The Satoshi Revolution – Chapter 1: What is a Trustless System? (Part 1) Comments Section Below

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    I really enjoyed this piece Wendy. The part about bad money driving out good money hit really close to home. I don’t want to spend crypto because it has more solid Economics backing it, it’s easy to use and transaction the fees are so much cheaper (good money) so I end up hoarding it. Instead I spend fiat because its always end up worth less the day after.

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    People like you restore my faith in humanity. Thank you.

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    Your lucid writing is a delight to read.

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    I am still waiting for an explanation to Bitcoin Cash and the theft of my “Values”.

    Satoshi

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      It is not theft if it is voluntary. What right or claim do you have to the subjective value of others? Yours is the same conceit of the fiat regime to assume that your values are superior to those of others.

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        Yo creé Bitcoin y en él deposité mis pocas esperanzas…Sus monedas las llamé BTCs, y lo hice por algo. BCC, no es Bitcoin, es una tapadera de una conspiración…
        Por desgracia sólo yo lo puede ver y entender y los mismos creadores de BCC..

        Satoshi

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      Hi, Satoshi,
      What do you think about bitcoin gold?
      And deflation?
      Centralisation of mining?
      The scaling problem?
      The rising transaction costs?
      The non-sustainable electricity consumption?
      The ethereum project?
      Other cryptos?
      Is bitcoin money or investment?
      Do you want a world government?

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    Currency (technically money supply) in the US is not Government issued, it’s issued by the Federal reserve and therein lies the crux of the problem. The Fed is a private organisation, the 3rd of it’s kind, the previous two failed. The government cannot afford to let this one fail (or be replaced) as it derives it’s working capital (if you like) from this source. For a new private currency to take the place of the established monopoly you are asking no less than the collapse of the world’s monetary system as the $US is also the world’s reserve currency. I wish it wasn’t so but this setup was concocted initially on Jekyll Island and then reinforced in 1933 and 1971 by Nixon and reinforced again by Nixon and Kissinger with the Petrodollar. If crypto actually succeeds in replacing the discredited and corrupt fiat system the consequences will be nothing short of a nuclear financial bomb detonating.

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      I don’t see fiat dying and have no use at all. I believe fiat will still be in circulation in the future, there will still be some common use for them. But crypto is here to keep tabs on fiat and it’s masters… that’s for sure. Every wrong move by the fiat master will just give crypto a boost in demand and trust.

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      Yes, the consequences to the cartel that runs the scheme now, and their counterparties, will be profound. However, surgery to remove cancer is also painful, traumatic, and perhaps life threatening, but necessary and good in the long run. Fiat is a cancer. A cancer that lives off of the productive class and causes harm to the host. Economics cannot be gamed, only ignored with consequences. The consequences for the fiat inflation of the money supply will come home to roost. Shamefully, it will likely be our children that will pay the piper for our malfeasance and lack of understanding of economics and our lack of courage to act economically.

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      The US Treasury could issue Debt Free Constitutional money as America originally had. Kennedy began this action but was murdered. The Treasury could just begin issuing good debt free money again and eventually everyone would just want to use it putting the Jewish Owned FED out of business. But the Jewish bankers being like the Mafia, nobody wants to go against them as they have a history of just killing people. But it still can be done if enough people wake up and begin to ask themselves what exactly is their money.

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      They are anarchists and hippies, they don’t understand this things and/or they don’t care. These guys would be happy to introduce bitcoin and deflation into the world and turn the whole planet into venezuela. Not to mention that a world money is like to bring a world government, too…

