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Please read this short thread where I explain why investment is still an attractive option with Bitcoin: https://news.ycombinator.com/item?id=5403360 https://ne

by snitko 14y ago

Please read this short thread where I explain why investment is still an attractive option with Bitcoin: https://news.ycombinator.com/item?id=5403360 https://news.ycombinator.com/item?id=5403360 I hope this changes your mind.

zanny 14y ago
My problem with this and BTC is that it isn't even a truly fixed currency supply - as people lose wallets, the bitcoins they contained are permanantly lost because only those wallets (that are now destroyed) are lost. So either you brute force the signing key and try to imitate the wallets or you will never get those coins back. So it isn't just that BTC will (in a hundred odd years) stop growing the money supply, it will probably (sooner than that) start leaking bitcoins from lost wallets, and as the money supply drops deflation grows faster than with a fixed money base.
- snitko 14y ago
  There won't be a lot of lost wallets. At least not enough to cause any kind of noticeable effect.
  - dragonwriter 14y ago
    > There won't be a lot of lost wallets. At least not enough to cause any kind of noticeable effect. With a fixed upper limit on the number of BTC ever issued, if wallets are lost at any non-zero rate, there will eventually be exactly 0 BTC that can be spent.
pyoung 14y ago
"Nobody invests. If that's the case, then the amount of goods and services in the economy remains constant" No, if nobody invests, then there will be NO goods and services at all. That is a recipe for economic calamity, and would create a situation where guns and ammo would end up more valuable than any currency (what is the point of holding a currency if you can't buy anything with it?). I have yet to read a convincing explanation as to how deflation is a good thing. The general premise is that a 'little' deflation is a good thing because it encourages people to save, but the authors always fail to address the fact that deflation leads to more deflation and hence the 'deflationary spiral' that eventually causes things like the great depression. One author actually argues that the Great Depression was a good thing, but I don't exactly agree with that sentiment. Once again, Gold is a better comparison to bitcoin than any fiat currency, because bitcoin is not a form of exchange for any particular economy and the dangers of deflation do not necessarily apply. More than anything, bitcoin is being used as a store of value. While this doesn't make for a good currency, it does not necessarily mean bitcoin is doomed.

by snitko 14y ago

zanny 14y ago

My problem with this and BTC is that it isn't even a truly fixed currency supply - as people lose wallets, the bitcoins they contained are permanantly lost because only those wallets (that are now destroyed) are lost. So either you brute force the signing key and try to imitate the wallets or you will never get those coins back. So it isn't just that BTC will (in a hundred odd years) stop growing the money supply, it will probably (sooner than that) start leaking bitcoins from lost wallets, and as the money supply drops deflation grows faster than with a fixed money base.

snitko 14y ago
There won't be a lot of lost wallets. At least not enough to cause any kind of noticeable effect.
- dragonwriter 14y ago
  > There won't be a lot of lost wallets. At least not enough to cause any kind of noticeable effect. With a fixed upper limit on the number of BTC ever issued, if wallets are lost at any non-zero rate, there will eventually be exactly 0 BTC that can be spent.

pyoung 14y ago

"Nobody invests. If that's the case, then the amount of goods and services in the economy remains constant" No, if nobody invests, then there will be NO goods and services at all. That is a recipe for economic calamity, and would create a situation where guns and ammo would end up more valuable than any currency (what is the point of holding a currency if you can't buy anything with it?). I have yet to read a convincing explanation as to how deflation is a good thing. The general premise is that a 'little' deflation is a good thing because it encourages people to save, but the authors always fail to address the fact that deflation leads to more deflation and hence the 'deflationary spiral' that eventually causes things like the great depression. One author actually argues that the Great Depression was a good thing, but I don't exactly agree with that sentiment. Once again, Gold is a better comparison to bitcoin than any fiat currency, because bitcoin is not a form of exchange for any particular economy and the dangers of deflation do not necessarily apply. More than anything, bitcoin is being used as a store of value. While this doesn't make for a good currency, it does not necessarily mean bitcoin is doomed.