Comments on: Quote note (#145)

By: pseudo-chrysostom

pseudo-chrysostom — Tue, 20 Jan 2015 16:09:23 +0000

occupying peoples time with ‘virtual’ engagements is all but inevitable i think, as it has the triple threat of filling a necessity, being simple to implement (indeed, people will do it all by themselves, because…), and oh so eminently desirable. i fully support it.

By: admin

admin — Tue, 20 Jan 2015 14:51:37 +0000

Precious metals used to do that. Demotic populism in its infinite wisdom scrapped that system, and replaced it with a set of paper political promises backed by the mediated will of the electorate. That’s just about over. The next stage is bound to be messy.

By: vimothy

vimothy — Tue, 20 Jan 2015 14:43:08 +0000

There’s this thing people have been using to balance supply and demand — it’s called a ‘market’. But that's too broad. The thing that is supposed to balance supply and demand is the price: prices clear markets. But since money is the unit of account (things are priced in money), we would like to prevent wild fluctuations in its price, which would necessitate wild fluctuations in all other prices. Hence central banking, the historical gold standard and so on. Or, if you prefer, hence why we do not use art as money.

By: Hurlock

Hurlock — Tue, 20 Jan 2015 03:06:52 +0000

And that’s pretty much the only argument in favor of bitcoin that you need.

By: Kgaard

Kgaard — Tue, 20 Jan 2015 02:44:21 +0000

Ah, well, now you are on to something. I agree that this is a real utility. So maybe there is hope.

What’s interesting from a monetary policy standpoint is how bitcoin is attempting to solve the supply-side of the equation. The creators of bitcoin recognized the supply of the currency would have to grow SOME … but they had no way of really knowing how to property calibrate the rate of money-supply growth, because that rate is always fluctuating. Hence they came up with this crazy mining formula, which makes no sense to the average guy (because it’s inherently arbitrary).

By: Lucian

Lucian — Tue, 20 Jan 2015 02:28:17 +0000

I once heard a flannel-wearing Marxist denounce BitCoin as potentially fascistic in a literature tutorial.

By: Paul Ennis

Paul Ennis — Mon, 19 Jan 2015 21:34:34 +0000

The function of Bitcoin is, surely, to buy things with ease on the internet sans banks fees and, if used right, anonymously. This is what sustains it in spite of the trading blips. Of course, what is unspoken here is that Bitcoin is the currency of the deep web and as such it has a very useful function for an entire black market (from hackers ddosing to people buying weed to legit purchases of vpns, etc.). Maybe you need to get murkier.

By: Paul Ennis

Paul Ennis — Mon, 19 Jan 2015 21:31:30 +0000

Second note meant for kgaard (it responds to one of his quotes).

By: VXXC

VXXC — Mon, 19 Jan 2015 19:57:33 +0000

@Kggard,

I’ve found your Value for Bitcoin.

[Bitcoin is] ‘Scientology for Aspergers…’ is a nice line (though surely you must see all in the spectrum would wish to lay claim…especially those with anxiety disorders – a currency that means you never need to leave the house again). ”

Odd as I certainly wasn’t looking for it.

I think perhaps Moldbug’s virtual solution to The Dire Problem may also have some application.

By: Kgaard

Kgaard — Mon, 19 Jan 2015 18:41:14 +0000

You just made my point Nick: The price of a Cezanne has risen from $100 to $100,000,000 over the last century because the supply is fixed (at 950 paintings, to be exact) yet demand keeps increasing.

Bitcoin is not a Cezanne. It is a bunch of 1s and 0s on your computer. It has no utility. It may be scarce, but so what? Lots of useless things are scarce. If limited supply is by definition the mark of value, I have some Canadian-listed miners I would like to sell you, such as this one:

http://finance.yahoo.com/echarts?s=YMI.TO+Interactive#{%22range%22%3A%225y%22%2C%22scale%22%3A%22linear%22}

There are hundreds more where this one came from. They all have limited share counts. They even have assets. But they are worthless because no one wants them. And no one wants them because they have no utility at prevailing metal prices.

For Bitcoin to have value it must be more than scarce. It must serve some FUNCTION. And as has been demonstrated, it doesn’t serve any of the three functions of a currency. So if it goes to zero it wouldn’t surprise me.