Bitcoins - digital currency
Bitcoin is a peer-to-peer digital currency. Peer-to-peer (P2P) means that there is no central authority to issue new money or keep track of transactions. Instead, these tasks are managed collectively by the nodes of the network. Advantages:
- Bitcoins can be sent easily through the Internet, without having to trust middlemen.
- Transactions are designed to be computationally prohibitive to reverse.
- Be safe from instability caused by fractional reserve banking and central banks. The limited inflation of the Bitcoin system’s money supply is distributed evenly (by CPU power) throughout the network, not monopolized by banks.
Total size 5,811,700 BTC
or 4,585,431 USD
or 3,545,137 EUR
or 133,094,323 RUB
or 3,849 ounces of gold
Any value to this idea or will it never work?
If all someone does is ask questions while providing no answers, are they even asking questions to begin with?
Asking for a thread.
Its a very big deal if I'm correct.
If we were to peg our money systems to something, what quality does it need?
Like if we were to peg to gold, what is the quality that makes gold better than silver for this?
I would like to point at that quality in a thing.
You need it so that the cost to produce it fluctuates with the intensity of demand otherwise bestowing the thing with the property of being the basis for our money systems will mine it into oblivion.
NOOOOOOOOOO!!!!!! It DOESN'T CHANGE. Its cost invariant.
Someone else try to argue me.
Nash said we need a cost invariant commodity based money. The cost to mine a bitcoin is invariant. It NEVER CHANGES.
If I am correct then bitcoin is an ideal basis for nash's proposal.
I already proved your statement incorrect... you obviously know nothing about running a business and cost basis.
Yes that you. BGP presented the total cost in USD to mine a bitcoin, if i understand correctly. And that didn't include anything about the mining power or miners. So you couldn't show that when the miner efforts increase, so does the total cost to mine a bitcoin.
Its invariant.
This series of words are completely gibberish and having NOTHING to do with the difficulty adjustment the Bitcoin network goes thru to control hashrate and block timing.
I said if you peg all the money systems in the world to bitcoin, the incredible demand for bitcoin will create an influx of mining, and the increase in mining power will mine all the bitcoin well before the supply schedule. Thats why it doesn't work for nash's proposal.
If we were to peg our CURRENCY system (NOT SYSTEMS) to something, what quality does it need?
Like if we were to peg to gold, what is the quality that makes gold better than silver for this?
I would like to point at that quality in a thing.
I corrected your sentences and made them more appropriate...
If you are speaking of what properties are necessary for something to be used as a backing asset for a currency, I can answer that for you.
Firstly, the asset needs to be widely accepted as a store of value... if it's sea shells and everyone, including sovereign nations, thinks sea shells are valuable... then it is sea shells.
Second, the asset needs to be limited or rare... this is important so that not everyone can go around and pick up 'money' off the beach because that dilutes value.
Third, in modern times this asset needs to be as transportable have the ability to settle as fast as possible... instantaneously if possible.
Fourth, the asset needs to be... FUNGIBLE.
Sea shells do not meet the criteria... gold doesn't meet the criteria... guess what does.
I said if you peg all the money systems in the world to bitcoin, the incredible demand for bitcoin will create an influx of mining, and the increase in mining power will mine all the bitcoin well before the supply schedule.
That is idiotic... that is why there is a difficulty adjustment even if there are no block rewards.
EVEN WHEN all the bitcoin were mined in another hundred years, the network will still function and produce blocks because the miners are still being paid usage/transaction fees.
I corrected your sentences and made them more appropriate...
If you are speaking of what properties are necessary for something to be used as a backing asset for a currency, I can answer that for you.
Firstly, the asset needs to be widely accepted as a store of value... if it's sea shells and everyone, including sovereign nations, thinks sea shells are valuable... then it is sea shells.
Second, the asset needs to be limited or rare... this is important so that not everyone can go around and pick
No economist in the world will agree with you that backing to a finite object thus creating a finite fiat is ideal. It makes no sense to anyone.
That is idiotic... that is why there is a difficulty adjustment even if there are no block rewards.
EVEN WHEN all the bitcoin were mined in another hundred years, the network will still function and produce blocks because the miners are still being paid usage/transaction fees.
You missed what I said. I'm asking you to drop your pre-concieved notions for a moment and put on a lens I give you...
