Bitcoin Forum
September 30, 2016, 10:03:38 AM *
News: Latest stable version of Bitcoin Core: 0.13.0 (New!) [Torrent]. Make sure you verify it.
 
   Home   Help Search Donate Login Register  
Poll
Question: Do you support the proposed amendments?
Yes
No
Partially (explain)

Pages: « 1 2 3 4 5 6 7 8 9 10 [11] 12 13 14 15 16 17 18 19 20 21 22 23 »  All
  Print  
Author Topic: The current Bitcoin economic model doesn't work  (Read 80011 times)
afterburner229
Jr. Member
*
Offline Offline

Activity: 42


View Profile
May 31, 2011, 04:28:00 PM
 #201

What the hell are you babbling about? How is selling anything for bitcoins any different than selling them for dollars or seashells?

Ask Kjj, he did understand me. Selling does differ in numbers - how fast, how easy, how many goods available.
If you compare dollars, bitcoin & seashells in such view, you see THE HUGE DIFFERENCE. As for now, bitcoins are much more like seashells. And you give no way for bitcoin society to grow: you can not say 'bitcoin is just in it childhood'.



Advertised sites are not endorsed by the Bitcoin Forum. They may be unsafe, untrustworthy, or illegal in your jurisdiction. Advertise here.
1475229818
Hero Member
*
Offline Offline

Posts: 1475229818

View Profile Personal Message (Offline)

Ignore
1475229818
Reply with quote  #2

1475229818
Report to moderator
1475229818
Hero Member
*
Offline Offline

Posts: 1475229818

View Profile Personal Message (Offline)

Ignore
1475229818
Reply with quote  #2

1475229818
Report to moderator
MoonShadow
Legendary
*
Offline Offline

Activity: 1666



View Profile
May 31, 2011, 04:28:02 PM
 #202

I'll give 5 BTC to anyone who can provide an economic definition of "hoarding" which does not rely on personal preference and is demonstrably different than "saving".

I'll give it a shot:

Hoarding has three general meanings in an economic sense.  They are as follows: (1) acquiring excessive quantities of items that have little value in the market (think the crazy person who hoards paperclips), (2) acquisition based on an expectation that certain items will become extremely valuable related to current values during times of economic, political, or environmental crisis, or (3) acquisition based on on an expectation that such items will become extremely valuable compared with current values due to future scarcity.

Saving, on the other hand, merely involves guarding or preserving an asset for future use.  It does not require an expectation of future windfall profits, or excessive acquisition of items that have little value in the market.  

Did I win?


I would say so, but then I'm not the judge here.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
kjj
Legendary
*
Offline Offline

Activity: 1302



View Profile
May 31, 2011, 04:33:22 PM
 #203

I'll give 5 BTC to anyone who can provide an economic definition of "hoarding" which does not rely on personal preference and is demonstrably different than "saving".

In our current system, saving almost always means "deposit in a bank".  Bank deposits are still in circulation, since the banks use the deposited funds for lending.  (That isn't really true.  In reality, banks make loans, and then seek deposits to meet reserve requirements.)

By contrast, stuffing currency under your mattress could be seen as hoarding.  That money is prevented from circulating by being under your mattress.

That meets the second part of your criteria, but there is no way to meet the first criteria.  All asset allocation is a matter of personal preference.  Bank account, mattress, gold bars, fancy cars, all preferences.  But only one of them actually keeps cash out of action.

p2pcoin: a USB/CD/PXE p2pool miner - 1N8ZXx2cuMzqBYSK72X4DAy1UdDbZQNPLf - todo
I routinely ignore posters with paid advertising in their sigs.  You should too.
BitterTea
Sr. Member
****
Offline Offline

Activity: 294



View Profile
May 31, 2011, 04:40:35 PM
 #204

Burning federal reserve notes removes them from circulation, is that hoarding?

My point is that when people use the term "hoarding", what they really mean is "saving more than I think is necessary", which is why I used the bit about personal preference.
bitcoinfrenzy
Jr. Member
*
Offline Offline

Activity: 56


View Profile WWW
May 31, 2011, 04:44:13 PM
 #205

I'll give 5 BTC to anyone who can provide an economic definition of "hoarding" which does not rely on personal preference and is demonstrably different than "saving".

I'll give it a shot:

Hoarding has three general meanings in an economic sense.  They are as follows: (1) acquiring excessive quantities of items that have little value in the market (think the crazy person who hoards paperclips), (2) acquisition based on an expectation that certain items will become extremely valuable related to current values during times of economic, political, or environmental crisis, or (3) acquisition based on on an expectation that such items will become extremely valuable compared with current values due to future scarcity.

