4 ms·

The flaws of ETH seem to show daily. The fact that this is a necessity to keep ETH flowing is a bad sign of things to come. Bitcoin not blockchain.

arcticbull 8y ago
Or neither Bitcoin nor Blockchain. The thing is, inflation is actually what keeps the entire economy moving. Deflationary currencies actively dissuade investment and lending. What would a loan even look like denominated in a deflationary currency? Lenders are incentivized not to give you the one, as their cash reserves appreciate risk-free. Oh, and also, why trust this random ad-hoc group of self-appointed economists (the core dev team) over a selected group of professional economists with degrees an arms-length away from politics (the federal reserve)? None of it makes sense. If the core team wants to create more bitcoin they can. Just like the fed. Inflation is not a bad thing - it's solely a regular haircut for unproductive capital. Nobody should be hoarding cash. They should invest. Salaries are indexed for inflation so they don't go down. This isn't rocket science.
- zmitton 8y ago
  Your economics are all wrong. Ever heard of the Cantillon Effect? https://www.aier.org/article/sound-money-project/cantillon-effects-and-money-neutrality https://www.aier.org/article/sound-money-project/cantillon-e...
  - arcticbull 8y ago
    Your article seems to be making a distinction between the Cantillon effects and Money Neutrality. "In principle, it could be argued that Cantillon Effects focus on the short-term effect of changes in money supply, but that money neutrality is a long term characteristic of money. Short-run effects in resource allocation are typically not denied, usually due to the fact that they alter “sticky” prices, such as wages." It then goes on to argue that Money Neutrality shouldn't be taken as a given. I don't think the article states money neutrality is fallacious, though, and I couldn't find any substantiating claims within it. I suppose the argument I am making is for money neutrality. That yes, the initial recipients of capital are temporarily advantaged being able to purchase assets are pre-inflation prices. However, over time, this does balance out. The market makes it so. I'm not sure, maybe I'm missing something? I'd love to read more on this if you think I am. That said Bitcoin has a worse Gini ratio than any banana republic, worse wealth distribution and all sorts of other economic factors, and an unbounded cost to transact that as a fixed fee unfairly burdens the poor -- that just make it worse all around than the existing USD based financial system.
  - runeks 8y ago
    > The Cantillon Effect refers to the change in relative prices resulting from a change in money supply. The change in relative prices occurs because the change in money supply has a specific injection point and therefore a specific flow path through the economy. The first recipient of the new supply of money is in the convenient position of being able to spend extra dollars before prices have increased. But whoever is last in line receives his share of new dollars after prices have increased. This theory is fundamentally flawed, because it assumes that whoever receives the “new money” buys consumer goods. If this is indeed what happens, then prices should increase. But what if he buys bonds? If newly produced money is used, not to buy consumer goods (or commodities), but bonds, then the injection of new money into the economy has the opposite effect on the price level, because the new money is used to improve the efficiency of production. E.g. if a producer of chickens sells a $250m bond (bought with “new money”) and