I want you to think about about the relationship between a commodity produced and the cost to produce it with regard to the consideration of a standard for backing a money...
making the thing the standard puts an economic pressure on its production based on the demand created.
if you don't have a throttle on its production via its cost YOU WILL OVER PRODUCE IT WHICH DEFEATS ITS PURPOSE AS A STANDARD!!!!!
It needs cost invariance.
That is idiotic... that is why there is a difficulty adjustment even if there are no block rewards.
EVEN WHEN all the bitcoin were mined in another hundred years, the network will still function and produce blocks because the miners are still being paid usage/transaction fees.
This was an important distinction I forgot...its to be pegged to the cost to produce blocks etc. So you need that cost to be protected/adjusted against the demand a bitcoin standard, the kind that would be like the gold standard, would imply.
Then we could do the thing...
don't ban me; I'm not crazy
So me and Nash have been talking (like philosophers do in theory), independent of this bitcoin craze, and we want to ask WHICH commodities would be a most suitable basis for a global standard for money (ie like the classical gold standard type). Nash says something MSChu alluded to:
[QUOTE=Nash]..., gold has been historically optimal and that largely because the labor cost of moving it over great distances is so small in relation to the value of what is transported.[/QUOTE]
And then considering platinum in the same context:
[QUOTE=Nash]But right now platinum would be even better than gold because of having more value per unit of weight.[/QUOTE]
Or consider oil as the commodity or component of an index:
Crude petroleum could also be used for barter transactions, and in relation to the present state of the global economy it would seem a proper component of an index of prices of internationally traded commodities that enter into the costs of industrial consumption.
There is a weakness to understand tho when it comes to the cost to produce:
[QUOTE=Nash] But nowadays few would propose a return to the actual use simply of the metal gold as a standard. Several factors can be mentioned: (1) The cost of mining gold effectively does depend on the technology. Recent cyanide leaching techniques have made it again possible to profitably mine gold at formerly abandoned sites in the USA so that the USA is now a big producer. But the unpredictability of the cost is a negative factor. [/QUOTE]
This was an important distinction I forgot...its to be pegged to the cost to produce blocks etc. So you need that cost to be protected/adjusted against the demand a bitcoin standard, the kind that would be like the gold standard, would imply.
Then we could do the thing...
John Nash didn't even say these things.
You are just making up you're own quotes, and posting them on a dead guys photo using Imgur.
I miss Toothsayer
I stand corrected.
No economist in the world will agree with you that backing to a finite object thus creating a finite fiat is ideal. It makes no sense to anyone.
You've once again failed the to comprehend the notion of 'backing' currency.
Are you familiar with the Brentton woods ageement?
No economist would agree a fixed currency system is desirable, that part is way to obvious.... captain. Being backed by an asset DOES NOT mean that the currency is always a 1 to 1 peg... that is idiocy and the fact you assume that shows you don't have an understanding of the monetary system.
I want you to think about about the relationship between a commodity produced and the cost to produce it with regard to the consideration of a standard for backing a money...
making the thing the standard puts an economic pressure on its production based on the demand created.
That ANOTHER non sequitur... really, you need to stop, it's just embarrassing.
A backing commodity that is allowed to fluctuate is the main issue with the previous 'gold standard' backing asset. As it pertains to Bitcoin, the 'production' is inflationary, as it is with any other commodity that isn't perishable but it is also extremely reliable and precisely controlled.
The backing asset needs to be fixed, or relatively fixed, and CURRENCY is the mechanism that allowed to inflate and deflate in proportion. The asset then becomes a hedge.
There are already currency mechanisms in place, such as the reverse repo market and the federal reserve monetary issuance that provides the liquidity for the economy.
Without a backing asset, the inflation rate can run away unchecked, as we have under the guidance of most of the democratic administrations, and the People don't have any way to avoid what is essentially an extreme form of TAXATION.
You've once again failed the to comprehend the notion of 'backing' currency.
Are you familiar with the Brentton woods ageement?
No economist would agree a fixed currency system is desirable, that part is way to obvious captain. Being backed by an asset DOES NOT mean that the currency is always a 1 to 1 peg... that is idiocy and the fact you assume that shows you don't have an understanding of the monetary system.
I didn't make the mistake you are pointing out.
So we understand that pegging to bitcoin is an elastic duty.
But wouldn't pegging to bitcoin cause the production rate of blocks to spike like as if we pegged to gold and the production of gold mining ramped up?
