Bitcoin - Part 2

[Samson]

I must stress that I agree entirely with this assessment. It's very much like the 1846 railway mania. The mania soon popped, but railways remained (and remain) a valuable resource. Over long periods railway undertakings have values that reflect the usefulness of this technology, and the revenues which it secures in the transport marketplace.

If blockchain turns out to be as useful as you suggest, as well it may, it will retain a value too. But it will nor jump from cents per "token" to tens of thousands of dollars, unless it becomes the pretext for yet another speculative bubble.

It sounds more like the internet than a railway line.
We should maybe consider what an "internetcoin" is valued at.
Hang on....

 

[Craig B]

It sounds more like the internet than a railway line.
We should maybe consider what an "internetcoin" is valued at.
Hang on....

For some strange reason, people who erect internet paywalls demand payment in "worthless" counterfeit fiat monetary tokens.

 

[Roger Ramjets]

Worst analogy ever. You cited three examples of real things with real value...

Gucci has to source the leather and other fine materials in order to craft their handbags. Rolex has to source not only precious metals, but retain expert watchmakers to produce some of the world's finest watches. The Mona Lisa is a unique work of art.

I hope you aren't arguing that only things of 'real value' can be counterfeited, because...

Counterfeit money

is imitation currency produced without the legal sanction of the state or government...

Today some of the finest counterfeit banknotes are called Superdollars because of their high quality and likeness to the real US dollar.

My use of the word counterfeit refers to the costless creation of endless amounts of money

But the US dollar can be counterfeited, so that means... oops!

Why is it ok for the Fed to do it, but not you or me?

Because they have the legal sanction of the state or government, and you don't?

BTW you are welcome to create whatever 'counterfeit' money you like, just don't try to pass it off as real US dollars.

Incidentally, the dollar was originally defined as 371.25 grains of fine silver. So yes, the Federal Reserve Note is a counterfeit in every sense of the word.

Incidentally, the US dollar was always 'counterfeit'...

History of the United States dollar

The American dollar coin was initially based on the value and look of the Spanish dollar, used widely in Spanish America from the 16th to the 19th centuries. The first dollar coins issued by the United States Mint (founded 1792) were similar in size and composition to the Spanish dollar, minted in Mexico and Peru. The Spanish, U.S. silver dollars, and later, Mexican silver pesos circulated side by side in the United States

And being made of 'precious' metals didn't prevent its value from declining...

In the early 19th century, gold rose in relation to silver... Therefore, in the Coinage Act of 1834, the 15:1 ratio of silver to gold was changed to a 16:1 ratio... The result of this revaluation, which was the first devaluation of the U.S. dollar, was that the value in gold of the dollar was reduced by 6%...

The discovery of large silver deposits in the Western United States in the late 19th century created a political controversy. Due to the large influx of silver, the value of silver in the nation's coinage dropped precipitously.

In hindsight, basing the money supply on a metal whose 'value' is dependent on mining activities was not a great idea.

The true value of a currency is nothing more than the value of the goods and services it was exchanged for. Therefore the medium itself should be as cheap to produce and use as possible, while being difficult enough to copy that making counterfeits is not worthwhile. Bitcoin fails as a currency because it is expensive to produce, anybody can make a copy and call it 'Bitcoin', and its supply is constrained by mining activities which are not related to economic wealth.

 

[psionl0]

Bitcoin fails as a currency because it is expensive to produce, anybody can make a copy and call it 'Bitcoin', and its supply is constrained by mining activities which are not related to economic wealth.

Wow, talk about delusional. A fork of bitcoin is not a copy of bitcoin let alone any other crypto.

You might not be able to tell the difference but others obviously can since the prices are all different.

 

[Tippit]

Your other points are too idiotic to address. As for:

Incidentally, the US dollar was always 'counterfeit'...

History of the United States dollar

The Spanish mill dollar was made of 371.25 grains of fine silver. The value of that and US dollars was the value of the *silver* used to make them, therefore, there was nothing counterfeit about them.

And being made of 'precious' metals didn't prevent its value from declining...


In hindsight, basing the money supply on a metal whose 'value' is dependent on mining activities was not a great idea.

I never claimed that sound money could be prevented from declining or increasing in value. In fact, the value of sound money is whatever the market, not some band of technocratic elites decides.

In hindsight, basing the money supply on the whims of some corrupt bankers who have the capability to issue an infinite supply of them and steal the world was not a great idea. I don't expect you to get this, as you are perpetually ignorant.

The true value of a currency is nothing more than the value of the goods and services it was exchanged for. Therefore the medium itself should be as cheap to produce and use as possible, while being difficult enough to copy that making counterfeits is not worthwhile. Bitcoin fails as a currency because it is expensive to produce, anybody can make a copy and call it 'Bitcoin', and its supply is constrained by mining activities which are not related to economic wealth.

Utter nonsense.

 

[Tippit]

What was the Continental paper currency? Or do you limit your hostility to the Federal Reserve?

