and have finally found a solution to the ills of the world's currencies, or I am supposed to pretend I am smarter than every financial mind that has ever existed and can prove you wrong. I don't really have a way out here.

To prove me wrong you only need to invalidate a deduction I make by showing that I'm not using cartesian logic rules. Or you can deny the validity of one of my assumptions.
Then I will have to get to that premise from logic rules and premises that you accept.
Discussing is not about being smarter, is about using logic and know the other person's assumptions.

I guess you mean freicoin will be better than bitcoin.
What about expocoin? Do you think is equivalent to freicoin too?

I don't think expocoin is equivalent, but I think it is better in one way over how fiat works because of how the money is distributed. However, it has no way of adjusting to economic conditions, so that will ultimately lead it to many of the same problems as fiat.

If they're different, is Freicoin better than expocoin? How?

There's a difference in how both system reward early adopters. With freicoin, speculators are losing freicoins with time. They cannot sit in their coins forever.

It would be better than bitcoin, but it's still a transfer of wealth and it still doesn't solve the speculative bubble that will happen when a small number of people grab a large portion of the supply before it has a chance to distribute. It will undoubtedly ease the bubble though. And perhaps with people that are not brainwashed by what satoshi has said about how a currency must work (lol @ the advertisements in the middle of threads quoting satoshi's feelings on the central bank and such--very third reich-esque), they will voluntarily make an effort to have a stable currency before manipulating it for profit. I won't bet on it though, especially if maaku is at the head. 1% demurrage to encourage early adoption is the same line of thinking that encourages hoarding and speculative bubbles.

The way we fight that "transfer of wealth" is by discouraging speculation through demurrage.
Again, I'm against a lower demurrage at the beginning.

I don't think that a decentralized system can warranty stable prices (actually I don't think a centralized system can do it neither) and I have read many proposals in this forum.
If it appears, I think it have many possibilities of being more used than bitcoin. I don't think that anything special must be done to reward early adopters.
But it's just the way it is. If very few people want the coin and later on many people want them, it's price is going to rise. You have inflation at the beginning of the coin, so they can lose money by speculating too.

If you can separate yourself from thinking a fixed supply of money is the only way, you should read the newest version of my proposal. I believe I am quite close to achieving a stable exchange rate. It is light years ahead of the last version. And it is based purely on the economy and market forces, not a strict set of rules.

I downloaded one of your proposals, but it is very long.
Can't you make a sumary on how you decide the target monetary base?

I don't see how a fixed supply is a pyramid, but not all people in the forums agree with the fixed monetary base.
For example, Sepp thinks an elastic supply is completely necessary. I'm not completely against an elastic supply, to be honest I doubt if its is desirable or not.
My point is that without a technical feasible solution we don't really need to discuss its desirability.

It's a pyramid if the early adopters spent comparatively nothing while the later adopters do all the labor for a pittance. If Freicoin has a similar distribution to bitcoin, it is going to be a pyramid. Being able to use Freedom money should not entail forking over your life savings and waiting for the next batch of suckers to come along to prop you up.

What labor?
With merged mining, I expect difficulty to be relatively high from the beginning. Most miners will sell most of the freicoins they mine for a long time.
So I expect freicoins to "cheap" for long. But that doesn't bother me. I want people to buy things with freicoins, is not important if they need 10 or 10000 fcn for a loaf of bread.

Again, see my proposal for technically feasible solution that solves a myriad of other problems with using the block chain to secure transactions.

I think your proposal lacks a clear summary.

[Etlase2]

But rise the price compared to what? For example, say he charges 4 btc or 5 frc. Fair enough.
But the price won't be risen over time because the demurrage is constant. Therefore it doesn't rise the costs of borrowing in the way you earlier suggested.

Well, I suppose it all depends on how the demurrage is applied. Obviously neater tricks can be done with a virtual currency. But yeah I'll concede the point that it doesn't raise the cost of borrowing.

To prove me wrong you only need to invalidate a deduction I make by showing that I'm not using cartesian logic rules. Or you can deny the validity of one of my assumptions.

I'm only trying to say that the effects of demurrage are not simple to predict. Especially using real-world scenarios. In a virtual currency with a fixed supply, it is somewhat easier, but still not obvious.

If they're different, is Freicoin better than expocoin? How?

I am not here to argue about expocoin. That's why I said stop bringing it up. I don't know who these people are that say Freicoin is similar to expocoin, I am not one of them.

The way we fight that "transfer of wealth" is by discouraging speculation through demurrage.

Then fight it by having a sane distribution of the currency too then. Not one like bitcoin's. I can't comment on how good or bad it might be until I know exactly what you guys are doing. But if it's the same as bitcoin's, then I wouldn't support it.

