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Carantoc said..

Hell, it is even called a "crypto-currency", as in "not an actual currency"

I assumed the crypto was short for cryptography. It was a bit cheeky to grab that name because we've all (unbeknowingly) been using the same/closely-related "Public key/private key" crypto wizardry since we first started transferring money with the plastic card. It's based on the Diffie-Hellman key exchange published by those two mathematicians in 1976. The British signals intelligence agency was messing around with the idea in 1969. SHA256 has been around since 2001. Dynamically linked lists (aka blockchain) were probably used by anyone programming a Commodore 64 way back then as well. Nothing in it is new. It's all in the packaging.

en.wikipedia.org/wiki/Diffie%E2%80%93Hellman_key_exchange

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Carantoc said..

Ian K said..
I've figured it out. You buy one of these.
miningstore.com.au/product/antminer-s19-pro/

Sorry mate, but you are wrong (kinda).

That will not make you money on bitcoin.

That will only make you bitcoins.

The only way to make money on bitcoin is to sell it to somebody for more than you paid for it.

And the only use for bitcoin is selling it to people for more than you paid for it.




Kinda interesting none of the bitcoin-disciples have objected to this thread's premise that bitcoin does not equal money, but that one must exchange bitcoin for something else for it to then be considered money.

I guess everyone has accepted that bitcoin isn't money...

Fiat goes down in value because it has an unlimited supply, and more and more of it is being printed. The people that make it try to make it at a rate that keeps inflation in a certain band, between 2 and 3 percent.

Bitcoin goes up in value because more and more people are using it (saving money is using money) and there is less and less of it being made.

So yes, one of its many uses is that you can sell it to someone else, or spend it, for more in the future.

This is by design.

This is what makes it a VERY strong currency.

I am very confident my saving account will be worth more in the future. Remember when people actually saved money, because it was worth something? That's the idea.

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Ian K said..

I assumed the crypto was short for cryptography. It was a bit cheeky to grab that name because we've all (unbeknowingly) been using the same/closely-related "Public key/private key" crypto wizardry since we first started transferring money with the plastic card. It's based on the Diffie-Hellman key exchange published by those two mathematicians in 1976. The British signals intelligence agency was messing around with the idea in 1969. SHA256 has been around since 2001. Dynamically linked lists (aka blockchain) were probably used by anyone programming a Commodore 64 way back then as well. Nothing in it is new. It's all in the packaging.

en.wikipedia.org/wiki/Diffie%E2%80%93Hellman_key_exchange

Bitcoin and blockchain were invented 14 years ago using inventions that you mentioned. Blockchain, is related to linked lists, but bitcoin could never function on a linked list structure.

^^Panda

But those things works in the exact opposite way as well.

If the amount of money is fixed, but we live in a world with an increasing population, increasing economy and increasing "total value" then a fixed bitcoin becomes unusable with that growth.

If there is 100 bitcoin in a society of 100 people 1 bitcoin has a value of 1/100 of the total worth of that society.

If that society then productively increases to 1,000 people with 1,000 houses and a 1,000 cars but there is still only 100 bitcoin then 1 bitcoin becomes equivalent to 10 times more value.

Without the ability to create more bitcoins eventually the smallest transactable bitcoin currency becomes 25 times the average annual salary and it has no ability to be useful.



Society and the economy needs the ability to transact money and currency at reasonable units. You can't buy food for a day if the smallest currency denomination is equal to an annual salary.

The ability to print more fiat currency is required to match the growth of the economy. And by printing more than the natural growth is, and thus devaluing it in real terms, it encourages the economy to be productive industry and not just service industry.

If the entire economy moved to a fixed money model then there becomes no incentive to be productive and everything just gets encouraged to do nothing but rely on time ticking over.

By having a centralized control adjusting things to 2 to 3% inflation you get the balance between production and saving. Is 2 to 3% the right balance ? Are those in control the right individuals ? No idea, but seems to work not too bad most of the time for most people. Not perfect for sure.

