6 ms·

> The more people get excited about faster ways to hoard bitcoins People seem to be oblivious to the fact that a currency must be available in order to be usef

> The more people get excited about faster ways to hoard bitcoins People seem to be oblivious to the fact that a currency must be available in order to be useful. There is a reason that Gresham's Law has achieved "Law" status. Oddly, the right thing to do for currency acceptance would be to shutdown all of the ASICs.

pseudonym 14y ago
I think people are more oblivious to the fact that a "deflationary currency" is inherently flawed because it by definition results in hoarding, which is not what you want people to do with your currency. Why would you bother loaning or investing it if you can make more money just sitting on it?
- fleitz 14y ago
  If USD was limited to currency in circulation then it would not be nearly as inflationary as it is. Once an established lending system based on bitcoins is established it will have the same problems as our current currencies. It wasn't printing money that caused the real estate bubble, it was the way to banking system has the power to expand credit and the systemic risk that expansion of credit causes. Once there are fractional reserve bitcoin banks it will no longer be a deflationary currency.
  - wintersFright 14y ago
    Will people want to borrow in defalationary biased currency though? Better to borrow in Bernanke Bucks where there is an unstoppable torrent being emitted monthly. IMHO the Real estate bubble was from the Fed bailing the prior tech bubble by suppressing interest rates - which encourages borrowing. When loans are paid back, the currency created by taking the loan is extinguished but they have been juicing the system by continually suppressing rates via QE/bond purchases and not letting the real market decide the risk (ie: price of bonds). Now that interest rates have hit the floor - the next bubble to pop is the USD itself.
    - fleitz 14y ago
      If the USD pops then BTC may be less deflationary. The bubble did not pop because mortgages were paid back. Loans are generally repaid in currency, paying back a loan creates even more currency as the additional currency created by the interest becomes an asset against which loans can be issued.
      - XorNot 14y ago
        The idea the USD is going to collapse is farcical. It would be a global catastrophe of a scale not yet seen, but also not threatened. Meanwhile, BTC gains and loses 50 - 80% of its value in a single day. I wonder which is more stable.
        wintersFright 14y ago
        Agree BTC is way too unstable but being the the best nag in the glue factory doesn't mean much. USD collapse would certainly be a far reaching global event but that doesn't mean it will not happen. I'm sure all prior entities with reserve status also thought their position unasailable. http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/03/Reserve%20Currency%20Status.png http://www.zerohedge.com/sites/default/files/images/user5/im... Global support for it is waning. China is doing direct currency swap deals and is no longer supporting USD by stacking treasuries at the rate it was. Russia is dishoarding treasuries too. The current trade deficit is propped up by the Fed buying USG bonds and suppressing interest rates. USD is not long for this world in its current form.
        XorNot 14y ago
        Plenty of currencies exist without being de facto global currencies and survive just fine. The question is what makes the USD likely to collapse as a currency altogether - rather then simply behave more like the normal internal currency of a sovereign nation? People don't go around predicting the decline and fall of the Australian dollar for example.
- zurn 14y ago
  Deflation is not desireable in itself, but it is not a crippling disadvantage. Eg Japan has had a very long deflation spiral and it didn't affect the usability of their currency. And the west has been living in a world of negative real interest rates since the 2008 crisis. As long as we don't have a big bitcoin credit market and we don't want to regulate the bitcoin "printing press" to adjust for market cycles, it won't even be a disadvantage. = As long as it's only a secondary currency to most users.
fleitz 14y ago
Why does the method of mining mean that a currency should not be accepted? Gold serves as a currency yet the methods of mining have changed drastically in the last 1,000 years.
- dualogy 14y ago
  > Gold serves as a currency Not for the last 80 years it hasn't..
  - wintersFright 14y ago
    Actually 39 years. The USD was a token for gold until Nixon shock.
    - dualogy 14y ago
      Yeah but that I define as "monetary metal for Central Bank settlements" gold, not "day-to-day normal-people transactional currency". Was it still "money" / monetary after 33? Certainly, until '71 (42 years ago, not 39). But "currency" (circulating to facilitate/lubricate individual micro rather than macro exchange&trade)? Hardly ;) Also not "legal tender" -- as in, for courts enforcing contract liabilities or tax payments. TL;DR: only outside the US, only to Central Banks.
      - wintersFright 14y ago
        Interesting point. Wouldn't an individual Frenchman see a USD as a token for metal until the shock? And until the shock, national currencies circulated at a fixed exchange with the USD - thereby his own currency was effectively gold backed? At a national level, yes the Central Banks settled in gold, but that was after the micro transactions bubbled up to be settled from the commercial banks and then eventually cleared at the Central Bank level (Talking on the edges of my understanding here - just trying to see if the reality for an individual level was the currency was gold backed until 71).
        14y ago
zwily 14y ago
The same number of coins will be mined, no matter how many ASICs are online.
- deleted 14y ago
  [deleted]

pseudonym 14y ago

I think people are more oblivious to the fact that a "deflationary currency" is inherently flawed because it by definition results in hoarding, which is not what you want people to do with your currency. Why would you bother loaning or investing it if you can make more money just sitting on it?