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        Deflation is not a bad word. Deflation, in the context you are using it, means a fall in prices. It is actually a contraction in the money supply, not the consequential fall in prices as you define. This definitional shift is in order to obscure causation so that central bank shenanigans can be justified or explained away. Deflation is the natural and beneficial consequence of market operations. Follow me for a moment:
        All prices are some ratio of the total stock of money. For example, if only $10 were in circulation, all prices would be some proportion of $10. Now if suddenly $20 was in circulation, then prices would eventually rise to be some proportion of $20, however, the actual value has not been changed, only the prices which depend on the ratio of the total stock of money. It is like how adding additional marks to a ruler does not change the length of a thing, only the units of measure of the thing.
        Given a constant money supply, firms must compete for consumers and profit. This competition drives investment into labor and time saving innovations, causing an increase in production, increase in quality, and a decrease in prices in that particular line of production. Supply and demand dictates that there is a general decrease in prices where supply is increased, not to mention the constant downward pressure that competition has on prices. This results in consumers getting goods cheaper and better than before, it increases utility, and increases the purchasing power of the unit of currency, again given a constant money supply.
        This is evidenced in history. The era of the late 19th century was initially thought to be a several decades long recession due to the constant deflation of prices and the reading into these prices by neoclassical economists who misunderstand deflation and its causes. However, most economists and historians now understand that this period was likely the most productive era ever in America, a period of phenomenal economic growth. The deflation noted was the increase in utility, production, and economic activity and the lack of a central bank to coordinate inflation, an increase in the money supply, that would have wicked those productive gains away. So people got more for their dollar, and had more left over for other productive ends, driving the engine of economy even further.
        Today we allow these productive gains to be stolen, well perhaps that is harsh, let us say expropriated, by the inflation of the money supply by our central bank. Under the guise of “managing” the economy, they take purchasing power from the productive economy (all holders of the currency) and give it to those closest to the loci of power, the cronies and fascists. This takes resources from some and redistributes to others who did not receive it by way of voluntary exchange, in other words, it is uneconomic (and immoral if you believe property to be a right) and reduces the increase in utility of the division of labor, impoverishing us all.
        There are other deleterious effects to this also, but let us stay on deflation for the moment.
        If sound money, like BTC or specie, was to again hold sway, this wicking away of the productive gains of the economy would result in falling prices (deflation), a rise in real wages, an overall increase in utility, and would incentivize saving and investment rather than consumption. It is the fallacies of the demand side economists, and their bootstrapped excuses, that have convinced the vast majority that inflation is inevitable and somewhat benign, it is neither. We live in inflationary times, we live in the era of central banks and their inflationary policies.

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          I knew all this, but I understand that you couldnt know that since I had to explain things to someone with a brain of a child.
          Let me ask some questions:
          “would result in falling prices (deflation), a rise in real wages,” Why do you think that wages wouldnt fall, too?
          “Given a constant money supply, firms must compete for consumers and profit. ” Since when they dont have to compete in inflation???
          And the most important factor what you miss is debt. How can you repay the debt from lower wages and turnovers? How could you think that deflation is healthier in THIS economy?

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            Wages (the price of labor) do fall, it is the relative movement wrt other prices that cause the increase in real wages. This is due to the increase in production per worker, or a higher productivity of labor, that serves to increase the supply of goods and services produced relative to the supply of labor that produces them. In this manner, prices relative to wages drop faster, resulting in an increase of real wages and the general standard of living.
            Not really sure what question your asking concerning competition, please rephrase.
            Concerning debt, there are several things at play.
            First, debt denominated in dollars, which would likely be in a hyper inflationary spiral, is more readily be paid off with less valuable dollars. This is the same trick governments want to employ to their favor by borrowing and then paying the debt with numerically identical but less valuable inflated fiat dollars. It belies the fact that intervention dislocates price from values, and all the consequences of that intervention.
            Second, lower wages are true, but relative wages or real wages are increased, by way of the explanation above.
            Deflation will not be painless. There is so much deformation in prices and the structure of the economy due to intervention that many will suffer as the correction occurs. This all must clear the market. There is no question about that. But the end result will be real prices and the possibility of real economic activity and real gains, not gains fueled by speculation and inflationary bubbles, but those fueled by the increase in the utility of the division of labor. This must occur eventually, all bubbles will pop. So if you disparage suffering the consequences now, then your only option is to kick the can down the road and fall from even greater heights later. This is the policy of our rulers now, to their shame they are passing the consequences of our economic malfeasance off onto our children. Disgusting really, it is the tale of the pied piper played out in real life.

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              “…it is the relative movement wrt other prices that cause the increase in real wages. This is due to the increase in production per worker, or a higher productivity of labor…” Sure, but what all this have to do to deflation? It works the same in inflation. If productivity is rising and relative wages are rising, its all good.
              “First, debt denominated in dollars…” Again, I understand all this. My question is what if suddenly we had a deflationary world money and all the debt converted into it? You really want hyperinflation to clean up the mess? REALLY? So are you Keynesian eventually? What I ask from you if you had any better idea…
              “Deflation will not be painless…” You simply underestimate the consequences. It would be a TOTAL collapse. Take Venezuela, make it 10x worse and you’ll start to see what we would have if our money would be as deflationary as bitcoin. (Before you ask: no, I dont think there is deflation in Venezuela. I think there is a POLITICAL problem over there what causes economic “adjustment” as you call it) Again, what i am asking if there is a better solution than the total collapse?
              I am sorry, but you did not answer my questions. Your “adjustments” are well known “solutions”. We call it hyperinflation or deflation or austerity. Depends. But the result is all the same: rich becomes richer, poor becomes poorer. DO YOU HAVE ANY BETTER IDEA THAN THOSE?
              Churchill, at the end of his life was asked about his biggest mistake in his life. He did not say that he tried to negotiate with Hitler and allowing him to kill millions of people, letting him bomb London to ground etc., no. He said it was the deflation he caused when he did not devalued gold after WWI and enforced the prewar price. It seems it took a few decades to him to understand deflation…

