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I disagree with several of your statements. First, bitcoin has a monetary policy, and the key is that it cant be changed, which is very appealing: more appealin

I disagree with several of your statements. First, bitcoin has a monetary policy, and the key is that it cant be changed, which is very appealing: more appealing that storing gold vs fiat, since gold has a less predictable monetary policy. Gold had been chosen as currency for most of history, across cultures and languages. In countries where the currency breaks down, things like chocolate, potatoes or corn get into circulation. Also bonds and other papers of different calibers. It is not the deflationary policy that makes bitcoin less adoptable: being deflationary predictably is better than unpredictably inflationary. Specially in this day and age, where bitcoin prices can be tracked to the second and prices changed accordingly across the board. Its interesting to see there's research talking about how the ability to price things faster has changed the effect of monetary policy on prices at all. The rest, I agree. It has a very speculative value, and its best usecase is pass-through. But pass through is still a good use-case. Argentina, 3 years ago, would pay up to 5% of funds to transfer money in-out of the country: bitcoin would have been easier and cheaper. And its still used as a way to evade controls. The use of bitcoin can severely reduce the government's capacity to levy taxes, as it is way harder to track down than bank/card transfers. Whether that's moral or good will be secondary to the fact that it can do that. If its use case is to sell drug money and reduce taxes, it will have value.

bestnameever 8y ago
> Specially in this day and age, where bitcoin prices can be tracked to the second and prices changed accordingly across the board. Its interesting to see there's research talking about how the ability to price things faster has changed the effect of monetary policy on prices at all. isn't this true for all currencies, virtual or not?
WJW 8y ago
> and the key is that it cant be changed, which is very appealing This is only very appealing if: - It is never necessary to change monetary policy. - The same monetary policy is appropriate for all nations. - The monetary policy that was chosen by the bitcoin dev team is exactly the right one.
- drdeca 8y ago
  Well, if they picked a policy that is very good, and the degree to which it falls short of the exact correct policy is small enough that the possibility of improving it doesn't outweigh the risks of it being changed for the worse, then the policy being unchanging could be a genuine advantage over other alternatives that aren't unchanging. Right?
- conanbatt 8y ago
  I think thats attempting to put the burden of a states monetary policy to a virtual currency. I dont think its necessary for bitcoin to fullfill some of the roles monetary policy does: bitcoin doesn't care about unemployment. At the same time it does not have the benefits typical monetary policy has: that it can force people to take the money, meaning that monetary policy in itself would be limited in effect.
- keymone 8y ago
  > The same monetary policy is appropriate for all nations you're conflating. the concept of nation has nothing to do with the concept of money.
  - api 8y ago
    Sure it is. Hard money advocates see the Fed as some kind of parasitic liability on America, but it's quite the opposite. It's a weapon of war. A sovereign currency that can be manipulated is an instrument of empire. Eliminating it in a world where everyone has one would be akin to unilateral disarmament. Generally speaking libertarian idealism is unthinkable until we have had at least 50 years with no war. It won't work in a violent, power-hungry world ruled by warlords and sociopaths. Getting rid of our warlords sounds great until you realize there are others.
    - keymone 8y ago
      > an instrument of empire i don't see the word "nation" in here. do you? i don't care about empires losing their weapons. i would very much invite such an event and would do everything in my power to enable it.
Lerc 8y ago
Bitcoin monetary policy can be changed. If there is a significant consensus then you can move to any set of rules. Bitcoin monetary policy cannot be unilaterally changed. Consensus is difficult and slow, but when it comes to the world economy, that's probably the least-bad solution.
- whofailed 8y ago
  > Bitcoin monetary policy can be changed People can fork bitcoin with a different monetary policy. I, and many others will continue to support the monetary policy as set out in the original white paper. Not much in bitcoin is sacrosanct, but 21 million coins is what makes it bitcoin for me.
crististm 8y ago
I'm sorry but your analogy is stretched at best. Unlike gold, potatoes rot...
- conanbatt 8y ago
  That was a reference to Venezuela, where I read that sometimes barter is done with potatoes. I didnt say its a good currency, but it has happened.
cirgue 8y ago
> being deflationary predictably is better than unpredictably inflationary. Unpredictable deflation is what bitcoin does, and with a fixed policy it can never do anything else. The amount of wealth generated by an economy grows in an unpredictable manner, and fixed monetary policy translates that fluctuation directly into the value of the currency. We learned this with metal currency. It didn’t go well.
- conanbatt 8y ago
  Did we? The history of monetary policy crisis were not related to the metal as much as to the instability of banking. Bitcoin cant go broke like a bank can.
  - hakfoo 8y ago
    You can still have crises that aren't banking-related. When the New World was conquered, the mountains of silver and gold flowing back to Spain in particular caused inflation, no bankers involved. I'm not sure if there's a direct equivalent for Bitcoin. My first thought is that there are probably a few large stashes of coins that the market assumes are "out of circulation" and priced accordingly.
    - conanbatt 8y ago
      Its true the metal created inflation, but I assure you it created less inflation issues that any paper ever, and could never create hyperinflation as we know it unless it rained gold or something. Im unaware of big crisis stemming from that inflation, although I find it very amusing when Adam Smith or Ricardo talk about it without having the word in their arsenal. I loved knowing they were trying to define inflation without knowing what it was.
throwaway123156 8y ago
The Fed can easily replicate the benefits of cryptocurrency in seconds. They simply need to come out and say "We will only print X number of dollars, every Y number of months". There you go. All the benefits of Bitcoin replicated in the USD, which is a far more widespread and versatile currency? So why doesn't the Fed do it? Because it really is a terrible idea. It's like pegging your currency to gold, which was a terrible idea (although good for its time) and the delay in moving away from it probably cost tons of money and lives.
- tromp 8y ago
  > say "We will only print X number of dollars, every Y number of months" Easily said. Not so easily verified. Verifiable emission remains a big advantage of cryptocurrencies.

