You mean like gold bug Randroid Alan Greenspan? Macro-inflation hasn't been lower in most core nations since, well, the last Great Depression you gold bugs caused.
Economically something is worth what some one is willing to pay for it. You've lost troll. First you were ranting about fiat currencies and commodities being safer, now you are engaged in some squishy sentimentalism. Over time old commodities tend to become less valuable, and they do not make a long term store of value any better than any other. Investors should own a diversified mix of assets, but gold buggery is a sickness the cure for which is known.
And is a great deal less valuable that in its hey day of the 19th century. The risk on holding any commodity is that there will either be a substitute, as with whale oil – I hear this electric light bulb thing could catch on any day now – or that there will be an improved process or discovery, as with aluminum the Bayer process and the power generation making aluminum much less expensive.
Commodities go through short booms, and long busts, they are hardly the risk free alternative to currency.
Your confusing a short term bubble in commodities with the long term, which is a relentless decrease in the number of hours of work to acquire a unit of raw materials. The exceptions are few in number, oil being the poster child. During the Great Commodities depression, the situation was reversed: nations needed to sell commodities to get access to capital and oil. Historically speaking, commodities are ground downwards, with a few exceptions, almost always where there are few enough suppliers to form a cartel.
Right, the US is totally worthless. A currency is backed by the economy it allows you access to. And no, the US dollar does not fluctuate on the scale of bitcoin, which has 70% down days.
The inflation savings mismatch isn't definitional to a currency, it is the inevitable result of the neo-liberal paradox.
Store of value and medium of exchange are seen as antagonistic in the micro- sense, but are in fact related in the macro- sense. A currency that can store no value won't be taken, and one that won't be taken stores no value.
That's true only so long as we are all immortal, indestructible rational economic trolls born at exactly the same moment who can never borrow or lend. These are conditions that do not exist any place in the visible universe that we know of.
No, that's not true, the intrinsic value of the currency is the value of the economy it allows access to. Much like a language, its value is what information it allows you to send and receive.
I like to think of it as a small economic experiment in why the perversion of gold buggery is doomed. It fails to take into account the relationship between store of value and medium of exchange. People who have currency want it to be a perfect store of value, but if it is, that is if past discounting is negative, the economy freezes over and there is nothing to exchange for, at which point the currency loses all value. The essential problem with bitcoin is it is made by people who wanted in on sieniorage but are not offering access to a market.
No it's that those not in the game's contributions have been discounted very heavily. It's a rental currency only there's no information entropy other than when people got into the game.
For a currency to work long term, there has to be past discounting, but we live in a society that is at the end of a technical and structural curve, it is so invested in the past, that the future is basically being declared useless. This aesthetic preference for being in first is reflected everywhere.
The usual way this ends is with a largish series of wars, where old capital is destroyed and old obligations nullified or inflated out of existence.
Once upon a time before the great Greenspan/Bernanke devaluation, people would take dollars around the world. But that was back under the Democracy, many young people can't remember living under it.
The irony is that when adopted, the classical international gold standard was an inflationary move, because bad gold coinage had driven out silver, and silver was being hoarded
The goal of a currency is to neutralize forward expectations. People, on net, should neither be moving purchases up to avoid macro-inflation, or holding them off to take advantage of macro-deflation. When a general expectation of either sets in, it becomes a spiral. Engineering is filled with people who think that dollars should be like inches, and never vary, which is why it is particularly prone to deflationism.
No because the bit coins have no utility unless you can get a loan against them, unlike the computer, they aren't capital stock, they are currency. And a poor one, since one can't buy much with them, and there is intense future discounting.
Arms race. The value of a computer is not the raw processing power, but its output relative to competitors and the rent of porting existing applications and data away from it.
is defined when an increase in price leads to a decrease in supply. Since many of the people who have BTC paid little or nothing for them, they have no reason to cash in until there is a rapid decline in value, which leads to one of the periodic BTC crashes. Since the desire for hard money is like the desire for any other form of perversion, it will keep coming back, booming in value until all the limited money perverts are stocked up, and then will be bleed dry by the echo system of people who, in their turn, prey up a moderate bandwidth of suckers. It's very similar to the market for Ponzi schemes: there is at any time a finite number of suckers, and every so often a Ponzi scheme offering claimed safe above market returns burns through a well connected group of them.
