5 ms·

Rant much? I wanted to actually learn something from your post but it reads like a madman wrote it. I own exactly zero bitcoins, but following the market sinc

by Shinkei 13y ago

Rant much? I wanted to actually learn something from your post but it reads like a madman wrote it. I own exactly zero bitcoins, but following the market since 2011 has proven that it is getting easier to use and more prevalent. People will be putting down bitcoin as a serious entity even after PayPal is accepting them.

parasubvert 13y ago
Have you atudied economics? The OP reads like someone who has and is utterly incredulous at the statements being made by Bitcoin's proponents. In fairness, the gentleman interviewed in this article insisted it was all an experiment. But the WSJ editorial board has a long time habit of being very non-mainstream and almost Austrian with its economic views, so this interview was likely intended to play into a political narrative. Here is a summary of what he is trying to say: 1. Bringing up hyperinflation in Zimbabwe is a common tactic of right-wing/Austrian economists to warn of the evils of government control over fiscal spending and currency, and that our current course of monetary expansion means that we in the US too are on the same path. This ignores of course that (a) Zimbabwe had a civil war at the time and the government confiscated or destoyed most private productive capacity; (b) we are in a liquidity trap currently, which in short means that money is nearly free to borrow at 0% interest. Companies are sitting on piles of cash or continuing to unwind their debt from the 2008 crisis, therefore we have not enough people spending. Printing money has had no discernible impact on inflation over the past 5 years. In fact, we could use a bit right now - to encourage spending! 2. The thought that "encouraging saving is good" therefore fixed currency and deflation is good. An economy is a closed system - if some are saving, others have to spend to keep the music going. If we all stop spending, we get into a depression, where people lose their jobs, and the economy isn't working to its potential - all because the currency is rising in value. In short, it is arguable the point of an economic system is to make and consume goods and services, not sit and watch your bank balance grow due to the psychological whims of the market. 3. A currency based in faith is not a dangerous thing - basing currency on gold is mostly a form of superstition. and it has real drawbacks (see #2). Lots of things in the world are based on faith in institutions or theorems. Bitcoin is too - faith in the algorithm, that it works and won't be compromised. Also (blind) faith that a fixed amount of Bitcoin will not lead to destabilization. Now. Does that help? These arguments lead to exasperation because they seem to happen over and over across decades in slightly different forms.
- im3w1l 13y ago
  On your point 2. Saving doesn't have to mean saving money. It can mean investing in stocks, bond, or funding start ups.
  - air 13y ago
    Yes, but deflationary currency discourages that sort of saving, because holding on to the currency works as an investment.
    - Andrew_Quentin 13y ago
      Yes but, regardless of the nature of the currency, investing in stocks etc is an investment with a higher return than simply holding.
- Retric 13y ago
  "An economy is a closed system" that's not quite true. The economy is a balance between things that create value and those that destroy it. In a healthy economy more value is created than destroyed so as long as the 'savings' is close to the amount of new wealth created there is no problem. The problem is when people try to store more value than than the genuine amount of new wealth created. Often it's as simple as a bubble created by over-investment followed by a crash back to actual value. However, the special case of people 'investing' in cash cash does strange things which are directly harmful even without a crash.
  - parasubvert 13y ago
    You're right. I was referring to exchange transactions, to simplify. Ie. you need a buyer and a seller (or an investor and an entrepreneur). It's not closed in the strict sense, because there is growth. Our current situation is similar to your final sentence - that of heavy liquidity preference - there are a lot of sellers and too few buyers, and investors who are mostly storing wealth in cash or liquid assets.
- 1337biz 13y ago
bergie 13y ago
* it is getting easier to use and more prevalent.* Yep. I'm seeing more and more of these signs in my neighbourhood: https://plus.google.com/100751105859582805241/posts/RpQ5adUFD63 https://plus.google.com/100751105859582805241/posts/RpQ5adUF...

by Shinkei 13y ago

parasubvert 13y ago

Have you atudied economics? The OP reads like someone who has and is utterly incredulous at the statements being made by Bitcoin's proponents. In fairness, the gentleman interviewed in this article insisted it was all an experiment. But the WSJ editorial board has a long time habit of being very non-mainstream and almost Austrian with its economic views, so this interview was likely intended to play into a political narrative. Here is a summary of what he is trying to say: 1. Bringing up hyperinflation in Zimbabwe is a common tactic of right-wing/Austrian economists to warn of the evils of government control over fiscal spending and currency, and that our current course of monetary expansion means that we in the US too are on the same path. This ignores of course that (a) Zimbabwe had a civil war at the time and the government confiscated or destoyed most private productive capacity; (b) we are in a liquidity trap currently, which in short means that money is nearly free to borrow at 0% interest. Companies are sitting on piles of cash or continuing to unwind their debt from the 2008 crisis, therefore we have not enough people spending. Printing money has had no discernible impact on inflation over the past 5 years. In fact, we could use a bit right now - to encourage spending! 2. The thought that "encouraging saving is good" therefore fixed currency and deflation is good. An economy is a closed system - if some are saving, others have to spend to keep the music going. If we all stop spending, we get into a depression, where people lose their jobs, and the economy isn't working to its potential - all because the currency is rising in value. In short, it is arguable the point of an economic system is to make and consume goods and services, not sit and watch your bank balance grow due to the psychological whims of the market. 3. A currency based in faith is not a dangerous thing - basing currency on gold is mostly a form of superstition. and it has real drawbacks (see #2). Lots of things in the world are based on faith in institutions or theorems. Bitcoin is too - faith in the algorithm, that it works and won't be compromised. Also (blind) faith that a fixed amount of Bitcoin will not lead to destabilization. Now. Does that help? These arguments lead to exasperation because they seem to happen over and over across decades in slightly different forms.

im3w1l 13y ago
On your point 2. Saving doesn't have to mean saving money. It can mean investing in stocks, bond, or funding start ups.
- air 13y ago
  Yes, but deflationary currency discourages that sort of saving, because holding on to the currency works as an investment.
  - Andrew_Quentin 13y ago
    Yes but, regardless of the nature of the currency, investing in stocks etc is an investment with a higher return than simply holding.
Retric 13y ago
"An economy is a closed system" that's not quite true. The economy is a balance between things that create value and those that destroy it. In a healthy economy more value is created than destroyed so as long as the 'savings' is close to the amount of new wealth created there is no problem. The problem is when people try to store more value than than the genuine amount of new wealth created. Often it's as simple as a bubble created by over-investment followed by a crash back to actual value. However, the special case of people 'investing' in cash cash does strange things which are directly harmful even without a crash.
- parasubvert 13y ago
  You're right. I was referring to exchange transactions, to simplify. Ie. you need a buyer and a seller (or an investor and an entrepreneur). It's not closed in the strict sense, because there is growth. Our current situation is similar to your final sentence - that of heavy liquidity preference - there are a lot of sellers and too few buyers, and investors who are mostly storing wealth in cash or liquid assets.
1337biz 13y ago

bergie 13y ago

* it is getting easier to use and more prevalent.* Yep. I'm seeing more and more of these signs in my neighbourhood: https://plus.google.com/100751105859582805241/posts/RpQ5adUFD63 https://plus.google.com/100751105859582805241/posts/RpQ5adUF...