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The whole value proposition [of cryptocurrency] is the digital scarcity, and if you have a million of these things then you’ve devalued all of them. ...

by panarky 13y ago

The whole value proposition [of cryptocurrency] is the digital scarcity, and if you have a million of these things then you’ve devalued all of them. ... I say the more the merrier, the more people trying stuff. You can create these economies out of nothing! ... I will buy any coins I can get my hands on. I haven't seen much discussion of this topic. If you assume that Bitcoin and Litecoin have value, and that value is preserved through scarcity, what does it mean when anyone can clone it and create their own currency?

terryjsmith 13y ago
I imagine it's not much different than different real world currencies; they'll all become relative to one another through a common conversion rate (ie. USD). Plus somewhere in the middle someone will create a meta-cryptocurrency payment service and sign up vendors to accept any type of cryptocurrency while making a conversion fee.
- panarky 13y ago
  Maybe the value comes from the network of miners and users of the altcoin. If a new cryptocurrency becomes popular and steals miners and users from an old cryptocurrency, the value of the new coin will increase at the expense of the old coin. But if the new cryptocurrency brings in new miners and users, like Dogecoin has, then the value of both old and new can grow.
ry0ohki 13y ago
Value comes through scarcity but more importantly willingness to accept the currency for goods and services. Anyone can make a currency out of shells and beads, but it will only have real value when more people will accept it as payment.
valtron 13y ago
The creation of a new coin has no bearing on the scarcity of another. Scarcity is just one requirement for something to act as a currency; another would be that it can be exchanged for goods and services (read: other things that people value, and for which they want things that they also value).
firstOrder 13y ago
> have value, and that value is preserved through scarcity Adam Smith, Benjamin Franklin, Thomad Malthus, David Ricardo, Jean-Baptiste Say, Thomas Malthus, John Stuart Mill etc. and all the early economists did not believe value was preserved through scarcity. People tried to change this idea in the 19th century, but in the early 1950s the idea that value was preserved through scarcity was only held widely in the USA, and perhaps in some quarters in Western Europe. Nowadays things are contradictory. Contradictory in the sense that the establishment speaks about government and free market in a certain way, then flips to the total opposite idea and demands banks be bailed out by taxpayers, then flips back to what they were originally saying once that is done. The establishment economists say value is through scarcity. Then they demand that mp3's, movies etc. not be "pirated" because "artists deserve the fruit of their labors" and the value they imputed to these mp3's, movies etc. But how can that be if value is derived through scarcity? If things are write once, read many, then there is no unfairness going on if no one buys movies and songs and "pirates" them. The mainstream economists say value is derived through scarcity, but then, when things can be reproduced digitially with no more scarcity, they try to impose the old legal system on things - the legal system which always more-or-less acknowledged that value came from labor time, whether or not the idealogues acknowledged things as such. This is also why Bitcoins are as worthless as tulips were in 1637 Holland ( http://en.wikipedia.org/wiki/Tulip_mania http://en.wikipedia.org/wiki/Tulip_mania ), or bum real estate projects in 2008, or Pets.com and Webvan stock in 2000 etc. The Mt. Gox collapse and such is just the heralding of the inevitable collapse of the worth of Bitcoins. In science, facts, such as say the inevitable collapse as Bitcoin, or the contradiction of where mp3's derive their value, and so forth, change established theory. But as who gets a bigger piece of the big pie is not a scientific endeavor, it's a struggle with lots of propaganda and such. If scientists predicted something, and then the evidence showed them wrong, they would change their theories. The inevitable collapse of Bitcoin will not change its slick huckster's propaganda one iota. They'll just sucker you into buying into their next MLM scheme. How long until it happens? However long Dutch tulip bulbs, or the housing bubble, or the dot-com bubble went on should be a clue. As Keynes said, markets can remain irrational longer than you can remain solvent. But those who want to understand how the world really works, will look at the inevitable crash of Bitcoin, meaning when they are worth not $630 or so each, but 63 cents each, or less - those who want to understand how the world works will see when that happens and will reconsider whether value comes from scarcity or not. Most won't. The ones who hype it today will have other reasons for why that collapse, which today they say will never happen, will have had happened. The propaganda will go on. But those who want to understand the world can take that time to reconsider things. Even though the discourse will be dominated even then by the phonies and hucksters who were just proven to be frauds. That day will come in the next few years, as it is impossible for Bitcoins to retain value due to "scarcity".