The only things worse than an economy printing more currency would be a) an economy not printing more currency and b) an economy deleting currency.

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Carantoc said..

Ummm, you sure you got that the right way round ?

You are saying bitcoin is currency but it isn't money ??

I assume you mean the opposite, that bitcoin is money but not a currency.

Hell, it is even called a "crypto-currency", as in "not an actual currency"


#Except that it isn't money either.



www.wallstreetmojo.com/money-vs-currency/#:~:text=The%20major%20difference%20between%20Money,and%20smell%20and%20its%20tangible.

No, I said bitcoin is a currency, it's also a commodity. Gold is a currency and a commodity also. I couldn't read your chart but I don't think bitcoin or gold is money.

Some people believe that their faith in God# is a commodity.

It has genuine worth and value to them and that faith can be transacted to others if they preach hard enough.


So I do get how some people might consider bitcoin to be a commodity or a currency.



(#or Allah or Buddha or Kistna or Huey or even the venerable Saint Carantoc or whoever you chose to self-identify your spiritual being as)

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Carantoc said..
Some people believe that their faith in God# is a commodity.

It has genuine worth and value to them and that faith can be transacted to others if they preach hard enough.


So I do get how some people might consider bitcoin to be a commodity or a currency.



(#or Allah or Buddha or Kistna or Huey or even the venerable Saint Carantoc or whoever you chose to self-identify your spiritual being as)

I've got an idea.... read the Wikipedia reference to bitcoin.

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myscreenname said..

Blockchain, is related to linked lists, but bitcoin could never function on a linked list structure.

You might as well claim that Bitcoin is not a pyramid scheme.

Of course it's a linked list. The first field in each data record is the hash of the previous record. Less the fields containing the pointers to the memory location of the next or previous block of course. You don't want to include the memory pointers on the hash, because they will depend in the particular machine that the blockchain is downloaded to.

There's a lot of "is it just a linked list" discussion on the web. It depends on which side of the fence you're sitting on. Any computer programmer will assure you that that's all it is.

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Ian K said..

You might as well claim that Bitcoin is not a pyramid scheme.

Of course it's a linked list. The first field in the each data record is the hash of the previous record. Less the fields containing the pointers to the memory location of the next or previous block of course. You don't want to include the memory pointers on the hash, because they will depend in the particular machine that the blockchain is downloaded to.

There's a lot of "is it just a linked list" discussion on the web. It depends on which side of the fence you're sitting on. Any computer programmer will assure you that that's all it is.

No Ian, Bitcoin couldn't possibly work on a linked list system. Here's why:




Two different things, Ian. You are wrong. There are all sorts of idiotic discussions on the web, doesn't mean they are right.

You are WRONG Ian.

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evlPanda said..
Bitcoin goes up in value because more and more people are using it (saving money is using money) and there is less and less of it being made.

So yes, one of its many uses is that you can sell it to someone else, or spend it, for more in the future.

This is by design.

This is what makes it a VERY strong currency.

I am very confident my saving account will be worth more in the future. Remember when people actually saved money, because it was worth something? That's the idea.

Except there are new crypto's coming along all the time for people to put their money into instead of Bitcoin. That must dilute the pool and also presents a risk that if something much better comes along, then Bitcoin could be abandoned en masse and crash.

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myscreenname said..

You are WRONG Ian.

Put it down to semantics then. Whatever you call it Bitcoin has made its linked list impossible to tamper with by including cryptography and the "Proof of work" needed to assemble a block in the block itself.

I've been looking hard to see if there is anything in this "Blockchain technology" that is actually new. Maybe it's the "Proof of work" I thought, that's pretty clever. No I find even that's an old idea

en.wikipedia.org/wiki/Proof_of_work
"The concept was invented by Cynthia Dwork and Moni Naor in 1993 as a way to deter denial-of-service attacks and other service abuses such as spam on a network by requiring some work from a service requester, usually meaning processing time by a computer."

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Ian K said..

