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The difference between magic internet money and USD is the word internet. All money is based on faith. At least Bitcoin has a cap. Dealing with inflation, even

The difference between magic internet money and USD is the word internet. All money is based on faith. At least Bitcoin has a cap. Dealing with inflation, even moderate amounts is annoying and risky. I'm sure you'd rather have Bitcoin if you lived in Germany, Zimbabwe, or Venezuela (to make a few hyperinflation events). I'm anti shitcoins, but at least Bitcoin has trust and scarcity.

jstx1 5y ago
You can't run an economy on a fixed-supply currency. We've tried in the past. Bitcoin's scarcity creates an incentive to get in early and hoard your spot on the blockchain. I don't get how that's productive or helps anyone unless you really manage to convince other people that having a spot on the blockchain is something extremely important.
- deregulateMed 5y ago
  "How much Bitcoin do you have?" Not enough I know those crazy libertarians who had 100+ Bitcoin. They mostly sold. I think you could also argue that infinite supply currency is bad for the lower class.
  - deleted 5y ago
    [deleted]
  - throwaway2048 5y ago
    inflation in general is good for people that have large debt loads, which tends to be lower class people.
- christophilus 5y ago
  > You can't run an economy on a fixed-supply currency. This is not a universally accepted truth. In the next decade or three, we may find out that you can’t run an economy on printing presses.
  - jstx1 5y ago
    It's more complicated than "printing press = bad". There's a good argument to be made for how and when monetary supply should be controlled and to what extent. But completely giving up that control is a recipe for disaster. It's like taking away the steering wheel just because your driver made a bad turn. I'm not sure how many of the people advocating for fixed-supply currencies actually understand history, economic cycles, inflation-deflation and the role of monetary policy. A lot of the argumentation comes from a surface-level understanding of these concepts and knee-jerk reactions that get repeated by the hivemind.
    - christophilus 5y ago
      I’m familiar with the theory, have read a number of history books on the subject, and have followed modern proponents of various economic schools. I think those in favor of the prevailing theory are overconfident. Time will tell.
    - roenxi 5y ago
      The government will literally arrest people who try to avoid using a fiat currency. I mean, you have to admit "this is in your own best interest" is a suspicious argument when it involves printing stacks of cash, giving it to big business/asset owners and prosecuting anyone who seriously tries to use a consistent stick to measure wealth. It looks like a bunch of people believe it isn't in their interest and need to be bought into line by force. I don't mind if you want a steering wheel, but given that we seem to be driving something of a money printing train I'm not sure what you expect the wheel to do. They're following an exponential curve of money creation. The only surprise is that they keep pretending that at some point they will be able to stop printing.
      - bgroat 5y ago
        Source of this ever happening?
        deregulateMed 5y ago
- CryptoPunk 5y ago
  >>You can't run an economy on a fixed-supply currency. We've tried in the past. 1. This is simply not true. The gold standard did not fail. It became inconvenient to political agendas. There were no economic deficiencies in the gold standard era. 2. The crypto world is multi-currency, so you can't draw lessons from a uni-currency past that apply to it.
  - bluedevil2k 5y ago
    The gold standard did fail. The main problem with a fixed supply currency is that an economy can't grow - GDP can't increase. Things like the Internet created wealth by growing the GDP and "creating" money. If you have a fixed-supply currency you can't create money. Globally, GDP would be a zero-sum game, someone's increase would mean someone's decrease. Wars have been fought for less.
    - danuker 5y ago
      GDP also depends on the velocity of currency, not just on the supply. If people spend a lot of the supply each year, the GDP is high, otherwise it is low. And if you "grow" an economy by increasing the number of monetary units, you can't create wealth, because wealth is not money. It just splits the same goods and services into more units. Printing money benefits whoever gets to spend them first, before the consequent inflation hits (all other things being equal). It re-slices the pie by making all pieces smaller (including the ones people have saved up for, say, retirement). Paradoxically, a good economy should drive prices *down* ( Moore's law should apply everywhere). As technology and processes improve, it should become easier to offer the old products and services, allowing for more sophisticated ones to appear.
