Cryptocurrencies and the economy

[psionl0]

Huh? Whether the “printer” gains isn’t contingent on inflation or production at all.

You reversed the logic. I was making a causal link between currency creation and inflation or production, not the other way around.

Obviously the currency printer benefits instantly either way so it is good that you did not support Belz's assertion that "Printing money doesn't usually make anyone actually richer".

ETA It could be argued that depriving people of a share in increased productivity could be seen as a form of theft.

 

[Tippit]

You reversed the logic. I was making a causal link between currency creation and inflation or production, not the other way around.

I am not trying to nitpick, because this is an important point. You used the words “if production doesn’t increase”, which is clearly a contingency that doesn’t exist. The only ways a “printer” could not gain from creating money are 1) if the costs/risks of creating the money offset the value of the money created, or 2) the money is never spent. Concepts like production, and how it relates to inflation is irrelevant when discussing the personal gains of a hypothetical “printer”, wouldn’t you agree?

Obviously the currency printer benefits instantly either way so it is good that you did not support Belz's assertion that "Printing money doesn't usually make anyone actually richer".

In the many years I’ve been on the forum, Belz has rarely made an assertion that I could support. For the most part he trolls people he doesn’t like with one liners.

ETA It could be argued that depriving people of a share in increased productivity could be seen as a form of theft.

It could, or alternatively, when governments do it, a form of taxation, or some combination of both, which you are aware I have argued in the past.

Clearly, spending printed money always makes someone richer, although maybe Belz was alluding to the idea that printing money doesn’t make society wealthier, much like redefining what a gallon is doesn’t yield more milk.

My point, which I think may deserve its own thread, is that using “inflation” (consumer prices) to gauge the consequences of monetary policy is a fool’s errand, for a couple of reasons. Asset prices play a crucially important role both in wealth and income gaps (and thus consumer spending), and what I alluded to above, which is that even if you have 0% inflation, this would represent stolen (or taxed) productivity gains for any positive rate of production.

As society produces more wealth, prices should, ceteris paribus, decline to the benefit of consumers. If prices remain stable or increase, then some (printers) have stolen or taxed this wealth.

This is the appeal of non-inflationary cryptocurrencies like bitcoin for some, because they recognize the merits of deflation.

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[Belz...]

Only if somebody who prints currency for themself gains nothing from it.

Obviously the currency printer will profit from it - either at the expense of others if production doesn't increase (inflation) or from increased production (if there is a currency shortage).

We're not talking about counterfeit money here. No one's printing money for themselves otherwise.

 

[psionl0]

I am not trying to nitpick, because this is an important point. You used the words “if production doesn’t increase”, which is clearly a contingency that doesn’t exist.

The words “if production doesn’t increase” were a contingency about how a currency printer might profit and not whether a currency printer would profit.

It could, or alternatively, when governments do it, a form of taxation, or some combination of both, which you are aware I have argued in the past.

I'm surprised that you draw a distinction between taxation and theft.

Sure, some taxation is necessary for a government to function and to implement its agreed agenda. In that sense, you could view it as a social contract.

But most taxation is for one purpose only - to make the government as powerful as possible (which requires bucket loads of money). Even worse is spending borrowed money. It shifts the taxation bill onto future generations. So in that sense, the bulk of taxation is indeed theft.

 

[Tippit]

The words “if production doesn’t increase” were a contingency about how a currency printer might profit and not whether a currency printer would profit.

Production doesn’t have any relevancy at all to how a currency printer might profit, is my point. He can simply create money and buy bitcoin. Or a dividend paying-stock. Or a beachfront mansion that was “produced” years ago. I suppose maybe you were trying to say that some future production is required, but even that isn’t true because many valuable things have already been produced. Maybe we’re splitting hairs at this point.

I'm surprised that you draw a distinction between taxation and theft.

Sure, some taxation is necessary for a government to function and to implement its agreed agenda. In that sense, you could view it as a social contract.

But most taxation is for one purpose only - to make the government as powerful as possible (which requires bucket loads of money). Even worse is spending borrowed money. It shifts the taxation bill onto future generations. So in that sense, the bulk of taxation is indeed theft.