by panarky 13y ago

terryjsmith 13y ago

I imagine it's not much different than different real world currencies; they'll all become relative to one another through a common conversion rate (ie. USD). Plus somewhere in the middle someone will create a meta-cryptocurrency payment service and sign up vendors to accept any type of cryptocurrency while making a conversion fee.

panarky 13y ago
Maybe the value comes from the network of miners and users of the altcoin. If a new cryptocurrency becomes popular and steals miners and users from an old cryptocurrency, the value of the new coin will increase at the expense of the old coin. But if the new cryptocurrency brings in new miners and users, like Dogecoin has, then the value of both old and new can grow.

ry0ohki 13y ago

Value comes through scarcity but more importantly willingness to accept the currency for goods and services. Anyone can make a currency out of shells and beads, but it will only have real value when more people will accept it as payment.

valtron 13y ago

The creation of a new coin has no bearing on the scarcity of another. Scarcity is just one requirement for something to act as a currency; another would be that it can be exchanged for goods and services (read: other things that people value, and for which they want things that they also value).

firstOrder 13y ago

> have value, and that value is preserved through scarcity Adam Smith, Benjamin Franklin, Thomad Malthus, David Ricardo, Jean-Baptiste Say, Thomas Malthus, John Stuart Mill etc. and all the early economists did not believe value was preserved through scarcity. People tried to change this idea in the 19th century, but in the early 1950s the idea that value was preserved through scarcity was only held widely in the USA, and perhaps in some quarters in Western Europe. Nowadays things are contradictory. Contradictory in the sense that the establishment speaks about government and free market in a certain way, then flips to the total opposite idea and demands banks be bailed out by taxpayers, then flips back to what they were originally saying once that is done. The establishment economists say value is through scarcity. Then they demand that mp3's, movies etc. not be "pirated" because "artists deserve the fruit of their labors" and the value they imputed to these mp3's, movies etc. But how can that be if value is derived through scarcity? If things are write once, read many, then there is no unfairness going on if no one buys movies and songs and "pirates" them. The mainstream economists say value is derived through scarcity, but then, when things can be reproduced digitially with no more scarcity, they try to impose the old legal system on things - the legal system which always more-or-less acknowledged that value came from labor time, whether or not the idealogues acknowledged things as such. This is also why Bitcoins are as worthless as tulips were in 1637 Holland ( http://en.wikipedia.org/wiki/Tulip_mania http://en.wikipedia.org/wiki/Tulip_mania ), or bum real estate projects in 2008, or Pets.com and Webvan stock in 2000 etc. The Mt. Gox collapse and such is just the heralding of the inevitable collapse of the worth of Bitcoins. In science, facts, such as say the inevitable collapse as Bitcoin, or the contradiction of where mp3's derive their value, and so forth, change established theory. But as who gets a bigger piece of the big pie is not a scientific endeavor, it's a struggle with lots of propaganda and such. If scientists predicted something, and then the evidence showed them wrong, they would change their theories. The inevitable collapse of Bitcoin will not change its slick huckster's propaganda one iota. They'll just sucker you into buying into their next MLM scheme. How long until it happens? However long Dutch tulip bulbs, or the housing bubble, or the dot-com bubble went on should be a clue. As Keynes said, markets can remain irrational longer than you can remain solvent. But those who want to understand how the world really works, will look at the inevitable crash of Bitcoin, meaning when they are worth not $630 or so each, but 63 cents each, or less - those who want to understand how the world works will see when that happens and will reconsider whether value comes from scarcity or not. Most won't. The ones who hype it today will have other reasons for why that collapse, which today they say will never happen, will have had happened. The propaganda will go on. But those who want to understand the world can take that time to reconsider things. Even though the discourse will be dominated even then by the phonies and hucksters who were just proven to be frauds. That day will come in the next few years, as it is impossible for Bitcoins to retain value due to "scarcity".