Put it down to semantics then. Whatever you call it Bitcoin has made its linked list impossible to tamper with by including cryptography and the "Proof of work" needed to assemble a block in the block itself.

I've been looking hard to see if there is anything in this "Blockchain technology" that is actually new. Maybe it's the "Proof of work" I thought, that's pretty clever. No I find even that's an old idea

en.wikipedia.org/wiki/Proof_of_work
"The concept was invented by Cynthia Dwork and Moni Naor in 1993 as a way to deter denial-of-service attacks and other service abuses such as spam on a network by requiring some work from a service requester, usually meaning processing time by a computer."

No Ian, the simple fact is that Bitcoin and blockchain was invented 14 years ago.

Look it up.

On a side note, I was reading up on Hal Finney, an early Bitcoin user who received the first bitcoin transaction from Bitcoin's creator Satoshi Nakamoto.

His life came to a premature and tragic end.

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myscreenname said..

No Ian, the simple fact is that Bitcoin and blockchain was invented 14 years ago.

Look it up.

If you suggest I look it up I will. Blockchain was 31 years ago.
academy.binance.com/en/articles/history-of-blockchain

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Carantoc said..
Without the ability to create more bitcoins eventually the smallest transactable bitcoin currency becomes 25 times the average annual salary and it has no ability to be useful.

1 bitcoin is divisible into 100,000,000 sats.

Layer 2/The Lightning Network sees it divided even further (in anticipation of streaming money).

Some people theorise abstract numbers, like 1 bitcoin, can be infinitely divided!

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The ability to print more fiat currency is required to match the growth of the economy. And by printing more than the natural growth is, and thus devaluing it in real terms, it encourages the economy to be productive industry and not just service industry.

It is not required to match any growth, any more than the air going over the top of a wing is required to meet the air it separated with, and is going under the wing. (it doesn't)

This is dogma. Repeat after me "we need to encourage people to spend, now, while the money is worth more."

What happens in actual practise is: People with assets get cheap debt and buy more assets which go up in value because money is constantly inflating. Those with assets (not money) get more assets. Those with just money, get less.

The entire "buy now" is wrong too: Generation A is able to buy an asset, such as a house, at n% of their salary. Even just n% of just one salary. They were smart, and bought early. These are the original investors.

Then Generation B comes along, and they buy the same asset for a bit more. Generation A profits from Generation B.

Generation C comes along and pays more again, perhaps from two salaries now, increasing the wealth of the original investors.

Generation D can't even afford one of these assets. They didn't buy early enough. They didn't listen to the market forces saying "the currency is intentionally devalued to encourage spending" because they weren't even born

It's a ponzi scheme, on a grand scale.

Two fish are swimming when another fish comes the other way. "Nice water today!" says the other fish. The two fish look at each other and say "What's water?"

We even need to add new participants to this enormous ponzi in the form of immigration, else the entire economy will collapse, they don't even deny.

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If the entire economy moved to a fixed money model then there becomes no incentive to be productive and everything just gets encouraged to do nothing but rely on time ticking over.

In a deflationary economy there is incentive to save, rather than go into debt. It is simply better management of money. It was bad debt that caused the 2008 Global Financial Crisis. It will be the massive printing of money the last few years that will cause the next.

It's just The Austrian Theory of Economics (mostly). I mean the ****ing Liberal party was going on, and on, and on about how we needed to get our debt under control, and while I agree there is good debt, there is also bad debt.

A deflationary currency makes bad debt much harder, and it reduces the planet wrecking over-consumption of **** we don't need.

Look, it doesn't really matter; there's the hardest currency ever made now, and it is unstoppable.

Are you going to keep the soft, devaluing currency A, or the hard, increasing in value currency B? Which will you spend first?

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The only things worse than an economy printing more currency would be a) an economy not printing more currency and b) an economy deleting currency.

The RBA does delete currency, sometimes.

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Ian K said..

If you suggest I look it up I will. Blockchain was 31 years ago.
academy.binance.com/en/articles/history-of-blockchain

No Ian, you are incorrect.