    - CryptoPunk 5y ago
      >>The gold standard did fail. The main problem with a fixed supply currency is that an economy can't grow - GDP can't increase. Economic and wage growth rates during the gold standard were excellent, so no, it did not fail, regardless of what this widely disseminated and overly simplistic model, that you're presenting now, claims. I recommend George Selgin's debunking of common myths about the gold standard: https://www.alt-m.org/2015/06/04/ten-things-every-economist-should-know-about-the-gold-standard-2/#deflation-permitted https://www.alt-m.org/2015/06/04/ten-things-every-economist-...
- danuker 5y ago
  > Bitcoin's scarcity creates an incentive to get in early and hoard your spot on the blockchain. Paradoxically, what got people to get in early was the *early inflation*. People would not have joined the project if it were released pre-mined, and just sold by its creator. But the fact that it was given away to newcomers (at a symbolic processing power cost) distributed it throughout the world. What attracts people now is, sadly, the expectation of quick profit. That will burn them - a lot of people have heard of Bitcoin by now, and have invested as much (or as little) as they wanted. There is limited growth left; the returns are diminishing. Personally, I believe the best use case of crypto is as a hedge against inflation. After the last halvening, the supply is increasing by 1.8% year-over-year ending July 18th [1]. Contrast that to fiat supply increase: 13.8% year-over-year ending May 2021. [2] [1] - https://www.blockchain.com/charts/total-bitcoins https://www.blockchain.com/charts/total-bitcoins [2] - https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL
speedgoose 5y ago
Bitcoin is a disaster for the environment.
- deregulateMed 5y ago
  Only if people use fossil fuels. Armored bank vehicles are bad for the environment too.
  - tveita 5y ago
    It is bad regardless what fuel you use. Bitcoin uses a proof-of-waste system which scales to any amount of resources available. If some day we had nearly limitless energy from fusion reactors and ran the economy on Bitcoin, there would be a race to strip mine the planet to build more reactors whose output would be wasted to capture the same fixed slice of the mining pie. If this conclusion sounds absurd we should reconsider the premise that Bitcoin deserves any kind of place in our society. > Armored bank vehicles are bad for the environment too. A negligible part of the traffic on the road are bank vehicles, and they don't carry a large part of global wealth. Dollars can be efficiently transferred over the internet now, because the banking system, however slow and fossilised, actually has incentive to reduce waste, unlike Bitcoin.
  - MereInterest 5y ago
    Fossil fuel plant reactivated and expanded solely to run transaction validation for cryptocurrencies. https://www.vice.com/en/article/pkby7z/a-fossil-fuel-power-plant-that-mines-bitcoin-is-about-to-massively-expand https://www.vice.com/en/article/pkby7z/a-fossil-fuel-power-p...
- consider_the 5y ago
  There is a convincing argument that the reverse is true. Namely that "Bitcoin incentivices renewable energy": https://assets.ctfassets.net/2d5q1td6cyxq/5mRjc9X5LTXFFihIlTt7QK/e7bcba47217b60423a01a357e036105e/BCEI_White_Paper.pdf https://assets.ctfassets.net/2d5q1td6cyxq/5mRjc9X5LTXFFihIlT...
  - 5y ago
lm28469 5y ago
> The difference between magic internet money and USD is the word internet. And the fact that one has been the de facto world currency for the better part of the last century, but that's just a detail for crypto enthusiasts > At least Bitcoin has a cap btc is slow as fuck and nowhere near fast enough to even remotely come close to replace any other system
peteretep 5y ago
> The difference between magic internet money and USD is the word internet. No, the differences are that people denominate prices in USD, there’s a gigantic and mature financial services industry around USD, and finally I have recourse to the courts for most USD transaction.
antihero 5y ago
> The difference between magic internet money and USD is the word internet. Nope, it's the US military.
- carnitine 5y ago
  Also the most productive economy in the world demanding all taxes be denominated in USD, providing an incredibly high floor on demand.
kristiandupont 5y ago
>As a Venezuelan, it's not being used. https://news.ycombinator.com/item?id=27232730 https://news.ycombinator.com/item?id=27232730

jstx1 5y ago

You can't run an economy on a fixed-supply currency. We've tried in the past. Bitcoin's scarcity creates an incentive to get in early and hoard your spot on the blockchain. I don't get how that's productive or helps anyone unless you really manage to convince other people that having a spot on the blockchain is something extremely important.