In the end BTC is like on line poker, it's fun to watch, and maybe even to play, but there is no value creation going on on the bottom of the market.
The question assumes a teleological fallacy, a better question is whether because of the nature of the lattice, certain kinds of direct observables interfere with what they are meant to observe. This happens with many circumstances in physics, where direct observation of a system alters the system sufficiently to erase what is being looked for, e.g. interference of waves.
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You mean like gold bug Randroid Alan Greenspan? Macro-inflation hasn't been lower in most core nations since, well, the last Great Depression you gold bugs caused.
It's called modernity.
Commodities go through short booms, and long busts, they are hardly the risk free alternative to currency.
Your confusing a short term bubble in commodities with the long term, which is a relentless decrease in the number of hours of work to acquire a unit of raw materials. The exceptions are few in number, oil being the poster child. During the Great Commodities depression, the situation was reversed: nations needed to sell commodities to get access to capital and oil. Historically speaking, commodities are ground downwards, with a few exceptions, almost always where there are few enough suppliers to form a cartel.
Wrong again.
Other way around. The more BTC are worth, the more people will hoard.
Once upon a time Aluminum was more valuable than gold. Too bad about the Bayer Process, better luck next sentient life form, may they will be dumber.
How's that whale oil investment working out for you?
This is closer to the truth than you would like to think. Only in the case of the US it was tax cuts, wars, and the housing bubble.
The inflation savings mismatch isn't definitional to a currency, it is the inevitable result of the neo-liberal paradox.
Store of value and medium of exchange are seen as antagonistic in the micro- sense, but are in fact related in the macro- sense. A currency that can store no value won't be taken, and one that won't be taken stores no value.
That's true only so long as we are all immortal, indestructible rational economic trolls born at exactly the same moment who can never borrow or lend. These are conditions that do not exist any place in the visible universe that we know of.
No, your comment is nonsense. The problem with deflation is that those not holding currency should not rationally participate.
We're done here.
No, that's not true, the intrinsic value of the currency is the value of the economy it allows access to. Much like a language, its value is what information it allows you to send and receive.
I like to think of it as a small economic experiment in why the perversion of gold buggery is doomed. It fails to take into account the relationship between store of value and medium of exchange. People who have currency want it to be a perfect store of value, but if it is, that is if past discounting is negative, the economy freezes over and there is nothing to exchange for, at which point the currency loses all value. The essential problem with bitcoin is it is made by people who wanted in on sieniorage but are not offering access to a market.
For a currency to work long term, there has to be past discounting, but we live in a society that is at the end of a technical and structural curve, it is so invested in the past, that the future is basically being declared useless. This aesthetic preference for being in first is reflected everywhere.
The usual way this ends is with a largish series of wars, where old capital is destroyed and old obligations nullified or inflated out of existence.
Once upon a time before the great Greenspan/Bernanke devaluation, people would take dollars around the world. But that was back under the Democracy, many young people can't remember living under it.
The irony is that when adopted, the classical international gold standard was an inflationary move, because bad gold coinage had driven out silver, and silver was being hoarded
But you can do what health insurance companies, banks, and patents do: bribe some legislators to force people to buy your crappy product.
The goal of a currency is to neutralize forward expectations. People, on net, should neither be moving purchases up to avoid macro-inflation, or holding them off to take advantage of macro-deflation. When a general expectation of either sets in, it becomes a spiral. Engineering is filled with people who think that dollars should be like inches, and never vary, which is why it is particularly prone to deflationism.
No because the bit coins have no utility unless you can get a loan against them, unlike the computer, they aren't capital stock, they are currency. And a poor one, since one can't buy much with them, and there is intense future discounting.
Arms race. The value of a computer is not the raw processing power, but its output relative to competitors and the rent of porting existing applications and data away from it.
In the end BTC is like on line poker, it's fun to watch, and maybe even to play, but there is no value creation going on on the bottom of the market.
The question assumes a teleological fallacy, a better question is whether because of the nature of the lattice, certain kinds of direct observables interfere with what they are meant to observe. This happens with many circumstances in physics, where direct observation of a system alters the system sufficiently to erase what is being looked for, e.g. interference of waves.