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Our current systems evolved slowly over the course of thousands of years. They weren't dreamed up one night in some nerd's basement. They were formed over time

Our current systems evolved slowly over the course of thousands of years. They weren't dreamed up one night in some nerd's basement. They were formed over time through public debate and useful exchange of value. Farmers aren't using Bitcoin. Bridge builders aren't using Bitcoin. Armies aren't using Bitcoin. This isn't some situation like where we're choosing between two Ruby libraries that do S3 uploads. This is a situation where we have the institutions that evolved over time vs. some dudes with a new idea on the Internet. Ya'll be ignorant.

anigbrowl 13y ago
Quite. Bitcoin has built-in authentication, which is a key feature of a traditional currency, and scarcity as well. But as long as it's not any kind of legal tender, there's no guarantee that any transaction or payment of debt offered in Bitcoin will be accepted, and that introduces considerable friction into its use as a currency. Also, the scarcity is arguably deflationary; nobody goes into solo mining any more because it's obviously not worth it, and the more coins that are mined the lower the incentive to go into mining. This means holding bitcoin results in appreciation proportional to population growth, even though no useful economic activity is taking place when someone sits on top of a pile of cash. The whole point of inflation is to reflect the natural rate of economic growth and to discourage economically inefficient hoarding. Runaway inflation is of course a bad thing, but no inflation at all, or deflation, is just as bad in economic terms.
- Sheepshow 13y ago
  > even though no useful economic activity is taking place Saving is a useful economic activity. Why should I let some filthy money lender touch my money? It's my money!
- nunb 13y ago
  >The whole point of inflation is to reflect the natural rate of economic growth and to discourage economically inefficient hoarding. Runaway inflation is of course a bad thing, but no inflation at all, or deflation, is just as bad in economic terms. Consider where that initial cash came from. You worked your ass off between 18 and 60 and you got a bunch of cash in exchange. Some you spent on consumption, some you saved for use later. In fact, cash is just 'tokens for exchange later' where later is a time window that varies from 1 hour (hand-to-mouth) to 50+ years (surplus productive capacity people). Wouldn't it be great if you could use your tokens for their promised exchange-value through your retirement and see those years of hard work payoff? In fact, multiply, because as you said the population grows, more goods are produced, and your cash tokens buy more and more of those goods. It's a great way to retire. Unfortunately for the retired, they are on fixed incomes (pensions) in an inflationary world: those people get SCREWED to the extent where they can't afford heating in some US States. These are people who worked hard all their lives and just wanted to live off the proceeds, the surplus they had generated. Think of the chi^H^H^H grandparents!
tragic 13y ago
The evolution is not always slow: the Banking Act of 1863 transformed American currency very rapidly, for example[1]; as did the foundation of the Bank of England in 1694 for the pound. Of course, your underlying point is correct - both these examples are coterminous with vast transformations in the two societies (the civil war and the Glorious Revolution), which equally were not dreamed up by a nerd in a basement. [1] James McPherson's Battle Cry of Freedom has some interesting material on this.

anigbrowl 13y ago

Quite. Bitcoin has built-in authentication, which is a key feature of a traditional currency, and scarcity as well. But as long as it's not any kind of legal tender, there's no guarantee that any transaction or payment of debt offered in Bitcoin will be accepted, and that introduces considerable friction into its use as a currency. Also, the scarcity is arguably deflationary; nobody goes into solo mining any more because it's obviously not worth it, and the more coins that are mined the lower the incentive to go into mining. This means holding bitcoin results in appreciation proportional to population growth, even though no useful economic activity is taking place when someone sits on top of a pile of cash. The whole point of inflation is to reflect the natural rate of economic growth and to discourage economically inefficient hoarding. Runaway inflation is of course a bad thing, but no inflation at all, or deflation, is just as bad in economic terms.

Sheepshow 13y ago
> even though no useful economic activity is taking place Saving is a useful economic activity. Why should I let some filthy money lender touch my money? It's my money!
nunb 13y ago
>The whole point of inflation is to reflect the natural rate of economic growth and to discourage economically inefficient hoarding. Runaway inflation is of course a bad thing, but no inflation at all, or deflation, is just as bad in economic terms. Consider where that initial cash came from. You worked your ass off between 18 and 60 and you got a bunch of cash in exchange. Some you spent on consumption, some you saved for use later. In fact, cash is just 'tokens for exchange later' where later is a time window that varies from 1 hour (hand-to-mouth) to 50+ years (surplus productive capacity people). Wouldn't it be great if you could use your tokens for their promised exchange-value through your retirement and see those years of hard work payoff? In fact, multiply, because as you said the population grows, more goods are produced, and your cash tokens buy more and more of those goods. It's a great way to retire. Unfortunately for the retired, they are on fixed incomes (pensions) in an inflationary world: those people get SCREWED to the extent where they can't afford heating in some US States. These are people who worked hard all their lives and just wanted to live off the proceeds, the surplus they had generated. Think of the chi^H^H^H grandparents!

tragic 13y ago

The evolution is not always slow: the Banking Act of 1863 transformed American currency very rapidly, for example[1]; as did the foundation of the Bank of England in 1694 for the pound. Of course, your underlying point is correct - both these examples are coterminous with vast transformations in the two societies (the civil war and the Glorious Revolution), which equally were not dreamed up by a nerd in a basement. [1] James McPherson's Battle Cry of Freedom has some interesting material on this.