deregulateMed 5y ago
"How much Bitcoin do you have?" Not enough I know those crazy libertarians who had 100+ Bitcoin. They mostly sold. I think you could also argue that infinite supply currency is bad for the lower class.
- deleted 5y ago
  [deleted]
- throwaway2048 5y ago
  inflation in general is good for people that have large debt loads, which tends to be lower class people.
christophilus 5y ago
> You can't run an economy on a fixed-supply currency. This is not a universally accepted truth. In the next decade or three, we may find out that you can’t run an economy on printing presses.
- jstx1 5y ago
  It's more complicated than "printing press = bad". There's a good argument to be made for how and when monetary supply should be controlled and to what extent. But completely giving up that control is a recipe for disaster. It's like taking away the steering wheel just because your driver made a bad turn. I'm not sure how many of the people advocating for fixed-supply currencies actually understand history, economic cycles, inflation-deflation and the role of monetary policy. A lot of the argumentation comes from a surface-level understanding of these concepts and knee-jerk reactions that get repeated by the hivemind.
  - christophilus 5y ago
    I’m familiar with the theory, have read a number of history books on the subject, and have followed modern proponents of various economic schools. I think those in favor of the prevailing theory are overconfident. Time will tell.
  - roenxi 5y ago
    The government will literally arrest people who try to avoid using a fiat currency. I mean, you have to admit "this is in your own best interest" is a suspicious argument when it involves printing stacks of cash, giving it to big business/asset owners and prosecuting anyone who seriously tries to use a consistent stick to measure wealth. It looks like a bunch of people believe it isn't in their interest and need to be bought into line by force. I don't mind if you want a steering wheel, but given that we seem to be driving something of a money printing train I'm not sure what you expect the wheel to do. They're following an exponential curve of money creation. The only surprise is that they keep pretending that at some point they will be able to stop printing.
    - bgroat 5y ago
      Source of this ever happening?
      - deregulateMed 5y ago
CryptoPunk 5y ago
>>You can't run an economy on a fixed-supply currency. We've tried in the past. 1. This is simply not true. The gold standard did not fail. It became inconvenient to political agendas. There were no economic deficiencies in the gold standard era. 2. The crypto world is multi-currency, so you can't draw lessons from a uni-currency past that apply to it.
- bluedevil2k 5y ago
  The gold standard did fail. The main problem with a fixed supply currency is that an economy can't grow - GDP can't increase. Things like the Internet created wealth by growing the GDP and "creating" money. If you have a fixed-supply currency you can't create money. Globally, GDP would be a zero-sum game, someone's increase would mean someone's decrease. Wars have been fought for less.
  - danuker 5y ago
    GDP also depends on the velocity of currency, not just on the supply. If people spend a lot of the supply each year, the GDP is high, otherwise it is low. And if you "grow" an economy by increasing the number of monetary units, you can't create wealth, because wealth is not money. It just splits the same goods and services into more units. Printing money benefits whoever gets to spend them first, before the consequent inflation hits (all other things being equal). It re-slices the pie by making all pieces smaller (including the ones people have saved up for, say, retirement). Paradoxically, a good economy should drive prices *down* ( Moore's law should apply everywhere). As technology and processes improve, it should become easier to offer the old products and services, allowing for more sophisticated ones to appear.
  - CryptoPunk 5y ago
    >>The gold standard did fail. The main problem with a fixed supply currency is that an economy can't grow - GDP can't increase. Economic and wage growth rates during the gold standard were excellent, so no, it did not fail, regardless of what this widely disseminated and overly simplistic model, that you're presenting now, claims. I recommend George Selgin's debunking of common myths about the gold standard: https://www.alt-m.org/2015/06/04/ten-things-every-economist-should-know-about-the-gold-standard-2/#deflation-permitted https://www.alt-m.org/2015/06/04/ten-things-every-economist-...
danuker 5y ago
> Bitcoin's scarcity creates an incentive to get in early and hoard your spot on the blockchain. Paradoxically, what got people to get in early was the *early inflation*. People would not have joined the project if it were released pre-mined, and just sold by its creator. But the fact that it was given away to newcomers (at a symbolic processing power cost) distributed it throughout the world. What attracts people now is, sadly, the expectation of quick profit. That will burn them - a lot of people have heard of Bitcoin by now, and have invested as much (or as little) as they wanted. There is limited growth left; the returns are diminishing. Personally, I believe the best use case of crypto is as a hedge against inflation. After the last halvening, the supply is increasing by 1.8% year-over-year ending July 18th [1]. Contrast that to fiat supply increase: 13.8% year-over-year ending May 2021. [2] [1] - https://www.blockchain.com/charts/total-bitcoins https://www.blockchain.com/charts/total-bitcoins [2] - https://fred.stlouisfed.org/series/M2SL https://fred.stlouisfed.org/series/M2SL