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Harrow said..
Except there are new crypto's coming along all the time for people to put their money into instead of Bitcoin. That must dilute the pool and also presents a risk that if something much better comes along, then Bitcoin could be abandoned en masse and crash.

Oh there are always better ones coming along. Constantly. Perpetually. Every new crypto is better than Bitcoin, just read what their inventors say.

There are 10,000+ that are all, each and every one of them, better than Bitcoin.

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evlPanda said..

Oh there are always better ones coming along. Constantly. Perpetually. Every new crypto is better than Bitcoin, just read what their inventors say.

There are 10,000+ that are all, each and every one of them, better than Bitcoin.

Out of the top 10 cryptocurrencies on coinmarketcap, none are competing with bitcoin to be the next currency.

Ethereum, Solana, Cardano, Binance Coin, Ripple and Avalanche are competing blockchains, that offer smart contracts that are basically competing with Ethereum to be the preferred platform for DEFI. Tether and USDC coin are stable coins tied to USD that run on the ethereum blockchain.

Binance Coin and Ripple are centralised blockchains and they club baby seals. I don't know enough about Terra Luna to comment, but it's some sort of fancy Oracle used for DEFI stable coins.

Bitcoin has almost 50% marketcap of all other cryptocurrencies, so it will take a long time for a competitor to knock it off. Dogecoin comes in at number 11, it's currently bitcoins biggest rival and it's a meme coin - a payment system that was created as a "joke" Number 14 is Shiba Inu which is another meme coin on the Ethereum network that is competing with dogecoin.

en.wikipedia.org/wiki/Shiba_Inu_(cryptocurrency)

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myscreenname said..

Ian K said..

If you suggest I look it up I will. Blockchain was 31 years ago.
academy.binance.com/en/articles/history-of-blockchain

No Ian, you are incorrect.

Are we talking when blockchain was invented or when it was implemented in Bitcoin?

Whichever way we look at it, someone (IanK?) could implement their own exact same version of Bitcoin and start again. There would be no difference except for the consumers that got in early. There would be no difference in functionality, and only worth what someone was willing to pay for it.

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evlPanda said..
Then Generation B comes along, and they buy the same asset for a bit more. Generation A profits from Generation B...

What your saying is fine Panda - assuming bitcoin is just a commodity that sits beside standard currencies and its value is only viewed in relation to another currency, (and people's belief that somebody else will want to buy it in the future). At which point it is just like any other finitely available commodity - except it has only one use. It isn't productive itself and it can't be used for any other purpose.

Or you only look a photograph of the world.


But I took it from the claims about the failures of fiat currencies there was some sort of notion that bitcoin would replace everything else and this would be a good thing. And thus my argument is about having a currency where the total volume of that currency remains static in a world where its total value isn't static.

If bitcoin (or anything similar) totally replaces fiat currency and remains at a single volume....
..then what you are ignoring is when generation B is (for the sake of maths) twice as big as generation A. Generation C is then 4 times the size and generation D 16 times the size. Generation D consumes and produces 16 times what generation A did. Their economy is 16 times the size. They need a method to exchange the value of that economy that remains relative. If there is a capped total amount of bitcoin currency across generation A to D then it will be spread 1/16 as thinly around generation D, making everything Generation D values 16 times what generation A did.


I'm happy to agree that when politicians get hold of things they print money at an exponential rate and want nothing but massive short term economic growth to get voted in again, which isn't going to be pretty in the end. But saying that economic growth should be zero, means that in a world with an increasing population everybody gets poorer and worse off every year.

The general idea of life is for the economic growth to be slightly higher than the population growth so that every year everybody gets a little better off. Last year you could buy 10 potatoes. This year you can buy 11 potatoes. Yippee, everyone gets more potatoes to eat. But at the same time if potato farmers simply get 10% more for each potato sold due to increased demand they have little incentive to grow any more. But they need to also grow more potatoes to feed more people or the whole thing flips the other way.

It is a fine balance to achieve.


