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But still Bitcoin has a lot of inflation due to speculators... I would trust more a criptocurrency that is used to buy/sell something "tangible" like Filecoin t

by GTP 8y ago

But still Bitcoin has a lot of inflation due to speculators... I would trust more a criptocurrency that is used to buy/sell something "tangible" like Filecoin that is used to buy/sell storage.

thinkmassive 8y ago
Bitcoin has inflation because there is still a block reward to subsidize mining. Speculators driving up the USD exchange rate does not create new units of the currency, it isn’t inflation.
- GTP 8y ago
  It's inflation because by buying/selling large quantities they effectively change bitcoin's value. In fact in the past there were a lot of repentine changes in bitcoin's value and not by some cents but in the order of hundreds of dollars.This is an inflation higher than most if not all "traditional" currencies.
- shkkmo 8y ago
  Inflation is not (directly) related to the supply of a currency, but to the value of that currency (usually measured vs the amount of goods/services a unit can purchase). When a currency loses value over time, it is inflating, when it gains value over time, it is deflating. Now, supply of a currency CAN impact its value, so large increases in supply can lead to large decreases in value. It seems pretty obvious that the main driver of value changes in Bitcoin is not the supply but the demand. The block reward will only have a significant impact on the deflation of bitcoin if demand becomes much, much more stable. Since the primary driver of Bitcoin demand is speculation, this does not seem likely anytime soon.
sparkie 8y ago
Bitcoin has initial inflation due to the process by which the currency is created, where the operators of the network are subsidized in the newly created coin for designating their hardware to securing the network. However, there is a halvening every 210000 blocks, with an eventual complete elimination of a subsidy and creation of any more of the currency. There is a hard cap on the amount of the currency in existence, which is a cap on inflation. The "inflation" of the BTC/USD exchange rate due to speculation is absolutely nothing to do with this. Those are simply growing pains for on-boarding while bitcoin is still in elementary stages. It is a mistake to think something "tangible" is better denominated by a token than by the thing itself. When you buy storage, you want storage. A promissory virtual token is not a replacement for storage, and has no inherent value in itself. The storage has value - that will continue to be the case whether there is a token or a hundred tokens, or no tokens. Currency is the same. If the currency itself does not have inherent value, then the paper which it represents would be useless. Junk economists have managed to convince most people that currency itself is worthless and it's value is a construct of our imagination. Bitcoin has inherent value. Other "cryptocurrencies" also have inherent value - the only difference is that their value will diminish over time, whereas bitcoin will appreciate.
- GTP 8y ago
  >The storage has value - that will continue to be the case whether there is a token or a hundred tokens, or no tokens. And this is exactly why I think that a token used for a specific tangible thing like storage would be more stable: storage has a value and that value doesn't repentinely change by hundreds of dollars in a day.
  - sparkie 8y ago
    Storage can change value at the blink of an eye, as can the junk token which purports to represent it. The things which dictate value are supply and demand. In storage, you will pay what you need based on your demands, and the price will be determined by how much is available. If there is abundance, it it cheap, if it is scarce, it will be expensive. The same is true for the token. However, as I've pointed out, the token is by-design not scarce, because anybody can print their own substitute. The token only creates additional friction between the consumer, who wants storage, and the seller, who wants money for their service. If the seller ends up with a bunch of "storage tokens", what good is it for them if they want to do their grocery shopping? What good is it for paying their bills? Do you think each of these services will have their own token, and each one will present an additional layer of friction for every person who just wants to get on with their lives? Of course this isn't the case. People will sell of whatever junk tokens they have and try to accumulate and save the most saleable commodity, which will be the one which does not depreciate, or depreciates as the slowest rate compared to any other commodity, ensuring that they will get their value's worth when they eventually want to trade it for something they need. The seller of storage is also going to want to trade their commodity, storage, for a commodity which is more saleable than storage. They would never sell it for something less saleable than storage unless they had a direct need for that commodity. The seller will therefore, also offer their services in exchange for the most saleable commodity - the one with universal applicability which the greatest number of other people will accept in exchange for goods or services. I suggest reading Carl Menger's "On the Origins of Money"[1] for a better understanding of how certain commodities become money. [1]:http://monadnock.net/menger/money.html http://monadnock.net/menger/money.html
deleted 8y ago
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by GTP 8y ago

But still Bitcoin has a lot of inflation due to speculators... I would trust more a criptocurrency that is used to buy/sell something "tangible" like Filecoin that is used to buy/sell storage.

thinkmassive 8y ago

Bitcoin has inflation because there is still a block reward to subsidize mining. Speculators driving up the USD exchange rate does not create new units of the currency, it isn’t inflation.