Saving, on the other hand, merely involves guarding or preserving an asset for future use.  It does not require an expectation of future windfall profits, or excessive acquisition of items that have little value in the market. 

Did I win?

1JxsbbP2k5KHYGWtmggT7yJJ4eRtj7n9sJ

1) does not apply to this discussion, though you are correct, but it relies on a subjective evaluation of "excessive"
2 and 3) seem to be a definitions for speculation, not hoarding


1) the market values it as excessive, that's the point.  Yes, the crazy person may value paperclips a lot more than the market, but the point is that the crazy hoarder's subjective valuation of the item is out of sync with the market. 

2/3) may also work for a definition of speculation, but I think 2 more specifically defines hoarding, no?

MoonShadow
Legendary
*
Offline Offline

Activity: 1666



View Profile
May 31, 2011, 04:50:32 PM
 #206

I'll give 5 BTC to anyone who can provide an economic definition of "hoarding" which does not rely on personal preference and is demonstrably different than "saving".

I'll give it a shot:

Hoarding has three general meanings in an economic sense.  They are as follows: (1) acquiring excessive quantities of items that have little value in the market (think the crazy person who hoards paperclips), (2) acquisition based on an expectation that certain items will become extremely valuable related to current values during times of economic, political, or environmental crisis, or (3) acquisition based on on an expectation that such items will become extremely valuable compared with current values due to future scarcity.

Saving, on the other hand, merely involves guarding or preserving an asset for future use.  It does not require an expectation of future windfall profits, or excessive acquisition of items that have little value in the market. 

Did I win?

1JxsbbP2k5KHYGWtmggT7yJJ4eRtj7n9sJ

1) does not apply to this discussion, though you are correct, but it relies on a subjective evaluation of "excessive"
2 and 3) seem to be a definitions for speculation, not hoarding


1) the market values it as excessive, that's the point.  Yes, the crazy person may value paperclips a lot more than the market, but the point is that the crazy hoarder's subjective valuation of the item is out of sync with the market. 

2/3) may also work for a definition of speculation, but I think 2 more specifically defines hoarding, no?
No, not really.  That is the function of speculation, as a predictive market.  If the speculator is correct in his predictions, then he profits while the market has stored resources that it needs during the crisis.  If he is wrong, he loses money.

"The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank...sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."

- Carroll Quigley, CFR member, mentor to Bill Clinton, from 'Tragedy And Hope'
bitcoinfrenzy
Jr. Member
*
Offline Offline

Activity: 56


View Profile WWW
May 31, 2011, 04:52:43 PM
 #207

I'll give 5 BTC to anyone who can provide an economic definition of "hoarding" which does not rely on personal preference and is demonstrably different than "saving".

I'll give it a shot:

Hoarding has three general meanings in an economic sense.  They are as follows: (1) acquiring excessive quantities of items that have little value in the market (think the crazy person who hoards paperclips), (2) acquisition based on an expectation that certain items will become extremely valuable related to current values during times of economic, political, or environmental crisis, or (3) acquisition based on on an expectation that such items will become extremely valuable compared with current values due to future scarcity.

Saving, on the other hand, merely involves guarding or preserving an asset for future use.  It does not require an expectation of future windfall profits, or excessive acquisition of items that have little value in the market. 

Did I win?

1JxsbbP2k5KHYGWtmggT7yJJ4eRtj7n9sJ

1) does not apply to this discussion, though you are correct, but it relies on a subjective evaluation of "excessive"
2 and 3) seem to be a definitions for speculation, not hoarding


1) the market values it as excessive, that's the point.  Yes, the crazy person may value paperclips a lot more than the market, but the point is that the crazy hoarder's subjective valuation of the item is out of sync with the market. 

2/3) may also work for a definition of speculation, but I think 2 more specifically defines hoarding, no?
No, not really.  That is the function of speculation, as a predictive market.  If the speculator is correct in his predictions, then he profits while the market has stored resources that it needs during the crisis.  If he is wrong, he loses money.

Speculation is defined as "investment involving high risk but also the possibility of high profits"  My definition did not focus on risk, hoarding doesn't necessarily involve high risk, it merely involves an anticipation of windfall profits due to either scarcity of the resource or external catastrophe (or both).  You can hoard something that is not a high risk asset, speculation requires a high risk of loss. 

