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And what's to blame for Bitcoin's high price? A broken fiat monetary system. I can't believe some people still think that Bitcoin is more speculative than majo

And what's to blame for Bitcoin's high price? A broken fiat monetary system. I can't believe some people still think that Bitcoin is more speculative than major tech stocks. Facebook, Twitter, Google, Uber, Snapchat... All propped up by money printing. I think if we ran a simulation using hard (non-fiat) money, the net losses of these big tech companies would be even more significant than Bitcoin's losses on electricity. They're only profitable because of the fiat monetary scheme. If you remove the scheme, I think it's likely that revenue would dry up and profits would quickly go negative. These companies are just not viable in a hard money system. More profitable competitors would quickly spring up and there would be constant churn. The reason why Bitcoin is so successful and anti-fragile is that it's located everywhere. It always has access to the easiest money from all around the world. It has placed itself at the root of every scheme around the world.

surfmike 5y ago
It wouldn’t matter if Google or Facebook’s profit was denominated in ETC, BTC, or fiat; those companies are massively profitable.
- cryptica 5y ago
  It would matter if all of their customers' earnings were also denominated in BTC. It would dramatically affect their customers' spending habits. For example, while they might be willing to borrow fiat to pay for ads, they might not want to borrow BTC for this same purpose because they know that they may not be able to meet repayments (e.g. BTC's scarcity means that it may not be possible to acquire back that borrowed BTC in the future; cost of BTC is likely to be higher due to the deflationary dynamic). Hard money would affect behavior in profound ways.
after_care 5y ago
What? One of the hallmarks of a tech company is that the costs associated with producing the product is relatively flat and the revenue from the product goes up linearly with usage. Most tech companies then spend their money on recruiting more engineers, to try to build more products that are cheap to maintain and generate smooth rising revenues. The increased fed spending changes the stock price, but it’s not changing the fundamentals of why selling network access software is so good.
anotheraccount9 5y ago
Your answer does not conform to the common model. Let's make it harder to read instead of having a frank discussion.
- wpietri 5y ago
  My problem with it is not the content, it's the totalizing, evangelical approach. In tone it's about a half-step from the goggle-eyed people who want to talk about "international bankers" and how they control everything. I have never had a good conversation with anybody who starts out like that, because they are in the grip of a strongly self-reinforcing worldview.
  - cryptica 5y ago
    People often say "follow the money, look at the incentives..." Yet those same people keep neglecting the system which produces the mother of all incentives. It's easy to see how heavily money-oriented the average person is nowadays. IMO, the way the economy works is that we're just like ants following a trail of breadcrumbs and the reserve banks decide which direction to toss all the new breadcrumbs...
MattRix 5y ago
This post is frankly delusional. You say a bunch of things but have zero explanation for WHY those things might be true. It’s clear at this point that Bitcoin has become an utter failure for almost all the things it was supposed to do, aside from making certain people rich due to speculation.
- elvatoloco123 5y ago
  Yeah, any bank or government can confiscate your BTC as well as preventing transactions and requiring papers to open accounts. Oh wait
xondono 5y ago
And what's to blame for the tulips high price? A broken fiat monetary system. The reason why tulips are so successful and anti-fragile is that they can be grown everywhere. By the way, if an activity like mining is only profitable because of money printing (depressing interest rates), given the world has been in zero to negative interest rates, this means the activity is not productive.
- cryptica 5y ago
  Some people have argued that tulip mania was driven by monetary policy. When discussing supply and demand, it's not only about supply and demand of the goods or services, it's also about supply and demand of the currency which those goods and services trade against. Changes in the supply of a currency can affect prices in unpredictable ways; inflation is not evenly distributed.
shash 5y ago
Actually what's to blame for Bitcoin's high price is the finite supply of Bitcoin, and the fact that there's wild speculation on its price (which incidentally is what makes it really horrible as a currency, but that's another topic). And you're mixing up profitability with stock price speculation, which are two very different things - witness the Gamestop incident. Once the stock is sold to the public, its price fluctuations don't actually affect the bottom line of the company unless there's a buyback.

surfmike 5y ago

It wouldn’t matter if Google or Facebook’s profit was denominated in ETC, BTC, or fiat; those companies are massively profitable.

cryptica 5y ago
It would matter if all of their customers' earnings were also denominated in BTC. It would dramatically affect their customers' spending habits. For example, while they might be willing to borrow fiat to pay for ads, they might not want to borrow BTC for this same purpose because they know that they may not be able to meet repayments (e.g. BTC's scarcity means that it may not be possible to acquire back that borrowed BTC in the future; cost of BTC is likely to be higher due to the deflationary dynamic). Hard money would affect behavior in profound ways.

after_care 5y ago

What? One of the hallmarks of a tech company is that the costs associated with producing the product is relatively flat and the revenue from the product goes up linearly with usage. Most tech companies then spend their money on recruiting more engineers, to try to build more products that are cheap to maintain and generate smooth rising revenues. The increased fed spending changes the stock price, but it’s not changing the fundamentals of why selling network access software is so good.

anotheraccount9 5y ago

Your answer does not conform to the common model. Let's make it harder to read instead of having a frank discussion.

wpietri 5y ago
My problem with it is not the content, it's the totalizing, evangelical approach. In tone it's about a half-step from the goggle-eyed people who want to talk about "international bankers" and how they control everything. I have never had a good conversation with anybody who starts out like that, because they are in the grip of a strongly self-reinforcing worldview.
- cryptica 5y ago
  People often say "follow the money, look at the incentives..." Yet those same people keep neglecting the system which produces the mother of all incentives. It's easy to see how heavily money-oriented the average person is nowadays. IMO, the way the economy works is that we're just like ants following a trail of breadcrumbs and the reserve banks decide which direction to toss all the new breadcrumbs...

MattRix 5y ago

This post is frankly delusional. You say a bunch of things but have zero explanation for WHY those things might be true. It’s clear at this point that Bitcoin has become an utter failure for almost all the things it was supposed to do, aside from making certain people rich due to speculation.

elvatoloco123 5y ago
Yeah, any bank or government can confiscate your BTC as well as preventing transactions and requiring papers to open accounts. Oh wait

xondono 5y ago

And what's to blame for the tulips high price? A broken fiat monetary system. The reason why tulips are so successful and anti-fragile is that they can be grown everywhere. By the way, if an activity like mining is only profitable because of money printing (depressing interest rates), given the world has been in zero to negative interest rates, this means the activity is not productive.

cryptica 5y ago
Some people have argued that tulip mania was driven by monetary policy. When discussing supply and demand, it's not only about supply and demand of the goods or services, it's also about supply and demand of the currency which those goods and services trade against. Changes in the supply of a currency can affect prices in unpredictable ways; inflation is not evenly distributed.

shash 5y ago

Actually what's to blame for Bitcoin's high price is the finite supply of Bitcoin, and the fact that there's wild speculation on its price (which incidentally is what makes it really horrible as a currency, but that's another topic). And you're mixing up profitability with stock price speculation, which are two very different things - witness the Gamestop incident. Once the stock is sold to the public, its price fluctuations don't actually affect the bottom line of the company unless there's a buyback.