I do draw a distinction between taxation and theft, since I am not an anarchist, and my ideal minimalist government would require some minimal funding. But certainly not the potentially unlimited funding provided by the issuance of a corruptible fiat currency.

I agree with you. In the sense that I believe most government spending benefits elite special interests, most taxation is theft.

We also agree that spending borrowed money is problematic.

Where we seem to disagree, is that creating money is a tax, and among the most regressive, unfair, and opaque forms of taxation that exists.

I would also point out that most government debts are monetized, either by their own corresponding central banks, or by foreign central banks in currency swaps... so there is that.


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[lomiller]

That sounds like a security problem with javascript, not bitcoin.

When you create an anonymous environment that incentivize theft the way bitcoin does people are going to find a way around whatever security measure you put in place. CI providers have hired teams of some the best security experts money can buy and they are still loosing this battle, what chance does an average person have of stopping javascript bots.

The client software should enable limits on CPU usage and resources. Or, alternatively it can just be disabled.

How do you propose this work? Do you think bitcoin farmers will enable CPU limits or disable their bots just because you ask nicely?

 

[Tippit]

How do you propose this work? Do you think bitcoin farmers will enable CPU limits or disable their bots just because you ask nicely?

Javascript runs in my browser, which means it’s possible for my browser to govern its usage of my CPU. It may be implausible to stop surreptitious bitcoin mining completely, but it’s certainly a trivial matter to keep it from being problematic.

I don’t dispute that other forms of stolen CPU time/bandwidth such as zombie botnets will increasingly be used to mine digital crypto assets, but this just amounts to whining about bitcoin because its valuable. I was referring to javascript.


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[lomiller]

Javascript runs in my browser, which means it’s possible for my browser to govern its usage of my CPU.

In which case you don't get to use it full speed when doing other things on the internet. Why have a good CPU in the first place if you are just going to throttle and only use a fraction of it's capabilities?

zombie botnets will increasingly be used to mine digital crypto assets,

And force online service providers to scale back their services, and undermine open source software, etc, etc, etc

just amounts to whining about bitcoin because its valuable.

JavaScript creates value, online services create value, open source software creates value, reliable electricity creates value. Sacrificing these for something like bitcoin that creates no value of it's own makes everyone poorer and worse off.

 

[Tippit]

JavaScript creates value, online services create value, open source software creates value, reliable electricity creates value. Sacrificing these for something like bitcoin that creates no value of it's own makes everyone poorer and worse off.

Ridiculous. The aggregate value of bitcoin is over a Trillion dollars. With a 'T'. Clearly, many people, with many dollars value it, for many reasons. Those who have, have been materially rewarded.

You're a socialist, and socialists typically criticize any attempt to decentralize power, in this case monetary power. Don't confuse your personal distaste for the asset with it not having value. While it's true that everyone other than bitcoin holders/users are generally worse off as a result of the expended power, this is merely a reflection of the profound corruption of money itself and the desire for something better.

You hate gold and silver too, even as an ounce of mined gold incurs no future costs other than storage, because it places an absolute limit on the spending of your beloved autocrats in government. You hate bitcoin for the same reason.

 

[Belz...]

Ridiculous. The aggregate value of bitcoin is over a Trillion dollars. With a 'T'. Clearly, many people, with many dollars value it, for many reasons.

Yes, many people also valued Enron and Theranos. The question that's more important is: can cryptos actually make a sustainable positive impact on the economy? Right now it's not the case.

You're a socialist, and socialists typically criticize any attempt to decentralize power, in this case monetary power.

How about you address his actual point rather than what you perceive as his inner thoughts?

 

[TurkeysGhost]

Yes, many people also valued Enron and Theranos. The question that's more important is: can cryptos actually make a sustainable positive impact on the economy? Right now it's not the case.



How about you address his actual point rather than what you perceive as his inner thoughts?

It is kinda fun watching the crypto conmen speedrunning centuries worth of financial scams in the last few years. Lots of money is certainly being made, or at least changing hands.

The bitconnect ponzi scheme was my favorite.

Crypto is the perfect practical example of libertarian principles in action. That is, it's a wildly destructive, idiotic thing that is massively harmful to the natural environment, involves unchecked scamming and thievery, and inevitably involves more child-porn than you'd expect.