BitterTea
Sr. Member
****
Offline Offline

Activity: 294



View Profile
May 31, 2011, 04:56:38 PM
 #208

Speculation is defined as "investment involving high risk but also the possibility of high profits"  My definition did not focus on risk, hoarding doesn't necessarily involve high risk, it merely involves an anticipation of windfall profits due to either scarcity of the resource or external catastrophe (or both).  You can hoard something that is not a high risk asset, speculation requires a high risk of loss. 

If you are saving something in order to capitalize on anticipated future increase in value, you are speculating on its future value. You can speculate over any time period... minutes or years. Would you consider it hoarding to buy one bitcoin expecting that its value will increase in the next two minutes?
bitcoinfrenzy
Jr. Member
*
Offline Offline

Activity: 56


View Profile WWW
May 31, 2011, 05:00:22 PM
 #209

Speculation is defined as "investment involving high risk but also the possibility of high profits"  My definition did not focus on risk, hoarding doesn't necessarily involve high risk, it merely involves an anticipation of windfall profits due to either scarcity of the resource or external catastrophe (or both).  You can hoard something that is not a high risk asset, speculation requires a high risk of loss.  

If you are saving something in order to capitalize on anticipated future increase in value, you are speculating on its future value.

I think in most cases you are correct.  The dictionary definition, however, generally looks at speculation as a risky investment.  Most of the time an asset that may appreciate significantly might also decline in value significantly.  But this is not necessary for hoarding.  For example, I could "hoard" guns and liquor on the belief that anarchy will break out and these assets will become incredibly valuable.  But I don't think this is "speculation" because these are not high risk assets, and they generally maintain their value over time.

BitterTea
Sr. Member
****
Offline Offline

Activity: 294



View Profile
May 31, 2011, 05:02:05 PM
 #210

Speculation is defined as "investment involving high risk but also the possibility of high profits"  My definition did not focus on risk, hoarding doesn't necessarily involve high risk, it merely involves an anticipation of windfall profits due to either scarcity of the resource or external catastrophe (or both).  You can hoard something that is not a high risk asset, speculation requires a high risk of loss. 

If you are saving something in order to capitalize on anticipated future increase in value, you are speculating on its future value.

I think in most cases you are correct.  The dictionary definition, however, generally looks at speculation as a risky investment.  Most of the time an asset that may appreciate significantly might also decline in value significantly.  But this is not necessary for hoarding.  For example, I could "hoard" guns and liquor on the belief that anarchy will break out and these commodities will become incredibly valuable.  But I don't think this is "speculation" because these are not high risk assets, and they generally maintain their value over time.

Ok, I agree with you on this point, but what is the difference between "hoarding" guns and liquor and "saving" guns and liquor? Can I save something with the expectation that it will increase in value, or is that always hoarding?

Does that mean that putting aside an asset is only saving if you expect it to stay the same or decrease in value?
bitcoinfrenzy
Jr. Member
*
Offline Offline

Activity: 56


View Profile WWW
May 31, 2011, 05:06:14 PM
 #211

Speculation is defined as "investment involving high risk but also the possibility of high profits"  My definition did not focus on risk, hoarding doesn't necessarily involve high risk, it merely involves an anticipation of windfall profits due to either scarcity of the resource or external catastrophe (or both).  You can hoard something that is not a high risk asset, speculation requires a high risk of loss. 

If you are saving something in order to capitalize on anticipated future increase in value, you are speculating on its future value.

I think in most cases you are correct.  The dictionary definition, however, generally looks at speculation as a risky investment.  Most of the time an asset that may appreciate significantly might also decline in value significantly.  But this is not necessary for hoarding.  For example, I could "hoard" guns and liquor on the belief that anarchy will break out and these commodities will become incredibly valuable.  But I don't think this is "speculation" because these are not high risk assets, and they generally maintain their value over time.

Ok, I agree with you on this point, but what is the difference between "hoarding" guns and liquor and "saving" guns and liquor? Can I save something with the expectation that it will increase in value, or is that always hoarding?

Does that mean that putting aside an asset is only saving if you expect it to stay the same or decrease in value?

The difference between hoarding and saving is the expectation of windfall profits, or (in the case of the crazy person) the "saving" of items that have no value in the market.  Saving doesn't entail expectation of windfall profits.  That's not to say it can't happen, and of course when you put money into the bank you hope it increases in value, but the proper definition of saving does not involve an expectation of windfall profits in the future.  Amassing a storehouse of guns and liquor in anticipation of the apocalypse, however, that is hoarding. 