bestnameever 8y ago

> Specially in this day and age, where bitcoin prices can be tracked to the second and prices changed accordingly across the board. Its interesting to see there's research talking about how the ability to price things faster has changed the effect of monetary policy on prices at all. isn't this true for all currencies, virtual or not?

WJW 8y ago

> and the key is that it cant be changed, which is very appealing This is only very appealing if: - It is never necessary to change monetary policy. - The same monetary policy is appropriate for all nations. - The monetary policy that was chosen by the bitcoin dev team is exactly the right one.

drdeca 8y ago
Well, if they picked a policy that is very good, and the degree to which it falls short of the exact correct policy is small enough that the possibility of improving it doesn't outweigh the risks of it being changed for the worse, then the policy being unchanging could be a genuine advantage over other alternatives that aren't unchanging. Right?
conanbatt 8y ago
I think thats attempting to put the burden of a states monetary policy to a virtual currency. I dont think its necessary for bitcoin to fullfill some of the roles monetary policy does: bitcoin doesn't care about unemployment. At the same time it does not have the benefits typical monetary policy has: that it can force people to take the money, meaning that monetary policy in itself would be limited in effect.
keymone 8y ago
> The same monetary policy is appropriate for all nations you're conflating. the concept of nation has nothing to do with the concept of money.
- api 8y ago
  Sure it is. Hard money advocates see the Fed as some kind of parasitic liability on America, but it's quite the opposite. It's a weapon of war. A sovereign currency that can be manipulated is an instrument of empire. Eliminating it in a world where everyone has one would be akin to unilateral disarmament. Generally speaking libertarian idealism is unthinkable until we have had at least 50 years with no war. It won't work in a violent, power-hungry world ruled by warlords and sociopaths. Getting rid of our warlords sounds great until you realize there are others.
  - keymone 8y ago
    > an instrument of empire i don't see the word "nation" in here. do you? i don't care about empires losing their weapons. i would very much invite such an event and would do everything in my power to enable it.

Lerc 8y ago

Bitcoin monetary policy can be changed. If there is a significant consensus then you can move to any set of rules. Bitcoin monetary policy cannot be unilaterally changed. Consensus is difficult and slow, but when it comes to the world economy, that's probably the least-bad solution.

whofailed 8y ago
> Bitcoin monetary policy can be changed People can fork bitcoin with a different monetary policy. I, and many others will continue to support the monetary policy as set out in the original white paper. Not much in bitcoin is sacrosanct, but 21 million coins is what makes it bitcoin for me.

crististm 8y ago

I'm sorry but your analogy is stretched at best. Unlike gold, potatoes rot...

conanbatt 8y ago
That was a reference to Venezuela, where I read that sometimes barter is done with potatoes. I didnt say its a good currency, but it has happened.

cirgue 8y ago

> being deflationary predictably is better than unpredictably inflationary. Unpredictable deflation is what bitcoin does, and with a fixed policy it can never do anything else. The amount of wealth generated by an economy grows in an unpredictable manner, and fixed monetary policy translates that fluctuation directly into the value of the currency. We learned this with metal currency. It didn’t go well.

conanbatt 8y ago
Did we? The history of monetary policy crisis were not related to the metal as much as to the instability of banking. Bitcoin cant go broke like a bank can.
- hakfoo 8y ago
  You can still have crises that aren't banking-related. When the New World was conquered, the mountains of silver and gold flowing back to Spain in particular caused inflation, no bankers involved. I'm not sure if there's a direct equivalent for Bitcoin. My first thought is that there are probably a few large stashes of coins that the market assumes are "out of circulation" and priced accordingly.
  - conanbatt 8y ago
    Its true the metal created inflation, but I assure you it created less inflation issues that any paper ever, and could never create hyperinflation as we know it unless it rained gold or something. Im unaware of big crisis stemming from that inflation, although I find it very amusing when Adam Smith or Ricardo talk about it without having the word in their arsenal. I loved knowing they were trying to define inflation without knowing what it was.

throwaway123156 8y ago

The Fed can easily replicate the benefits of cryptocurrency in seconds. They simply need to come out and say "We will only print X number of dollars, every Y number of months". There you go. All the benefits of Bitcoin replicated in the USD, which is a far more widespread and versatile currency? So why doesn't the Fed do it? Because it really is a terrible idea. It's like pegging your currency to gold, which was a terrible idea (although good for its time) and the delay in moving away from it probably cost tons of money and lives.

tromp 8y ago
> say "We will only print X number of dollars, every Y number of months" Easily said. Not so easily verified. Verifiable emission remains a big advantage of cryptocurrencies.