6 ms·

> intrinsically deflationary, and thus cannot serve as money. It is hard getting out of the inflationary currency mind-set, I recognize that. > it's just dumb

> intrinsically deflationary, and thus cannot serve as money. It is hard getting out of the inflationary currency mind-set, I recognize that. > it's just dumb. It's great. The money put on my debit card card a few months ago means that the beers I buy today are 1/3 of the price of what they were relative to the time the money was put on the card. And you know what's better than beer? Good beer on special.

Udik 9y ago
I think you shouldn't buy those beers: in a few more months they'll be a 1/9th of the price. And maybe then you should wait again...
- Frogolocalypse 9y ago
  But I like beer. So that's why I buy them.
  - Udik 9y ago
    Don't buy them now, and you'll eventually get more. Damn, you can buy a villa and fill the swimming pool with beer, if only you can wait long enough.
    - Frogolocalypse 9y ago
      But.... beer is delicious. In fact, I kind of feel like one right now.
      - deleted 9y ago
        [deleted]
- meri_dian 9y ago
  He (and all the rest of them) dont understand the modern economy. It's like banging your head against a wall. You explain the importance of monetary policy, why the gold standard is problematic, why this means Bitcoin will not replace modern currencies, yet they don't really hear. They just don't like "The System" and want to subvert it. Bitcoin is great, but it will not change 'the system'. It is a novel and ingenious asset, nothing more.
  - jcoffland 9y ago
    One thing we can be certain of, is that 'the system' will change.
  - mrb 9y ago
    This has been said many, many times, but I will say it again: the criticism of Bitcoin being deflationary would be valid only if Bitcoin was to replace the entire financial system. But it's perfectly fine for it to be deflationary if it's replacing only parts of the system.
    - Udik 9y ago
      Could you explain briefly why? I don't see how it can be deflationary and used as a currency, period, be it the whole system or part of it.
  - etherael 9y ago
    Or perhaps it is you that is wrong, and all the illusions you cling to amount to nothing more than the indignant declarations from seventeenth century clergy of the intolerable social consequences if it were to be widely accepted that god may not exist. Things do not endure merely because some social engineer has a tortured explanation for them he trots out at every opportunity to justify the construct.
  - ric2b 9y ago
    Can you give any other data-point that shows the dangers of deflation that didn't happen during during a world war and wasn't actually caused by fractional reserve banking and government interference? Gold has existed for thousands of years, surely this commonly accepted idea is based on more than one or two heavily flawed data-points.
- garmaine 9y ago
  I’m not sure why you are being down voted. What you are illustrating is the time value of money, a real economic concept. A deflationary currency like bitcoin encourages non productive hoarding at the expense of investment and commerce. It makes a great store of value, but a terrible medium of exchange. And when we say “currency” we are usually talking about the medium of exchange purpose of money...
  - Frogolocalypse 9y ago
    That is the effect of our current financial system, where the use of debt to bid up the price of fixed assets has been labeled 'commerce' and 'investment'. The only effect of which has been the punishment of savers. Bitcoin is that systems reckoning.
    - garmaine 9y ago
      It also disincentivises investment, resulting in an economy less productive than it could be, and with built-in bias and stratifying wealth transfer, not unlike the system of bankers it seeks to replace.
      - BlueZeniX 9y ago
        That's assuming the return on investment is _always_ lower than the rate of deflation. Which is, nonsense.
        ufo 9y ago
        The return on investment only needs to be lower some of the times for deflation to start hurting the economy
      - tarsinge 9y ago
        Do we have data on this or is it still just a theory?
        9y ago
- logicchains 9y ago
