5 ms·

Rather than debating the validity of the Gold Standard (which is essentially what this discussion boils down to) I would direct you to a great set of podcasts f

Rather than debating the validity of the Gold Standard (which is essentially what this discussion boils down to) I would direct you to a great set of podcasts from Planet Money[1] in particular [2][3] which discuss the general current thought on the Gold Standard, and show why most economists agree it is untenable in the long run. [1]http://www.npr.org/templates/archives/archive.php?thingId=133252308 http://www.npr.org/templates/archives/archive.php?thingId=13... [2]http://www.npr.org/blogs/money/2011/02/15/133781593/the-tuesday-podcast-the-gold-standard http://www.npr.org/blogs/money/2011/02/15/133781593/the-tues... [3]http://www.npr.org/blogs/money/2011/02/18/133874462/the-friday-podcast-gold-standard-r-i-p http://www.npr.org/blogs/money/2011/02/18/133874462/the-frid...

tcoppi 16y ago
Most of these arguments apply if you are going to be using a finite supply of money as your "main" currency. I agree that not having an inflatable supply is bad in such situations. However it is incredibly unlikely that bitcoin will ever occupy this niche(I highly doubt anyone is going to ever pay taxes in BTC). For what it is, an easy and quick way to transact payments anonymously* and securely online, it is incredibly valuable and I hope it caches on. *How anonymous it is obviously depends on how sophisticated you are at using it.
- ZitchDog 16y ago
  It will still be bad for the adoption of Bitcoin as a trading currency. If I have a Bitcoin that is worth $1 today but will almost certainly be worth more than that in a month, what is my incentive to give you the Bitcoin? Wouldn't it be smarter for me to just give you $1 directly via PayPal? As it stands the only reason to use Bitcoin currently is for shady deals, novelty, and speculation. I find it laughable that Bitcoin advocates laud the increase in the currency's value as a good thing. It is most certainly not a good sign for a currency when it's value increases dramatically over time such as the Bitcoin has.
  - mike_esspe 16y ago
    You should get $1 somehow (exchange BTC to dollars for example), so it's equivalent to sending the exchanged amount of BTC.
  - Groxx 16y ago
    >Wouldn't it be smarter for me to just give you $1 directly via PayPal? Which you would get by... selling some amount of bitcoins to an exchanger. And the person you give $1 to would turn around and buy the same amount from another exchanger, less overall fees both ways. It amounts to the same thing, unless you view bitcoins as a dead-end worthless location to put money in, because you never use them. Which is irrational - it's pure loss for you if you never use them.
    - euccastro 16y ago
      No, I would get USD/EUR by the same means I was getting them before Bitcoin existed.
      - Groxx 16y ago
        But we're speaking hypothetically as if they were actually buying bitcoins, but not withdrawing them, because it's cheaper in the long run to pay with other currencies. But if you never withdraw them, they have no value at all. Therefore some are withdrawn, and at least some of that $1 came from bitcoins. If you even withdraw one penny worth, you have added one penny to your net bank account, which has influence on your account forever. The simpler hypothesis is that they intended to show the uselessness of a deflationary currency by infinitely hoarding. But that's completely irrational, so an alternate, simple hypothesis is that they are using bitcoin, so any money they have is influenced by bitcoins they exchange.
- deleted 16y ago
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dpatru 16y ago
You might want to read Rothbard's What Has Government Done to Our Money. It's available free both in pdf and mp3 at mises.org. The tl;dr reply to the arguments in podcast 3 (banks fail if forced to redeem paper for gold) is that fractional reserve banking is incompatible with the gold standard. The gold standard treats paper money as mere warehouse receipts for gold. But bankers tend to issue more receipts than they have in gold, i.e., they commit fraud. When the public cash in their paper, the banks run out of gold, something that shouldn't happen if the bank only issued paper for gold in the first place. Rather than blame the bankers and put them in prison, governments have taken away people's right to use gold as money and even to own gold. Far from an argument against the gold standard, the history related in your reference 3 (about the collapse of the English and American banking industries) is a lesson of government tyranny, bank fraud, and an argument for real money as a check on government power.

tcoppi 16y ago

Most of these arguments apply if you are going to be using a finite supply of money as your "main" currency. I agree that not having an inflatable supply is bad in such situations. However it is incredibly unlikely that bitcoin will ever occupy this niche(I highly doubt anyone is going to ever pay taxes in BTC). For what it is, an easy and quick way to transact payments anonymously* and securely online, it is incredibly valuable and I hope it caches on. *How anonymous it is obviously depends on how sophisticated you are at using it.

ZitchDog 16y ago
It will still be bad for the adoption of Bitcoin as a trading currency. If I have a Bitcoin that is worth $1 today but will almost certainly be worth more than that in a month, what is my incentive to give you the Bitcoin? Wouldn't it be smarter for me to just give you $1 directly via PayPal? As it stands the only reason to use Bitcoin currently is for shady deals, novelty, and speculation. I find it laughable that Bitcoin advocates laud the increase in the currency's value as a good thing. It is most certainly not a good sign for a currency when it's value increases dramatically over time such as the Bitcoin has.
- mike_esspe 16y ago
  You should get $1 somehow (exchange BTC to dollars for example), so it's equivalent to sending the exchanged amount of BTC.
- Groxx 16y ago
  >Wouldn't it be smarter for me to just give you $1 directly via PayPal? Which you would get by... selling some amount of bitcoins to an exchanger. And the person you give $1 to would turn around and buy the same amount from another exchanger, less overall fees both ways. It amounts to the same thing, unless you view bitcoins as a dead-end worthless location to put money in, because you never use them. Which is irrational - it's pure loss for you if you never use them.
  - euccastro 16y ago
    No, I would get USD/EUR by the same means I was getting them before Bitcoin existed.
    - Groxx 16y ago
      But we're speaking hypothetically as if they were actually buying bitcoins, but not withdrawing them, because it's cheaper in the long run to pay with other currencies. But if you never withdraw them, they have no value at all. Therefore some are withdrawn, and at least some of that $1 came from bitcoins. If you even withdraw one penny worth, you have added one penny to your net bank account, which has influence on your account forever. The simpler hypothesis is that they intended to show the uselessness of a deflationary currency by infinitely hoarding. But that's completely irrational, so an alternate, simple hypothesis is that they are using bitcoin, so any money they have is influenced by bitcoins they exchange.
deleted 16y ago
[deleted]

dpatru 16y ago

You might want to read Rothbard's What Has Government Done to Our Money. It's available free both in pdf and mp3 at mises.org. The tl;dr reply to the arguments in podcast 3 (banks fail if forced to redeem paper for gold) is that fractional reserve banking is incompatible with the gold standard. The gold standard treats paper money as mere warehouse receipts for gold. But bankers tend to issue more receipts than they have in gold, i.e., they commit fraud. When the public cash in their paper, the banks run out of gold, something that shouldn't happen if the bank only issued paper for gold in the first place. Rather than blame the bankers and put them in prison, governments have taken away people's right to use gold as money and even to own gold. Far from an argument against the gold standard, the history related in your reference 3 (about the collapse of the English and American banking industries) is a lesson of government tyranny, bank fraud, and an argument for real money as a check on government power.