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I cannot tell if this is sarcasm or not. But I’ll assume it’s not: You cannot eat gold or bitcoin. The “hoarders” at some point will want to consume be it a pi

by whb07 6y ago

I cannot tell if this is sarcasm or not. But I’ll assume it’s not: You cannot eat gold or bitcoin. The “hoarders” at some point will want to consume be it a pizza or a lambo. Then there’s those who invest in ways to get more... what for it.. gold or bitcoin so they go out and purchase picks and shovels. Crazy stuff, extremely complicated when I write it as such. Btw, the FED made a trivial recession into a “great” one back in 1929.

BenoitEssiambre 6y ago
I am dead serious. The FED did cause the great depression and a lot of it had to do with currency being tied too closely to a deflationary token (gold). >You cannot eat gold or bitcoin. That is precisely the problem. The economy can get into a bad equilibrium where hoarding intrinsically valueless tokens displaces investing in productive assets. This state can persist because the firsts to invest in productive things are at a disadvantage to the token hoarders (at least for some time). >The “hoarders” at some point will want to consume be it a pizza or a lambo. Yes, then it becomes a game of "catch the peak" because when people realize all these tokens are sitting on the sideline but production has declined and there isn't much to purchase with the tokens, and that if they want to buy something at a good price they better be quick, the cycle can reverse explosively. It's important for aggregate savings to be (at least indirectly) tied to things you "can eat" or the production thereof.
- whb07 6y ago
  The "economy" is some number larger than (2^999999999999999999999999999999999) of decisions done at every second. Unless you or some cabal of godly beings exist they cannot determine whats a "good" equilibrium in the first place. Furthermore, to describe descriptions good/bad to a market is against the definition of a market. It is what it is. A high price signal lets others that they should come in and get involved and thus bring the price down one way or another. Being humble is a good thing. I cannot understand how certain ideologies or peoples always proclaim to know whats best for a stranger.
  - tobmlt 6y ago
    Just commenting to let you know that at least one other person on hacker news knows marginal revolution style economics/moral philosophy/classical liberalism and finds it more compelling than the alternatives seen to date. No offense meant to those who see it otherwise.
    - whb07 6y ago
      There are... dozens of us! I always find it weird when a group purports to know what the price of cacao should be halfway across the world when they’ve never stepped on to a finca in Ecuador.
      - tobmlt 6y ago
        Cheers, and spot on. I think a good deal of the hate Bitcoin gets is due to people not having much to go on when trying to think about currency generally. Without anything to stand on but the status quo, feelings seem to take over, and they are generally negative, motivating quickly thought up objections, in the mean, anyway.
  - BenoitEssiambre 6y ago
    Even Milton Friedman, champion of free market capitalism recognized that widely used currencies were special because they are the yard sticks everything else is measured against. That's why for example, he proposed as a free market alternative to government currencies, a currency based on a k-percent rule (https://en.wikipedia.org/wiki/Friedman%27s_k-percent_rule https://en.wikipedia.org/wiki/Friedman%27s_k-percent_rule) which would avoid the problems with deflationary currencies. Someone should make a crypto Friedman coin based on this. Of course this would remove the ponzi, get-rich-quick aspect, so most wouldn't care for it.
    - RhodoGSA 6y ago