 

[Belz...]

It is kinda fun watching the crypto conmen speedrunning centuries worth of financial scams in the last few years. Lots of money is certainly being made, or at least changing hands.

The bitconnect ponzi scheme was my favorite.

Crypto is the perfect practical example of libertarian principles in action. That is, it's a wildly destructive, idiotic thing that is massively harmful to the natural environment, involves unchecked scamming and thievery, and inevitably involves more child-porn than you'd expect.

Hey, I'm happy for those who actually made money off of this rollercoaster. Good for them. I wish I'd got a few when they were 50 cents a pop. But the fact that some people made actual cash out of BTC doesn't mean either that others can cash out on all of their coins, or that BTC can be a viable part of the future economy.

 

[lomiller]

Ridiculous. The aggregate value of bitcoin is over a Trillion dollars. With a 'T'.

Don't try to change the subject. We are discussing the economic value of bitcoin, and it has none. It doesn't facilitate the creation of goods or services in any way.

You're a socialist, and socialists typically criticize any attempt to decentralize power, in this case monetary power. Don't confuse your personal distaste for the asset with it not having value. While it's true that everyone other than bitcoin holders/users are generally worse off as a result of the expended power, this is merely a reflection of the profound corruption of money itself and the desire for something better.

You hate gold and silver too, even as an ounce of mined gold incurs no future costs other than storage, because it places an absolute limit on the spending of your beloved autocrats in government. You hate bitcoin for the same reason.

Nope, but there is already a relatively active thread where we discuss peoples ignorance of what socialism even is.

socialists typically criticize any attempt to decentralize power

Just the opposite in fact. Socialists seek to democratize economic power, though their chosen vehicle isn't the best.

Don't confuse your personal distaste for the asset with it not having value.

My "distaste" for crypto comes entirely from the negative economic effects it creates.

this is merely a reflection of the profound corruption of money itself and the desire for something better.

Now THAT sounds like something a socialist would say, or perhaps more correctly a something a Communist would say. Lennon would be proud.

You hate gold and silver too,

I don't hate silver and even gold has decorative use

because it places an absolute limit on the spending of your beloved autocrats in government.

Would be dictators and aristocrats always claim that democracies are "autocratic". This mainly happens because democracy is a mechanism created to keep them in check.

 

[Belz...]

Lennon would be proud.

So would Lenin.

It's strange that he would call you a socialist when he posts so many anti-bourgeoisie rhetoric.

 

[lomiller]

It is kinda fun watching the crypto conmen speedrunning centuries worth of financial scams in the last few years. Lots of money is certainly being made, or at least changing hands.

The bitconnect ponzi scheme was my favorite.

Crypto is the perfect practical example of libertarian principles in action. That is, it's a wildly destructive, idiotic thing that is massively harmful to the natural environment, involves unchecked scamming and thievery, and inevitably involves more child-porn than you'd expect.

Ironically at it's inception bitcoin was clearly designed by people with radical left wing viewpoints. It was supposed to free people from the power of corporations and the evil banking system.

 

[lomiller]

So would Lenin.

Probabaly but I tend to associate "money is evil" more with Lennon.

Imagine no possessions
I wonder if you can
No need for greed or hunger
A brotherhood of man
Imagine all the people
Sharing all the world

 

[Belz...]

Yeah the lyrics of that song sound great until you give them more than a second of thought.

 

[psionl0]

Ironically at it's inception bitcoin was clearly designed by people with radical left wing viewpoints.

I didn't know that you knew Satoshi Nakamoto personally. When did he discuss his "radical left wing viewpoints" with you?

 

[Belz...]

I didn't know that you knew Satoshi Nakamoto personally.

Well, one can infer someone's objectives without directly asking them, but it's always speculation to a degree. Personally I have no idea what the original idea really was.

 

[psionl0]

Well, one can infer someone's objectives without directly asking them, but it's always speculation to a degree. Personally I have no idea what the original idea really was.

If you were interested in the operation of his mind, you might get a few clues by going to the original post:

...
The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.
....
Posted by Satoshi Nakamoto on February 11, 2009 at 22:27

http://p2pfoundation.ning.com/forum/topics/bitcoin-open-source