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In terms of monetary policy it's pretty clear that you don't just want it to be predictable. One function of money is to be able to reference a stable amount of

In terms of monetary policy it's pretty clear that you don't just want it to be predictable. One function of money is to be able to reference a stable amount of value in a contact (i.e. how much a person is paid). Just because a monetary policy is predictable doesn't mean it is stable, if the price changes more rapidly than prices are set or contacts are made it can't be used for that. Currently bitcoin is useless for setting prices. The only places where prices are determined in bitcoin are places that are extremely inefficient (i.e. ransomware). A fixed inflation rate of 50% each year is very predictable, but useless for money.

tananaev 9y ago
I believe to be stable Bitcoin market cap should go much higher than it is now. It needs to be at the point where it's hard for someone even with a lot of money to manipulate it. It should be at the level where governments are afraid to seriously tamper with it because it can cause global recession. My long term bet is that it will get there at some point. It might be in 5 years, 10 years or more, but we will get there. We are in a bubble now, but that's just market/human nature and I don't see any way to avoid it. This bubble will pop. There might be more bubbles to come, but what doesn't kill it makes it stronger.
- amenghra 9y ago
  > This bubble will pop. There might be more bubbles to come, but what doesn't kill it makes it stronger. Some bubbles pop and never recover. E.g. the tulip market isn’t a “strong” market today.
koonsolo 9y ago
To me it always seemed strange to use currency as "unit of value". Because it is not a unit of value, currency prices go up and down just like everything else (look at Zimbabwe). Why don't we use a real unit of value, based on the consumer index for example. Certain goods could be "x consumer points", averaged out. Contracts could be made more stable, because it would actually express purchasing power, and not based on some potentially fluctuating currency/asset/whatever. Edit: Also, it would make things more clear for contracts running over 30 years for example, what that number will be worth at the end of the contract.
- XR0CSWV3h3kZWg 9y ago
  Consumer price indexes change. The price of almost everything changes, even in the same time period the price of different goods and services vary depending on where you are and how much of it you are buying at once. Nice history of the price of light: https://www.vox.com/2015/6/9/8749751/historic-cost-of-lighting https://www.vox.com/2015/6/9/8749751/historic-cost-of-lighti... The price of transistors has famously dropped by half every 2 years. The price of t shirts fell even when the price of cotton stayed the same: https://www.forbes.com/sites/samanthasharf/2013/07/02/the-t-shirt-turns-100/#136442865305 https://www.forbes.com/sites/samanthasharf/2013/07/02/the-t-... Brazil has such great variation in CPI that they need to calculate it for all their major cities. Even if we purposefully chose something had it's supply held almost perfectly constant we see heavy price drift. (land is a great example, most countries don't see significant land gain or loss)

tananaev 9y ago

I believe to be stable Bitcoin market cap should go much higher than it is now. It needs to be at the point where it's hard for someone even with a lot of money to manipulate it. It should be at the level where governments are afraid to seriously tamper with it because it can cause global recession. My long term bet is that it will get there at some point. It might be in 5 years, 10 years or more, but we will get there. We are in a bubble now, but that's just market/human nature and I don't see any way to avoid it. This bubble will pop. There might be more bubbles to come, but what doesn't kill it makes it stronger.

amenghra 9y ago
> This bubble will pop. There might be more bubbles to come, but what doesn't kill it makes it stronger. Some bubbles pop and never recover. E.g. the tulip market isn’t a “strong” market today.

koonsolo 9y ago

To me it always seemed strange to use currency as "unit of value". Because it is not a unit of value, currency prices go up and down just like everything else (look at Zimbabwe). Why don't we use a real unit of value, based on the consumer index for example. Certain goods could be "x consumer points", averaged out. Contracts could be made more stable, because it would actually express purchasing power, and not based on some potentially fluctuating currency/asset/whatever. Edit: Also, it would make things more clear for contracts running over 30 years for example, what that number will be worth at the end of the contract.

XR0CSWV3h3kZWg 9y ago
Consumer price indexes change. The price of almost everything changes, even in the same time period the price of different goods and services vary depending on where you are and how much of it you are buying at once. Nice history of the price of light: https://www.vox.com/2015/6/9/8749751/historic-cost-of-lighting https://www.vox.com/2015/6/9/8749751/historic-cost-of-lighti... The price of transistors has famously dropped by half every 2 years. The price of t shirts fell even when the price of cotton stayed the same: https://www.forbes.com/sites/samanthasharf/2013/07/02/the-t-shirt-turns-100/#136442865305 https://www.forbes.com/sites/samanthasharf/2013/07/02/the-t-... Brazil has such great variation in CPI that they need to calculate it for all their major cities. Even if we purposefully chose something had it's supply held almost perfectly constant we see heavy price drift. (land is a great example, most countries don't see significant land gain or loss)