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> The main problem is that it was built on crank economic assumptions. It is literally an implementation of Federal Reserve/gold bug conspiracist economic theor

> The main problem is that it was built on crank economic assumptions. It is literally an implementation of Federal Reserve/gold bug conspiracist economic theories and weird Bircher ideas of where inflation comes from - that's actually its point. Speaking as one of those western developers - and as someone with a standard economics education - what makes you think those economic assumptions hurt Bitcoin itself? Sure deflation is a terrible thing for economies, but that has no bearing on the success and value of the currency itself. What matters for a currency that people aren't forced to use is that it maintains its value, which is exactly what the eventual deflation in Bitcoin does. Equally, _currently_ Bitcoin's monetary supply is highly inflationary, about 8%/year right now iirc, and will remain high for years to come. Let's not let our economic education prejudice us; Bitcoin is a good example of how good monetary policy is often similar to taxes in general in terms of the conflict between what's good for individuals and what's good for society as a whole.

davidgerard 10y ago
They do seem to supply the inherently contradictory element seen at the heart of a lot of viral ideologies. Bitcoin ideology propagated through two things: * if you want to get rich for free, take on this weird ideology that goes with it. * don't worry if you don't understand the ideology yet, just keep doing the things and you'll get rich for free! Since the ideology doesn't actually make coherent sense - and is literally straight out of John Birch Society and Eustace Mullins - this means the second condition is reinforced. (Not making coherent sense is why you will observe advocates claiming that everything and its opposite is actually good for Bitcoin.) So being made of fractally wrong ideas that don't work did indeed help it along a whole lot during the bubble! That and the insatiable urge to gamble of Chinese day traders. And the drug market. It was less convincing when it turned out it wasn't going to go up forever, but was a completely standard asset bubble.
- petertodd 10y ago
  > Bitcoin ideology Yes, a subset of the Bitcoin community is a mixture of crazy and money driven; that happens a lot in all sorts of communities. But you've completely missed the reason I and most other developers I know work on Bitcoin: it's censorship resistant money. For me personally, I first got interested in digital currency years ago when I started getting interested in the decentralized censorship-resistance publishing network Freenet; adding censorship-resistant money to censorship-resistant publishing was an obvious extension. Is that always pretty? No. But neither is freedom of speech protecting technology - witness how Tor is used for lots of unsavory things too.
  - davidgerard 10y ago
    >a subset of the Bitcoin community is a mixture of crazy and money driven The lunatic economic theories were literally a part of Bitcoin from day one. David Golumbia's book is highly recommended here (I cribbed from it heavily), even if he is a huge commie. I must admit the censorship-resistant money aspect is a positive for me too. Wikileaks having its funding cut off at the whim of three companies threw that into stark relief. I'll also note that the actual Bitcoin devs are generally way saner than the ideologues ...
pjc50 10y ago
> maintains its value But it doesn't maintain a steady purchasing power, because the price fluctuates around all over the place! Inflation has very little to do with money supply, especially M0, and everything to do with the availability of goods.
- davidgerard 10y ago
  Yep. The John Birch Society literally tries to redefine "inflation" as "the central bank makes more cash available" (more M0, though they don't use such highfalutin terms), because ridiculous bollocks is much easier to prove if you assume your conclusion. Bitcoin ideology assumes that inflation is a purely monetary phenomenon, and that Bitcoin is immune due to its strictly limited supply. This was demonstrated stupendously false when the price of a bitcoin dropped from $1000 in late 2013 to $200 in early 2015 - 400% inflation - while supply only went up 10%. The conventional view is that inflation is a phenomenon of consumer prices, consumer confidence, productivity, commodity and asset prices, etc., which a central bank then responds to with monetary policy. The conspiracist view is that it's the central bank intervention causing it. Even people who've suffered bitcoiners' strident blaring ideological lunacy frequently don't realise the depths of economic delusion that goes into the ideology. I suppose we can be grateful that they adopted only Eustace Mullins' central bank conspiracy theories and not his antisemitism. Mostly, anyway.
- petertodd 10y ago
  Bitcoin is a decentralized system; it has no option but to have a floating exchange rate, because all known forms of peg and other stability measures require centralized third parties. It isn't going to maintain it's value better by having a higher inflation rate than it does.
dragonwriter 10y ago
> What matters for a currency that people aren't forced to use is that it maintains its value, No, what matters for a currency (vs. speculative asset) is relatively stable value over short terms. For a speculative asset, appreciation over a longer term is more important than stability.

