Remind me -- what's the point of a QR code printed on a screen?
Seems like a link or something might do?
I think for any cryptocurrency to work as a currency, there has to be someone somewhere with the authority to "print" more of it as needed. Since a currency has no inherent value and exists as a means of transferring existing value, it doesn't work to have it exist in limited amounts. That will always lead to volatility and speculative investing which is not what a currency is for.
I think for any cryptocurrency to work as a currency, there has to be someone somewhere with the authority to "print" more of it as needed. Since a currency has no inherent value and exists as a means of transferring existing value, it doesn't work to have it exist in limited amounts. That will always lead to volatility and speculative investing which is not what a currency is for.
You seem to have internalized the idea that government has the right to steal from you some percentage of your savings through inflation.
I would counter that we can no longer afford inflationary currencies, as they reward immediate consumption and penalize savings. This is exactly why we are deluged with won hung lo garbage. In a deflationary economy these products would not exist as no rational actor would waste their precious money on something that would not serve their goals and last.
You read that comment too literally. I would not replace my current bank right now with Bitcoin, and probably never would. I think Bitcoin is unusable as a currency for several reasons. However the world of crypto currencies is bigger than just Bitcoin, so look beyond. It is conceivable that something will appear that is usable in the way that Bitcoin aspired to be.
There are many, like IOTA and Cardano (ADA) to name a few.
I actually like the new Cardano wallet Daedelus, and an now accepting ADA donations
Yes they do look good compared to Bitcoin. Much more practical on efficiency, scalability and fees.
Interesting times...
I think for any cryptocurrency to work as a currency, there has to be someone somewhere with the authority to "print" more of it as needed. Since a currency has no inherent value and exists as a means of transferring existing value, it doesn't work to have it exist in limited amounts. That will always lead to volatility and speculative investing which is not what a currency is for.
You seem to have internalized the idea that government has the right to steal from you some percentage of your savings through inflation.
I would counter that we can no longer afford inflationary currencies, as they reward immediate consumption and penalize savings. This is exactly why we are deluged with won hung lo garbage. In a deflationary economy these products would not exist as no rational actor would waste their precious money on something that would not serve their goals and last.
Slow, steady inflation is critical to keeping an economy moving. It means people and companies re-invest their money into the economy instead of letting it sit and rot in a bank account. With deflation, there's little or no incentive to invest your money. The stock market would dry up, interest rates for loans would go through the roof, etc.
I think for any cryptocurrency to work as a currency, there has to be someone somewhere with the authority to "print" more of it as needed. Since a currency has no inherent value and exists as a means of transferring existing value, it doesn't work to have it exist in limited amounts. That will always lead to volatility and speculative investing which is not what a currency is for.
I agree because it makes perfect sense. The amount of currency required grows as the economy grows (= more value gets added). The current cryptocurrencies can't be produced when necessary and are not available in a infinite amount. A cryptocurrency which has some chance of being useful to replace money needs to adjust the mining difficulty based on it's value so the value stays constant and it needs to allow for an infinite number of coins.
Side note: I'm not an economist but for a economy to run well there has to be some deflation because it stimulates spending money, investing money (instead of storing it in an old matrass and making it unavailable for economic growth) and decreases debt.
All this in mind, this is why I have high hopes for Ripple (XRP). It's not designed to replace banks and traditional currency, rather compliment it. It's also doing great in terms of it's stability and value.
Side note: I'm not an economist but for a economy to run well there has to be some deflation because it stimulates spending money, investing money (instead of storing it in an old matrass and making it unavailable for economic growth) and decreases debt.
That's inflation, but yes you're right.
With deflation, there's little or no incentive to invest your money. The stock market would dry up, interest rates for loans would go through the roof, etc.
precisely
This fight is already over save for the gnashing of teeth. Humanity has finally been given a choice, Gresham's law will dictate the outcome. No more will we be at liberty to spend the resources of future generations. Embrace the new reality, believe it or not opportunities abound in it.
You seem to have internalized the idea that government has the right to steal from you some percentage of your savings through inflation.
I would counter that we can no longer afford inflationary currencies, as they reward immediate consumption and penalize savings. This is exactly why we are deluged with won hung lo garbage. In a deflationary economy these products would not exist as no rational actor would waste their precious money on something that would not serve their goals and last.
