5 ms·

The really amusing part is that their trolling represents better economic policy than Bitcoin.

by Eliezer 13y ago

VMG 13y ago
Better for the collective, maybe, but removing selfish incentives for hoarding and mining Alt-coin will lead to low adoption and depreciation. Same problem with Peercoin: http://www.peercoin.net/ http://www.peercoin.net/
drewblaisdell 13y ago
I'm sure you'll get voted up because the HN crowd loves to hate things, but I'm honestly curious why anyone would think this is objectively a better economic policy. Regardless of the inflation vs. deflation debate, the same exact thing could happen in bitcoin if it is what the community wants.
- kevinpet 13y ago
  Ideally, the money supply grows at the same rate as the economy. In this case "the economy" is the segment using Dogecoin. If you can't get it right, most people consider it better to have a bit of inflation rather than deflation. This may just be a consequence of people being more used to inflation and able to deal with it. For example, people don't mind prices going up as much as they mind their income going down.
  - natrius 13y ago
    Low, steady inflation is better for an economy than the alternatives humanity has experienced thus far. However, if people had the choice between holding a currency they expected to slowly decrease in value like today's central bank currencies and a currency they expected to slowly increase in value like Bitcoin in a post-adoption world, why would anyone pick the former? Central banks have only had the ability to steer the economy because they controlled the best currencies available in the eyes of consumers. Dollars are much easier to deal with than gold, so people use them even though they know the dollars will be worth less than the equivalent gold in a year or two. When Bitcoin is as easy to use for trade as dollars are, people won't choose dollars, nor will they chose inflationary altcoins.
    - shock-value 13y ago
      You stuck a "however" in between your first two sentences, but doesn't the second one just explain the first? If people are only going to hold Bitcoin and not trade it for goods and services, then it's a poor currency and will not drive economic development.
      - natrius 13y ago
        I don't understand why you think people won't trade Bitcoin for goods and services. I use Bitcoin at every vendor that accepts it, especially if there's a discount involved. It costs me 1% to replace the Bitcoin since my paychecks are in dollars (for now), but it's a much more reasonable policy than holding and never spending. Normal folks won't use Bitcoin until merchants pass some of the savings they get to their customers as discounts, or until inflation gets out of control.
        shock-value 13y ago
        > but it's a much more reasonable policy than holding and never spending It seems to me that what you are doing is actually not "reasonable". If you are assuming that Bitcoin is going to increase in value over time (or at least not decrease), then you should be spending all your dollars first (which are known to decrease in value over time). The issue of whether merchants can offer discounts based on lower transaction costs would make these crypto-currencies more attractive (if that is the case) but it is not relevant to the discussion of inflation vs. deflation.
        natrius 13y ago
        Dollars and Bitcoin are easily interchangeable, so the concept of spending dollars first doesn't make sense to me. The amount of Bitcoin someone holds is based on their belief in Bitcoin's future success, their wealth, their spending needs that can only be transacted in dollars, and their backup plan in the likely event that Bitcoin becomes worthless. Once you've reached the proper balance for your risk tolerance, whether you spend Bitcoin or dollars is irrelevant, other than the 1% fee to switch between the two. Even if you think Bitcoin will triple in price tomorrow, it still makes sense to spend Bitcoin today because you can easily replace it with Bitcoin purchased at the current price.
- zanny 13y ago
  This is actually the principle reason I invest in bitcoin - I imagine that (at a very consecrative rate, because it requires a super majority of consensus to bring about a protocol upgrade) it will integrate features from other cryptocurrencies that can be proven valuable. And I don't mean things like scrypt - the status quo of bitcoin like their sha1 hashes. And they don't want proof of stake because they buy expensive mining hardware to get the cash outs from doing work. But they might (probably, actually) inflate the money base a lot further down the line, and never let it actually cap at the 21 million btc Satoshi advertised.
yxhuvud 13y ago
Better, but still not good. 5 billion a year will be noticable in the short run, but in the long run, the inflation per anno will approach 0.
- smileysteve 13y ago
  Agreed. They should consider making it 5% (which is initially $5b)
baddox 13y ago
Where "better" means "more in line with mainstream economic ideas on monetary policy." Of course, the goal of Bitcoin was not to adopt the mainstream economic ideas on monetary policy, so this definition of "better" probably isn't appropriate.
Houshalter 13y ago
That's very debatable and even if true, would only matter if dogecoin became a mainstream currency, which it certainly isn't. At best it just means a continuous transfer of wealth from coin owners to miners for doing nothing other than wasting electricity on cpu cycles.
grinnbearit 13y ago
FTFY "... their trolling better represents economic policy than Bitcoin" A money is a refrigerator for productivity, not an abstraction over goods and services.
lexcorvus 13y ago
Monetary dilutionists (i.e., basically all legitimate economists, and thus almost all armchair economists well) and hard-money advocates (i.e., basically all legitimate thinkers pre-1920 or so) each accuse the other of practicing pseudoscience, or at least pseudoeconomics. The cool thing about cryptocurrencies like Bitcoin and Dogecoin is they finally offer people a way to put their money (so to speak) where their mouth is.