The world's central banks try to balance the supply of currency to match the demand such that 1 potato = 1 dollar across multiple generations A to D. Except - not quite, they also work to ensure that the value of one potato goes down slightly, such that potato farmers have to become more productive to stay in the same place and the economy doesn't stagnate. Stagnation would result in the growth of potato eaters outgrowing the number of potato farmers causing hyper potato-inflation prices and a potato famine ensuing. Of course when they get it a bit wrong a potato glut ensues and potato farmers go broke.

It is a fine balance to achieve.


But in your generation A then 21 million people earn 1 bitcoin a day and with it buy 21 million potatoes . 1 bitcoin was exchanged for 1 potato. 1 potato = 1 days work = 1 bitcoin.

You can't change one of those numbers and not have the equation get out of whack. If 168 million people in generation D are buying 168 million potatoes but still only have 21 million bitcoin then they only get 1/8 of a potato for tea, they are all worse off. Or if 168 million people are chasing 21 million potatoes - or 21 million people have 168 million potatoes to chose from - or 21 million people buy 21 million potatoes with 168 million bitcoin...............

Instead of one member of generation A profiting from two members of Generation B (who each produce twice the value of what each member of generation A consumes) then one member of generation A pays for 2 members of generation B (who each consume twice the value that generation A produces).

Select to expand quote

Carantoc said..

What your saying is fine Panda - assuming bitcoin is just a commodity that sits beside standard currencies and its value is only viewed in relation to another currency, (and people's belief that somebody else will want to buy it in the future). At which point it is just like any other finitely available commodity - except it has only one use. It isn't productive itself and it can't be used for any other purpose.

Or you only look a photograph of the world.


But I took it from the claims about the failures of fiat currencies there was some sort of notion that bitcoin would replace everything else and this would be a good thing. And thus my argument is about having a currency where the total volume of that currency remains static in a world where its total value isn't static.

If bitcoin (or anything similar) totally replaces fiat currency and remains at a single volume....
..then what you are ignoring is when generation B is (for the sake of maths) twice as big as generation A. Generation C is then 4 times the size and generation D 16 times the size. Generation D consumes and produces 16 times what generation A did. Their economy is 16 times the size. They need a method to exchange the value of that economy that remains relative. If there is a capped total amount of bitcoin currency across generation A to D then it will be spread 1/16 as thinly around generation D, making everything Generation D values 16 times what generation A did.


I'm happy to agree that when politicians get hold of things they print money at an exponential rate and want nothing but massive short term economic growth to get voted in again, which isn't going to be pretty in the end. But saying that economic growth should be zero, means that in a world with an increasing population everybody gets poorer and worse off every year.

The general idea of life is for the economic growth to be slightly higher than the population growth so that every year everybody gets a little better off. Last year you could buy 10 potatoes. This year you can buy 11 potatoes. Yippee, everyone gets more potatoes to eat. But at the same time if potato farmers simply get 10% more for each potato sold due to increased demand they have little incentive to grow any more. But they need to also grow more potatoes to feed more people or the whole thing flips the other way.

It is a fine balance to achieve.


The world's central banks try to balance the supply of currency to match the demand such that 1 potato = 1 dollar across multiple generations A to D. Except - not quite, they also work to ensure that the value of one potato goes down slightly, such that potato farmers have to become more productive to stay in the same place and the economy doesn't stagnate. Stagnation would result in the growth of potato eaters outgrowing the number of potato farmers causing hyper potato-inflation prices and a potato famine ensuing. Of course when they get it a bit wrong a potato glut ensues and potato farmers go broke.

It is a fine balance to achieve.


But in your generation A then 21 million people earn 1 bitcoin a day and with it buy 21 million potatoes . 1 bitcoin was exchanged for 1 potato. 1 potato = 1 days work = 1 bitcoin.

You can't change one of those numbers and not have the equation get out of whack. If 168 million people in generation D are buying 168 million potatoes but still only have 21 million bitcoin then they only get 1/8 of a potato for tea, they are all worse off. Or if 168 million people are chasing 21 million potatoes - or 21 million people have 168 million potatoes to chose from - or 21 million people buy 21 million potatoes with 168 million bitcoin...............