It should be pretty obvious by now that I have contempt for all fiat money, as I understand precisely what it represents.

What does it matter what the dollar was originally defined as? The pound sterling was once simply a pound weight of silver in the form of 240 silver pennies. But the definition has changed. The US government defines what its unit of account represents. That may change over time, and therefore its notes are not counterfeit in any sense of the word.

It matters because I want politicians and government to adhere to the rule of law, and to use honest weights, measures, and money. The ability to issue unlimited money, is the ability to levy unlimited taxes, and so as a citizen i have a basic interest in keeping the government's ability to do so limited. Clearly you don't understand how important this is, or you simply don't care, but I do.

 

[Craig B]

It should be pretty obvious by now that I have contempt for all fiat money, as I understand precisely what it represents.



It matters because I want politicians and government to adhere to the rule of law, and to use honest weights, measures, and money. The ability to issue unlimited money, is the ability to levy unlimited taxes, and so as a citizen i have a basic interest in keeping the government's ability to do so limited. Clearly you don't understand how important this is, or you simply don't care, but I do.

It is wonderful that you understand everything and nobody else does. I am honoured to communicate with such a genius.

Just one thing. Earlier you were referring to "counterfeit" paper money. I was saying it isn't. You don't like paper money. That doesn't mean it's counterfeit, and it isn't. You can prefer silver dollars or bone fish hooks as currency for all I care. But that doesn't make Federal Reserve dollars "counterfeit".

 

[ponderingturtle]

After every modern bubble, there have remained survivors that held great value. After the dotcom bubble, there remained several companies that went on to become huge winners.

I don’t think crypto will be any different.

The problem is that those things did provide a fundamental service that had value, I am not convinced that any blockchain based cryptocurrency succeeds in doing that. Even tulips had some value to plant them in your yard.

I don't see them going away, because I expect them to become endemic instead of epidemic like they are now.

 

[ponderingturtle]

It should be pretty obvious by now that I have contempt for all fiat money, as I understand precisely what it represents.



It matters because I want politicians and government to adhere to the rule of law, and to use honest weights, measures, and money. The ability to issue unlimited money, is the ability to levy unlimited taxes, and so as a citizen i have a basic interest in keeping the government's ability to do so limited. Clearly you don't understand how important this is, or you simply don't care, but I do.

But why does tying monetary policy to commodity pricing actually do that? The advantage of fiat currency is that your monetary policy can be what ever you want to achieve the desired end. Sometimes this desired end is harmful to people like how germany inflated away its debt from WWI. But that seems best done by making sure responsible people are in charge of monetary policy. It certainly has led to more stable currency than when it was tied to commodity prices.

 

[Roger Ramjets]

I never claimed that sound money could be prevented from declining or increasing in value. In fact, the value of sound money is whatever the market, not some band of technocratic elites decides.

Money is supposed to be a medium of exchange, not a commodity. When a commodity is used as money the economy becomes vulnerable to changes in the commodity's supply.

'Sound money' is matched to actual economic worth, not tied to the supply of some unrelated commodity. Europe discovered this a long time ago...
Spanish Price Revolution

The shortage of precious metals during the late 15th and early 16th centuries eased in the second half of the 16th century. The Spanish mined American gold and silver at minimal cost and flooded the European market with an abundance of specie. This influx caused a relative decrease in the value of these metals in comparison with agricultural and craft products... The failure of the Spanish to control the influx of gold and the price fluctuations of gold and silver from the American mines, combined with war expenditures, led to three bankruptcies of the Spanish monarchy by the end of the 16th century.

In hindsight, basing the money supply on the whims of some corrupt bankers who have the capability to issue an infinite supply of them and steal the world was not a great idea.

You rail against 'technocratic elites' creating 'infinite supply', yet you seem to love crypto currencies which are constantly being created out of thin air and produced by huge multinational corporations?

List of cryptocurrencies

The number of cryptocurrencies available over the internet as of 7 January 2018 is over 1384 and growing. A new cryptocurrency can be created at any time.

Bitcoin 'mining' goes from enthusiasts to giant enterprises

The early bitcoin mining pioneers are giving way to giant organizations operating on multiple continents...

Bitcoin mining hardware and software company Bitfury generated nearly $100 million in revenue for fiscal year 2017, according to a July 24 report from CoinDesk... The company said it has expanded from "a handful of people" to more than 250 employees working in more than 20 countries. Meanwhile, its customers have grown from "bitcoin enthusiasts buying hardware" to "governments, companies and organizations"

You are just trading a money supply which is based on 'the whims of some corrupt bankers who have the capability to issue an infinite supply' to one based on the whims of some shadowy internet personas and technologists who have the capability to issue an infinite supply.

 

[Roger Ramjets]

that seems best done by making sure responsible people are in charge of monetary policy.

But when you have anarchy, nobody is in charge. Apparently this is what Tippet wants - an economy which is subject to the whims of billions of self-centered individuals who give no thought to the cumulative effect of their actions.

