How To Use Bitcoin – The Most Important Creation In The History Of Man

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psionl0 said:
The sun rises, the sun sets. There is nothing new or unexpected going on here.
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But it does show what an exceptionally bad currency bitcoin truly is.
The total lack of regulation allows for this.
It's nice for speculators, but imagine if you truly traded whatever commodity you work with for only bitcoins.
One week ago you bought a storehouse full of goods and today its worth a quarter of it's value.
No currency with such volatility is useful.

I personally do not see how any currency can exist without some form of regulation to counteract people's natural tendency to rip each other off. And if it's going to be regulated my choice is a government I at least have *some* say in, rather than a few unelected businessmen.

Clearly a lot of those dumping their bitcoins now agree, or they wouldn't be cashing in their BTC's for dollars or euros.
 
StankApe said:
Isn't economic growth really just a big con though?

Inflation occurs, value goes down, wages rise... so 100 years from now you make $180,00 a year and it has the same buying power that the $35,000 a year you would have made in 2013... so what was the point of all that "growth" when in reality you are only wealthier in dollars but not in purchasing power?
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This could occur, of course, excluding the part about 100 years from now, as we'll assume that almost nobody making $35k a year will be earning an income in 2113.

But wages can and do rise compared to inflation. For example, when workers become more productive (do more in the same amount of time) then their employers can pay them more even absent any inflation. There are several reasons why this can occur; the workers could become better trained. There could be a technological change that makes them more productive. Or there could be a capital investment in new equipment (sometimes public, sometimes private) that makes them more productive; new roads or a new harbor, for example.
 
Brainster said:
This could occur, of course, excluding the part about 100 years from now, as we'll assume that almost nobody making $35k a year will be earning an income in 2113.

But wages can and do rise compared to inflation. For example, when workers become more productive (do more in the same amount of time) then their employers can pay them more even absent any inflation. There are several reasons why this can occur; the workers could become better trained. There could be a technological change that makes them more productive. Or there could be a capital investment in new equipment (sometimes public, sometimes private) that makes them more productive; new roads or a new harbor, for example.
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That really hasn't happened in the US in recent history. Over the past thirty years, all the income gains due to increased productivity have gone to the top and working class wages have been flat. Nothing to do with bitcoins, but I couldn't help point that out.
 
Lukraak_Sisser said:
But it does show what an exceptionally bad currency bitcoin truly is.
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Yes, agreed.

The total lack of regulation allows for this.
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I completely disagree and can't understand how anyone could possibly agree. Look at the millennial long use of metal specie as money - there was no coherent regulation and no such problems. I'm not a goldbug or anything like one, but central regulation is NOT the thing that makes currency value stable.


It's nice for speculators, but imagine if you truly traded whatever commodity you work with for only bitcoins.
One week ago you bought a storehouse full of goods and today its worth a quarter of it's value.
No currency with such volatility is useful.
Click to expand...

Well I've read arguments in several papers that suggest inflation rates of 100%-200% per year can be tolerated w/o currency rejection. Obviously bitcoin is well beyond that at this point.

I personally do not see how any currency can exist without some form of regulation to counteract people's natural tendency to rip each other off. And if it's going to be regulated my choice is a government I at least have *some* say in, rather than a few unelected businessmen.
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Please explain. How does currency regulation prevent a "rip-off" ? What rip-off ? What regulation ? How did gold survive as a currency w/o regulation no anything I would call "rip off" ? "More regulation" is the demand of the unthinking IMO, but please explain your position, convince me, explain your proposed regulations.

Clearly a lot of those dumping their bitcoins now agree, or they wouldn't be cashing in their BTC's for dollars or euros.
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No - they aren't agreeing that more regulation is an answer, they are convinced the risk-adjusted returns of other currencies are better than BC.

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I'm not really up to date w/ the recent BC issues, tho' I've observed it's huge volatility. (it's changed from $86.50 to $75.61 while I've written this post). I've already posted my feelings on why bitcoin is not very good (qty is not flexible).

Still I see no reason at all why a non-governmental currency shouldn't be highly successful.
 
stevea said:
I completely disagree and can't understand how anyone could possibly agree. Look at the millennial long use of metal specie as money - there was no coherent regulation and no such problems.
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But much of human history saw very different economic complexities, no ? I mean, things were a lot simpler back then.
 
Lukraak_Sisser said:
But it does show what an exceptionally bad currency bitcoin truly is.
The total lack of regulation allows for this.It's nice for speculators, but imagine if you truly traded whatever commodity you work with for only bitcoins.
One week ago you bought a storehouse full of goods and today its worth a quarter of it's value.
No currency with such volatility is useful.
Click to expand...
Governments can't regulate the value of currency. Even governments that assume the power to regulate rents and prices or set the international rate of exchange can't achieve this. What they can do is regulate the volume of base money but the amount of money in circulation depends on how much credit the banks create.
 
They can't control the value but they can take steps to prevent the sort of stuff we've seen BTC do these last 48 hours.

Even with MTGox back online, value is currently 65$.
 
psionl0 said:
Governments can't regulate the value of currency. Even governments that assume the power to regulate rents and prices or set the international rate of exchange can't achieve this. What they can do is regulate the volume of base money but the amount of money in circulation depends on how much credit the banks create.
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Governments can control the amount of money that banks create in the aggregate (or at least the maximum amount) by setting minimum reserve rates. The higher the reserve rate, the fewer times base money can cycle through the fractional reserve system.
 
Belz... said:
They can't control the value but they can take steps to prevent the sort of stuff we've seen BTC do these last 48 hours.
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That's more to do with the size of the economy than with any clever government regulation. The M2 money supply exceeds $10T and there is relatively little wild speculation on the value of the USD.

In contrast, the "bitcoin economy" is only worth about $1B. At that scale, it only takes a relatively small number of greedy speculators to send the price of bitcoins all over the place.
 
psionl0 said:
Governments can't regulate the value of currency. Even governments that assume the power to regulate rents and prices or set the international rate of exchange can't achieve this. What they can do is regulate the volume of base money but the amount of money in circulation depends on how much credit the banks create.
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True up to a point in that it doesn't end there. The banks create money upon demand by consumers, but that is regulated by Fed policy. Once that money has been created the bank will then have to borrow it from the Fed at an interest rate set by Fed policy. That is what the Prime Rate actually is, the interest the Fed charges the banks to borrow money.

That's a pretty quick view, but that's the way that money is given value in it's origin by having an interest cost attached to it.
 
psionl0 said:
That's not how it works.
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I will do a search and see if I can find anything to back up my view. What would you consider to be an authoritative source? I don't think wikipedia would do in this case. Although defining a reputable source might be a debate in itself.

ETA: Wow. I'm faced with the realization that I have a relatively simple view of banking. You have given me some reading to do. I can find some support of what I'm talking about with commercial money but I don't think that's what you're talking about.
 
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