But you're assuming that the currency itself has inherent value which generally speaking it doesn't. If I want to buy something from you and I give you a $10 bill what I'm essentially saying is "I don't currently have anything to trade you so I'm giving you this note that indicates I owe you X value in goods or services." You then can use that note to trade for (buy) other goods or services from somebody else because it's backed by the fact that I owe some value to the system, which I presumably paid in to get the $10 bill that I gave you.
The money itself does not have any significant value of its own, the money is used to transfer value because it's a lot easier to buy and sell using money than to haul the physical goods around to trade them on the spot. If you try to use an artificially limited commodity as currency then you end up with the current situation where people are buying and selling the currency itself instead of using it to facilitate other transactions. Bitcoin for example has no actual value, heck it doesn't even physically exist. You can't make anything out of it, you can't even touch it, the value is sky high purely due to people speculating that it will go higher so that they can sell it off to somebody else before the value crashes. At some point people will start cashing out and that will cascade into more people cashing out and the whole thing will come crashing down, it's inevitable. This has happened countless times throughout history, the previously mentioned tulip mania is a great example. Magic cards, baseball cards, Beanie Babies, there have been numerous smaller scale examples like that. Crypto coins are no more a currency than baseball cards, both are backed by nothing but speculation.
Crypto coins are no more a currency than baseball cards, both are backed by nothing but speculation.
Don't confuse speculation with tangible backing.
Speculation is what drives the price relative to other currencies.
The "backing" is based on people's trust in the thing, in which it is essentially no different to US dollar currency, or even gold to a large extent.
Crypto coins are no more a currency than baseball cards, both are backed by nothing but speculation.
Don't confuse speculation with tangible backing.
Speculation is what drives the price relative to other currencies.
The "backing" is based on people's trust in the thing, in which it is essentially no different to US dollar currency, or even gold to a large extent.
Don't forget, there are quite a few crypto currencies with actual purpose beyond just being "worth something" (and Bitcoin isn't one of them).
Look at Ethereum and IOTA for example, they have the ability to create smart contracts not to mention ETH is far quicker to transact than Bitcoin is (minutes vs. tens of minutes).
Ripple is another, it's able to perform transactions within seconds at a rate of thousands per second, that's up there with the big credit card companies. In fact Ripple has already been adopted by a lot of big companies with some of the big banks in Australia trialling the technology, I believe even American Express are on-board. It's essentially aiming to be a replacement for SWIFT. Rather than taking days or weeks to transfer money, it's done in seconds at fractions of a cent, the cost
savings alone are enormous.
Comparing crypto currencies is like comparing apples to capacitors.
One fact remains, crypto is here to stay whether you like it or not. It won't replace traditional, government-backed currency any time soon, but rather live alongside it. As long as you can convert any kind of crypto into money, it's worth something.
As long as you can convert any kind of crypto into money, it's worth something.
Excuse, not "money", but in the underlying values and services which one
comparatively also gets for a
amount of money.
I think for any cryptocurrency to work as a currency, there has to be someone somewhere with the authority to "print" more of it as needed. Since a currency has no inherent value and exists as a means of transferring existing value, it doesn't work to have it exist in limited amounts. That will always lead to volatility and speculative investing which is not what a currency is for.
I agree because it makes perfect sense. The amount of currency required grows as the economy grows (= more value gets added). The current cryptocurrencies can't be produced when necessary and are not available in a infinite amount. A cryptocurrency which has some chance of being useful to replace money needs to adjust the mining difficulty based on it's value so the value stays constant and it needs to allow for an infinite number of coins.
The total value of currency needs to grow as the economy (and use) grows, but that doesn't mean you need more units of the currency. It's quite ok for the value of each unit to increase instead, provided that the currency is infinitely divisible.
Gold is something close to infinitely divisible. Certainly we've never got to the point that you can buy a house with a gram of gold or a loaf of bread with a microgram and it's getting hard to manage.
Bitcoin is actually infinitely divisible. You can keep adding decimal places as long as you want to.
At the moment, all amounts in the bitcoin protocol and blockchain are measured in units of 0.00000001 BTC. At the current price of near US$18000 per bitcoin there are 55 such units to one cent.
Which means the current protocol perhaps wasn't quite as forward-looking as they expected nine years ago. But anyway nothing needs to change until one BTC is worth a million dollars, or even a few million (you can't buy anything with 1c anyway).
I think for any cryptocurrency to work as a currency, there has to be someone somewhere with the authority to "print" more of it as needed. Since a currency has no inherent value and exists as a means of transferring existing value, it doesn't work to have it exist in limited amounts. That will always lead to volatility and speculative investing which is not what a currency is for.