It certainly has led to more stable currency

Stability? Pah! Chaos is much more profitable!

 

[psionl0]

You rail against 'technocratic elites' creating 'infinite supply', yet you seem to love crypto currencies which are constantly being created out of thin air and produced by huge multinational corporations?

List of cryptocurrencies

Bitcoin 'mining' goes from enthusiasts to giant enterprises

You are just trading a money supply which is based on 'the whims of some corrupt bankers who have the capability to issue an infinite supply' to one based on the whims of some shadowy internet personas and technologists who have the capability to issue an infinite supply.

Your ignorance is showing again.

No amount of processing power will change the rate at which bitcoin is produced. It can only affect the cost of mining for bitcoin (hasn't anybody ever explained this to you?).

As for the idea that anybody can create a new crypto, the same is true in the "real" world. You or I could create money by simply writing an IOU. The problem is getting anybody to accept it. This is the same problem for upstart cryptos. Very few of them will ever be worth any real money.

 

[PartSkeptic]

Your ignorance is showing again.

No amount of processing power will change the rate at which bitcoin is produced. It can only affect the cost of mining for bitcoin (hasn't anybody ever explained this to you?).

As for the idea that anybody can create a new crypto, the same is true in the "real" world. You or I could create money by simply writing an IOU. The problem is getting anybody to accept it. This is the same problem for upstart cryptos. Very few of them will ever be worth any real money.

So Bitcoin is "different"? It has value and advantages?

And the others are just scams relieving people of their "worthless fiat currency"?

Personally I think all cryptos are scams with no value.

 

[psionl0]

So Bitcoin is "different"? It has value and advantages?

And the others are just scams relieving people of their "worthless fiat currency"?

Personally I think all cryptos are scams with no value.

Was my post too complicated for you?

That response had nothing to do with what you quoted.

 

[PartSkeptic]

Was my post too complicated for you?

That response had nothing to do with what you quoted.

I quoted your post.

This is the same problem for upstart cryptos. Very few of them will ever be worth any real money.

You imply that Bitcoin is different, and will be worth something.

 

[Tippit]

It is wonderful that you understand everything and nobody else does. I am honoured to communicate with such a genius.



Just one thing. Earlier you were referring to "counterfeit" paper money. I was saying it isn't. You don't like paper money. That doesn't mean it's counterfeit, and it isn't. You can prefer silver dollars or bone fish hooks as currency for all I care. But that doesn't make Federal Reserve dollars "counterfeit".

I haven’t said anything about “paper money”. The overwhelming vast majority of money and credit is electronic. You either fail at basic reading comprehension, or you’re being intentionally manipulative. Given that Federal Reserve notes are unconstitutional, don’t conform to the Spanish mill dollar which is defined as 371.25 grains of fine silver, and confer the unlimited taxation/theft that a common counterfeiter would enjoy, its perfectly reasonable to describe the fiat dollar as counterfeit, and the process as counterfeiting. It has nothing to do with the supposed authenticity of the note, and everything to do with the consequences.


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[ponderingturtle]

I haven’t said anything about “paper money”. The overwhelming vast majority of money and credit is electronic. You either fail at basic reading comprehension, or you’re being intentionally manipulative. Given that Federal Reserve notes are unconstitutional, don’t conform to the Spanish mill dollar which is defined as 371.25 grains of fine silver,

Except that the constitution does not say any of that. It simply gives congress the power to coin money

"To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;

To provide for the Punishment of counterfeiting the Securities and current Coin of the United States"

Noting about 371.25 grains of silver or anything like that.

A standing army is far far more of an issue constitutionally than paper money.

 

[psionl0]

You imply that Bitcoin is different, and will be worth something.

The current price is still $10,000+. I don't know what price you think it should be before you say it is "worth something".

 

[Craig B]

I Given that Federal Reserve notes are unconstitutional, don’t conform to the Spanish mill dollar which is defined as 371.25 grains of fine silver, and confer the unlimited taxation/theft that a common counterfeiter would enjoy, its perfectly reasonable to describe the fiat dollar as counterfeit, and the process as counterfeiting. It has nothing to do with the supposed authenticity of the note, and everything to do with the consequences.

That's simple nonsense from start to finish. Whether a document is counterfeit or not has everything to do with the authenticity of the document and nothing whatever to do with the consequences. If I were to create counterfeit money - on paper or electronically - it might have the consequence of making me rich or the consequence of sending me to jail. But as long as I am not authorised to print banknotes - or create electronic currency - the money I produce is counterfeit, whatever the consequences might be.

You are creating new definitions of words, and pulling them out of your bum.

 

[PartSkeptic]

The current price is still $10,000+. I don't know what price you think it should be before you say it is "worth something".

You could offer me $10,000 for the gum stuck on my shoe because you have been told that the guy down the road will offer you twice that price.

The gum is worthless at any price and so is bitcoin.

That message is having a hard time against the aggressive marketing and hype, but I have patience.