I downloaded one of your proposals, but it is very long.
Can't you make a sumary on how you decide the target monetary base?

I need to make a wiki or something so that it is easier to follow. The network would manage smaller, "pool"-like groups of people. The more pools, the more currency is created. But there are two ways the difficulty is raised: based on the changes in the average speed of currency creation, and based on temporarily reducing the supply to encourage competition among more efficient machines to set a new difficulty for when the supply is no longer reduced. People who hoard/save money are encouraged to trade it when demand is high (velocity is low) because otherwise more money will be created and the value of their money is reduced. I am always looking to tend to a stable purchasing power.

Since the amount of people creating money is variable, I have come up with a whole different system to secure the network that is not based on hashing power.

What labor?
With merged mining, I expect difficulty to be relatively high from the beginning. Most miners will sell most of the freicoins they mine for a long time.
So I expect freicoins to "cheap" for long. But that doesn't bother me. I want people to buy things with freicoins, is not important if they need 10 or 10000 fcn for a loaf of bread.

The labor of processing cycles. Ah yes, merged mining. The wet dream of a secondhand currency creator. I'm glad your intentions are honest, maaku did everything to sound just like a bitcoin pyramid supporter in my eyes.

I think your proposal lacks a clear summary.

Most of the economic summary is in section 4. Everything else revolves around how the network works completely differently from bitcoin. But yes, I'm aware the proposal is not written well, but I'm on the fourth major revision but this is the first one where I believe the concept is solid from beginning to end. The next major revision will be a clear whitepaper.

[johnyj]

Interest and deflation are profoundly related to unemployment.

I think interest and deflation has no direct connection to employment, the employment rate can be assured by job-guarantee or similar program, and the high unemployment rate is caused by a high level of automation and high number of matured consumer

They can save by lending the fish to other people who can use their time in investments (say the construction of a boat).

Very good point! You showed that short term saving (food) can translate into long term saving (boat)

On further thought, in an island with only 2 people, the speed of this saving will not be fast: A could both capture fish and pick fruits as much as possible to free B from the food gathering work, but B will still consume only one fish and one basket of fruits per day while he is building the boat, the excessive fish and fruits will get trashed, thus the maximum saving A could have is 1 fish + 1 basket fruit per day. Anyway, A can have some saving without causing B's debt, but his saving still caused stocking of goods (the boat), but that is more acceptable since boat can be regarded as value keeping

Yes, they use to be more durable. Even (real) capitals deteriorate, but that fact is often ignored.
They're more durable, let's say they're everlasting. What's your point here?

In my island model, it is very easy to see that A's saving will cause either stocking of goods or B's debt, but if those stocked goods are everlasting and their value seldom changes (This is another aspect: Even the goods are everlasting, people's preference changes), then saving in money's form in principle can be unlimited. But in reality, nothing's value is everlasting, if saving can not be translated into everlasting goods, then it must come from some one else's debt

[johnyj]

Some progress:

With only 2 people, the speed of wealth accumulation can not be fast: A could both capture fish and pick fruits as much as possible to free B from the food gathering work, but B will still consume only one fish and one basket of fruits per day while he is building the boat, the excessive fish and fruits will get trashed, thus the maximum saving A could have is 1 fish + 1 basket fruit per day

Since a big society can be divided into millions of A and B pair, so the society as a whole can not have huge savings per person if the daily consumption per person is limited by 1 fish and 1 basket fruit

Imagine that the consumption level increased: B can consume fish/fruit/egg/milk and many other things per day, thus A could also produce all of these things, but B still make the same boat for A, this means the boat price will get much higher. But since A are not able to build boat due to lack of skills, A might still accept a boat with higher price

Here is something notable: The productivity of A increased, but the wealth accumulation did not

[rahl]

The real question is: The country as a whole did not lose any wealth in the financial crisis, but why many people are getting poorer and the real tangible and consumable products are getting less produced?

No, wealth was not destroyed during the crisis. It is is during the boom that wealth is destroyed.

When you build a house that no one is going to value enough to live in you are destroying wealth. So it is the distorted market signals during the booms that make people allocated wealth to wastefull use that is the destruction. The crisis is just the correction when people start to realise they destroyed capital...

[johnyj]

No, wealth was not destroyed during the crisis. It is during the boom that wealth is destroyed.

When you build a house that no one is going to value enough to live in you are destroying wealth. So it is the distorted market signals during the booms that make people allocated wealth to wastefull use that is the destruction. The crisis is just the correction when people start to realise they destroyed capital...

Good view, I think the word "value" seems play a vital role here.

I spent lots of resources to dig out a stone that no one seems like, my labor has just been wasted, this means wealth are destroyed. But if a person with the right knowledge can identify the stone as a diamond, then suddenly I have made a fortune, wealth are created

So, is wealth dependent on others valuation?