I agree because it makes perfect sense. The amount of currency required grows as the economy grows (= more value gets added). The current cryptocurrencies can't be produced when necessary and are not available in a infinite amount. A cryptocurrency which has some chance of being useful to replace money needs to adjust the mining difficulty based on it's value so the value stays constant and it needs to allow for an infinite number of coins.
The total value of currency needs to grow as the economy (and use) grows, but that doesn't mean you need more units of the currency. It's quite ok for the value of each unit to increase instead, provided that the currency is infinitely divisible.
Gold is something close to infinitely divisible. Certainly we've never got to the point that you can buy a house with a gram of gold or a loaf of bread with a microgram and it's getting hard to manage.
Bitcoin is actually infinitely divisible. You can keep adding decimal places as long as you want to.
But the problem with doing that is that existing Bitcoins increase in value which is called deflation. Deflation is bad because it increases value of money without someone doing any work (adding the value). In the end that will bring the economy to a grinding halt. Hence gold and bitcoins are unsuitable to use as money.
In the end that will bring the economy to a grinding halt. Hence gold and bitcoins are unsuitable to use as money.
We've already done that one and the purchasing power parity of gold
by weight has remained remarkably constant from ancient times to today. The example used was that 1 oz of gold would buy a Roman Senator's robes in early history and a US Senator's business suit today. Gold generally does not inflate or deflate, it's the currencies that are used to price gold that undergo the inflation and deflation.
In the end that will bring the economy to a grinding halt. Hence gold and bitcoins are unsuitable to use as money.
We've already done that one and the purchasing power parity of gold by weight has remained remarkably constant from ancient times to today. The example used was that 1 oz of gold would buy a Roman Senator's robes in early history and a US Senator's business suit today. Gold generally does not inflate or deflate, it's the currencies that are used to price gold that undergo the inflation and deflation.
That is only because we have let gold go as basis for the value of money. Nowadays there are many more senators on earth so you'd need many times more gold which would drive the value up (=deflate).
The "backing" is based on people's trust in the thing, in which it is essentially no different to US dollar currency, or even gold to a large extent.
Price controls, rationing and other central planning measures get a bad name because it's usually communists which use these tools and they screw everything up. They have been used by less incompetent governments too and despite the wailing and gnashing of teeth of economists that they did more harm than good, it doesn't necessarily crash the economy. You don't need trust to place value in money (or rationing coupons) in those cases, just common sense.
Legal tender is mostly trust based (though as I said, you HAVE to pay your taxes ... trust doesn't enter into it) for as long as the government has trust in it as well, but they have the tools and the necessity to put something more fundamental underpinning it in an emergency. That necessity doesn't exist for bitcoin.
It quite frequently works.
The answers to many of the questions posted and answered here are not actually known. Economists spend their careers studying this stuff and often have conflicting opinions. While the broad brush arguments are pretty clear, most only apply in detail in special cases.
One of the most classic examples is the Laffer curve. Everyone agrees that government revenue is zero at zero tax rate. Most agree that at 100% tax rate the revenue is also zero, or near zero since production can't continue if everything is taken each year (no seed corn in the oldest example). And experience tells us that revenues are larger at interim tax rates. But there is little agreement on whether the curve joining those endpoints is time independent, continuous, differentiable, single valued or anything else. So any statement about adjustments in tax rate based on this concept is a guess or worse.
Legal tender is mostly trust based (though as I said, you HAVE to pay your taxes ... trust doesn't enter into it) for as long as the government has trust in it as well, but they have the tools and the necessity to put something more fundamental underpinning it in an emergency. That necessity doesn't exist for bitcoin.
Assuming the government is a democratic one it is the people themselves putting trust into the money.
Price controls, rationing and other central planning measures get a bad name because it's usually communists which use these tools and they screw everything up. They have been used by less incompetent governments too and despite the wailing and gnashing of teeth of economists that they did more harm than good, it doesn't necessarily crash the economy. You don't need trust to place value in money (or rationing coupons) in those cases, just common sense.
Legal tender is mostly trust based (though as I said, you HAVE to pay your taxes ... trust doesn't enter into it) for as long as the government has trust in it as well, but they have the tools and the necessity to put something more fundamental underpinning it in an emergency. That necessity doesn't exist for bitcoin.
Realistically these tools are as much as a threat as they are an insurance. There's a rich history of countries endlessly printing money, or manipulating things otherwise, causing economic unrest or full on collapse.