davidgerard 10y ago

They do seem to supply the inherently contradictory element seen at the heart of a lot of viral ideologies. Bitcoin ideology propagated through two things: * if you want to get rich for free, take on this weird ideology that goes with it. * don't worry if you don't understand the ideology yet, just keep doing the things and you'll get rich for free! Since the ideology doesn't actually make coherent sense - and is literally straight out of John Birch Society and Eustace Mullins - this means the second condition is reinforced. (Not making coherent sense is why you will observe advocates claiming that everything and its opposite is actually good for Bitcoin.) So being made of fractally wrong ideas that don't work did indeed help it along a whole lot during the bubble! That and the insatiable urge to gamble of Chinese day traders. And the drug market. It was less convincing when it turned out it wasn't going to go up forever, but was a completely standard asset bubble.

petertodd 10y ago
> Bitcoin ideology Yes, a subset of the Bitcoin community is a mixture of crazy and money driven; that happens a lot in all sorts of communities. But you've completely missed the reason I and most other developers I know work on Bitcoin: it's censorship resistant money. For me personally, I first got interested in digital currency years ago when I started getting interested in the decentralized censorship-resistance publishing network Freenet; adding censorship-resistant money to censorship-resistant publishing was an obvious extension. Is that always pretty? No. But neither is freedom of speech protecting technology - witness how Tor is used for lots of unsavory things too.
- davidgerard 10y ago
  >a subset of the Bitcoin community is a mixture of crazy and money driven The lunatic economic theories were literally a part of Bitcoin from day one. David Golumbia's book is highly recommended here (I cribbed from it heavily), even if he is a huge commie. I must admit the censorship-resistant money aspect is a positive for me too. Wikileaks having its funding cut off at the whim of three companies threw that into stark relief. I'll also note that the actual Bitcoin devs are generally way saner than the ideologues ...

pjc50 10y ago

> maintains its value But it doesn't maintain a steady purchasing power, because the price fluctuates around all over the place! Inflation has very little to do with money supply, especially M0, and everything to do with the availability of goods.

davidgerard 10y ago
Yep. The John Birch Society literally tries to redefine "inflation" as "the central bank makes more cash available" (more M0, though they don't use such highfalutin terms), because ridiculous bollocks is much easier to prove if you assume your conclusion. Bitcoin ideology assumes that inflation is a purely monetary phenomenon, and that Bitcoin is immune due to its strictly limited supply. This was demonstrated stupendously false when the price of a bitcoin dropped from $1000 in late 2013 to $200 in early 2015 - 400% inflation - while supply only went up 10%. The conventional view is that inflation is a phenomenon of consumer prices, consumer confidence, productivity, commodity and asset prices, etc., which a central bank then responds to with monetary policy. The conspiracist view is that it's the central bank intervention causing it. Even people who've suffered bitcoiners' strident blaring ideological lunacy frequently don't realise the depths of economic delusion that goes into the ideology. I suppose we can be grateful that they adopted only Eustace Mullins' central bank conspiracy theories and not his antisemitism. Mostly, anyway.
petertodd 10y ago
Bitcoin is a decentralized system; it has no option but to have a floating exchange rate, because all known forms of peg and other stability measures require centralized third parties. It isn't going to maintain it's value better by having a higher inflation rate than it does.

dragonwriter 10y ago

> What matters for a currency that people aren't forced to use is that it maintains its value, No, what matters for a currency (vs. speculative asset) is relatively stable value over short terms. For a speculative asset, appreciation over a longer term is more important than stability.