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Author Topic: Why Bitcoin can’t be a currency  (Read 7993 times)
Anonymous
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May 08, 2011, 11:55:04 AM
 #41

Both paypal and apple think bitcoin is a currency so what does that say to those who claim it isnt?

They see it as enough of a threat to try to shut it down.....
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May 08, 2011, 12:51:41 PM
 #42

I for one am not in favor of this "virtual central bank" idea. However I am curious to hear some ideas about how you'd go about "achieving stability without a central authority"

Oh gawd, how the fk do you think? How does any price stabilize? People bid and eventually the market discovers the appropriate price.. You don't see the price of milk jumping up and down by a huge margin even though there is no milk central bank, you don't see the price of houses jumping up or down by a huge margin even though there is no house central bank nor do you see the price jump up or down by a huge margin for any other established good or service and none of them have a central bank besides fiat money. Sure the market place constantly reevaluates the price and changes it if necessary  but that's how it's suppose to be.

Once the market for Bitcoins gets deep enough there will be no problem in always knowing the approx exchange rates even for the future with futures contracts.

Careful there. You are using the current system (central bank based) as an example of why bitcoin will not have the same problem (different). And by achieving stability I am referring to stability in extreme situations as described by the author of the blog post I linked to (ie extreme bouts of inflation or deflation and constant swings between the two extremes).




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May 08, 2011, 01:18:28 PM
 #43

Both paypal and apple think bitcoin is a currency so what does that say to those who claim it isnt?

They see it as enough of a threat to try to shut it down.....

When did Apple representatives say anything about bitcoin?
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May 08, 2011, 01:22:34 PM
 #44

Careful there. You are using the current system (central bank based) as an example of why bitcoin will not have the same problem (different).

Erm no? It's not like there's always been a central bank regulating currency in the entire history and yet we had stable prices. Particularly in USA between 1836 and 1913.

My personality type: INTJ - please forgive my weaknesses (Not naturally in tune with others feelings; may be insensitive at times, tend to respond to conflict with logic and reason, tend to believe I'm always right)

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May 08, 2011, 01:33:26 PM
 #45

When did Apple representatives say anything about bitcoin?

read this

My personality type: INTJ - please forgive my weaknesses (Not naturally in tune with others feelings; may be insensitive at times, tend to respond to conflict with logic and reason, tend to believe I'm always right)

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May 08, 2011, 03:51:20 PM
 #46

Careful there. You are using the current system (central bank based) as an example of why bitcoin will not have the same problem (different).

Erm no? It's not like there's always been a central bank regulating currency in the entire history and yet we had stable prices. Particularly in USA between 1836 and 1913.

Fair enough, but in that time period all the countries were on a gold backed standard and everyone benefited from a universal stable monetary system. I'd imagine a country who adopted gold as their official currency say several years ago would've had quite the fun time dealing with massive deflation as gold appreciated at a tremendous rate. This rapid appreciation would adversely affect exports among other things. What I'm saying is that bitcoin is in an unique position as one of the few examples of free market money in a world dominated by fiat (in the true sense of the word) money. It will be interesting to see how the bitcoin economy grows and how it will be affected by the fiat economy whose money is tightly and centrally controlled.

The true test would come when the bitcoin economy faces the economist's bogeyman - the "market cycle." Which of the two systems would survive (ie between bitcoin and central bank controlled money) and in which manner is the really interesting test. If we look back in history even during the period of the classical gold standard there were boom and bust cycles. Bitcoin will no doubt be put to the test in the future with its very own boom and bust event or something else possibly much worse. I hope it comes out unscathed and survives this trial by fire.


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May 09, 2011, 05:07:06 PM
 #47

Land can be considered a currency that has a fixed supply.  You can still buy land in the United States.  The land economy is still valid.  Yes, there is deflation but who cares.   In a city land is divided into smaller and smaller units.

The real danger is central banks stealing money in a period of deflation.  Since prices are dropping, they can inflate and their crimes would go unpunished.
MoonShadow
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May 09, 2011, 06:15:19 PM
 #48

Careful there. You are using the current system (central bank based) as an example of why bitcoin will not have the same problem (different).

Erm no? It's not like there's always been a central bank regulating currency in the entire history and yet we had stable prices. Particularly in USA between 1836 and 1913.

This is because the US monetary system was pegged to a defined weight in gold.  This is not the case anywhere in the world today.

"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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