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Well, traditional currencies were stable because of the gold standard, but nowadays the stability of bitcoin comes from the miners and the difficulty setting, w
by JepZ 9y ago
Well, traditional currencies were stable because of the gold standard, but nowadays the stability of bitcoin comes from the miners and the difficulty setting, while the stability of national currencies is controlled by institutions like the FED.
Nevertheless, at the moment there is an increased global demand for bitcoins due to the many people and organizations who are joining the system. The only problem is that due to high demand the bitcoin value to normal currencies quote increases so rapidly that it attracts even more people, which could lead to many people loosing their interest in bitcoin as soon as the growth rates cool down.
So let's hope the cool down will happen gradually. That way we should not be afraid of the bubble.
- brucephillips 9y ago> the stability of bitcoin comes from the miners and the difficulty setting The mining system controls the supply, not the value.
- slededit 9y agoOnly in the short term. The difficulty adjustment eventually makes changes in mining capacity moot.
- brucephillips 9y agoI consider the difficult adjustment to be part of the "mining system". My point is that BTC self-regulates supply, not value. Value is determined by the (volatile) market.
- JepZ 9y agoAnd I thought 'supply and demand' define 'value'. So when you control the 'supply' you should be able to control the value to some extend. Granted, as the mining system can only add coins the control is limited.
- emodendroket 9y agoOK, so we have shown that inflation of Bitcoins would not be likely if they were in wide use. Have you considered deflation at all? Deflation is great if you're holding the currency to speculate, but not if it's running an economy.
- knocte 9y agoStop the fucking mantra of "deflation is bad". We've had way more crisis caused by inflation than by deflation. Stop thinking that the problems caused by printing more money can only be solved by printing more money! And actually, maybe these days our planet needs a bit of deflation, to stop all that mad consumerism of our society.
- emodendroket 9y agoWow, with such a well-reasoned argument how could I not be convinced?
- knocte 9y agoIt's the person that makes the assertion the one that needs to give proof. Most of the "deflation is bad" arguments are never argumented. I'm calling them out.
- emodendroket 9y agoAs I've said repeatedly, deflation is bad because it discourages investment and buying, and would grind our economy to a halt. Also more Americans are net debtors than not. You are the one looking to argue against essentially every economist on Earth here.