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                Yes, the dollar will, in all likelihood, totally collapse. It will cause shocks, panics, and much pain. I do not understate the consequences. However, this is inevitable, as the dollar is insolvent already and has been since Nixon admitted it by breaking the gold link. We are only delaying the inevitable and increasing the height from which we will fall by continuing down this path.

                You are right to be worried about the consequences and fallout. It will cause massive social upheaval. Vast bubbles and industries have formed around a structure that is artificial and coerced into being. So it is supremely important that people, or at least the academics that lead the herd, understand the causation that has led us to this precipice. It is not the market, which is self correcting, but those who seek to manipulate it coercively by inflating the supply of money and protecting this privilege jealously and violently, that have caused us to have to suffer in the first place. I say we face it NOW, and rebuild with sound economics, rather than leave it to our kids to suffer the fate we provided for them. Trying to centrally plan our way out of a centrally planned disaster will result in the exact same outcome as in the past, i.e. the Great Depression and the ongoing Japanese economic malaise.

                What is even scarier than the fall is the solution that will be proffered by the state. They surely wont let this crisis go without benefitting from it. I foresee a global, centralized blockchain currency being their “solution” to the problem they created by inflation in the first place. In this way, all our value will be held hostage in the all seeing, all knowing central authority. It will be a huge blow to liberty and economy. It will enable their intervention in every manner imaginable, and some not yet even imagined. We must resist the centralization of this power at all costs.

                The better solution is to let the market operate freely and to forge institutions, preferably private, that protect property and pursue justice. There are two rationales for this, utility and morality. On utility, there is no question that voluntarism offers more utility than coercion, so the rebuilding that must come will be done so more quickly and efficiently via the market. On morality, if you believe that people have rights, then to violate a right is immoral and ought to be criminal under any “rule of law”, and not the arbitrary and tyrannical alternative “rule of men”.

                The storm is coming friend. It nearly occurred in 2008, but the state doubled down on inflation and regulation in order to continue the blowing of bubbles and protection their cronies at our expense. I cannot make a predictive statement except to say it is a matter of when, not if, the dollar hegemony collapses in a spectacular crash that is the same fate of all fiat currencies. The urge to inflate is irresistible to those who benefit from it. Economics cannot be gamed, simply ignored with consequences.

                Churchill, with all of his good attributes, was obviously convinced that intervention was better than otherwise. He did not have the privilege of reading Mises, before making this statement (Human Action was not published in English until 1947, and I don’t believe he could read German to understand the arguments in the earlier editions). He was beholden to Mr. Robbins and the Oxford types who rejected the rationality of Mises and Hayek for the fallacies of Keynes. He was a man of his times, a planner, a wartime leader coercively directing the economy to meet the ends he and his cabinet and generals chose.

                As an aside, here is a link to a nice article about the ledger that is the blockchain, and the absolute paradigm shift it represents, good stuff:

                https://medium.com/@cryptoe…

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        Yeah, right, because that’s Venezuela’s problem….deflation.

        </sarc>

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          🙂
          No, venezuela has a political problem what caused problems in the economy. What I meant is the result: unemployment, hunger, riots, fighting with the police etc. Deflation would be worse…

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            Bub, you keep talking about deflation as if you have clear evidence of it being so much worse than inflation, as if somehow it occurs all
            by itself, could you please enlighten us all with several examples of catastrophic deflation that was not a result of the prior inflation?

            PS: Just got news that Bitcoin shot to $7200 on the Zimbabwean Exchange
            today….I wonder why?

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              Use some simple logic: when population grows and economy grows, money supply needs to grow too to keep the prices on the same level. This part is really simple.
              “examples of catastrophic deflation that was not a result of the prior inflation” No need to. Whatever the reason of inflation, deflation is not a solution. Again, our money system is far from perfect and I am not protecting it. I just want to see how the deflationary bitcoin system would be better.
              “We did not find solution to deflation in the last 5000 years. If you have one, you will win a Nobel for it.” This is usually the comment I get no answer to…

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                Hayek did win the Nobel for the Austrian Business Cycle Theory that explains the causation of business cycles by way of growing the stock of money and the consequences of that on the structure of the economy.
                Seeing as this knowledge does not support the central banks and their government sponsors plans to take by inflation, it is roundly ignored and chided, even though Hayek, Mises, and Rothbard have the rational and reasonable high ground compared to the Keynesian quacks that currently reign.

