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Author Topic: Why I think the Bitcoin wealth pyramid hinders economic development  (Read 2979 times)
asdf
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October 24, 2011, 11:24:40 AM
 #21

Strawman  Angry

Are you made of straw?

If there is a flaw in my logic, please do me the honor of deconstructing it. I think I made a reasonable case for hoarders not hindering development.
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ElectricMucus
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October 24, 2011, 11:29:28 AM
 #22

Strawman  Angry

Are you made of straw?

If there is a flaw in my logic, please do me the honor of deconstructing it. I think I made a reasonable case for hoarders not hindering development.
No you made a strawman argument, there is no point in deconstructing it since it doesn't apply to my statement.

First they ignore you, then they laugh at you, then they keep laughing, then they start choking on their laughter, and then they go and catch their breath. Then they start laughing even more.
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October 24, 2011, 11:35:38 AM
 #23

Hoarders spending money into the economy doesn't grow it. That's just consumption: taking real wealth out and putting currency in, bidding up prices.

To grow the economy, hoarders would need to invest their coins. investment creates or grows new businesses, which is precisely economic growth. The thing is, you can't really loan out bitcoins at the moment, but this is a problem of a lack of infrastructure, which will come with time.

Just holding coins forever doesn't impact the economy, except by lowering prices due to reduced supply of coins in the active economy.

You contradict yourself.

Why would hoarders invest their coins and create businesses? It is far more profitable to just sit on their coins and let the economy suffer deflation while sitting pretty on that pile of money. If the price of goods is reduced, I can buy more stuff with my hoard.

You are right though, hoarding is bad for society in general. Tax the rich.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
asdf
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October 24, 2011, 12:14:22 PM
 #24

Hoarders spending money into the economy doesn't grow it. That's just consumption: taking real wealth out and putting currency in, bidding up prices.

To grow the economy, hoarders would need to invest their coins. investment creates or grows new businesses, which is precisely economic growth. The thing is, you can't really loan out bitcoins at the moment, but this is a problem of a lack of infrastructure, which will come with time.

Just holding coins forever doesn't impact the economy, except by lowering prices due to reduced supply of coins in the active economy.

You contradict yourself.

Why would hoarders invest their coins and create businesses? It is far more profitable to just sit on their coins and let the economy suffer deflation while sitting pretty on that pile of money. If the price of goods is reduced, I can buy more stuff with my hoard.

You are right though, hoarding is bad for society in general. Tax the rich.

Your forgetting that investment, if done right, will bring nominal returns. Why sit on money when it can earn interest.

If you "buy more stuff with your hoard" then you're no longer hoarding.
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October 24, 2011, 12:43:42 PM
 #25

The only way the economy will grow at a healthy rate is by an increase in business volume.

No. the economy grows from savings and loans, not by consumption. Growth means the economy produces more goods and services than it did before. It can't do that unless it increases it's efficiency, that is: more output for the same input (labor). To increase efficiency a business must invest in new equipment, RND, etc.

If a bunch of hoarders suddenly start spending their money, business will experience a temporary spike in sales and the value of money will drop. Afterwards, the economy is no bigger than it was before and businesses will have low stock.

To sustain an increased volume a business must improve it's infrastructure. This requires capital.

This is a direct argument against your core assumption.
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October 24, 2011, 01:10:52 PM
 #26

You are repeating yourself.  Cheesy

Absolute bullshit btw.

First they ignore you, then they laugh at you, then they keep laughing, then they start choking on their laughter, and then they go and catch their breath. Then they start laughing even more.
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October 24, 2011, 02:21:02 PM
 #27

You are repeating yourself.  Cheesy

Absolute bullshit btw.

This is the noise made by people without arguments.

If growth does not require savings of capital, why don't you go spend yourself into prosperity?
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October 24, 2011, 02:27:10 PM
 #28

You are repeating yourself.  Cheesy

Absolute bullshit btw.

This is the noise made by people without arguments.
Well I could repeat my own argument but that won't do any good. As I said asdf made a strawman argument and there is nothing to refute.

But to give you something of why I am not attempting to refute his claims:
Stating that increase in business volume and economic growth are not correlated is just and simple false.

First they ignore you, then they laugh at you, then they keep laughing, then they start choking on their laughter, and then they go and catch their breath. Then they start laughing even more.
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October 24, 2011, 02:32:43 PM
 #29

But to give you something of why I am not attempting to refute his claims:
Stating that increase in business volume and economic growth are not correlated is just and simple false.

Correlation != causation

An increase in business volume can only come after the necessary capital is in place. Individuals must forego consumption now (save/hoard) in order for those resources to be devoted to creating that necessary capital. It's an iterative process.
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October 24, 2011, 02:39:00 PM
 #30

Yes it is but real growth can only occur when profits are made and reinvested. That's the way it always worked. While short-term loans might be desirable for a startup or during a period of unexpected rapid development they are not the main engine for growth. 

