4 ms·

The M1 money supply in any currency is always a tiny fraction of the money supply in comparison to the M2, M3, and MB, which are illiquid and used for speculati

The M1 money supply in any currency is always a tiny fraction of the money supply in comparison to the M2, M3, and MB, which are illiquid and used for speculation. It isn't mysterious that this is also the result in cryptocurrency as well. An oft parroted rebuttal is that bitcoin is being used for speculation and very little is being used for purchases of goods and services, even though that fits the same behavior of national currencies it is used to discredit bitcoin's use as a currency. It looks like it is growing the way one would expect.

JumpCrisscross 9y ago
> An oft parroted rebuttal is that bitcoin is being used for speculation and very little is being used for purchases of goods and services, even though that fits the same behavior of national currencies Are you asserting that a sizeable fraction of U.S. dollar M3 or even M2 is sitting idle speculating on the future value of the U.S. dollar? Rates are built into modern currencies in a way they were not for gold. That's Bitcoin's fundamental problem. It's a 19th-century currency relearning old economics.
- ringaroundthetx 9y ago
  > Are you asserting that a sizeable fraction of U.S. dollar M3 or even M2 is sitting idle speculating on the future value of the U.S. dollar? No. But that also happens whether it is inadvertently just sitting there, or in bonds as part of a massive carry trade Secondly did you read the article? It is about sizeable portions of bitcoin being used to invest in ICOs, which I was agreeing with and pointing out how otherwise illiquid portions of national currencies are used this way as well
  - JumpCrisscross 9y ago
    > that also happens whether it is inadvertently just sitting there, or in bonds Bonds fund useful activity. Most ICOs have yet to finance a single developer's salary.
    - acty1 9y ago
      District0x is paying salaries like that and many others. The point the parent was making is that the money IS SITTING there. And bonds are not M0.... you are proving his point. Anyone holding USD in a deposit account or loaned it out is speculating that the value of USD will remain almost the same (willing to lose 2% to inflation). Of course someone holding a currency expects value to hold or go up. Unfortunately value of USD and other fiat goes down at exponential rate and by end of century will be practically worthless. Imagine paper bills in year 2100. No? Then you can imagine USA will digitize it's currency on some Blockchain of their own(this is a no brainer). Now imagine THE Fed changing interest rates (aka Coin Emission Rate) as they please. Pretty soon people will diversify their currency holdings away from a single country/government that can change emission (interest) rate at will and has onerous reporting and surveillance requirements. Logical conclusion is a supra/trans-national global currency something Bitcoin or Monero. "Granpa, was it true that when you were young you used to get paid in tree cotton papers?"
      - danblick 9y ago
        I think you are conflating "blockchain" with "electronic payment". I can use my Visa card without needing a blockchain. And banks will settle the payment electronically without ever moving paper money. "No Timmy, I was not paid with paper money even in the 1990s."
        acty1 9y ago
        Funny, I remember getting my first pay from summer job in 1999 in CASH, then later by check and then finally by dirext deposit (which I would withdraw in cotton paper form to spend). Maybe you lived in a more advanced Country than Canada or the USA. Curious where in the 1990's you would have been paid, and spend, purely digitally.
      - rocqua 9y ago
        People like having recourse with trusted third parties. They also like universally accepted currency.
    - 9y ago

JumpCrisscross 9y ago

> An oft parroted rebuttal is that bitcoin is being used for speculation and very little is being used for purchases of goods and services, even though that fits the same behavior of national currencies Are you asserting that a sizeable fraction of U.S. dollar M3 or even M2 is sitting idle speculating on the future value of the U.S. dollar? Rates are built into modern currencies in a way they were not for gold. That's Bitcoin's fundamental problem. It's a 19th-century currency relearning old economics.

ringaroundthetx 9y ago
> Are you asserting that a sizeable fraction of U.S. dollar M3 or even M2 is sitting idle speculating on the future value of the U.S. dollar? No. But that also happens whether it is inadvertently just sitting there, or in bonds as part of a massive carry trade Secondly did you read the article? It is about sizeable portions of bitcoin being used to invest in ICOs, which I was agreeing with and pointing out how otherwise illiquid portions of national currencies are used this way as well
- JumpCrisscross 9y ago
  > that also happens whether it is inadvertently just sitting there, or in bonds Bonds fund useful activity. Most ICOs have yet to finance a single developer's salary.
  - acty1 9y ago
    District0x is paying salaries like that and many others. The point the parent was making is that the money IS SITTING there. And bonds are not M0.... you are proving his point. Anyone holding USD in a deposit account or loaned it out is speculating that the value of USD will remain almost the same (willing to lose 2% to inflation). Of course someone holding a currency expects value to hold or go up. Unfortunately value of USD and other fiat goes down at exponential rate and by end of century will be practically worthless. Imagine paper bills in year 2100. No? Then you can imagine USA will digitize it's currency on some Blockchain of their own(this is a no brainer). Now imagine THE Fed changing interest rates (aka Coin Emission Rate) as they please. Pretty soon people will diversify their currency holdings away from a single country/government that can change emission (interest) rate at will and has onerous reporting and surveillance requirements. Logical conclusion is a supra/trans-national global currency something Bitcoin or Monero. "Granpa, was it true that when you were young you used to get paid in tree cotton papers?"
    - danblick 9y ago
      I think you are conflating "blockchain" with "electronic payment". I can use my Visa card without needing a blockchain. And banks will settle the payment electronically without ever moving paper money. "No Timmy, I was not paid with paper money even in the 1990s."
      - acty1 9y ago
        Funny, I remember getting my first pay from summer job in 1999 in CASH, then later by check and then finally by dirext deposit (which I would withdraw in cotton paper form to spend). Maybe you lived in a more advanced Country than Canada or the USA. Curious where in the 1990's you would have been paid, and spend, purely digitally.
    - rocqua 9y ago
      People like having recourse with trusted third parties. They also like universally accepted currency.
  - 9y ago