Instead of one member of generation A profiting from two members of Generation B (who each produce twice the value of what each member of generation A consumes) then one member of generation A pays for 2 members of generation B (who each consume twice the value that generation A produces).

TLTR. I think you are the only one to say bitcoin will replace all other currencies. I haven't heard anyone say that before, so to speculate about that scenario is absurd.

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myscreenname said..
TLTR. I think you are the only one to say bitcoin will replace all other currencies. I haven't heard anyone say that before, so to speculate about that scenario is absurd.

sooooo...., you'se are saying bitcoin is the ultimate solution to currencies and sooo much better than any other currency....

- but at the same time also agreeing it isn't good enough to exist in any form without an actual currency propping it up.


Mmmmm, seems like we are actually agreeing on one basic - that the dollar doesn't need bitcoin but bitcoin needs the dollar.

Just not sure how anyone can conclude from that fact that bitcoin is better at being a currency than the dollar is.

Something to ponder on today I guess. Although I doubt that enlightenment will come via pondering on how the conclusion is reached, but more from pondering about the people making the conclusion.

Anyways, I am off now to ponder.

Select to expand quote

Carantoc said..
sooooo...., you'se are saying bitcoin is the ultimate solution to currencies and sooo much better than any other currency....

- but at the same time also agreeing it isn't good enough to exist in any form without an actual currency propping it up.


Mmmmm, seems like we are actually agreeing on one basic - that the dollar doesn't need bitcoin but bitcoin needs the dollar.

Just not sure how anyone can conclude from that fact that bitcoin is better at being a currency than the dollar is.

Something to ponder on today I guess. Although I doubt that enlightenment will come via pondering on how the conclusion is reached, but more from pondering about the people making the conclusion.

Anyways, I am off now to ponder.

There never has been nor will there ever be one single currency. Bitcoin does have many advantages over fiat. I think it is inevitable that cryptocurrencies will be the future.

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myscreenname said..

There never has been nor will there ever be one single currency. Bitcoin does have many advantages over fiat. I think it is inevitable that cryptocurrencies will be the future.

There will always be a benchmark currency. Can you see the day a US dollar is worth 0.0000192 BTC?

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Ian K said..
There will always be a benchmark currency. Can you see the day a US dollar is worth 0.0000192 BTC?

I don't know Ian. I have no say in the price of bitcoin. It, like any other currency, goes up and down depending on many factors.

Put it this way, in 5 years time, I'm confident; and have placed bets that bitcoin will be worth more in USD than it is today.

You guys are the bitcoin experts. If you are so cock sure of your ability to predict the unknown - take a punt on it failing and sort out your own retirement.

My heart pumps nothing but urine for all the dickheads who are now whining about missing the past 4 year bull run.

So many people were telling you to invest!


Hahahaha

Select to expand quote

Carantoc said..

evlPanda said..
Then Generation B comes along, and they buy the same asset for a bit more. Generation A profits from Generation B...

What your saying is fine Panda - assuming bitcoin is just a commodity that sits beside standard currencies and its value is only viewed in relation to another currency, (and people's belief that somebody else will want to buy it in the future). At which point it is just like any other finitely available commodity - except it has only one use. It isn't productive itself and it can't be used for any other purpose.

Or you only look a photograph of the world.


But I took it from the claims about the failures of fiat currencies there was some sort of notion that bitcoin would replace everything else and this would be a good thing. And thus my argument is about having a currency where the total volume of that currency remains static in a world where its total value isn't static.

If bitcoin (or anything similar) totally replaces fiat currency and remains at a single volume....
..then what you are ignoring is when generation B is (for the sake of maths) twice as big as generation A. Generation C is then 4 times the size and generation D 16 times the size. Generation D consumes and produces 16 times what generation A did. Their economy is 16 times the size. They need a method to exchange the value of that economy that remains relative. If there is a capped total amount of bitcoin currency across generation A to D then it will be spread 1/16 as thinly around generation D, making everything Generation D values 16 times what generation A did.


