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Resorting to let me google that for you to construct your reply mean you aren't taking me seriously. I am told that deflation is a bad thing actually assume ma

by kiba 16y ago

Resorting to let me google that for you to construct your reply mean you aren't taking me seriously. I am told that deflation is a bad thing actually assume many things to be true. 1. Deflation is the result of collapsing monetary base. However, the bitcoin economy isn't experiencing anything remotely similar to what you think is going to happen. The Bitcoin economy is experiencing growth deflation. 2. Assumption that retention of cash is not investment. To the holder of cash, it is an investment. The economy, on the other hand, see money retention as a forecast of time preference. Moverover, an inflationary regime favor investors and producers. A hard money regime like bitcoins favor the average joe who are consumer and savior of money.

btilly 16y ago
Deflation is the result of demand for money rising faster than supply. Look at a basic supply/demand curve for an explanation of this. The point about investment is that incentive to invest results in money being available for people who have the drive, energy and motivation to change the world to realize their dreams, even if they have not done it yet. If money is not available for investment those people's dreams get shattered before they change the world. This is a Bad Thing. (And generally results in a stagnant economy and persistently high unemployment.) The current experience of bitcoin should not be deflation for the simple reasons that bitcoins continue to be issued, and should be issued for very good reasons. You are right that an inflationary regime favors investors and producers. However it turns out that favoring investors and producers results in favoring the people who are most likely to result in investing in our future and producing things that make us all better off. Therefore favoring people who are trying to change the world for the better is a _Good Thing_ (tm).
- kiba 16y ago
  The point about investment is that incentive to invest results in money being available for people who have the drive, energy and motivation to change the world to realize their dreams, even if they have not done it yet. If money is not available for investment those people's dreams get shattered before they change the world. This is a Bad Thing. (And generally results in a stagnant economy and persistently high unemployment.) In the first place, the bitcoin economy is experiencing a phrase of deflationary growth. There were little services and goods before the slashdotting. Now, there are more. The bitcoin economy is not stagnating. The current experience of bitcoin should not be deflation for the simple reasons that bitcoins continue to be issued, and should be issued for very good reasons. I assure you, my observation of the bitcoin economy is accurate. There are 7200 bitcoins being created each day, but the price of bitcoins aren't crashing. Demand for bitcoins are growing faster or keeping up with monetary inflation. Mt. Gox, before the dollars become essentially worthless(thus invalidating Mt. Gox usefulness on indication of demand for bitcoin), reach a record high of 0.12 cents per bitcoin, with enormous amount of volume. 200,000 bitcoins were exchanged. Same thing for bitcoin market, though on a much lower scale.
  - btilly 16y ago
    I submit to you that investment in the bitcoin economy is paid for in other currencies (eg dollars), not in bitcoins. Given that, the strength of the bitcoin economy has nothing to do with the availability of money for investment. And indeed a growth in value for bitcoins should drive investment in bitcoins, which leads to what you've observed. The dynamics would be opposite were bitcoins the primary currency.

by kiba 16y ago

btilly 16y ago

Deflation is the result of demand for money rising faster than supply. Look at a basic supply/demand curve for an explanation of this. The point about investment is that incentive to invest results in money being available for people who have the drive, energy and motivation to change the world to realize their dreams, even if they have not done it yet. If money is not available for investment those people's dreams get shattered before they change the world. This is a Bad Thing. (And generally results in a stagnant economy and persistently high unemployment.) The current experience of bitcoin should not be deflation for the simple reasons that bitcoins continue to be issued, and should be issued for very good reasons. You are right that an inflationary regime favors investors and producers. However it turns out that favoring investors and producers results in favoring the people who are most likely to result in investing in our future and producing things that make us all better off. Therefore favoring people who are trying to change the world for the better is a _Good Thing_ (tm).

kiba 16y ago
The point about investment is that incentive to invest results in money being available for people who have the drive, energy and motivation to change the world to realize their dreams, even if they have not done it yet. If money is not available for investment those people's dreams get shattered before they change the world. This is a Bad Thing. (And generally results in a stagnant economy and persistently high unemployment.) In the first place, the bitcoin economy is experiencing a phrase of deflationary growth. There were little services and goods before the slashdotting. Now, there are more. The bitcoin economy is not stagnating. The current experience of bitcoin should not be deflation for the simple reasons that bitcoins continue to be issued, and should be issued for very good reasons. I assure you, my observation of the bitcoin economy is accurate. There are 7200 bitcoins being created each day, but the price of bitcoins aren't crashing. Demand for bitcoins are growing faster or keeping up with monetary inflation. Mt. Gox, before the dollars become essentially worthless(thus invalidating Mt. Gox usefulness on indication of demand for bitcoin), reach a record high of 0.12 cents per bitcoin, with enormous amount of volume. 200,000 bitcoins were exchanged. Same thing for bitcoin market, though on a much lower scale.
- btilly 16y ago
  I submit to you that investment in the bitcoin economy is paid for in other currencies (eg dollars), not in bitcoins. Given that, the strength of the bitcoin economy has nothing to do with the availability of money for investment. And indeed a growth in value for bitcoins should drive investment in bitcoins, which leads to what you've observed. The dynamics would be opposite were bitcoins the primary currency.