NobleSavage
Veteran Member
I've been laughing at it all along but now Paypal is integrating it http://www.washingtonpost.com/news/...l-embraces-anarchic-virtual-currency-bitcoin/
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So maybe Bitcoing will take off
- Thread starter NobleSavage
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SimpleDon
Veteran Member
The problem with bitcoin is that it is designed to have a value beyond what it can purchase by limiting the ultimate number of bitcoins. It is designed to produce deflation, the increase in the value of money. This makes it impractical to use as an exchange medium, especially in a capitalistic country.
Capitalism's main aim is to encourage private investment to produce goods and services for consumption, not to hoard money hoping that its value will go up. And capitalism depends on debt, to invest and to consume, no one will go into debt if they know that they will have to pay back the debt with money that is quite a bit more valuable than the money that they borrowed. Capitalism works better all round with moderate inflation.
It has all of the failings of the gold standard. Which is no surprise, it was invented by people who proudly proclaim their ignorance of any problems that money based on the gold standard clearly demonstrated in its short use as domestic currency, about 4 decades, and its century of on and off use to settle international trade.
They also never heard of Gresham's law, "bad money drives out good money." If you want to see a practical demonstration of it look in your dad's sock drawer if he was an adult in 1964 in the US. Chances are that there are some silver coins in it. 1964 is when we took the silver of our coins. People hoard "good" money and spend "bad" money. As bitcoins become more valuable they will be circulated in the economy less and less, becoming less a form of money. Money has to circulate to be money in the economy. It is not money in the economic sense when it is in the sock drawer.
Capitalism's main aim is to encourage private investment to produce goods and services for consumption, not to hoard money hoping that its value will go up. And capitalism depends on debt, to invest and to consume, no one will go into debt if they know that they will have to pay back the debt with money that is quite a bit more valuable than the money that they borrowed. Capitalism works better all round with moderate inflation.
It has all of the failings of the gold standard. Which is no surprise, it was invented by people who proudly proclaim their ignorance of any problems that money based on the gold standard clearly demonstrated in its short use as domestic currency, about 4 decades, and its century of on and off use to settle international trade.
They also never heard of Gresham's law, "bad money drives out good money." If you want to see a practical demonstration of it look in your dad's sock drawer if he was an adult in 1964 in the US. Chances are that there are some silver coins in it. 1964 is when we took the silver of our coins. People hoard "good" money and spend "bad" money. As bitcoins become more valuable they will be circulated in the economy less and less, becoming less a form of money. Money has to circulate to be money in the economy. It is not money in the economic sense when it is in the sock drawer.
NobleSavage
Veteran Member
^^^ Agreed. I tried arguing this in a Bitcoin forum and got my head chewed off. They have this idea that it is the perfect world currency that will usher in great change an free us from banks and the Federal Reserve. 
untermensche
Contributor
Or it's collapse will be worse.
Nice Squirrel
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Remember it is like gold, but doesn't exist like gold... The crash is going to be spectacular.