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                  Sorry, no keynesians exist. Keynes wrote about monetary ease when debt level was low, but now debt level is high. So, Keynes not a solution.
                  What I was trying to understand how bitcoin hippies imagine the financial world with bitcoin. NO ANSWER WHATSOEVER.
                  So please answer this: if tomorrow bitcoin is declared world money and all debt in fiat is converted to BTC, how could the world survive the insane deflation without everybody going bankrupt?

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                    No Keynes!?! what world are you talking about? The underpinning argument of Keynes is that intervention is necessary and preferred, which is exactly what all the hand waiving and mathification of econ by the neoclassical and other empirical schools are built to justify and support. Name one school of econ in the mainstream that does not assert intervention to be necessary or preferred, besides the Austrians.

                    Now, I will agree with you on the point that Keynes is not a solution.

                    “if tomorrow bitcoin is declared world money”

                    This statement belies part of the problem with your understanding of economics and of money. Money does not need to be “declared” by any authority, but must be accepted by the subjective values of individuals in great enough number to facility a network of exchange. This is the “commonly accepted” attribute of money. No decree is necessary, only the judgment of individuals that the medium is better suited for them, for whatever subjective reason.

                    So your scenario of “declaring BTC world money” is not conceived properly, as dictating people to use BTC, vice any other currency that they would freely choose, imposes some of the same issues with coercion that plague the fiat system today, of course without the fiat inflation of the money supply, but not voluntary none the less.

                    But that issue aside, if a free market in currency was allowed, yes, the current structure of the economy would be significantly changed. To start, the US Treasury/Fed system of fiat inflation would immediately suffer from massive defections of capital and value. Why would anyone stay where they could be pillaged so easily? I certainly wouldn’t, I’d rather my currency be a solid store of value, because I value that end. So the state would have a massive decline in their ability to spend. Central banks, the big banks, and all of their counterparties would sufferer catastrophic losses as the prices could not be sustained by inflating the supply of money. I don’t argue that that wouldn’t be painful and world changing, but it is necessary if you care to act morally and economically. The losses would be due to the actual values of consumers and individuals being respected and not coerced. The liquidation is necessary to remove the deformations caused by intervention and manipulation. It is akin to the pain one experiences when going out into the sun after being in the dark for a time. The “sun” of subjective value would dazzle and confuse one who only knows the “dark” of intervention. But once the economy has adjusted, as one’s eyes eventually adjust to the sun, then one can see much more clearly and make much more sound judgments based on their improved vision. The price mechanism would then be allowed to property function to coordinate economic activity, whereas before price was dislocated from subjective value by intervention.

                    I find that making arguments from a 10,000 ft. perspective, so far removed from first principles, is confusing. It is simply too onerous to try to untangle the long chains of ratiocinations that are used to arrive at the that perspective, to show errors in reasoning. So I urge you to think about first principles, like subjective value, and the methodology used to form economic arguments, then reason forward. In short, your perspective relies on the empirical method, that of amassing economic historical data, and attempting to find patters, which can then be used to make models, which then can be applied to predict the future state of the economy. This methodology is very enticing because it has been so beautifully and successfully employed by the mother of all science, physics. But human beings are not particles or billiard balls. Human beings are individuals and have free will. That said, the historic economic data is not homogenous, but is unique. There is no statistical correlation between unique data, so it is improper to apply statistics and mathematics to the data, so as to make predictive models. What you are essentially saying can be done is that it is possible to predict the future using the data of the past. If this were true, then Hari Seldon is vindicated, and we only need enough data to know all future history. Do you really claim that power, to see the future? I don’t think so. Krugman and Yellen can only venture an entrepreneurial guess and are no more able to predict of the future state of the economy than they can predict my favorite song next year, literally.

                    What is necessary is a differing methodology, one that encompasses the apodictic fact that humans are individuals with free will. This is the method of Mises, and his praxeology, which makes no claim of the ability to predict the future, but does show causation. The consequences of this are to show that intervention reduces utility and violates rights. Mises shows with superior reasoning and argument’s employing the subjective method, that intervention reduces utility from the optimum and necessitates the violation of the right of property. In other words, it is uneconomic and immoral to assert intervention.