  In that case I assume you never brought a computer from 2000-2010, when you could wait a year or so to get twice the computation for the same price? For that matter, would you even buy beer now, when you could instead invest the money risk-free in US govt. bonds so you could buy more beer in future?
  - Udik 9y ago
    I did, but during the years I certainly delayed the purchase of many technological goods because I assumed that waiting for their price to decrease or their performances to improve was a wise thing to do. Didn't you? Imagine how companies loved that, and imagine extending it to just everything, from food to housing. However, with technological items there was always another side: the new ones were so much better than our current ones, ours were actually getting old faster, and we were driven to buy. The same won't happen with the other goods on the market. The interest of gov bonds or of any other financial instrument afaik represents (and is proportional to) a risk of not getting repaid.
    - logicchains 9y ago
      >I did, but during the years I certainly delayed the purchase of many technological goods because I assumed that waiting for their price to decrease or their performances to improve was a wise thing to do. Didn't you? But you still purchased it eventually. In that sense a deflationary currency might change the balance of consumer spending vs saving in favour of more saving, but that doesn't mean a continuous downwards spiral in spending, it could just be a new equilibrium. >Imagine how companies loved that, and imagine extending it to just everything, from food to housing. Personally I'd absolutely love if house prices halved every year, as at the rate they're currently increasing it'll be a long time before I could afford even a tiny apartment anywhere near where I work. >However, with technological items there was always another side: the new ones were so much better than our current ones, ours were actually getting old faster, and we were driven to buy. The same won't happen with the other goods on the market. Would it be bad thing if it did happen to other goods on the market? If e.g. a 2005 car was better than a 2000 car to the same degree that a 2005 computer was better than a 2000 computer. >The interest of gov bonds or of any other financial instrument afaik represents (and is proportional to) a risk of not getting repaid. I was referring to https://en.wikipedia.org/wiki/Risk-free_interest_rate https://en.wikipedia.org/wiki/Risk-free_interest_rate : "In practice, to infer the risk-free interest rate in a particular situation, a risk-free bond is usually chosen—that is, one issued by a government or agency whose risks of default are so low as to be negligible."
slyfocks 9y ago
You do know that trend isn’t sustainable, right? Bitcoin evangelists in 2017 seem to love talking about the rate of increase in price as if increasing in value by 300% every couple of months is a built-in feature.
- Frogolocalypse 9y ago
  I expect bitcoin to stabilize at an ever appreciating value in line with existing inflation. And not government CPI, with their hedonic quality adjustments either, actual inflation. But I don't see getting to that point for a long long time.
  - mirimir 9y ago
    Yes, cryptocurrency prices will stabilize when they displace all fiat currencies ;) Because, until they do, they'll be too damn attractive for speculative investors to resist. That was part of the original plan, as I recall from discussion in various cryptoanarchist forums.
  - beefield 9y ago
    Why would you expect bitcoin to stabilize? I see no mechanism that would do that. Gold has had thousands of years of use as money-like instrument, and only periods of relative (nominal) stability during the last century or so have been when there have been organizations (central banks) to keep that stable. http://www.macrotrends.net/1333/historical-gold-prices-100-year-chart http://www.macrotrends.net/1333/historical-gold-prices-100-y... (be sure to play around with the "inflation adjusted" checkbox)
md224 9y ago
Just FYI, you wrote "debit" and "card" twice.
- Frogolocalypse 9y ago
  Oops. I did it on my phone. Sometimes that happens. Thanks.
mikefallen 9y ago
What debit card do you use that keeps your balance in BTC and concerts on purchase? All the ones iv seen convert from BTC to USD when you load them.