invests the proceeds in a chicken plant[1], the price of chickens will decrease, due to increased productivity of producing chickens. In the above scenario, the only price that will increase is the price of bonds, which is the same as a falling rate of interest (the rate of interest is inversely proportional to the price of the bond). And this is exactly what has been happening for the past 35 years or so[2]. [1] https://markets.businessinsider.com/news/stocks/costco-plans-to-keep-rotisserie-chicken-at-5-dollars-2018-9-1027555791 https://markets.businessinsider.com/news/stocks/costco-plans... [2] https://awealthofcommonsense.com/wp-content/uploads/2015/12/Screen-Shot-2015-12-16-at-3.26.43-PM.png https://awealthofcommonsense.com/wp-content/uploads/2015/12/...
- dpc_pw 8y ago
  Blah, blah, blah. Take your inflationary currency if you really like it so much, no one really cares, and no one ever forced anyone to use deflationary currency (unlike fiat ones), which tells you where the the truth is.
  - arcticbull 8y ago
    I don't hold it, I invest it in productive things, like I said. I sell those productive assets when I need to buy something substantial, and I use the US Dollar as a medium of exchange and unit of account. You know, a currency. I don't hold it for long enough for 3% annual inflation to make a meaningful dent in my net worth. It's also trivially false that nobody ever forced a deflationary currency on people, the US dollar used to backed by gold. If your argument is the US dollar is/was forced on people, then the argument is moot. I'm not sure what you're trying to say.
- topmonk 8y ago
  > If the core team wants to create more bitcoin they can. If you believe this, you lack a fundamental understanding of btc.
  - nosuchthing 8y ago
    Actually it’s possible for any hacker to generate more Bitcoins if another bug like CVE-2018-17144 is discovered. What Exactly Did the Bug Do? The obvious worst part of this bug was the inflation exploit. An attack could create new bitcoins at will, exceeding the 21 million hard cap limit that is currently in place. This would absolutely destroy confidence in not only Bitcoin, but every cryptocurrency. https://www.livebitcoinnews.com/cve-2018-17144-the-aftermath-of-a-catastrophic-bitcoin-bug/ https://www.livebitcoinnews.com/cve-2018-17144-the-aftermath...
    - arcticbull 8y ago
      Further we've no idea if other such bugs have been discovered and exploited already without responsible disclosure.
      - topmonk 8y ago
        You also don't know if your brick and mortar bank has been hacked. It's a silly argument.
        arcticbull 8y ago
        I don’t really care though, because they don’t guarantee that no additional dollars are going to enter circulation, we know they well, and the balance of my bank account is insured by the FDIC. If there’s any counterfeiting going on, that’s going to get investigated by the Secret Service and the FBI. If anyone makes more bitcoin, holders just all lose because decentralization. It’s not meant to be a silly argument, it’s meant to be a concrete demonstration of the difference in value between traditional currencies and crypto currencies.
    - topmonk 8y ago
amingilani 8y ago
I don't understand how the fact that the author solved a novel problem and then posted a bounty points to "flaws of ETH". Could you elaborate? Also, what do you mean by "Bitcoin not blockchain"?
tree_of_item 8y ago
The fact that what is a necessity? New data structures? Why wouldn't you expect new data structures in absolutely any new environment?
joshschreuder 8y ago
What about open-mindedness, not maximalism