      Polkadot is a crypto currency that does some interesting things with it's economics and governance. It's staking and treasury funding is similiar to the K-Percent Rule.
- tgraves83 6y ago
  Do you think the government is going to tie the currency to bitcoin and we'll be on a bitcoin standard? That would be the equivalent and would mean bitcoin would be insanely valuable so maybe you should buy some. On the other hand, it's far more likely the fed will stick with fiat currency. You'll still get paid in USD, pay your taxes in USD but bitcoin will exist as an alternative store of value like gold. There is around ~$11 trillion worth of gold above ground. Bitcoin has some properties that could make it a better store of value and much easier to transact with than gold. If it eats into gold's primary use case it will probably be a lot more valuable than it is right now.
  - BenoitEssiambre 6y ago
    I admit that if central banks and governments don't get in on the dangerous hoarding process, the token bubble might resolve much better than in 1929. Let's hope that's what happens. However, cryptocoins might have stronger network effects and memetic effects than gold which might make them dangerous to the aggregate regardless of central bank involvement. You can buy more things more easily with bitcoin than with gold especially if companies like Tesla start accepting payment in bitcoins.
    - tgraves83 6y ago
      I think cryptocurrencies definitely do have stronger network and memetic effects than gold. I agree with you that something like a bitcoin standard would probably be a disaster. However, I think of bitcoin as more of an inflationary hedge (even if we don't actually get inflation) or check on central bank monetary policy. So it's ultimately just an alternative asset. It also has some pretty amazing potential as a global settlement network but more so when it's volatility goes down.
      - BenoitEssiambre 6y ago
        The inflationary edge should be capital, inventory, productive investment eg. real stuff, not immaterial crypto tokens.
shortandsweet 6y ago
I can't tell if your post is sarcasm or not. Look at Apple, or any other large tech company. Hoarding billions in cash. Business lives to suck up any dollar possible and refuses to spend unless absolutely necessary because they are scared of risk or loss. They find their niche and that's it. Notice how there's no more research divisions in companies anymore? Like old school ATT.
- whb07 6y ago
  No such thing as “hoarding”. That’s just a low thought argument like calling everyone you disagree with a racist. Think of how many people’s retirement account owns Apple shares directly / indirectly. With Apple having $100b in cash, some portion of their valuation reflects that fact. So perhaps, Apple would be worth N% less if it just distributed all the cash tomorrow back to shareholders, correct? The point I’m making is that, the owners of the shares now own more valuable shares and thus benefit. The guy who is 95 leaves on his will that his favorite charity should get his Apple shares. Now there’s a very real example that counters your “hoarding” claims on the assumption that no one benefits from their savings. Not only that, Apple doesn’t keep the cash in a basement with dragons. But you’ve thought that one out I’m auree
  - neop1x 6y ago
    Apple is making less and less repairable machines to force you upgrade sooner btw...
- BenoitEssiambre 6y ago
  Sure but cash is held in banks and banks lend that out to be reinvested elsewhere (this investment channel is moderated by central banks). Not so with cryptocoins, it's just pure accumulation of tokens.
  - whb07 6y ago
    The people who have $10 Trillion in gold savings beg to differ. There is a growing market for loans using crypto as collateral. Using crypto to transact frees up the added financial costs required for charities, non profits , and regular businesses to thrive.

