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Those are the first uses because online gamblers and muckraking NGOs are the ones most desperate for an alternative to a government-issued currency. If the aver

Those are the first uses because online gamblers and muckraking NGOs are the ones most desperate for an alternative to a government-issued currency. If the average person was unable to function with inflationary currencies, they'd find an alternative.

euroclydon 16y ago
People don't just utilize things in order to function: think iPhone. Wikileaks and gambling will sink bitcoin before it can mean anything.
phillmv 16y ago
Inflationary currencies? I'm pretty sure every form of currency is subject to inflation.
- quanticle 16y ago
  Currencies linked to physical goods of limited quantities wouldn't inflate. For example, I could make a currency that represented shares of Picasso paintings. Since there are only a limited number of Picasso paintings, my currency wouldn't inflate. Commodity-linked currencies (e.g. those that are gold/silver based) don't inflate much in a practical sense, since the amount of gold/silver being mined each year is usually much less than the amount of gold and silver already being used for exchange. That said, the US did experience a pretty huge bout of inflation after the California gold rush, as all that new currency increased the money supply.
  - phillmv 16y ago
    Hrm. My understanding is that inflation can affect anything we attach value to (and that broadly speaking "value" is also an abstract concept). Suppose the price of oil (or any other primary resource) jumps 50%, increasing the nominal cost of everything that has been made from it. Your gold backed dollar now can be exchanged for less things than before, irrespective of the total supply of gold in the world. Does that make sense? I'm woefully under read in economics.
    - StavrosK 16y ago
      That's not inflation, though, that's just a price change...
      - phillmv 16y ago
        Yesterday, I could get 1kg of sugar for $1. Today, I can only get 0.75kg of sugar for $1. My dollar is worth less (can be exchanged for less goods) than it was before - I'm pretty sure that's inflation.
        nradov 16y ago
        The word "inflation" has several different meanings. You're talking about consumer price inflation. There is also monetary inflation, which is the supply of money plus debt (marked to market). Those are really completely different things with only a very loose relationship.
- bonzoesc 16y ago
  Bitcoin is resistant to centralized inflation due to currency supply increases because CPU power votes on new currency entering the system. If I make a block that gives me a 100 BTC bounty instead of the current 50 BTC, no other nodes will make blocks dependent on mine, meaning that it didn't happen.

euroclydon 16y ago

People don't just utilize things in order to function: think iPhone. Wikileaks and gambling will sink bitcoin before it can mean anything.

phillmv 16y ago

Inflationary currencies? I'm pretty sure every form of currency is subject to inflation.

quanticle 16y ago
Currencies linked to physical goods of limited quantities wouldn't inflate. For example, I could make a currency that represented shares of Picasso paintings. Since there are only a limited number of Picasso paintings, my currency wouldn't inflate. Commodity-linked currencies (e.g. those that are gold/silver based) don't inflate much in a practical sense, since the amount of gold/silver being mined each year is usually much less than the amount of gold and silver already being used for exchange. That said, the US did experience a pretty huge bout of inflation after the California gold rush, as all that new currency increased the money supply.
- phillmv 16y ago
  Hrm. My understanding is that inflation can affect anything we attach value to (and that broadly speaking "value" is also an abstract concept). Suppose the price of oil (or any other primary resource) jumps 50%, increasing the nominal cost of everything that has been made from it. Your gold backed dollar now can be exchanged for less things than before, irrespective of the total supply of gold in the world. Does that make sense? I'm woefully under read in economics.
  - StavrosK 16y ago
    That's not inflation, though, that's just a price change...
    - phillmv 16y ago
      Yesterday, I could get 1kg of sugar for $1. Today, I can only get 0.75kg of sugar for $1. My dollar is worth less (can be exchanged for less goods) than it was before - I'm pretty sure that's inflation.
      - nradov 16y ago
        The word "inflation" has several different meanings. You're talking about consumer price inflation. There is also monetary inflation, which is the supply of money plus debt (marked to market). Those are really completely different things with only a very loose relationship.
bonzoesc 16y ago
Bitcoin is resistant to centralized inflation due to currency supply increases because CPU power votes on new currency entering the system. If I make a block that gives me a 100 BTC bounty instead of the current 50 BTC, no other nodes will make blocks dependent on mine, meaning that it didn't happen.