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Author Topic: Prices Cannot Stabilize  (Read 6921 times)
hashman
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March 07, 2012, 12:53:40 PM
 #61

The supply of coins grows at the same rate regardless of demand. Stability requires a flexible supply increase to correspond with demand increase. This limitation will be an impediment to the growth of Bitcoin commerce.

Your logic is the product of living under an inflationary economic system with a gaping security hole. 
The truth is that economic stability is higher under an inflexible money supply.  This is also the case historically when one considers the stability created e.g. in the 19th century under a relatively fixed quantity of physical specie.
 
The increase in stability is because demand increase (or decrease) will meet market forces and equilibrium can be reached.  Manipulation of the money supply only hinders the ability of the free market to respond to changes, especially when the exact amount of the manipulation is kept secret from market participants. The only limitation caused by an open money supply is a limitation on inflationary fraud.     

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March 07, 2012, 04:35:34 PM
 #62

The only limitation caused by an open money supply is a limitation on inflationary fraud.     

+100

https://www.bitcoin.org/bitcoin.pdf
While no idea is perfect, some ideas are useful.
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March 07, 2012, 06:26:28 PM
 #63

It's all relative, really. A dollar is stable and is always a dollar only when you look at it with the dollar being your point of view. If you flip it, and, say, make gasoline our currency and dollars being something we buy, dollars are anything but stable. Here is a  chart, from my own car fuelup data (fuelly.com), showing the value of a dollar over just the last 3 years (1 dollar will buy you 0.3 gallons, then 0.65 gallons, and then downhill from here). From this you can see that a dollar fluctuates quite a bit as well. (the chart even looks somewhat familiar XD)


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March 17, 2012, 05:58:04 AM
 #64

And you are completely ignorant and stupid. How do you know what must happen in the long-run? Why are these things important? How do you know that they are important?

What a fucking idiot you are. It is really mind-boggling.

lol...

you are disqualified for 5 counts of ad hominem.  you lose.

You could always go with the "twice on Sunday," "rubber-glue," or the old standby nananana poopoo rejoinders. Anything more poignant, such as pointing out a fallacious argument to such a poster in Latin is doubly wasted.

Any significantly advanced cryptocurrency is indistinguishable from Ponzi Tulips.
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March 18, 2012, 07:41:49 AM
 #65

Alternatively, we can say that the earth supplies more gold to the miners due to the miners investing more mining resources into extracting it.

No you can't.  That's crazy talk.

The supply of coins grows at the same rate regardless of demand. Stability requires a flexible supply increase to correspond with demand increase. This limitation will be an impediment to the growth of Bitcoin commerce.

Fuck commerce.  Bitcoin is not commerce.  Bitcoin is trade.

The utility of Bitcoin is to aggregate and transmit information on the supply and demand of goods in the economy.  This utility is destroyed if the supply changes arbitrarily.

Stability requires zero external disturbance so that market participants can use accurate price information to stabilize the supply of goods and services in relation to demand.

Civil Liberty Through Complex Mathematics
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March 20, 2012, 01:16:26 PM
 #66

Another way of looking at Bitcoin, is seeing it as a product of Electricity. Each miner consumes 'V' KWatts of electricity
and produces 'Z' Bitcoins. Thus 'V' x 'Processing Coefficient' = 'Z' Bitcoins / 'Reward Factor'. This holds true until all the
21Million coins are mined. After that the formula will change and miners income will be transaction based.

The price will probably stabilize when someone comes up with an idea of how it's possible to convert Bitcoins into electricity.
In other words, closing the loop... Noteworthy to say that electricity has extreme liquidity. There is no cap on its demand
as we speak, and I doubt there will ever be...


Regards,


BF Labs Inc.  www.butterflylabs.com   -  Bitcoin Mining Hardware
Anth0n
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March 20, 2012, 05:22:37 PM
 #67

The supply of coins grows at the same rate regardless of demand. Stability requires a flexible supply increase to correspond with demand increase. This limitation will be an impediment to the growth of Bitcoin commerce.

Your logic is the product of living under an inflationary economic system with a gaping security hole.  
The truth is that economic stability is higher under an inflexible money supply.  This is also the case historically when one considers the stability created e.g. in the 19th century under a relatively fixed quantity of physical specie.
  
The increase in stability is because demand increase (or decrease) will meet market forces and equilibrium can be reached.  Manipulation of the money supply only hinders the ability of the free market to respond to changes, especially when the exact amount of the manipulation is kept secret from market participants. The only limitation caused by an open money supply is a limitation on inflationary fraud.    



Oh, I'm completely against inflationism in traditional banking. What I mean is that with gold, for example, an increase in demand will lead to an increase in gold mining, which increases the supply to match. With Bitcoin, supply is increased at the same rate regardless of demand so no equilibrium price can be sustained.

I'm not talking about having some centralized jerk manipulating the supply to his liking, but rather having a dynamic market instead of a static one.
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