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Muhuhahaha (evil laugh), and my parents thought I was crazy when I told them there was a new digital currency you kept in files, that had no inflation, was (alm

Muhuhahaha (evil laugh), and my parents thought I was crazy when I told them there was a new digital currency you kept in files, that had no inflation, was (almost) completely anonymous, and - get this - that it was real and traded on actual markets. When I started talking about Bitcoin mining, that was when they seriously thought I was going off the deep end. And really, most non-tech-savvy people would think the idea was crazy. Crazy enough that it's genius. I smile a little every time I see "Bitcoin Now Accepted Here". I personally don't use them, but the ideology behind the currency is fascinating and remarkable. Not to mention the credibility WordPress gives it (and hopefully soon, Reddit...).

javert 14y ago
ideology behind the currency is fascinating and remarkable I'm going to take the liberty to nit pick. There isn't any ideology behind bitcoin. It's just a protocol. Among existing serious bitcoin users, there's a pretty diverse range of political opinions (some of which I find pretty distasteful), plus disagreement on the actual merits and potential demerits of bitcoin.
- wmf 14y ago
  Bitcoin does have a particular monetary policy coded into it, which can be seen as an ideology.
  - javert 14y ago
    "Monetary policy" and "ideology" are two distinct and separate concepts. I'm not even sure I would be in favor of labelling bitcoin as having a "monetary policy." Monetary policy describes governmental policy-making. The rules of the bitcon protocol are also unlike "policy" in that they can never change. I know I'm nit picking, but I think that it's really important to keep concepts clear and crisp. (There's a bit of ideology for you!)
    - nickpinkston 14y ago
      Well, I'm not sure picking nits is a good policy either ;-) (or am I picking one now?)
    - Danieru 14y ago
      I disagree, bitcoin does have a hardcoded monetary policy of nominal money supply targeting. The policy is primitive and will not provide any of the benefits of contemporary monetary policy, but it should provide an interesting case study. Wikipedia has a good list of the common policy options: https://en.wikipedia.org/wiki/Monetary_policy#Types_of_monetary_policy https://en.wikipedia.org/wiki/Monetary_policy#Types_of_monet... Notice how many are focused on inflation (CPI and price level as measures of inflation/deflation). All of them are used by central banks to influence the markets. None make much sense for an virtual medium of exchange. Now supposing there was a central bitcoin bank I'd suggest a policy of targeting low volatility. Bitcoins utility as a medium of exchange is a function of transaction cost and volatility risk. Still even without a central bank both attributes will improve with time. Thus the lack of central bank may become a feature by removing human fallibility.
      - deleted 14y ago
        [deleted]
      - javert 14y ago
        I mean, the definition of monetary policy given at the top of the Wikipedia page you linked to rules out there being such a thing as a "monetary policy" hardcoded into bitcoin.
      - jacoblyles 14y ago
        What are the benefits of a contemporary monetary policy? There was a piece I saw by George Selgin lately showing that modern monetary policy has caused the economy to be measurably less stable than in the old days. I haven't followed the responses to it, though. The Milton Friedman/John Taylor position is that markets will adapt to pretty much any monetary rule as long as it is stable and predictable. Bitcoin's monetary rule is about as predictable as you can get. The one part of the Keynesian story that I find compelling is the part about inflation being needed to address the problem of sticky wages. But wages in web sectors tend to be much less sticky. Free money's time has come.
- gwern 14y ago
  > There isn't any ideology behind bitcoin. It's just a protocol. I disagree. It was motivated by particular strains of cryptopunk thought, has features designed specifically for long-desired applications like multi-signing or a built-in programming language for stuff like Szabo's smart contracts, the original Satoshi whitepaper was explicit about goals, and multiple design choices were made for non-technical reasons (such as a hardwired limit to coin issuance). Finally, in the very first block in the official blockchain, Satoshi included a newspaper quote about bank bailouts! Not the most neutral non-ideologically-charged topic in the world, let us say. Certainly serious Bitcoin users have a wide range of views, but to say 'there isn't any ideology behind Bitcoin' is to just plain ignore everything about its conception.
seiji 14y ago
Attaching your personality identity and happiness to external entities isn't very healthy.
omni 14y ago
No inflation? Which mythical currency are you talking about? It obviously isn't Bitcoin. Bitcoin's value sank like a rock in late 2011. http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zv http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zv
- fghh45sdfhr3 14y ago
  That is not inflation. That's a price swing of a commodity. Apples and oranges. Price swings can go both ways. Deflation is extremely rare.

