bitcoinfrenzy
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June 01, 2011, 08:48:35 PM |
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zef
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June 01, 2011, 09:40:06 PM |
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Thanks, you should of just pointed me to http://lmgtfy.com/?q=definition+of+hoarding ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) Seriously though, is this the literature where you specifically draw your assumptions from? Perhaps I should of been more clear, if you believe that hoarding is quantifiably, objectively different from savings, where did you learn this? I looked over those sources and I can only conclude that there is no difference in their terminology between hoarding and saving. One source defines it as a variable that effects velocity of money, or "idle deposits", which could obviously be said of savings. The first source looks promising, but only alludes to definitions of hoarding, the closest thing to a definition was "actual holding of cash". Please correct me if am missing something though.
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bitcoinfrenzy
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June 01, 2011, 09:44:01 PM |
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Thanks, you should of just pointed me to http://lmgtfy.com/?q=definition+of+hoarding ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif) Seriously though, is this the literature where you specifically draw your assumptions from? Perhaps I should of been more clear, if you believe that hoarding is quantifiably, objectively different from savings, where did you learn this? I looked over those sources and I can only conclude that there is no difference in their terminology between hoarding and saving. One source defines it as a variable that effects velocity of money, or "idle deposits", which could obviously be said of savings. The first source looks promising, but only alludes to definitions of hoarding, the closest thing to a definition was "actual holding of cash". Please correct me if am missing something though. No, I just found these today and haven't looked at them in depth but from the looks of it the definition I proposed is not what these authors are referring to.
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Waschtel
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June 02, 2011, 11:38:19 AM |
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I think your analysis is sound, but your solution would burst the bitcoin-bubble: The success of bitcoin is largely due to early adopters speculating on deflation. If monetary policy is changed to open-end bitcoin generation, an enormous inflation will set in immediately, collapsing the whole project.
What I think will happen: When bitcoin-mining gets less and less profitable, some mining-guilds will switch to block reweaving, double spending bitcoins instead of mining. This will happen more and more often, weakening faith in the currency, and collapsing the system.
The whole project doesn't have a future, but have fun while it lasts!
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BitterTea
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June 02, 2011, 03:10:37 PM |
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The whole project doesn't have a future, but have fun while it lasts!
You're entitled to your opinion. I'll buy your bitcoins at $5/each before the bubble bursts though. (paging Kiba to the bubble, Kiba to the bubble)
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FooDSt4mP
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June 02, 2011, 03:20:46 PM |
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I think your analysis is sound, but your solution would burst the bitcoin-bubble: The success of bitcoin is largely due to early adopters speculating on deflation. If monetary policy is changed to open-end bitcoin generation, an enormous inflation will set in immediately, collapsing the whole project.
What I think will happen: When bitcoin-mining gets less and less profitable, some mining-guilds will switch to block reweaving, double spending bitcoins instead of mining. This will happen more and more often, weakening faith in the currency, and collapsing the system.
The whole project doesn't have a future, but have fun while it lasts!
Any pool that engaged in double spending would quickly see it's users switch to a different pool. The largest pool is only about 1/3 of the total hashing power. Non-pooled mining altogether is around 1/4 of all hashing power. Double spends are nearly impossible after a few confirmations unless all the pool operators work together. Why would they do that when they are making a lot of BTC, and doing so could only lower the value of their income?
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As we slide down the banister of life, this is just another splinter in our ass.
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Suggester (OP)
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June 03, 2011, 03:48:26 AM Last edit: June 03, 2011, 05:37:35 AM by Suggester |
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Just read this article by Adam Cohen titled Is the cryptocurrency Bitcoin a good idea? http://www.quora.com/Is-the-cryptocurrency-Bitcoin-a-good-idea/answer/Adam-Cohen-2Though his third and fourth raised points are overly pessimistic, he strongly addresses the early adopters bonus and the perpetual deflation as the first and second "severe problems". I'm glad the same points were raised by an independent economist. I'm also beginning to notice a trend in the ongoing discussion here: Most new comers (folks with a small number of posts) support my suggestions, while most "early adopters" don't. There can't be any mischievous intentions here, right? Just in case there was, I'm reminding the early adopters that the proposed system will not take any of their profits away. It will simply freeze the coin's value at the point which it's at once the implementation begins. But contrary to having people like Cohen (rightfully) doubting the sincerity of the project which Satoshi et al made thousands if not millions of dollars in profits for "taking an early risk", the new system will be much more trustworthy as it will be fair to all with a stable exchange price. No more speculation, no more incentives to hoard/save, and no more unwarranted profits (or losses). You can casually keep a few hundred coins in your virtual wallet without worrying about a price crash. And you can casually spend them without pulling your hair out when the price doubles the week after. How on earth does the current system beat the proposed one?