First they ignore you, then they laugh at you, then they keep laughing, then they start choking on their laughter, and then they go and catch their breath. Then they start laughing even more.
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October 24, 2011, 02:45:24 PM
 #31

Yes it is but real growth can only occur when profits are made and reinvested. That's the way it always worked. While short-term loans might be desirable for a startup or during a period of unexpected rapid development they are not the main engine for growth.

Speaking of straw...

I said nothing about loans, only saving/hoarding which is reducing consumption in order to divert scarce resources toward building capital
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October 24, 2011, 02:53:36 PM
 #32

Yes it is but real growth can only occur when profits are made and reinvested. That's the way it always worked. While short-term loans might be desirable for a startup or during a period of unexpected rapid development they are not the main engine for growth.

Speaking of straw...

I said nothing about loans, only saving/hoarding which is reducing consumption in order to divert scarce resources toward building capital
So the upper 0.1% which own 50% of issued coins are about to come up with their own businesses? But hey we never know, wake me up when they do.  Roll Eyes
(I think they don't they want to retire, big time which will not happen imo)

The statement about loans was dedicated to asdf who said growth is dependent upon loans.

First they ignore you, then they laugh at you, then they keep laughing, then they start choking on their laughter, and then they go and catch their breath. Then they start laughing even more.
BitterTea
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October 24, 2011, 02:57:56 PM
 #33

So the upper 0.1% which own 50% of issued coins are about to come up with their own businesses? But hey we never know, wake me up when they do.  Roll Eyes

Why do you assume that they have not?

The statement about loans was dedicated to asdf who said growth is dependent upon loans.

Are you a liar, or can you not read?

Quote
the economy grows from savings and loans, not by consumption

Individuals must save/hoard and then loan/invest their savings to businesses which use those loans to build capital, which is economic growth.
ElectricMucus
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October 24, 2011, 03:03:41 PM
 #34

Old coins barely move. You can see that if you dig though the block chain a little.
I mean, fuck not everybody is retarded and some of those startups might have been partially funded by early adopter coins but a majority of the 0.1% still thinks they gonna live their golden years in a castle by doing nothing.

First they ignore you, then they laugh at you, then they keep laughing, then they start choking on their laughter, and then they go and catch their breath. Then they start laughing even more.
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October 24, 2011, 03:07:47 PM
 #35

Old coins barely move. You can see that if you dig though the block chain a little.
I mean, fuck not everybody is retarded and some of those startups might have been partially funded by early adopter coins but a majority of the 0.1% still thinks they gonna live their golden years in a castle by doing nothing.

Kinda like all those lazy hoarders with stocks and bonds in their 401k's and pension funds. F those guys, right?

BitterTea
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October 24, 2011, 03:09:45 PM
 #36

Old coins barely move. You can see that if you dig though the block chain a little.

So? What if those keys are lost? What if they want to keep their older coins for their savings?

I mean, fuck not everybody is retarded and some of those startups might have been partially funded by early adopter coins

What?

but a majority of the 0.1% still thinks they gonna live their golden years in a castle by doing nothing.

Yeah, project those beliefs, project them!
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October 24, 2011, 03:10:13 PM
 #37

Kinda like all those lazy hoarders with stocks and bonds in their 401k's and pension funds. F those guys, right?

Guys! Compounded interest is magic, they taught me that in elementary school!
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October 24, 2011, 03:21:21 PM
 #38

Old coins barely move. You can see that if you dig though the block chain a little.
I mean, fuck not everybody is retarded and some of those startups might have been partially funded by early adopter coins but a majority of the 0.1% still thinks they gonna live their golden years in a castle by doing nothing.

Kinda like all those lazy hoarders with stocks and bonds in their 401k's and pension funds. F those guys, right?

Bitcoin is differnt. With current price development the only people who can fund a startup with their coins are those 0.1%. Of course that is not for everybody that's why the alternative is partial consumption from people who startup from the fiat side.

The main thought process seems to be 'they never know I have 100k coins, I'll use those when I can buy myself an island'. Problem is the economy needs a small percentage of those coins to get started because the public now involved to with bitcoins plans to buy a new car by then. (Real world examplified but see the rest of the argumentation above)

I think I've gone over that in enough detail to make it clear.

Old coins barely move. You can see that if you dig though the block chain a little.

So? What if those keys are lost? What if they want to keep their older coins for their savings?
I can totally follow the thought process but that's not the point.

First they ignore you, then they laugh at you, then they keep laughing, then they start choking on their laughter, and then they go and catch their breath. Then they start laughing even more.
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October 24, 2011, 03:27:56 PM
 #39

Who has more incentive to see bitcoin succeed than the 0.1% holding 50% of the coins?

BitterTea
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October 24, 2011, 03:30:49 PM
 #40

The main thought process seems to be 'they never know I have 100k coins, I'll use those when I can buy myself an island'.

From what evidence do you draw this conclusion?

All I see is you projecting your thought process onto others.
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