In a desert, a man desperately looking for water, how much a bottle of water value to him, compared with the same bottle of water in the city? Can we say that scarcity create wealth and abundance destroy wealth?

[jtimon]

I wouldn't say that wealth and value are the same thing.
Value is very relative and wealth also a bit relative but not that much.
I'll try to explain it with an example similar to yours.
Let's say we have city A with 50 people and 7 three-room houses and another one with also city B with 50 people and 25 four-room houses.
A house in city B can be considered more wealth than a house in city A, because it has an extra room.
But a house in city A is certainly more valuable due to the city's real state scarcity.
As an investment, the house in A is probably a better choice because its yield is higher.

In this sense, wealth is even harder to define than value.

[niko]

There is one thing always confused me: People always say that financial crisis destroyed trillions dollar worth of wealth

Based on general economy definition, only consumable goods and services are wealth, money is just a medium of exchange. So, if a house used to worth 5 million now worths 3 million, the actual wealth (the house) do not change, it is just the price of the house changed, and I think this price change are mainly caused by two things: money supply and people's desire

In my opinion, only war or natural disaster can really destroy wealth massively, any kind of financial loss is just a illusion, since people mistakenly think that money is wealth

The real question is: The country as a whole did not lose any wealth in the financial crisis, but why many people are getting poorer and the real tangible and consumable products are getting less produced?

I'll quote Alan Watts who back in the 1970s pointed out how people often confuse measure with what is being measured:

Think about the Great Depression. One day everything was going along fine - everybody was pretty wealthy and had plenty to eat - and the next day, suddenly, everybody was in poverty. What happened? Had the farms disappeared? Had the cows vanished into thin air? Had the fish of the sea ceased to exist? Had human beings lost their energy, their skills, and their brains? No. This is what happened: On the morning after the beginning of the Depression, a carpenter came to work, and the foreman said to him, 'Sorry, chum, you can't work today. There ain't no inches.'

The carpenter said, 'What do you mean, there ain't no inches?'

'Yeah,' the foreman said. 'We got lumber, we got metal, but we ain't got no inches.'

'You're crazy,' the carpenter said.

And the foreman replied, 'The trouble with you is you don't understand business.'

What happened in the Great Depression was that human beings confused money with wealth. And they didn't realize that money is a measure of wealth, in exactly the same way that inches are a measure of length. They think it is something that is valuable in and of itself. And as a result of that they get into unbelievable trouble.

[johnyj]

I wouldn't say that wealth and value are the same thing.
Value is very relative and wealth also a bit relative but not that much.
I'll try to explain it with an example similar to yours.
Let's say we have city A with 50 people and 7 three-room houses and another one with also city B with 50 people and 25 four-room houses.
A house in city B can be considered more wealth than a house in city A, because it has an extra room.
But a house in city A is certainly more valuable due to the city's real state scarcity.
As an investment, the house in A is probably a better choice because its yield is higher.

In this sense, wealth is even harder to define than value.

Good example

Hundreds of years ago, Adam Smith tried to define the value of the goods by using amount of labor used to produce the goods in general, that theory has been replaced by supply and demand in later economics. But I still feel that an unbiased measure of value is needed. Up until now, the best measurement I can find is Energy - If a product include lots of energy or it is made by lots of energy, then it will have high value

But even this measurement is not static: Depends upon the technology level of the human, same energy can be very valuable or not valuable at all. Imagine that you have found a stone that contains billions watts of power but the technology in the near future still are not able to utilize that power, then it will worth nothing

Keynes said from long term point of view we are all dead, maybe that is he's view: Only those happened when you are alive are valuable, then it is almost impossible to find an unbiased measure of value

[jtimon]

If a product include lots of energy or it is made by lots of energy, then it will have high value cost

You're using labor theory of value there. But things are not valuable because they're expensive to produce.
What happens is:

1) Prices show how people value things
2) If the costs of production are lower than the selling price, more items of that type are produced, if the costs are higher, the production stops.
So production costs are a function of value instead of the other way around.

Keynes said from long term point of view we are all dead, maybe that is he's view: Only those happened when you are alive are valuable, then it is almost impossible to find an unbiased measure of value

Not sure, but I think that it was just his answer to the critics that said that their policies may look effective in the short run but slow growth in the long run.
I think an expert in Keynes explains these sentence and others in the EconStories youtube channel.

[Etlase2]

When can we expect the next book, dr. jtimon?

[jtimon]

When can we expect the next book, dr. jtimon?

Sorry for trying to explain things to people in an economics forum.
I'll let you know when the book is out.
Seriously, I want to answer you in the discussion we're having, but I haven't had the time.