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cbeast
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June 03, 2011, 04:36:40 AM |
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regarding: http://www.quora.com/Is-the-cryptocurrency-Bitcoin-a-good-idea/answer/Adam-Cohen-2"Fortunately, it's such an obviously flawed system that it will probably never grow to a point where it causes any ill-effects,or even impact, to world economies." Obviously ![Roll Eyes](https://bitcointalk.org/Smileys/default/rolleyes.gif) "No matter what your reasoning, Bitcoin is a ridiculous idea that will not accomplish what you want." Or maybe it will. This guy clearly believes he is an expert about economics; yet he is writing a blog about a currency, not an economy. His argument about a "central bank" fails. Where is this "central bank?" America? Germany? Switzerland? The fact is, there is no workable banking system anywhere. That's why the world is financed by dodgy credit default swaps, derivatives, naked short-sells, and other financial jalopies. Bitcoin may not be perfect, but as long as it is reasonably secure, convenient, and available, it will thrive. The naysayers and demagogs can ad hominem and make all the strawmen arguments they want, but unless they show good evidence that bitcoin fails after two years, they can get get in the game or get out of the way. BTW, I have only known about BTC a couple weeks and have not yet seen any valid case presented against BTC. I am open to evidence, not just opinion.
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Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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Suggester (OP)
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June 03, 2011, 04:41:42 AM Last edit: June 03, 2011, 05:04:33 AM by Suggester |
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BTW, I have only known about BTC a couple weeks and have not yet seen any valid case presented against BTC.
You read the initial post right? It's against the limited supply system, not Bitcoin in general. I am open to evidence, not just opinion.
https://mtgox.com/trade/historyNuff said? ![Smiley](https://bitcointalk.org/Smileys/default/smiley.gif)
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MoonShadow
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June 03, 2011, 07:41:22 AM |
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Feel free to start your fork anytime. This experiment is ours.
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"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'
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ShadowOfHarbringer
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Bringing Legendary Har® to you since 1952
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June 03, 2011, 10:39:12 AM |
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Feel free to start your fork anytime. This experiment is ours.
+1 I don't particularly believe that this would be successful, but i will surely watch the development with interest. Perhaps even many forks should be created - inflata-coin, superdeflata-coin, stuff-coin, alter-coin - so we can experiment & test which one will be more successful than others.
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Catallaxy
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June 03, 2011, 12:43:05 PM |
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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.
People save with the incentive that they will profit, otherwise there would be no saving. It seems to me to be a little disingenuous to suggest people save altruistically and hoard selfishly.
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bitcoinfrenzy
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June 03, 2011, 02:06:22 PM |
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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.
People save with the incentive that they will profit, otherwise there would be no saving. It seems to me to be a little disingenuous to suggest people save altruistically and hoard selfishly. There was no such intended implication, I did not suggest that saving is altruistic or that hoarding is selfish. Later I acknowledged that the term "windfall" was probably not as precise as "significant price increases". Savers do not generally anticipate significant price increases, although you are correct that they do have a profit incentive. They just do not anticipate their profits will deviate significantly from historical averages generally. Hoarding, on the other hand, generally entails an expectation that profits will be significant, for the reasons I noted above. I do not think hoarding is any more selfish or altruistic than saving. As many have noted, hoarded serves an important function for the market.
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MoonShadow
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June 03, 2011, 02:25:52 PM |
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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.
People save with the incentive that they will profit, otherwise there would be no saving. It seems to me to be a little disingenuous to suggest people save altruistically and hoard selfishly. There was no such intended implication, I did not suggest that saving is altruistic or that hoarding is selfish. Later I acknowledged that the term "windfall" was probably not as precise as "significant price increases". Savers do not generally anticipate significant price increases, although you are correct that they do have a profit incentive. They just do not anticipate their profits will deviate significantly from historical averages generally. Hoarding, on the other hand, generally entails an expectation that profits will be significant, for the reasons I noted above. I do not think hoarding is any more selfish or altruistic than saving. As many have noted, hoarded serves an important function for the market. The problem with "hording" is that the term has a commonly understood negative connotation, whether we would agree with your benign definition or not.