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                      You dont get it: I understand the values behind bitcoin. But, as a responsible investor, I like to consider every scenario. While I dont think that bitcoin would be ever world money, I still ask the question: what if?
                      No, i dont think I could predict the future, thats why I ask questions to many people. Not necessarily because I dont know the answer, but it is valuable to know what others think about the same problem.
                      So, what I need is not a philosophy lesson, but an answer.
                      The economy has so many variables, it is really silly to even think that money supply needed to be fixed. Specially, because it has been never fixed before. It would be a very interesting experiment though, however I dont think I would like to be a part of that…
                      While I believe the variable supply is needed, the central bankers have questionable ideas, they work with dodgy numbers, politicians are short-sighted watching the next election etc. Human factor is the problem, and innovations (AI, smart contracts etc.) will solve this eventually.
                      We have pretty extensive experiences about deflation. You are right to say that it is not necessarily a problem on the personal level if the person has no debt. But lets not play the selfish for a moment, I talk about the world economy as a whole.
                      I think your examples of “adjustments” came from the gold age. Yes, during the different gold standards the adjustment was swift and automatic. But those days are long gone, the fiat is very different. Do you have adjustment examples from after 1971? The UK has a 650% TOTAL debt to GDP and you say deflation would be a small adjustment? It would be a total collapse, several times worse than 1929-1933 and it was a gold standard that time and the solution was confiscating peoples gold and devalue it (=inflation).
                      Another very annoying thing about bitcoiners is that they systematicly use the word “bitcoin” instead of “blockchain”. While I am sure blockchain is here to stay and will be part of the solution, personally dont think the same about bitcoin. Good investment, shitty money. No need to worry, Gresham’s law will take care of it. Its velocity confirms that primarily it is not used as money, the digital gold description is much more accurate. I am happy to hold it, would be stupid to spend it, which is, again, the core problem of deflation.
                      So, question is still the same: how could you survive the insane deflation if the debt level is high? How can we achieve growth in a deflationary economy suffering under unpayable debt?

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                    Doc, you take hypotheticals to an insanely absurd, conspiracy-theory level. Try to wrap your head around these facts:
                    1. No one is going to declare bitcoin “world money.”
                    2. No one is going to convert all debit in fiat currencies to BTC.
                    You might as well ask “if tomorrow aliens descend from outer space, immediately vaporize all central banks, and declare human hair to be money, how could the world’s barbers survive?”

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                      Yes, it is a hypothetical question and I would like to have a workable answer to that. As an investor, I like to consider ALL possibilities. Thats all. You wrote no answers to me so far. Not one.

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                        Have you been suffering under the delusion that I’m some kind of Bitcoin authority? I have no answers for you, especially for absurd hypotheticals, doubly so when the question is asked with your insulting manner. As I said to you last week: I’m under no obligation to talk to you at all, you silly person.

                        P.S. As an investor, do you consider the possibility of alien invasion?

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                          “Have you been suffering under the delusion that I’m some kind of Bitcoin authority?” No, you confessed that you have no idea about the basics of economics nor bitcoins future. You dont even know what a currency is.
                          However, I do admire your values. You are great in ridiculing yourself and insulting others.
                          I am always happy to read your replies and just hope some day they will be relevant…

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                            Oh, I suspect that my definition of currency is closer to common usage than yours. But I have always said up front that I am not an economist. You, on the other hand, are the Wikipedia Economist, heaping insult and derision on those who dare to question your Internet-derived pretense of knowledge. I find it amusing.

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                The definition of proof-of-work is the amount of energy for 1.0 unit of coin. If the money’s proof-of-work is constant, the price level will not change. Define inflation as decreasing proof-of-work and deflation as increasing proof-of-work. A typical increase of money volume without the correspondent energy to use will result in inflation. The reason Bitcoin looks like deflation currently is that its price is not correct from financial point of view. If people consider all the halving into the pricing, the proof-of-work is much higher instantly. However, not every one is financial engineering literate, this is an education process in the society and that is why we see a steady deflation of bitcoin and its steady increasing price rather than a sharp response to the correct number like a typical efficient stock market. As long as the price is correct, the proof-of-work would be constant unless some sudden fundamental story happens.

                It is logical to imagine that a miner quit mining for bitcoin and bitcoin becomes inflation (in the above definition) and people find that the purchase power of bitcoin decreases.

                The universe does have a money that never inflates or deflates in 5000 years. The amount of energy to boil a 100 gram water is the same at 5000 years ago and now. Any sound currency or money is simply an accounting system about energy.