javert 14y ago

ideology behind the currency is fascinating and remarkable I'm going to take the liberty to nit pick. There isn't any ideology behind bitcoin. It's just a protocol. Among existing serious bitcoin users, there's a pretty diverse range of political opinions (some of which I find pretty distasteful), plus disagreement on the actual merits and potential demerits of bitcoin.

wmf 14y ago
Bitcoin does have a particular monetary policy coded into it, which can be seen as an ideology.
- javert 14y ago
  "Monetary policy" and "ideology" are two distinct and separate concepts. I'm not even sure I would be in favor of labelling bitcoin as having a "monetary policy." Monetary policy describes governmental policy-making. The rules of the bitcon protocol are also unlike "policy" in that they can never change. I know I'm nit picking, but I think that it's really important to keep concepts clear and crisp. (There's a bit of ideology for you!)
  - nickpinkston 14y ago
    Well, I'm not sure picking nits is a good policy either ;-) (or am I picking one now?)
  - Danieru 14y ago
    I disagree, bitcoin does have a hardcoded monetary policy of nominal money supply targeting. The policy is primitive and will not provide any of the benefits of contemporary monetary policy, but it should provide an interesting case study. Wikipedia has a good list of the common policy options: https://en.wikipedia.org/wiki/Monetary_policy#Types_of_monetary_policy https://en.wikipedia.org/wiki/Monetary_policy#Types_of_monet... Notice how many are focused on inflation (CPI and price level as measures of inflation/deflation). All of them are used by central banks to influence the markets. None make much sense for an virtual medium of exchange. Now supposing there was a central bitcoin bank I'd suggest a policy of targeting low volatility. Bitcoins utility as a medium of exchange is a function of transaction cost and volatility risk. Still even without a central bank both attributes will improve with time. Thus the lack of central bank may become a feature by removing human fallibility.
    - deleted 14y ago
      [deleted]
    - javert 14y ago
      I mean, the definition of monetary policy given at the top of the Wikipedia page you linked to rules out there being such a thing as a "monetary policy" hardcoded into bitcoin.
    - jacoblyles 14y ago
      What are the benefits of a contemporary monetary policy? There was a piece I saw by George Selgin lately showing that modern monetary policy has caused the economy to be measurably less stable than in the old days. I haven't followed the responses to it, though. The Milton Friedman/John Taylor position is that markets will adapt to pretty much any monetary rule as long as it is stable and predictable. Bitcoin's monetary rule is about as predictable as you can get. The one part of the Keynesian story that I find compelling is the part about inflation being needed to address the problem of sticky wages. But wages in web sectors tend to be much less sticky. Free money's time has come.
gwern 14y ago
> There isn't any ideology behind bitcoin. It's just a protocol. I disagree. It was motivated by particular strains of cryptopunk thought, has features designed specifically for long-desired applications like multi-signing or a built-in programming language for stuff like Szabo's smart contracts, the original Satoshi whitepaper was explicit about goals, and multiple design choices were made for non-technical reasons (such as a hardwired limit to coin issuance). Finally, in the very first block in the official blockchain, Satoshi included a newspaper quote about bank bailouts! Not the most neutral non-ideologically-charged topic in the world, let us say. Certainly serious Bitcoin users have a wide range of views, but to say 'there isn't any ideology behind Bitcoin' is to just plain ignore everything about its conception.

seiji 14y ago

Attaching your personality identity and happiness to external entities isn't very healthy.

omni 14y ago

No inflation? Which mythical currency are you talking about? It obviously isn't Bitcoin. Bitcoin's value sank like a rock in late 2011. http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zv http://bitcoincharts.com/charts/mtgoxUSD#tgSzm1g10zm2g25zv

fghh45sdfhr3 14y ago
That is not inflation. That's a price swing of a commodity. Apples and oranges. Price swings can go both ways. Deflation is extremely rare.