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I can't help it but feel that the current boom in P2P-currencies is not healthy. 1) There are some people out there sitting on fortunes in *coin. If and when t

by iSnow 14y ago

I can't help it but feel that the current boom in P2P-currencies is not healthy. 1) There are some people out there sitting on fortunes in *coin. If and when they sell, the boom goes bust 2) If that does not happen, or even if it happens for some time, the future of a currency with no inflation seems to be limited - as long as there is any interest by merchants, it will always gain against fiat money. This upward pressure makes those currencies fight with gold for the role of a long-term asset but makes them impractical as a day-to-day trading vehicle. Remember the 10,000 BTC pizza? That pizza would now be worth $1.4M - this is absurd and even if we switch to micro-BTC, such a trend leads to hoarding, not spending. A P2P-currency with a built-in Tobin tax or demurrage would be more interesting. edited out the factor of 100 in the pizza.

wwwtyro 14y ago
$1.4M, not $140M.
- iSnow 14y ago
  Meh, my bad, a little factor of 100 goes a long way.
cinquemb 14y ago
You are entitled to voice your opinion, but… 10K BTC would be worth ~$1.4M and the pizza will still be worth relatively the same as it was before. Unless $GS and friends are actively long pizza futures (since it is a vegetable now), then it might be a little more expensive than it was before. People seem to be focusing too much on market cap and not on the ever increasing companies and people using it to transact for services. Dont hear much talk on here about EURUSD, USDJPY, USDCNH ctrl+P operations, i wonder how healthy that is?
- Nursie 14y ago
  "Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor!" (Sorry, you saying the pizza will still be worth relatively the same as it was before reminded me of this)
- iSnow 14y ago
  >10K BTC would be worth ~$1.4M and the pizza will still be worth relatively the same as it was before I can't see how you arrive at this. No-one is going to buy a pizza for 10K BTC anymore, so clearly the worth has changed.
  - cinquemb 14y ago
    For some perspective: in the mid 90's, i could buy a gallon of gas for about $1. Now it will cost about 4x that. Do i expect to show up at a gas station now with 4 dollars and get 4 gallons worth? No. Is it that hard for one to think: "Oh i have 1BTC now and it is worth $10000. It used to be worth $.001 when i bought a pizza. The pizza is still valued at $10, now I will spend ~.001BTC since that is what it is worth now. quel chance!" The worth of the pizza has stayed the same, the worth of the BTC has gone up. Come back next week and we'll practice paying for pizza in Euros! (unless you live in cyprus of course :P)
    - iSnow 14y ago
      >Oh i have 1BTC now and it is worth $10000. It used to be worth $.001 when i bought a pizza Most likely the guy who got the pizza now thinks "gee, that other guy is now sitting on a BTC treasure that could buy him a house, a car and a lot of nice holidays. I got a pizza". BTC and $ (or €) are competing for value - and as long as the BTC story is intact, it makes more sense to hoard BTC and spend $$. When there is inflation, it makes sense to invest or consume your money, with BTC this does not make sense if you can hold off your purchase for a while. I therefore would not be surprised to see a tremendous spike in the BTC valuation but I have no idea what the distant future would be - it can only be a hard crash or the stifling of the BTC economy. Edit: see also: https://medium.com/money-banking/2b5ef79482cb https://medium.com/money-banking/2b5ef79482cb This is actually a serious problem, if you’re trying to put together a currency, rather than a vehicle for financial speculation. If the currency of a country ever fluctuated as much as bitcoins did, it would never be taken seriously as a medium of exchange: how are you meant to do business in a place where an item costing one unit of currency is worth $10 one day and $20 the next? [...] If millions of people started using bitcoins on a regular basis, the soaring value of bitcoins would actually be disastrous. You’ve heard of hyperinflation: this would be hyperdeflation
- danmaz74 14y ago
  Accepting BTC is not the same thing as fixing prices in BTC. Who is fixing prices in Bitcoin? And if eg the Eur/USD conversion rate had changed +/- X00% in 3 months you could be sure that you would hear much talk about that here (and everywhere).

by iSnow 14y ago

wwwtyro 14y ago

$1.4M, not $140M.

iSnow 14y ago
Meh, my bad, a little factor of 100 goes a long way.

cinquemb 14y ago

You are entitled to voice your opinion, but… 10K BTC would be worth ~$1.4M and the pizza will still be worth relatively the same as it was before. Unless $GS and friends are actively long pizza futures (since it is a vegetable now), then it might be a little more expensive than it was before. People seem to be focusing too much on market cap and not on the ever increasing companies and people using it to transact for services. Dont hear much talk on here about EURUSD, USDJPY, USDCNH ctrl+P operations, i wonder how healthy that is?

Nursie 14y ago
"Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor!" (Sorry, you saying the pizza will still be worth relatively the same as it was before reminded me of this)
iSnow 14y ago
>10K BTC would be worth ~$1.4M and the pizza will still be worth relatively the same as it was before I can't see how you arrive at this. No-one is going to buy a pizza for 10K BTC anymore, so clearly the worth has changed.
- cinquemb 14y ago
  For some perspective: in the mid 90's, i could buy a gallon of gas for about $1. Now it will cost about 4x that. Do i expect to show up at a gas station now with 4 dollars and get 4 gallons worth? No. Is it that hard for one to think: "Oh i have 1BTC now and it is worth $10000. It used to be worth $.001 when i bought a pizza. The pizza is still valued at $10, now I will spend ~.001BTC since that is what it is worth now. quel chance!" The worth of the pizza has stayed the same, the worth of the BTC has gone up. Come back next week and we'll practice paying for pizza in Euros! (unless you live in cyprus of course :P)
  - iSnow 14y ago
    >Oh i have 1BTC now and it is worth $10000. It used to be worth $.001 when i bought a pizza Most likely the guy who got the pizza now thinks "gee, that other guy is now sitting on a BTC treasure that could buy him a house, a car and a lot of nice holidays. I got a pizza". BTC and $ (or €) are competing for value - and as long as the BTC story is intact, it makes more sense to hoard BTC and spend $$. When there is inflation, it makes sense to invest or consume your money, with BTC this does not make sense if you can hold off your purchase for a while. I therefore would not be surprised to see a tremendous spike in the BTC valuation but I have no idea what the distant future would be - it can only be a hard crash or the stifling of the BTC economy. Edit: see also: https://medium.com/money-banking/2b5ef79482cb https://medium.com/money-banking/2b5ef79482cb This is actually a serious problem, if you’re trying to put together a currency, rather than a vehicle for financial speculation. If the currency of a country ever fluctuated as much as bitcoins did, it would never be taken seriously as a medium of exchange: how are you meant to do business in a place where an item costing one unit of currency is worth $10 one day and $20 the next? [...] If millions of people started using bitcoins on a regular basis, the soaring value of bitcoins would actually be disastrous. You’ve heard of hyperinflation: this would be hyperdeflation
danmaz74 14y ago
Accepting BTC is not the same thing as fixing prices in BTC. Who is fixing prices in Bitcoin? And if eg the Eur/USD conversion rate had changed +/- X00% in 3 months you could be sure that you would hear much talk about that here (and everywhere).