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You can create a scarce token with all the qualities you desire in like 5 minutes. Creating 'internet money' with a stable value and network of potential trans
by ftlio 9y ago
You can create a scarce token with all the qualities you desire in like 5 minutes. Creating 'internet money' with a stable value and network of potential transactees probably looks exactly like Bitcoin's development though.
- jordigh 9y agoI'm mostly happy with bitcoins except for what I mentioned: transaction fees and waiting times. If those things can really be brought down by the lightning network, that's all I care about. Financial stability seems like a secondary concern that cannot be solved via computer code but might instead require other kinds of human codification, perhaps legal.
- tbabb 9y agoBitcoin is not set up to ever be "stable" by any definition. Real currency has a federal reserve to balance supply against demand and keep the value steady. BTC has entirely demand-driven value-- which is precisely as steady and predictable as the human mind.
- stephengillie 9y agoLooking at the Coinbase graphs reminds me of reading CPU charts, comparing resource use between 3 web servers. Sometimes one coin will spike or dip independently, indicating higher utilization of one coin over the other 2 - an arbitrage opportunity; other times all 3 coins see a matching dip or raise, likely indicating a systematic cause.
- JBSay 9y agoI wonder how real currencies existed before central banks...
- tbabb 9y agoThey weren't stable.
- JBSay 9y agoYou mean stable like the US dollar which went from $35 per ounce of gold when Nixon closed the gold window to $668 ten years later? By contrast the aureus, the solidus, the fiorino and many other metal based currencies preserved their value over several centuries. What eventually destroyed those currencies was not the lack of a central bank but on the contrary eventual debasement by the central authority.
- tbabb 9y agoActually, I'm glad you pointed to the failure of the gold standard. It's a great example of why commodity money is dangerous. The gold standard was abolished because the economy was on the brink of collapse. A dollar grossly mismeasured the value of an ounce of gold, because there were far FAR mare dollars than gold to back them, and the mapping of gold to dollars was not adjusted at all (from $35/oz) despite the discrepancy growing and growing for decades. In a sense, each ounce of gold was being double-counted 100 times over by so many dollars floating around in the economy. That situation was horribly unstable, because it was at huge risk of a run on gold (You'd have a lot more wealth if you exchange your dollar for gold; because of the aforementioned double counting, an ounce of gold actually corresponds to a great many dollars. If everyone had realized that and done it, the economy would have been toast). Disconnecting the dollar from gold allowed the value of an ounce of gold to be correctly measured. So while other prices in the economy remained stable, gold shot up, because now the market was free to price it accurately (reflecting that the economy had grown far faster than the supply of gold). That doesn't indicate inflation, it precisely illustrates how dangerously out of whack things were before the gold standard was lifted.