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"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'
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Guy Inkognito
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June 03, 2011, 02:45:37 PM |
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Hi, I will repost this here as the previous thread has been closed by the admin for unkown reasons / probably a lot of "deflation" posts which was not intended. I believe 2 things are imperative 1) controlled growth of the supply as suggested by "Suggester" 2) Making credit available and facilitating savings through an interest free credit/savings exchange. This will prevent "hoarding". Instead of "hoarding" the BC could be lent out to others without interest. The lender will be compensated by credit points, which allows him to get a bigger credit from future savers. ----------------------------------------------------------------------------------------------------------------------------------------------------------------- Bitcoins had quite a frenzy about them recently, being mentioned in mass media and their value increasing. However, they will die out even without governments etc. Intervening or clamping them down. Let me explain: Bitcoins are not money. They are a (perfect) medium of exchange. Their properties are similar to gold: scarce (finite amount), divisible, stable, low volume / easy transport, secure. So they only fulfil two properties of money: exchange and storage of value. But they lack CREDIT. Fiat however, is born out of credit (each dollar/euro/... cash or deposit is mirrored by an equal amount of debt). The next is zero. Money is debt. The debt money (fiat) arises from property rights: somebody needs cash so he will pledge his property against a loan. The bank demands interest for giving up her property right on the money (a compensation for not being able to use the money, NOT because of the credit risk). Fiat systems thus have inherent interest in debt contracts. This interest has not yet been created, in order to have the interest paid back, new money must be perpetually created. Obviously, over the course of many years, the fiat system leads to an unequal distribution of net worth, as people owning property earn interest and people needing money pay interest. The advantage, however, of the fiat system is Credit: only Credit enables economic trade, investment etc. Everybody who started their own business or wanted to buy a house knows that. But credit comes into place with property rights – the only conundrum is the interest which is inherent to it. If we could remove the interest, we could go towards more equilibrium and a more stable and sustainable economy. Without credit, we would live in a mere barter society. That’s what the bitcoin world is at the moment – a bartering club. Unless bit coins allow CREDIT, they will just be a scarce barter medium and will end in an awful way: Due to their scarcity (and the relatively huge amount of fiat in circulation), a bubble is already building: many people buy bitcoins without the intention of even use them for barter. Easy to see, as mtgox a “exchange” is the biggest bitcoin accepting site. They are now valued at ten dollar, with about 8 million in circulation. I would not be surprised if they go to 100 dollars due to their scarcity and similar properties to gold. They are a highly deflationary medium. Eventually, the bubble will burst however, as people suddenly find themselves on the selling side and convert their bitcoins into physical goods or fiat. (the velocity of money rises, everybody wants to get rid of them, prices of goods relatively rise, the currency plummets). This would lead to a sad end to a nice experiment. Just like with Tulipmania, Dot Com Bubble etc. People would lose a lot of fiat and staying away from alternative currencies for a long time. So what can be done to avoid it? 1) Bitcoins should not be completely scarce. A finite amount of bitcoins makes them highly deflationary. Similar to gold, a controlled mining should be allowed even after the intended stop, so their availability grows with usage 2) Credit needs to be allowed and facilitated: As we don’t want to have another fiat experiment, bitcoins would be ideal to try true interest free credit: please take a look at the following interest free credit/banking model which could be easily setup for Bitcoins http://jak.aventus.nu/download/Uppsatser/MARK_BURTON_DISSERTATION_2.pdfhttp://www.feasta.org/documents/review2/carrie2.htmThoughts / critique / discussion welcome! Guy
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Catallaxy
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June 03, 2011, 03:12:44 PM |
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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.
People save with the incentive that they will profit, otherwise there would be no saving. It seems to me to be a little disingenuous to suggest people save altruistically and hoard selfishly. Savers do not generally anticipate significant price increases, although you are correct that they do have a profit incentive. They just do not anticipate their profits will deviate significantly from historical averages generally. Hoarding, on the other hand, generally entails an expectation that profits will be significant, for the reasons I noted above. I do not think hoarding is any more selfish or altruistic than saving. Well in this case I would say that hoarders seem to be more knowledgeable than savers. Also there is nothing stopping people from lending their bitcoins out for credit.
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marcus_of_augustus
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June 03, 2011, 03:18:18 PM |
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SuggesterCoin
any coin will do.
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rahl
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June 03, 2011, 04:46:23 PM |
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Every four years a miner needs to spend double the effort to create the same amount of coins.
And you mean to say that computer processing speeds don't double that fast? What exactly is the problem here....
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MoonShadow
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June 03, 2011, 06:32:52 PM |
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Hi, I will repost this here as the previous thread has been closed by the admin for unkown reasons / probably a lot of "deflation" posts which was not intended. I believe 2 things are imperative
1) controlled growth of the supply as suggested by "Suggester"
Bitcoin has a controlled rate of growth. That's it's primary feature. It's so well controlled, I can predict with high accuracy what the monetary base will be years in advance, and never be off on my timing by more than +-.5%. Does any fiat currency in current use have such a record? 2) Making credit available and facilitating savings through an interest free credit/savings exchange. This will prevent "hoarding". Instead of "hoarding" the BC could be lent out to others without interest. The lender will be compensated by credit points, which allows him to get a bigger credit from future savers.
Go ahead. There is no reason that you or anyone else interested in such a bitcoin bank can't start one, but nor is there any need to incorporate credit lending into the Bitcoin protocol itself. Bitcoins are not money. They are a (perfect) medium of exchange. Their properties are similar to gold: scarce (finite amount), divisible, stable, low volume / easy transport, secure. So they only fulfil two properties of money: exchange and storage of value. But they lack CREDIT.
So does gold. Credit is a feature provided by institutions, not the medium of exchange. Thoughts / critique / discussion welcome! Guy
Be careful what you wish for.
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"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'
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DrSammyD
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June 03, 2011, 06:40:36 PM |
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Why is it so hard to believe that these "problems" are taken into account in the price of bitcoins. Why does everybody assume that the speculators are wrong? The increase in the price of bitcoin is not credit driven, nor even inflation driven. There is no reason for there to be a cluster of errors specifically in bitcoins. There are no policies favorable to buying bitcoins in place by the government. Nobody is giving out massive loans to people who aren't good debtors in order to buy bitcoins. All the reasons for a bubble are absent in bitcoin.
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