Udik 9y ago

I think you shouldn't buy those beers: in a few more months they'll be a 1/9th of the price. And maybe then you should wait again...

Frogolocalypse 9y ago
But I like beer. So that's why I buy them.
- Udik 9y ago
  Don't buy them now, and you'll eventually get more. Damn, you can buy a villa and fill the swimming pool with beer, if only you can wait long enough.
  - Frogolocalypse 9y ago
    But.... beer is delicious. In fact, I kind of feel like one right now.
    - deleted 9y ago
      [deleted]
meri_dian 9y ago
He (and all the rest of them) dont understand the modern economy. It's like banging your head against a wall. You explain the importance of monetary policy, why the gold standard is problematic, why this means Bitcoin will not replace modern currencies, yet they don't really hear. They just don't like "The System" and want to subvert it. Bitcoin is great, but it will not change 'the system'. It is a novel and ingenious asset, nothing more.
- jcoffland 9y ago
  One thing we can be certain of, is that 'the system' will change.
- mrb 9y ago
  This has been said many, many times, but I will say it again: the criticism of Bitcoin being deflationary would be valid only if Bitcoin was to replace the entire financial system. But it's perfectly fine for it to be deflationary if it's replacing only parts of the system.
  - Udik 9y ago
    Could you explain briefly why? I don't see how it can be deflationary and used as a currency, period, be it the whole system or part of it.
- etherael 9y ago
  Or perhaps it is you that is wrong, and all the illusions you cling to amount to nothing more than the indignant declarations from seventeenth century clergy of the intolerable social consequences if it were to be widely accepted that god may not exist. Things do not endure merely because some social engineer has a tortured explanation for them he trots out at every opportunity to justify the construct.
- ric2b 9y ago
  Can you give any other data-point that shows the dangers of deflation that didn't happen during during a world war and wasn't actually caused by fractional reserve banking and government interference? Gold has existed for thousands of years, surely this commonly accepted idea is based on more than one or two heavily flawed data-points.
garmaine 9y ago
I’m not sure why you are being down voted. What you are illustrating is the time value of money, a real economic concept. A deflationary currency like bitcoin encourages non productive hoarding at the expense of investment and commerce. It makes a great store of value, but a terrible medium of exchange. And when we say “currency” we are usually talking about the medium of exchange purpose of money...
- Frogolocalypse 9y ago
  That is the effect of our current financial system, where the use of debt to bid up the price of fixed assets has been labeled 'commerce' and 'investment'. The only effect of which has been the punishment of savers. Bitcoin is that systems reckoning.
  - garmaine 9y ago
    It also disincentivises investment, resulting in an economy less productive than it could be, and with built-in bias and stratifying wealth transfer, not unlike the system of bankers it seeks to replace.
    - BlueZeniX 9y ago
      That's assuming the return on investment is _always_ lower than the rate of deflation. Which is, nonsense.
      - ufo 9y ago
        The return on investment only needs to be lower some of the times for deflation to start hurting the economy
    - tarsinge 9y ago
      Do we have data on this or is it still just a theory?
      - 9y ago
logicchains 9y ago
In that case I assume you never brought a computer from 2000-2010, when you could wait a year or so to get twice the computation for the same price? For that matter, would you even buy beer now, when you could instead invest the money risk-free in US govt. bonds so you could buy more beer in future?
- Udik 9y ago
  I did, but during the years I certainly delayed the purchase of many technological goods because I assumed that waiting for their price to decrease or their performances to improve was a wise thing to do. Didn't you? Imagine how companies loved that, and imagine extending it to just everything, from food to housing. However, with technological items there was always another side: the new ones were so much better than our current ones, ours were actually getting old faster, and we were driven to buy. The same won't happen with the other goods on the market. The interest of gov bonds or of any other financial instrument afaik represents (and is proportional to) a risk of not getting repaid.
  - logicchains 9y ago
    >I did, but during the years I certainly delayed the purchase of many technological goods because I assumed that waiting for their price to decrease or their performances to improve was a wise thing to do. Didn't you? But you still purchased it eventually. In that sense a deflationary currency might change the balance of consumer spending vs saving in favour of more saving, but that doesn't mean a continuous downwards spiral in spending, it could just be a new equilibrium. >Imagine how companies loved that, and imagine extending it to just everything, from food to housing. Personally I'd absolutely love if house prices halved every year, as at the rate they're currently increasing it'll be a long time before I could afford even a tiny apartment anywhere near where I work. >However, with technological items there was always another side: the new ones were so much better than our current ones, ours were actually getting old faster, and we were driven to buy. The same won't happen with the other goods on the market. Would it be bad thing if it did happen to other goods on the market? If e.g. a 2005 car was better than a 2000 car to the same degree that a 2005 computer was better than a 2000 computer. >The interest of gov bonds or of any other financial instrument afaik represents (and is proportional to) a risk of not getting repaid. I was referring to https://en.wikipedia.org/wiki/Risk-free_interest_rate https://en.wikipedia.org/wiki/Risk-free_interest_rate : "In practice, to infer the risk-free interest rate in a particular situation, a risk-free bond is usually chosen—that is, one issued by a government or agency whose risks of default are so low as to be negligible."

slyfocks 9y ago

You do know that trend isn’t sustainable, right? Bitcoin evangelists in 2017 seem to love talking about the rate of increase in price as if increasing in value by 300% every couple of months is a built-in feature.

Frogolocalypse 9y ago
I expect bitcoin to stabilize at an ever appreciating value in line with existing inflation. And not government CPI, with their hedonic quality adjustments either, actual inflation. But I don't see getting to that point for a long long time.
- mirimir 9y ago
  Yes, cryptocurrency prices will stabilize when they displace all fiat currencies ;) Because, until they do, they'll be too damn attractive for speculative investors to resist. That was part of the original plan, as I recall from discussion in various cryptoanarchist forums.
- beefield 9y ago
  Why would you expect bitcoin to stabilize? I see no mechanism that would do that. Gold has had thousands of years of use as money-like instrument, and only periods of relative (nominal) stability during the last century or so have been when there have been organizations (central banks) to keep that stable. http://www.macrotrends.net/1333/historical-gold-prices-100-year-chart http://www.macrotrends.net/1333/historical-gold-prices-100-y... (be sure to play around with the "inflation adjusted" checkbox)

md224 9y ago

Just FYI, you wrote "debit" and "card" twice.

Frogolocalypse 9y ago
Oops. I did it on my phone. Sometimes that happens. Thanks.

mikefallen 9y ago

What debit card do you use that keeps your balance in BTC and concerts on purchase? All the ones iv seen convert from BTC to USD when you load them.