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                (“examples of catastrophic deflation that was not a result of the prior
                inflation”) “No need to. Whatever the reason of inflation, deflation is
                not a solution.”

                Again, so difficult to take you seriously.

                Deflation is the natural result of inflation when economies re-adjust, when the inflation balloon can no longer have an effect, consider Japan for the last 22 years.

                As my company fights the slowing demand, my price needs to come down in order to compete, for my price to come down sufficiently i need to both reduce profit and reduce costs, that means wages come down.

                As wages come down there is more pressure on suppliers to reduce their margins to meet the lower market demand.

                You know, its not really that difficult Bub.

                The reason you WONT answer my question about deflation is that you CANT FIND ONE EXAMPLE of truly harmful deflation wiothout the prior inflation that caused it.

                Do us all a favour and stop posting crap you have no idea of nor willingess to learn.

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                  “As my company fights the slowing demand, my price needs to come down in order to compete,” Yes, but your debt service to the bank will not come down, thats why you go bankrupt.
                  “Deflation is the natural result of inflation when economies re-adjust” Sometimes, yes. In other cases, not. Let me not give you a financial history lesson here. The point is, that the debt burden we have no is unpayable, so we have to find a solution. Deflation (deleverage) is the worst of all.
                  It looks like you look at things from your own selfish viewpoint without having properly understood basic definitions and reasons for all this shit we live in. I would like to know how bitcoin would be better after the fiat system fails, but no one can answer. You guys too lazy and stupid even to read ‘deflation’ on wikipedia.

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                    BTC would be better because:

                    -It would inhibit inflation of the money supply.

                    -It would force those who want to gather wealth to do so by way of voluntary exchange satisfying the wants and needs of consumers, rather than by expropriation of purchasing power by way of the printing press.

                    -It would incentivize saving, vice consumption, as the unit of currency would increase in purchasing power over time, resulting in real interest rates and prices, not illusory prices that are a as a result of inflationary policies, aiding in sound economic calculation and a rational delegation of scarce resources.

                    -It would empower consumers over inflators, returning power to people vice concentrating it in banks.

                    -It would enable transparency in valuations and virtually remove fraud due to accounting shenanigans, as the blockchain is visible to all.

                    -It would allow prices and the structure of the economy to find the natural and voluntary levels, not the distorted caricature that is a result of inflation and spending of the inflated into the economy.

                    -It would force the government to actually face the real costs of policies and would force them to pay for things by taxation, instead of by inflation which operates in stealth.

                    -It would immediately increase utility of every exchange, as intermediaries are no longer required to verify trust and fidelity.

                    -It would facilitate micro exchanges and high speed exchanges between autonomous machines, which his the future.

                    -It would remove barriers to accessing financial services, increasing division of labor and the possible degrees of cooperation.

                    I could keep going, and that is not even addressing the real power behind BTC, the blockchain. See here:

                    https://medium.com/@cryptoe…

                    If you knowledge of economics is restricted to things you’ve read on Wikipedia, I’d highly suggest that you read further. There is no replacement for rigor. I would suggest Mises, and the Austrian school of economics, as the system is based on the correct methodology to address economics and its dependence on the subjective.
                    This is a great resource:

                    https://mises.org/

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                      I like you. You are the 1st here who were able to write a relevant answer.
                      While I understand all this, still some question remains:
                      What would happen with the existing debt?
                      How a government could boost the economy? How do you achieve growth in deflation? Specially now, when debt level is nearly unservicable.
                      “It would force those who want to gather wealth to do so by way of voluntary exchange satisfying the wants and needs of consumers…” FORCE???
                      “It would force the government to actually face the real costs of policies and would force them to pay for things by taxation, instead of by inflation which operates in stealth” While it is true, the problem could be simply solved by giving people proper financial education. I kept mentioning wikipedia because he did not seem to know those fact. And still doesnt.
                      And one more thing. Imagine a king and his prosperous country with stable money system. One day an enemy attack his country. Now hes got the choice to run or build an army, buy weapons etc. or simply hire mercenaries (=he needs money). Typical situation when it is not stupidity or crime causes inflation but the need and the changes of circumstances. If he couldnt print money, what could be the solution? Simply raise taxes? Borrow? As far as I understand, whatever he does would trigger the deadly spiral of deflation.
                      I agree with the rest.
                      Since I also invest in bitcoin, your answers would be highly appreciated – if relevant to my questions above.

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                    Ah, I see you have reverted to your trademark charm and wit.