BitterTea
Sr. Member
****
Offline Offline

Activity: 294



View Profile
May 31, 2011, 05:11:26 PM
 #212

The difference between hoarding and saving is the expectation of windfall profits, or (in the case of the crazy person) the "saving" of items that have no value in the market.  Saving doesn't entail expectation of windfall profits.  That's not to say it can't happen, and of course when you put money into the bank you hope it increases in value, but the proper definition of saving does not involve an expectation of windfall profits in the future.  Amassing a storehouse of guns and liquor in anticipation of the apocalypse, however, that is hoarding. 

"Windfall profits"... that is a subjective valuation essentially meaning "too many profits". Rather like "hoarding" = "saving too much".

If I hold 1 BTC with the expectation that it will someday buy me a house, is that hoarding?

If I hold 5,000,000 BTC with the expectation of a mild increase in value, is that hoarding?
bitcoinfrenzy
Jr. Member
*
Offline Offline

Activity: 56


View Profile WWW
May 31, 2011, 05:19:49 PM
 #213

The difference between hoarding and saving is the expectation of windfall profits, or (in the case of the crazy person) the "saving" of items that have no value in the market.  Saving doesn't entail expectation of windfall profits.  That's not to say it can't happen, and of course when you put money into the bank you hope it increases in value, but the proper definition of saving does not involve an expectation of windfall profits in the future.  Amassing a storehouse of guns and liquor in anticipation of the apocalypse, however, that is hoarding. 

"Windfall profits"... that is a subjective valuation essentially meaning "too many profits". Rather like "hoarding" = "saving too much".

If I hold 1 BTC with the expectation that it will someday buy me a house, is that hoarding?

If I hold 5,000,000 BTC with the expectation of a mild increase in value, is that hoarding?

I think the language I used originally is probably clearer, that hoarding involves an expectation that the future price will become "extremely valuable compared with current value" (for the non-crazy hoarder).  The distinction between hoarding and saving is that saving does not require an expectation of significant or extreme price increases, while hoarding does.  The distinction between hoarding and speculating is that hoarding does not require a significant risk of loss, while speculation does.  These definitions can overlap depending on the circumstances, but that does not mean they are the same. 

As for your examples, I would think that neither involve hoarding.  In the first case while you do have an expectation of significant price increases, you just hold 1, whereas hoarding probably requires amassing significant quantities.  In your second case, while you have amassed significant quantities, there isn't the expectation of significant future price increases.  The first case may be an example of speculation (because the value of the BTC is currently around $9 USD and could drop significantly), and the second may be an example of saving. 

BitterTea
Sr. Member
****
Offline Offline

Activity: 294



View Profile
May 31, 2011, 05:21:42 PM
 #214

As for your examples, I would think that neither involve hoarding.  In the first case while you do have an expectation of significant price increases, you just hold 1, whereas hoarding probably requires amassing significant quantities.  In your second case, while you have amassed significant quantities, there isn't the expectation of significant future price increases.  The first case may be an example of speculation (because the value of the BTC is currently around $9 USD and could drop significantly), and the second may be an example of saving. 

Quote
requires amassing significant quantities

Your definition requires the subjective valuation of a personal preference and does not qualify for my bounty.
bitcoinfrenzy
Jr. Member
*
Offline Offline

Activity: 56


View Profile WWW
May 31, 2011, 05:30:47 PM
 #215

As for your examples, I would think that neither involve hoarding.  In the first case while you do have an expectation of significant price increases, you just hold 1, whereas hoarding probably requires amassing significant quantities.  In your second case, while you have amassed significant quantities, there isn't the expectation of significant future price increases.  The first case may be an example of speculation (because the value of the BTC is currently around $9 USD and could drop significantly), and the second may be an example of saving. 

Quote
requires amassing significant quantities

Your definition requires the subjective valuation of a personal preference and does not qualify for my bounty.

I don't think it does.  Significance can be measured statistically, and can be defined as "observations that are unlikely to occur by chance and that therefore indicate a systematic cause."  Someone that amasses significantly more guns and liquor than the average Joe, as measured statistically, and does so because of the expectation of extreme price increases in times of anarchy or scarcity, is hoarding. 

BitterTea
Sr. Member
****
Offline Offline

Activity: 294



View Profile
May 31, 2011, 05:42:00 PM
 #216

As for your examples, I would think that neither involve hoarding.  In the first case while you do have an expectation of significant price increases, you just hold 1, whereas hoarding probably requires amassing significant quantities.  In your second case, while you have amassed significant quantities, there isn't the expectation of significant future price increases.  The first case may be an example of speculation (because the value of the BTC is currently around $9 USD and could drop significantly), and the second may be an example of saving. 

