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Exactly, any supply of money will do, no need to permanently increase the amount in circulation — this is why the market settled on gold (which has an inherentl
by sbenitoj 8y ago
Exactly, any supply of money will do, no need to permanently increase the amount in circulation — this is why the market settled on gold (which has an inherently low inflation rate due to the difficulties of mining) and impossible to pass off counterfeit gold at scald.
- ur-whale 8y ago>this is why the market settled on gold Gold, which, by the way, has an extraordinarily high energy and environmental cost to extract.
- sbenitoj 8y agoThat’s not a bug, it’s a feature — if it were easy to extract (like aluminum), it would have been much more inflationary and thus not a “good” choice for money.
- ur-whale 8y agoI didn't claim it was a bug. I was trying to make the point that all the tree huggers that scream bloody murder because of Bitcoin mining costs never look at the actual environmental cost of existing systems.
- sbenitoj 8y agoAh gotcha, misunderstood your comment — good point!
- creato 8y agoGold is a fringe commodity valued by a similar small subset of the population that values bitcion. And yeah, I'd say that those people are also causing similar problems to bitcoin because they incentivize significant environmental destruction. Even worse than bitcoin, they also increase the costs of real commercial use cases for gold.
- stolsvik 8y ago> Gold is a fringe commodity valued by a similar small subset of the population that values bitcion. https://en.wikipedia.org/wiki/Gold_reserve#Officially_reported_holdings https://en.wikipedia.org/wiki/Gold_reserve#Officially_report...
- hanniabu 8y agoYou need inflation for proper incentives. It's like a tax on the entire network to keep it supported. Without proper incentives, the game theory collapses. The difference here is that inflation is predetermined and set instead of printing money on demand like we do in the traditional financial system.
- sbenitoj 8y ago“You need inflation for proper incentives. It's like a tax on the entire network to keep it supported. Without proper incentives, the game theory collapses.” What, specifically, do you think the consequences of a stable money supply are?
- hanniabu 8y agoNo incentive to support the network if there's no block rewards. The transaction fees are not sufficient and just meant to prevent spam. It's also better to tax the network as a whole (through this set inflation) than to tax for each usage.
- sbenitoj 8y agoI misunderstood you at first. That’s an interesting speculation, but it remains to be seen what will happen when inflation is near zero. If people value transacting on the network, then they will pay the necessary fees to keep it running. If they don’t then it will go down. I suspect this isn’t the big issue people think it is, regardless there’s no way to “prove” that transaction fees won’t be enough — everyone from miners to speculators by owning mining equipment and Bitcoin are specifically betting that transaction fees will be enough.
- hanniabu 8y agoThere's an assumption here that the network will be used and valuable. If the network is used more it will be more valuable, which means the reward value will increase as the inflation decreases. If nobody uses the network then it'll be worthless, which at that point it doesn't matter since nobody is using it.
- Scarblac 8y agoThe market has settled on gold? For money? What? The market moved on to other forms of money centuries ago.
- Qasaur 8y agoThis is categorically false. The gold standard (albeit a reduced version of it established under the Bretton-Woods monetary regime) was abolished in the United States as recently as 1971. In Switzerland this link was abolished in the early 2000's AFAIK.