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                    Thanks for that Bub, not sure what ou meant by “yes, but your debt service to the bank will not….”???
                    I spoke of the slowing demand due to an economic recession, not struggling to service debt. Ive never needed to service debt in any of my companies. The two recessions I worked through came directly after government inflation, its not a ‘distorted view’ its just what happened. The great recession the US had was ALSO directly after inflation through easy credit and the prime loans deception.
                    I have tried desperately to explain that the crippling deflation YOU speak of ONLY comes after serious levels of inflation that may have built up over a number of years.
                    You continue to make the claim that deflation is detrimental “Let me not give you a financial history lesson…” What do you think I have been asking you to do? PROVE YOUR claim please, when was there ever a critical deflation that was NOT preceeded by serious inflation?

                    Please dont change that subject, its the reason you continue to slag those on this thread. If you can’t prove your claim then you prove the real threat facing the world is the atempted control of INFLATION, that is, a DELIBERATE lowering of the value of money in the ADVERTISED hope of expanding the economy, but that sir, is the Cool Aid many like you have drunk.

                    The problem much of the world is in today will be solved in the same way the last 600+ fiat currencies ended, in a collapse. But as we are not speaking of Subprime Morgages, nor the Derivative market, nor a Banking crisis, we are way beyond all of that, we are speaking of a Sovereign Debt crisis that is a ticking time bomb.

                    NOTHING will solve this problem, it WILL all collapse. More inflation wont help, deflation will naturally come after the Sovereign debt bubble bursts, thats my claim which I CAN prove historically. But NOTHING WILL solve this problem.

                    Its possible however that some currency, limited in quantity, as a medium of exchange, seen as having discernable value, will need to be there to pick up the pieces. Bitcoin, Silver, Gold, Eth, Ripple, gold backed Yuan? Who knows.

                    I read the deflation article for you, no surpises there, particualry when we realise that 99.99% of all our money today IS debt, whats debt? Its another way of saying I.N.F.L.A.T.I.O.N.

                    I can explain how that works if you really need me to but FIRST, tell me the history of when critical deflation EVER HAPPENED that was not preceeded by INFLATION!

                    I await my lesson.

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                      “when critical deflation EVER HAPPENED that was not preceeded by INFLATION!” Never, as economy is cyclical. Deflation, inflation, deflation… Or you can start with inflation, as you like. Like chicken and egg. Do you need someone to assure you that politicans do a shitty job? Or just need a hug? Get over it.
                      Your confusion is that under the old gold system indeed the economy was able to correct itself as gold was flowing in and out of countries. The fiat system is very different and the corrections are made by central banks and politicians. Who make “mistakes”.
                      “it WILL all collapse” Sure, the question is what happens after that.
                      “some currency, limited in quantity…” You fall for the old propaganda that money is a store of value. Not since 1971. You hate inflation because you fail to understand how fiat money works and fail to know how to preserve your wealth. Fiat is a means of exchange and unit of account, nothing more. If someone so stupid that he holds his wealth in fiat…
                      ” Ive never needed to service debt in any of my companies.” You are an ignorant selfish idiot. Every company and person having any debt will bankrupt in severe deflation. If you lent money, you’ll never get it back. Unemployment rate will go all time high and even if you dont have debt, you will lose your customers. Central bankers do a questionable job, but it makes sense to protect the economy from total collapse. Thats why tax payers pay them.
                      “Bitcoin, Silver, Gold, Eth, Ripple, gold backed Yuan” Sure these will increase in price, but Gresham’s law will take care of them. I have bitcoin and gold as INVESTMENT. Have you checked the ‘bitcoin velocity chart’?The money or investment debate is over. What I want to know is what kind of MONEY systems we could have after the fall of fiat?
                      And yes, so far the only solution to deflation is inflation. From 1929-1933 the US had sever deflation. Solution? Confiscating gold and devalue it = inflation. Give me ANY better solution and you will get a Nobel.

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                        Thanks for all that bub, you avoided confirming your answer yet again, we all know of the cycles bub, this is not new and cycles are certainly not what we are talking about now is it? You speak of the great danger of deflation as if the dangerous version happens all on its own, you are the one who brings it up in every post you make as your great argument, but when we ask you to prove your premise, you wave your hand and direct us all to that wonderful super intelectual resourse called Wiki. You are a fraud sir and each time you respond you confirm it.

                        But worse than that, I am a little worried about you.

                        I tell you I never had debt in a company, you call me an ‘ignorant selfish idiot’ wow, what can I say to the insanity of that responce and how it even relates? Tell me,are you having converstions with yourself? Are you reading what is being written? or are your translating it into your own galactic note of relevant absurdity?
                        You take my words, turn them inside out so you can find a way to argue against them, then argue against that which you have just created in your own mind.