Quote
requires amassing significant quantities

Your definition requires the subjective valuation of a personal preference and does not qualify for my bounty.

I don't think it does.  Significance can be measured statistically, and can be defined as "observations that are unlikely to occur by chance and that therefore indicate a systematic cause."  Someone that amasses significantly more guns and liquor than the average Joe, as measured statistically, and does so because of the expectation of extreme price increases in times of anarchy or scarcity, is hoarding. 

What is significantly more? Twice as many as normal? Ten times? What is an extreme price increase? Double? Ten times? Fifty times?

This all subjective and is no different than "you are saving more than I think you should, thus you are hoarding".

The problem with your logic is that the only person who can tell what is the correct amount of anything to save is that person, no one else.
bitcoinfrenzy
Jr. Member
*
Offline Offline

Activity: 56


View Profile WWW
May 31, 2011, 05:52:51 PM
 #217


What is significantly more? Twice as many as normal? Ten times? What is an extreme price increase? Double? Ten times? Fifty times?

This all subjective and is no different than "you are saving more than I think you should, thus you are hoarding".

The problem with your logic is that the only person who can tell what is the correct amount of anything to save is that person, no one else.

There are different ways of measuring significance using statistics, but that does not mean it can not be done in a manner that does not rely on personal preference.  

Also, I really didn't think there were any value judgments expressed in the definitions I offered.  In popular discourse hoarding may have a negative connotation, but I thought you were looking for an economic definition that distinguished it from saving, which I think I provided.  

With the exception of the crazy person, the definition I offered had nothing to do with personal preference.  I could hoard guns and liquor and have no personal preference for these items, I could be someone who never drinks and never shoots.  

The definition of hoarding simply refers to the acquisition based on an expectation of significant future price increases.  Again, this is something that could be measured statistically, you could look at historical price variance for these assets, and if I was buying them with the expectation that their prices would increase beyond the normal distribution, I would probably be hoarding, regardless of my preference for the items.  

With savings, on the other hand, there is no requirement that the saver expect that his savings will increase beyond the normal range of increase based on historical data and variance.  

nazgulnarsil
Full Member
***
Offline Offline

Activity: 224


View Profile
May 31, 2011, 06:07:22 PM
 #218

hoarding means your expected price appreciation/depreciation is entirely in the market price for the object itself.

saving covers everything that involves investing in a productive venture to receive more of that item in the future.

hoarding you have X of some item and expect that to be worth more in the future.
saving you have X of some item and try to make it grow by some percentage over time.

hoarding is stuffing your mattress
savings is making loans
markm
Legendary
*
Offline Offline

Activity: 1722



View Profile WWW
May 31, 2011, 06:39:36 PM
 #219

Hoarding tends to be a loaded term implying possible wrongness or something a bit off.

A community might save up lots of stuff to build a big project, but a dragon does not save up oodles of gold and jewels to any purpose other than to have the largest hoard er I mean savings.

People might save boxtops or someting to some purpose but although I don't watch the television show "hoarders" I get the impression much of the so called hoarding is not to any particular purpose it is just sheer accumulation.

People might save eggs or a nice roast or something for sunday dinner but in wartime the longer they save rationed items for more sunday dinners they never actually have the more likely they are to be accused of hoarding.

-MarkM-

Browser-launched Crossfire client now online (select CrossCiv server for Galactic  Milieu)
Free website hosting with PHP, MySQL etc: http://hosting.knotwork.com/
evoorhees
Legendary
*
Offline Offline

Activity: 980


Democracy is the original 51% attack


View Profile
May 31, 2011, 06:52:56 PM
 #220

"Hoarding" is a moot concept. It's not important. It's a bogeyman.

As money is "withheld" from circulation, interest rates rise as the demand for money increases. As these rates rise, it becomes increasingly attractive to loan out "hoarded" funds and thus it's a self-correcting problem. ie- not really a problem at all.



Pages: « 1 2 3 4 5 6 7 8 9 10 [11] 12 13 14 15 16 17 18 19 20 21 22 23 »  All
  Print  
 
Jump to:  

Sponsored by , a Bitcoin-accepting VPN.
Powered by MySQL Powered by PHP Powered by SMF 1.1.19 | SMF © 2006-2009, Simple Machines Valid XHTML 1.0! Valid CSS!