I'm happy to agree that when politicians get hold of things they print money at an exponential rate and want nothing but massive short term economic growth to get voted in again, which isn't going to be pretty in the end. But saying that economic growth should be zero, means that in a world with an increasing population everybody gets poorer and worse off every year.

The general idea of life is for the economic growth to be slightly higher than the population growth so that every year everybody gets a little better off. Last year you could buy 10 potatoes. This year you can buy 11 potatoes. Yippee, everyone gets more potatoes to eat. But at the same time if potato farmers simply get 10% more for each potato sold due to increased demand they have little incentive to grow any more. But they need to also grow more potatoes to feed more people or the whole thing flips the other way.

It is a fine balance to achieve.


The world's central banks try to balance the supply of currency to match the demand such that 1 potato = 1 dollar across multiple generations A to D. Except - not quite, they also work to ensure that the value of one potato goes down slightly, such that potato farmers have to become more productive to stay in the same place and the economy doesn't stagnate. Stagnation would result in the growth of potato eaters outgrowing the number of potato farmers causing hyper potato-inflation prices and a potato famine ensuing. Of course when they get it a bit wrong a potato glut ensues and potato farmers go broke.

It is a fine balance to achieve.


But in your generation A then 21 million people earn 1 bitcoin a day and with it buy 21 million potatoes . 1 bitcoin was exchanged for 1 potato. 1 potato = 1 days work = 1 bitcoin.

You can't change one of those numbers and not have the equation get out of whack. If 168 million people in generation D are buying 168 million potatoes but still only have 21 million bitcoin then they only get 1/8 of a potato for tea, they are all worse off. Or if 168 million people are chasing 21 million potatoes - or 21 million people have 168 million potatoes to chose from - or 21 million people buy 21 million potatoes with 168 million bitcoin...............

Instead of one member of generation A profiting from two members of Generation B (who each produce twice the value of what each member of generation A consumes) then one member of generation A pays for 2 members of generation B (who each consume twice the value that generation A produces).

I ...think I follow?

The crux being:
"You can't change one of those numbers and not have the equation get out of whack. If 168 million people in generation D are buying 168 million potatoes but still only have 21 million bitcoin then they only get 1/8 of a potato for tea, they are all worse off. "

In this fantasy potato land let's continue keeping it simple and say that the cost of producing a potato stayed relative across all of these generations; no efficiencies were made. I assume you meant that too.

1 generation A potato = 1 generation B/C/D potato.

We now have 1 + 2 + 4 + 8 million people = 15 million. Let's just make it 16 million people.

1 generation A person = 1 generation B/C/D person.

We still have 21 million bitcoin, assuming they are all mined now.

1 btc = 1 btc

So, 1 potato = 1/16th of a bitcoin, or 0.125 btc, or 12,500,000 sats.

Select to expand quote

Carantoc said..

myscreenname said..
TLTR. I think you are the only one to say bitcoin will replace all other currencies. I haven't heard anyone say that before, so to speculate about that scenario is absurd.

sooooo...., you'se are saying bitcoin is the ultimate solution to currencies and sooo much better than any other currency....

- but at the same time also agreeing it isn't good enough to exist in any form without an actual currency propping it up.


Mmmmm, seems like we are actually agreeing on one basic - that the dollar doesn't need bitcoin but bitcoin needs the dollar.

Just not sure how anyone can conclude from that fact that bitcoin is better at being a currency than the dollar is.

Something to ponder on today I guess. Although I doubt that enlightenment will come via pondering on how the conclusion is reached, but more from pondering about the people making the conclusion.

Anyways, I am off now to ponder.

It is just most often and most conveniently exchangeable for another currency. That doesn't mean it is "propped up" by it. Most currencies are traded for other currencies.

I have traded it for computers. Does that make it propped up by computers? Of course not.