GTP 8y ago
It's inflation because by buying/selling large quantities they effectively change bitcoin's value. In fact in the past there were a lot of repentine changes in bitcoin's value and not by some cents but in the order of hundreds of dollars.This is an inflation higher than most if not all "traditional" currencies.
shkkmo 8y ago
Inflation is not (directly) related to the supply of a currency, but to the value of that currency (usually measured vs the amount of goods/services a unit can purchase). When a currency loses value over time, it is inflating, when it gains value over time, it is deflating. Now, supply of a currency CAN impact its value, so large increases in supply can lead to large decreases in value. It seems pretty obvious that the main driver of value changes in Bitcoin is not the supply but the demand. The block reward will only have a significant impact on the deflation of bitcoin if demand becomes much, much more stable. Since the primary driver of Bitcoin demand is speculation, this does not seem likely anytime soon.

sparkie 8y ago

Bitcoin has initial inflation due to the process by which the currency is created, where the operators of the network are subsidized in the newly created coin for designating their hardware to securing the network. However, there is a halvening every 210000 blocks, with an eventual complete elimination of a subsidy and creation of any more of the currency. There is a hard cap on the amount of the currency in existence, which is a cap on inflation. The "inflation" of the BTC/USD exchange rate due to speculation is absolutely nothing to do with this. Those are simply growing pains for on-boarding while bitcoin is still in elementary stages. It is a mistake to think something "tangible" is better denominated by a token than by the thing itself. When you buy storage, you want storage. A promissory virtual token is not a replacement for storage, and has no inherent value in itself. The storage has value - that will continue to be the case whether there is a token or a hundred tokens, or no tokens. Currency is the same. If the currency itself does not have inherent value, then the paper which it represents would be useless. Junk economists have managed to convince most people that currency itself is worthless and it's value is a construct of our imagination. Bitcoin has inherent value. Other "cryptocurrencies" also have inherent value - the only difference is that their value will diminish over time, whereas bitcoin will appreciate.

GTP 8y ago
>The storage has value - that will continue to be the case whether there is a token or a hundred tokens, or no tokens. And this is exactly why I think that a token used for a specific tangible thing like storage would be more stable: storage has a value and that value doesn't repentinely change by hundreds of dollars in a day.
- sparkie 8y ago
  Storage can change value at the blink of an eye, as can the junk token which purports to represent it. The things which dictate value are supply and demand. In storage, you will pay what you need based on your demands, and the price will be determined by how much is available. If there is abundance, it it cheap, if it is scarce, it will be expensive. The same is true for the token. However, as I've pointed out, the token is by-design not scarce, because anybody can print their own substitute. The token only creates additional friction between the consumer, who wants storage, and the seller, who wants money for their service. If the seller ends up with a bunch of "storage tokens", what good is it for them if they want to do their grocery shopping? What good is it for paying their bills? Do you think each of these services will have their own token, and each one will present an additional layer of friction for every person who just wants to get on with their lives? Of course this isn't the case. People will sell of whatever junk tokens they have and try to accumulate and save the most saleable commodity, which will be the one which does not depreciate, or depreciates as the slowest rate compared to any other commodity, ensuring that they will get their value's worth when they eventually want to trade it for something they need. The seller of storage is also going to want to trade their commodity, storage, for a commodity which is more saleable than storage. They would never sell it for something less saleable than storage unless they had a direct need for that commodity. The seller will therefore, also offer their services in exchange for the most saleable commodity - the one with universal applicability which the greatest number of other people will accept in exchange for goods or services. I suggest reading Carl Menger's "On the Origins of Money"[1] for a better understanding of how certain commodities become money. [1]:http://monadnock.net/menger/money.html http://monadnock.net/menger/money.html

deleted 8y ago

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