speedgoose 5y ago

Bitcoin is a disaster for the environment.

deregulateMed 5y ago
Only if people use fossil fuels. Armored bank vehicles are bad for the environment too.
- tveita 5y ago
  It is bad regardless what fuel you use. Bitcoin uses a proof-of-waste system which scales to any amount of resources available. If some day we had nearly limitless energy from fusion reactors and ran the economy on Bitcoin, there would be a race to strip mine the planet to build more reactors whose output would be wasted to capture the same fixed slice of the mining pie. If this conclusion sounds absurd we should reconsider the premise that Bitcoin deserves any kind of place in our society. > Armored bank vehicles are bad for the environment too. A negligible part of the traffic on the road are bank vehicles, and they don't carry a large part of global wealth. Dollars can be efficiently transferred over the internet now, because the banking system, however slow and fossilised, actually has incentive to reduce waste, unlike Bitcoin.
- MereInterest 5y ago
  Fossil fuel plant reactivated and expanded solely to run transaction validation for cryptocurrencies. https://www.vice.com/en/article/pkby7z/a-fossil-fuel-power-plant-that-mines-bitcoin-is-about-to-massively-expand https://www.vice.com/en/article/pkby7z/a-fossil-fuel-power-p...
consider_the 5y ago
There is a convincing argument that the reverse is true. Namely that "Bitcoin incentivices renewable energy": https://assets.ctfassets.net/2d5q1td6cyxq/5mRjc9X5LTXFFihIlTt7QK/e7bcba47217b60423a01a357e036105e/BCEI_White_Paper.pdf https://assets.ctfassets.net/2d5q1td6cyxq/5mRjc9X5LTXFFihIlT...
- 5y ago

lm28469 5y ago

> The difference between magic internet money and USD is the word internet. And the fact that one has been the de facto world currency for the better part of the last century, but that's just a detail for crypto enthusiasts > At least Bitcoin has a cap btc is slow as fuck and nowhere near fast enough to even remotely come close to replace any other system

peteretep 5y ago

> The difference between magic internet money and USD is the word internet. No, the differences are that people denominate prices in USD, there’s a gigantic and mature financial services industry around USD, and finally I have recourse to the courts for most USD transaction.

antihero 5y ago

> The difference between magic internet money and USD is the word internet. Nope, it's the US military.

carnitine 5y ago
Also the most productive economy in the world demanding all taxes be denominated in USD, providing an incredibly high floor on demand.

kristiandupont 5y ago

>As a Venezuelan, it's not being used. https://news.ycombinator.com/item?id=27232730 https://news.ycombinator.com/item?id=27232730