by whb07 6y ago

BenoitEssiambre 6y ago

I am dead serious. The FED did cause the great depression and a lot of it had to do with currency being tied too closely to a deflationary token (gold). >You cannot eat gold or bitcoin. That is precisely the problem. The economy can get into a bad equilibrium where hoarding intrinsically valueless tokens displaces investing in productive assets. This state can persist because the firsts to invest in productive things are at a disadvantage to the token hoarders (at least for some time). >The “hoarders” at some point will want to consume be it a pizza or a lambo. Yes, then it becomes a game of "catch the peak" because when people realize all these tokens are sitting on the sideline but production has declined and there isn't much to purchase with the tokens, and that if they want to buy something at a good price they better be quick, the cycle can reverse explosively. It's important for aggregate savings to be (at least indirectly) tied to things you "can eat" or the production thereof.

whb07 6y ago
The "economy" is some number larger than (2^999999999999999999999999999999999) of decisions done at every second. Unless you or some cabal of godly beings exist they cannot determine whats a "good" equilibrium in the first place. Furthermore, to describe descriptions good/bad to a market is against the definition of a market. It is what it is. A high price signal lets others that they should come in and get involved and thus bring the price down one way or another. Being humble is a good thing. I cannot understand how certain ideologies or peoples always proclaim to know whats best for a stranger.
- tobmlt 6y ago
  Just commenting to let you know that at least one other person on hacker news knows marginal revolution style economics/moral philosophy/classical liberalism and finds it more compelling than the alternatives seen to date. No offense meant to those who see it otherwise.
  - whb07 6y ago
    There are... dozens of us! I always find it weird when a group purports to know what the price of cacao should be halfway across the world when they’ve never stepped on to a finca in Ecuador.
    - tobmlt 6y ago
      Cheers, and spot on. I think a good deal of the hate Bitcoin gets is due to people not having much to go on when trying to think about currency generally. Without anything to stand on but the status quo, feelings seem to take over, and they are generally negative, motivating quickly thought up objections, in the mean, anyway.
- BenoitEssiambre 6y ago
  Even Milton Friedman, champion of free market capitalism recognized that widely used currencies were special because they are the yard sticks everything else is measured against. That's why for example, he proposed as a free market alternative to government currencies, a currency based on a k-percent rule (https://en.wikipedia.org/wiki/Friedman%27s_k-percent_rule https://en.wikipedia.org/wiki/Friedman%27s_k-percent_rule) which would avoid the problems with deflationary currencies. Someone should make a crypto Friedman coin based on this. Of course this would remove the ponzi, get-rich-quick aspect, so most wouldn't care for it.
  - RhodoGSA 6y ago
    Polkadot is a crypto currency that does some interesting things with it's economics and governance. It's staking and treasury funding is similiar to the K-Percent Rule.
tgraves83 6y ago
Do you think the government is going to tie the currency to bitcoin and we'll be on a bitcoin standard? That would be the equivalent and would mean bitcoin would be insanely valuable so maybe you should buy some. On the other hand, it's far more likely the fed will stick with fiat currency. You'll still get paid in USD, pay your taxes in USD but bitcoin will exist as an alternative store of value like gold. There is around ~$11 trillion worth of gold above ground. Bitcoin has some properties that could make it a better store of value and much easier to transact with than gold. If it eats into gold's primary use case it will probably be a lot more valuable than it is right now.
- BenoitEssiambre 6y ago
  I admit that if central banks and governments don't get in on the dangerous hoarding process, the token bubble might resolve much better than in 1929. Let's hope that's what happens. However, cryptocoins might have stronger network effects and memetic effects than gold which might make them dangerous to the aggregate regardless of central bank involvement. You can buy more things more easily with bitcoin than with gold especially if companies like Tesla start accepting payment in bitcoins.
  - tgraves83 6y ago
    I think cryptocurrencies definitely do have stronger network and memetic effects than gold. I agree with you that something like a bitcoin standard would probably be a disaster. However, I think of bitcoin as more of an inflationary hedge (even if we don't actually get inflation) or check on central bank monetary policy. So it's ultimately just an alternative asset. It also has some pretty amazing potential as a global settlement network but more so when it's volatility goes down.
    - BenoitEssiambre 6y ago
      The inflationary edge should be capital, inventory, productive investment eg. real stuff, not immaterial crypto tokens.

shortandsweet 6y ago

I can't tell if your post is sarcasm or not. Look at Apple, or any other large tech company. Hoarding billions in cash. Business lives to suck up any dollar possible and refuses to spend unless absolutely necessary because they are scared of risk or loss. They find their niche and that's it. Notice how there's no more research divisions in companies anymore? Like old school ATT.

whb07 6y ago
No such thing as “hoarding”. That’s just a low thought argument like calling everyone you disagree with a racist. Think of how many people’s retirement account owns Apple shares directly / indirectly. With Apple having $100b in cash, some portion of their valuation reflects that fact. So perhaps, Apple would be worth N% less if it just distributed all the cash tomorrow back to shareholders, correct? The point I’m making is that, the owners of the shares now own more valuable shares and thus benefit. The guy who is 95 leaves on his will that his favorite charity should get his Apple shares. Now there’s a very real example that counters your “hoarding” claims on the assumption that no one benefits from their savings. Not only that, Apple doesn’t keep the cash in a basement with dragons. But you’ve thought that one out I’m auree
- neop1x 6y ago
  Apple is making less and less repairable machines to force you upgrade sooner btw...
BenoitEssiambre 6y ago
Sure but cash is held in banks and banks lend that out to be reinvested elsewhere (this investment channel is moderated by central banks). Not so with cryptocoins, it's just pure accumulation of tokens.
- whb07 6y ago
  The people who have $10 Trillion in gold savings beg to differ. There is a growing market for loans using crypto as collateral. Using crypto to transact frees up the added financial costs required for charities, non profits , and regular businesses to thrive.