fleitz 14y ago
If USD was limited to currency in circulation then it would not be nearly as inflationary as it is. Once an established lending system based on bitcoins is established it will have the same problems as our current currencies. It wasn't printing money that caused the real estate bubble, it was the way to banking system has the power to expand credit and the systemic risk that expansion of credit causes. Once there are fractional reserve bitcoin banks it will no longer be a deflationary currency.
- wintersFright 14y ago
  Will people want to borrow in defalationary biased currency though? Better to borrow in Bernanke Bucks where there is an unstoppable torrent being emitted monthly. IMHO the Real estate bubble was from the Fed bailing the prior tech bubble by suppressing interest rates - which encourages borrowing. When loans are paid back, the currency created by taking the loan is extinguished but they have been juicing the system by continually suppressing rates via QE/bond purchases and not letting the real market decide the risk (ie: price of bonds). Now that interest rates have hit the floor - the next bubble to pop is the USD itself.
  - fleitz 14y ago
    If the USD pops then BTC may be less deflationary. The bubble did not pop because mortgages were paid back. Loans are generally repaid in currency, paying back a loan creates even more currency as the additional currency created by the interest becomes an asset against which loans can be issued.
    - XorNot 14y ago
      The idea the USD is going to collapse is farcical. It would be a global catastrophe of a scale not yet seen, but also not threatened. Meanwhile, BTC gains and loses 50 - 80% of its value in a single day. I wonder which is more stable.
      - wintersFright 14y ago
        Agree BTC is way too unstable but being the the best nag in the glue factory doesn't mean much. USD collapse would certainly be a far reaching global event but that doesn't mean it will not happen. I'm sure all prior entities with reserve status also thought their position unasailable. http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2013/03/Reserve%20Currency%20Status.png http://www.zerohedge.com/sites/default/files/images/user5/im... Global support for it is waning. China is doing direct currency swap deals and is no longer supporting USD by stacking treasuries at the rate it was. Russia is dishoarding treasuries too. The current trade deficit is propped up by the Fed buying USG bonds and suppressing interest rates. USD is not long for this world in its current form.
        XorNot 14y ago
        Plenty of currencies exist without being de facto global currencies and survive just fine. The question is what makes the USD likely to collapse as a currency altogether - rather then simply behave more like the normal internal currency of a sovereign nation? People don't go around predicting the decline and fall of the Australian dollar for example.
zurn 14y ago
Deflation is not desireable in itself, but it is not a crippling disadvantage. Eg Japan has had a very long deflation spiral and it didn't affect the usability of their currency. And the west has been living in a world of negative real interest rates since the 2008 crisis. As long as we don't have a big bitcoin credit market and we don't want to regulate the bitcoin "printing press" to adjust for market cycles, it won't even be a disadvantage. = As long as it's only a secondary currency to most users.

fleitz 14y ago

Why does the method of mining mean that a currency should not be accepted? Gold serves as a currency yet the methods of mining have changed drastically in the last 1,000 years.

dualogy 14y ago
> Gold serves as a currency Not for the last 80 years it hasn't..
- wintersFright 14y ago
  Actually 39 years. The USD was a token for gold until Nixon shock.
  - dualogy 14y ago
    Yeah but that I define as "monetary metal for Central Bank settlements" gold, not "day-to-day normal-people transactional currency". Was it still "money" / monetary after 33? Certainly, until '71 (42 years ago, not 39). But "currency" (circulating to facilitate/lubricate individual micro rather than macro exchange&trade)? Hardly ;) Also not "legal tender" -- as in, for courts enforcing contract liabilities or tax payments. TL;DR: only outside the US, only to Central Banks.
    - wintersFright 14y ago
      Interesting point. Wouldn't an individual Frenchman see a USD as a token for metal until the shock? And until the shock, national currencies circulated at a fixed exchange with the USD - thereby his own currency was effectively gold backed? At a national level, yes the Central Banks settled in gold, but that was after the micro transactions bubbled up to be settled from the commercial banks and then eventually cleared at the Central Bank level (Talking on the edges of my understanding here - just trying to see if the reality for an individual level was the currency was gold backed until 71).
      - 14y ago

zwily 14y ago

The same number of coins will be mined, no matter how many ASICs are online.

deleted 14y ago
[deleted]