arcticbull 8y ago

Or neither Bitcoin nor Blockchain. The thing is, inflation is actually what keeps the entire economy moving. Deflationary currencies actively dissuade investment and lending. What would a loan even look like denominated in a deflationary currency? Lenders are incentivized not to give you the one, as their cash reserves appreciate risk-free. Oh, and also, why trust this random ad-hoc group of self-appointed economists (the core dev team) over a selected group of professional economists with degrees an arms-length away from politics (the federal reserve)? None of it makes sense. If the core team wants to create more bitcoin they can. Just like the fed. Inflation is not a bad thing - it's solely a regular haircut for unproductive capital. Nobody should be hoarding cash. They should invest. Salaries are indexed for inflation so they don't go down. This isn't rocket science.

zmitton 8y ago
Your economics are all wrong. Ever heard of the Cantillon Effect? https://www.aier.org/article/sound-money-project/cantillon-effects-and-money-neutrality https://www.aier.org/article/sound-money-project/cantillon-e...
- arcticbull 8y ago
  Your article seems to be making a distinction between the Cantillon effects and Money Neutrality. "In principle, it could be argued that Cantillon Effects focus on the short-term effect of changes in money supply, but that money neutrality is a long term characteristic of money. Short-run effects in resource allocation are typically not denied, usually due to the fact that they alter “sticky” prices, such as wages." It then goes on to argue that Money Neutrality shouldn't be taken as a given. I don't think the article states money neutrality is fallacious, though, and I couldn't find any substantiating claims within it. I suppose the argument I am making is for money neutrality. That yes, the initial recipients of capital are temporarily advantaged being able to purchase assets are pre-inflation prices. However, over time, this does balance out. The market makes it so. I'm not sure, maybe I'm missing something? I'd love to read more on this if you think I am. That said Bitcoin has a worse Gini ratio than any banana republic, worse wealth distribution and all sorts of other economic factors, and an unbounded cost to transact that as a fixed fee unfairly burdens the poor -- that just make it worse all around than the existing USD based financial system.
- runeks 8y ago
  > The Cantillon Effect refers to the change in relative prices resulting from a change in money supply. The change in relative prices occurs because the change in money supply has a specific injection point and therefore a specific flow path through the economy. The first recipient of the new supply of money is in the convenient position of being able to spend extra dollars before prices have increased. But whoever is last in line receives his share of new dollars after prices have increased. This theory is fundamentally flawed, because it assumes that whoever receives the “new money” buys consumer goods. If this is indeed what happens, then prices should increase. But what if he buys bonds? If newly produced money is used, not to buy consumer goods (or commodities), but bonds, then the injection of new money into the economy has the opposite effect on the price level, because the new money is used to improve the efficiency of production. E.g. if a producer of chickens sells a $250m bond (bought with “new money”) and invests the proceeds in a chicken plant[1], the price of chickens will decrease, due to increased productivity of producing chickens. In the above scenario, the only price that will increase is the price of bonds, which is the same as a falling rate of interest (the rate of interest is inversely proportional to the price of the bond). And this is exactly what has been happening for the past 35 years or so[2]. [1] https://markets.businessinsider.com/news/stocks/costco-plans-to-keep-rotisserie-chicken-at-5-dollars-2018-9-1027555791 https://markets.businessinsider.com/news/stocks/costco-plans... [2] https://awealthofcommonsense.com/wp-content/uploads/2015/12/Screen-Shot-2015-12-16-at-3.26.43-PM.png https://awealthofcommonsense.com/wp-content/uploads/2015/12/...
dpc_pw 8y ago
Blah, blah, blah. Take your inflationary currency if you really like it so much, no one really cares, and no one ever forced anyone to use deflationary currency (unlike fiat ones), which tells you where the the truth is.
- arcticbull 8y ago
  I don't hold it, I invest it in productive things, like I said. I sell those productive assets when I need to buy something substantial, and I use the US Dollar as a medium of exchange and unit of account. You know, a currency. I don't hold it for long enough for 3% annual inflation to make a meaningful dent in my net worth. It's also trivially false that nobody ever forced a deflationary currency on people, the US dollar used to backed by gold. If your argument is the US dollar is/was forced on people, then the argument is moot. I'm not sure what you're trying to say.
topmonk 8y ago
> If the core team wants to create more bitcoin they can. If you believe this, you lack a fundamental understanding of btc.
- nosuchthing 8y ago
  Actually it’s possible for any hacker to generate more Bitcoins if another bug like CVE-2018-17144 is discovered. What Exactly Did the Bug Do? The obvious worst part of this bug was the inflation exploit. An attack could create new bitcoins at will, exceeding the 21 million hard cap limit that is currently in place. This would absolutely destroy confidence in not only Bitcoin, but every cryptocurrency. https://www.livebitcoinnews.com/cve-2018-17144-the-aftermath-of-a-catastrophic-bitcoin-bug/ https://www.livebitcoinnews.com/cve-2018-17144-the-aftermath...
  - arcticbull 8y ago
    Further we've no idea if other such bugs have been discovered and exploited already without responsible disclosure.
    - topmonk 8y ago
      You also don't know if your brick and mortar bank has been hacked. It's a silly argument.
      - arcticbull 8y ago
        I don’t really care though, because they don’t guarantee that no additional dollars are going to enter circulation, we know they well, and the balance of my bank account is insured by the FDIC. If there’s any counterfeiting going on, that’s going to get investigated by the Secret Service and the FBI. If anyone makes more bitcoin, holders just all lose because decentralization. It’s not meant to be a silly argument, it’s meant to be a concrete demonstration of the difference in value between traditional currencies and crypto currencies.
  - topmonk 8y ago

amingilani 8y ago

I don't understand how the fact that the author solved a novel problem and then posted a bounty points to "flaws of ETH". Could you elaborate? Also, what do you mean by "Bitcoin not blockchain"?

tree_of_item 8y ago

The fact that what is a necessity? New data structures? Why wouldn't you expect new data structures in absolutely any new environment?

joshschreuder 8y ago

What about open-mindedness, not maximalism