                        I have never seen that before, that is incredible and I must hand it to you as you manage to do all of that while still being able to hit the right keys on your keyboard to make some sort of coherant speach. If you are actually human, I really do fear for you. But seeing you claim to be ‘not of this world’, I have some comfort.

                        However you have just confirmed to all this community that S.E.T.I. needs to change their acrostic to simply S.E.T. Best we stop wasting government currency looking for the ‘I’ out there.
                        Thanks for you ‘input’ bub….its been quite a…a… revelation.

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                          No relevant answer, only insults. It tells it all about you.

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                            “No relevant answer, only insults. It tells it all about you.”

                            This from the man who calls us “lazy and stupid,” calls Wendy “scam” and an “idiot,” and has yet to answer my question about why deflation is automatically and inherently bad. (And no, “go read Wikipedia” is not an answer.)

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                              LOL
                              this is from a man who took the effort to explain it to you and you failed to understand, because you are too lazy and stupid and full of BS
                              and when someone spreads propaganda, obvious lies and clearly not even understand what she’s writing about, then she’s a scam.
                              remember, you and wendy all failed to answer any of my questions.

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                So why do prices need to keep on the same level? If the economy grows and the money supply remains fixed, prices will tend to fall. As long as the money is sufficiently divisible, why is this a problem? Why does deflation need a solution?

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                  Read deflation on wikipedia. Then read it again.
                  During the gold years (3-400 years ago and backwards), debt was not as huge as now. Nobody had a mortgage or credit card. Big companies did not existed, you bought local products only. So, deflation wasnt a big problem. Economy corrected itself or the emperor started a war (inflation). Now, with this debt level, the results of 50% falling prices/year are unimaginable. Unemployment could hit double than in 1933 easily. And bitcoin could cause 90% fall in prices (and wages) /year or more. We dont want to go there.
                  Erasing debt in the Fight Club way would have the same result. People would lose their pension, all their investments, total economic collapse and possible hunger riots and wars. We dont want to go there.
                  I can think of ways to make bitcoin inflationary even without removing the 21m cap, but that could possibly include some kind of world government and maybe a 0.01% tax on bitcoin holdings at every block mined. So, we dont want to go there either.
                  The traditional way to get rid of debt is inflation or hyper inflation (weimar germany). It takes its toll, but works and after that it is a fresh start. I expect rising inflation in the next years because we cant have deflation, simply because that would be MUCH worse.
                  Any better idea?

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                    So your arguments seem to boil down to
                    (a) we have too much debt to endure a widespread deflation, and
                    (b) we need periodic inflation cycles to wipe out debt (“fresh start”).

                    Re. (a), all of that massive debt is denominated in dollars (or euros or pounds or whatever), and a deflation in a different currency will not put a sudden burden on those debt-holders. No one is arguing that bitcoin is going to make the U.S. dollar deflationary. Those incurring debts in bitcoin will do so knowing that it’s a deflationary currency, and will plan accordingly.

                    Re. (b), you seem to be arguing that periodic widespread debt default is a necessary feature of an economy. I disagree. Indeed, I’d say that incurring a debt with the expectation that at some future time it will be wiped out and you won’t have to pay it, is fraudulent. I may be old-fashioned, but I think people who incur debts should pay them back.

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                      “(a) we have too much debt to endure a widespread deflation” Thats correct.
                      “(b) we need periodic inflation cycles to wipe out debt” I did not say it was necessary. I said that is the usual solution. You know any better?
                      “deflation in a different currency will not put a sudden burden on those debt-holders.” Correct. But we talking about bitcoin as world money. And when it is officially world money than all the debt and investments will be converted to BTC. Then we would have deflation and every entities (governments, companies, private persons) with any kind of debt are like to bankrupt.
                      “No one is arguing that bitcoin is going to make the U.S. dollar deflationary. You are very confused. BTC will not make USD deflationary. As far as central bankers concerned, they will do anything to keep all fiat inflationary. Literally: ANYTHING. Even starting a war is on the table.
                      “I may be old-fashioned, but I think people who incur debts should pay them back.” I 100% agree.
                      I wrote down how the system works now and what the options are. I am open to any better idea. I just dont see how bitcoin would give us any solution as it is today. The 2 main problems are deflation and Gresham’s law. For these reasons bitcoin is already behaving as investment not money.

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fintechcryptocurrencymining

Financial Technological Networker , developing Crypto Currency Mining enthusiast , here in an African Continent !! A participant in various FinTech Platforms Local and Globally !!

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