The really amusing part is that their trolling represents better economic policy than Bitcoin.

by Eliezer 13y ago

The really amusing part is that their trolling represents better economic policy than Bitcoin.

VMG 13y ago

Better for the collective, maybe, but removing selfish incentives for hoarding and mining Alt-coin will lead to low adoption and depreciation. Same problem with Peercoin: http://www.peercoin.net/ http://www.peercoin.net/

drewblaisdell 13y ago

I'm sure you'll get voted up because the HN crowd loves to hate things, but I'm honestly curious why anyone would think this is objectively a better economic policy. Regardless of the inflation vs. deflation debate, the same exact thing could happen in bitcoin if it is what the community wants.

kevinpet 13y ago
Ideally, the money supply grows at the same rate as the economy. In this case "the economy" is the segment using Dogecoin. If you can't get it right, most people consider it better to have a bit of inflation rather than deflation. This may just be a consequence of people being more used to inflation and able to deal with it. For example, people don't mind prices going up as much as they mind their income going down.
- natrius 13y ago
  Low, steady inflation is better for an economy than the alternatives humanity has experienced thus far. However, if people had the choice between holding a currency they expected to slowly decrease in value like today's central bank currencies and a currency they expected to slowly increase in value like Bitcoin in a post-adoption world, why would anyone pick the former? Central banks have only had the ability to steer the economy because they controlled the best currencies available in the eyes of consumers. Dollars are much easier to deal with than gold, so people use them even though they know the dollars will be worth less than the equivalent gold in a year or two. When Bitcoin is as easy to use for trade as dollars are, people won't choose dollars, nor will they chose inflationary altcoins.
  - shock-value 13y ago
    You stuck a "however" in between your first two sentences, but doesn't the second one just explain the first? If people are only going to hold Bitcoin and not trade it for goods and services, then it's a poor currency and will not drive economic development.
    - natrius 13y ago
      I don't understand why you think people won't trade Bitcoin for goods and services. I use Bitcoin at every vendor that accepts it, especially if there's a discount involved. It costs me 1% to replace the Bitcoin since my paychecks are in dollars (for now), but it's a much more reasonable policy than holding and never spending. Normal folks won't use Bitcoin until merchants pass some of the savings they get to their customers as discounts, or until inflation gets out of control.
      - shock-value 13y ago
        > but it's a much more reasonable policy than holding and never spending It seems to me that what you are doing is actually not "reasonable". If you are assuming that Bitcoin is going to increase in value over time (or at least not decrease), then you should be spending all your dollars first (which are known to decrease in value over time). The issue of whether merchants can offer discounts based on lower transaction costs would make these crypto-currencies more attractive (if that is the case) but it is not relevant to the discussion of inflation vs. deflation.
        natrius 13y ago
        Dollars and Bitcoin are easily interchangeable, so the concept of spending dollars first doesn't make sense to me. The amount of Bitcoin someone holds is based on their belief in Bitcoin's future success, their wealth, their spending needs that can only be transacted in dollars, and their backup plan in the likely event that Bitcoin becomes worthless. Once you've reached the proper balance for your risk tolerance, whether you spend Bitcoin or dollars is irrelevant, other than the 1% fee to switch between the two. Even if you think Bitcoin will triple in price tomorrow, it still makes sense to spend Bitcoin today because you can easily replace it with Bitcoin purchased at the current price.
zanny 13y ago
This is actually the principle reason I invest in bitcoin - I imagine that (at a very consecrative rate, because it requires a super majority of consensus to bring about a protocol upgrade) it will integrate features from other cryptocurrencies that can be proven valuable. And I don't mean things like scrypt - the status quo of bitcoin like their sha1 hashes. And they don't want proof of stake because they buy expensive mining hardware to get the cash outs from doing work. But they might (probably, actually) inflate the money base a lot further down the line, and never let it actually cap at the 21 million btc Satoshi advertised.

yxhuvud 13y ago

Better, but still not good. 5 billion a year will be noticable in the short run, but in the long run, the inflation per anno will approach 0.

smileysteve 13y ago
Agreed. They should consider making it 5% (which is initially $5b)

baddox 13y ago

Where "better" means "more in line with mainstream economic ideas on monetary policy." Of course, the goal of Bitcoin was not to adopt the mainstream economic ideas on monetary policy, so this definition of "better" probably isn't appropriate.

Houshalter 13y ago

That's very debatable and even if true, would only matter if dogecoin became a mainstream currency, which it certainly isn't. At best it just means a continuous transfer of wealth from coin owners to miners for doing nothing other than wasting electricity on cpu cycles.

grinnbearit 13y ago

FTFY "... their trolling better represents economic policy than Bitcoin" A money is a refrigerator for productivity, not an abstraction over goods and services.

lexcorvus 13y ago

Monetary dilutionists (i.e., basically all legitimate economists, and thus almost all armchair economists well) and hard-money advocates (i.e., basically all legitimate thinkers pre-1920 or so) each accuse the other of practicing pseudoscience, or at least pseudoeconomics. The cool thing about cryptocurrencies like Bitcoin and Dogecoin is they finally offer people a way to put their money (so to speak) where their mouth is.