By the way, I'm not a doctor. Not even economist, just computer scientist. But the monetary issue has been obsessing me for the last 5 years. Friends of mine that are economists (with degree and all) haven't thought about money half the time I've done.

And a little advice: try not to be so rude just because people don't agree with you.
We're all trying to change the world for the better, right?

[Etlase2]

Sorry for trying to explain things to people in an economics forum.

He did mention Adam Smith and how value is now considered to be a factor of supply and demand just 2 sentences prior to the one you quoted. So I think pointing out that something with a high energy cost will have a high value as "LTV" in that context is inaccurate. LTV or CTP-TV are not wrong, they are just not the whole picture. Like Newton's theory of motion versus Einstein's. And it is not a given that current economic theory, Einstein's theory, or any other theory is true either. It is just a better description for the same phenomena. So by saying "that is LTV, LTV is wrong" I think you are doing everyone an intellectual disservice.

And a little advice: try not to be so rude just because people don't agree with you.
We're all trying to change the world for the better, right?

This forum brings out the worst in me because I see the worst in people here (--I'm not referring to you). So many people unashamedly promote the scam that is bitcoin and it revolts me. There is absolutely no question in my mind that bitcoin is a scam, and the guise of solid economic principles makes it even more fraudulent. People perpetuate this silly economy not to change the world, but to increase the weight of their pocketbooks. Bitcoin is a vessel to bring out the worst in people. And it does so in such an ingenious way that they often don't even realize it. I feel like I have a moral obligation to set things right, but I know my voice is one of the few dissenting and that I probably have no effect and it is frustrating. The intellectual dishonesty around here is so high that I feel like I'm reading Fox News or listening to a politician speak in a campaign.

[niko]

This forum brings out the worst in me because I see the worst in people here (--I'm not referring to you). So many people unashamedly promote the scam that is bitcoin and it revolts me. There is absolutely no question in my mind that bitcoin is a scam, and the guise of solid economic principles makes it even more fraudulent. People perpetuate this silly economy not to change the world, but to increase the weight of their pocketbooks. Bitcoin is a vessel to bring out the worst in people. And it does so in such an ingenious way that they often don't even realize it. I feel like I have a moral obligation to set things right, but I know my voice is one of the few dissenting and that I probably have no effect and it is frustrating. The intellectual dishonesty around here is so high that I feel like I'm reading Fox News or listening to a politician speak in a campaign.

+1

Bitcoin, if it ever becomes popular, will only transfer the control of money flow from the greedy hands of bankers into greedy hands of the populus. Not sure if that would be a good thing or not, but even in this early stage it clearly damaged the potential of the idea. It also eliminates centralized control over money supply, as it is now hard-coded into algorithm, which I think it is a good thing (especially because it is deflationary, and it would somewhat curb wasteful consumerism).

But all this has got nothing to do with the subject of this thread.

[jtimon]

Sorry for trying to explain things to people in an economics forum.

He did mention Adam Smith and how value is now considered to be a factor of supply and demand just 2 sentences prior to the one you quoted. So I think pointing out that something with a high energy cost will have a high value as "LTV" in that context is inaccurate. LTV or CTP-TV are not wrong, they are just not the whole picture. Like Newton's theory of motion versus Einstein's. And it is not a given that current economic theory, Einstein's theory, or any other theory is true either. It is just a better description for the same phenomena. So by saying "that is LTV, LTV is wrong" I think you are doing everyone an intellectual disservice.

Maybe he wasn't making a conceptual mistake but just a typographic one.
I don't know what is CTP-TV, but definitely you can say that LTV is wrong.
As classical mechanics, it is incompatible with some observable phenomena in nature.

And a little advice: try not to be so rude just because people don't agree with you.
We're all trying to change the world for the better, right?

This forum brings out the worst in me because I see the worst in people here (--I'm not referring to you). So many people unashamedly promote the scam that is bitcoin and it revolts me. There is absolutely no question in my mind that bitcoin is a scam, and the guise of solid economic principles makes it even more fraudulent. People perpetuate this silly economy not to change the world, but to increase the weight of their pocketbooks. Bitcoin is a vessel to bring out the worst in people. And it does so in such an ingenious way that they often don't even realize it. I feel like I have a moral obligation to set things right, but I know my voice is one of the few dissenting and that I probably have no effect and it is frustrating. The intellectual dishonesty around here is so high that I feel like I'm reading Fox News or listening to a politician speak in a campaign.

There's people who sincerely believe that bitcoin, gold or silver can change the monetary system for the better. You should try to understand why they think like this instead of always show you don't trust their intentions. Bitcoin is not perfect, but I don't think it is a scam. Many people is putting their (most times) unpaid coding, documenting and thinking effort here and it's a shame that you call them scamers.

But as niko says, this is all off-topic.