It's just traded for whatever it can be traded for. At the time of the trade one party valued it more than the other, and an exchange was made. It's how every transaction works. Money is very convenient for transacting in, so it is more often transacted for money.

As it is still a speculative commodity or digital asset it is most often traded for another currency.


[bubble bubble bubble]

Even the atmosphere transacts air from high pressure/supply to low pressure/supply. All energy is arbitrage : D

By the way real trading is where you buy in one location and sell in another for a higher price; think spice trader. This is still done wit stocks and currency via "arbitrage", whereas your average "trader" arbitrages over time instead of space.

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evlPanda said..
I ...think I follow?

Naaaahhhh.

In generation A there are 1 million potatoes and 21 million bitcoin. Each potato is worth 21 bitcoins.

Potatoes here are representing the total value of all assets of generation A.

In generation D there are now 16 million potatoes. i.e the total value of assets is 16 times greater in real terms.

But if there are still only 21 million bitcoin then each potato is now only worth 1.3 bitcoins.

1 btc for generation A does not equal 1 btc for generation D.



As you pointed out if you print 25% more currency in an economy that is growing by 2% this creates an imbalance and a deflation in the real-terms value of that currency. I took it you were suggesting this was bad and that bitcoin was the solution as nobody could create more of it so it would therefore be very stable.

I was merely pointing out that the same goes both ways. If there is more currency OR less currency relative to the total value of assets there is a change in real value of the currency.

You might say a relative reduction in currency volume is good for savers. Fair enough. But it is bad for spenders. And we all have to spend at some point.

I guess you could argue the change in relative bitcoin volume is much easier to predict than the whim of the central bankers to print dollars. But you still have the unknown change in the economy so the change in relative value isn't calculable, just perhaps slightly easier to predict.



But it is all by-the-by anyway. Because that assumes bitcoin is a currency.

But as you say bitcoin is just a speculative commodity or digital asset. Nothing more, nothing less. It isn't a money and it isn't a currency. It is a speculative non-tangible commodity that has no purpose other than being a very specialized speculative digital commodity.

If the value of my potato collection crashes I can still cook up a tasty baked potato. If the value of my bitcoin collection crashes then the Chinese or Ukrainian miners walk away with all my real money.

Oh and don't get me wrong here.

I am not saying bitcoin couldn't theoretically be a currency.

I am sure it could. I suspect that some society could theoretically use bitcoin as a money and as a currency.


I am just saying it isn't either at the moment and that if it was it wouldn't be a very good one.

All up and everything considered (and it doesn't take long to consider it), I can't see how it would be better than the one we have.


Hence I can't ever see bitcoin being anything other than a speculative digital "asset" (and the term "asset" is somewhat incorrect).

Not to say there is anything fundamentally wrong in that. There are lots of specialized speculative non-tangible "assets". CFDs and various derivatives come to mind. And I am sure the next one is just around the corner, ready to snare all those who buy into snake-oil dreams and ready to make the pointy end of the pyramid very rich.

Select to expand quote

Carantoc said..
Oh and don't get me wrong here.

I am not saying bitcoin couldn't theoretically be a currency.

I am sure it could. I suspect that some society could theoretically use bitcoin as a money and as a currency.


I am just saying it isn't either at the moment and that if it was it wouldn't be a very good one.

All up and everything considered (and it doesn't take long to consider it), I can't see how it would be better than the one we have.


Hence I can't ever see bitcoin being anything other than a speculative digital "asset" (and the term "asset" is somewhat incorrect).

Not to say there is anything fundamentally wrong in that. There are lots of specialized speculative non-tangible "assets". CFDs and various derivatives come to mind. And I am sure the next one is just around the corner, ready to snare all those who buy into snake-oil dreams and ready to make the pointy end of the pyramid very rich.

Doesn't matter what you think. I've come around to the fact that there are only two types of people in the world.

Winners and Carantoc.

I think tulips will have a comeback.
www.investopedia.com/terms/t/tulipmania.asp#:~:text=What%20Is%20Tulipmania%3F,their%20prices%20to%20unprecedented%20highs.