Doesn't their have to be some sort of centralized ledger that keeps track of them? I should probably just read the wiki page instead of being lazy.
What bitcoin servers? The system is entirely decentralized. The bitcoin servers are every full node run by anyone, anyone running bitcoin-qt.exe is running a full node. Shutting them all down would require shutting down the internet.
Doesn't their have to be some sort of centralized ledger that keeps track of them? I should probably just read the wiki page instead of being lazy.
A deflationary spiral is a little piece of fantasy conjured up by capitalist economists who make a living by justifying the status quo. A deflationary spiral has never, not even once, been ever seen to occur in the real world.
In fact, the computer hardware market is eerily similar in practice to what a deflationary spiral is supposed to look like- if you save your money, you can buy more computer hardware tomorrow than you can today, because it is always getting cheaper relative to the USD. Has the computer hardware market ground to a halt? Does everyone always wait to buy hardware later? No. The deflationary spiral myth has already been tested in the real world, and proven to be a lie.
I see some of you have taken a shine to my $$$nail coins idea, perhaps I should pursue it.
I worked it out that a $$$nail coin shall henceforth be worth 100% the value of the USD, anytime, all the time. No fluctuation, degradation, deflation, inflation, flatulation, etc... to fuss about. I guaruntee it!
You do have to pay administrative fees, however. It's about 10% of the transaction, the fees help me forget about the transaction...
I keep answering this ,and you keep ignoring it. Here goes again: the fluctuation is a neccessary part of bitcoin's growth. $120 per bitcoin isn't the end of the line. Bitcoin is growing in usage daily, and given the set number of them that will ever exist, it's required that they increase in value to fit the needs of the larger user pool. This in turn attracts speculators, which can cause the value growth of bitcoin to exceed the usage growth for periods of time, and may lead to corrections back to the true value. All of this leads to instability.
Yet, someday bitcoin will be finished growing. Maybe 5% of commerce will use it, maybe 50%, maybe some incredible flaw will be discovered and it goes to 0%. But in any case, when bitcoin reaches it's final usage level, the instability will be far smaller than it is now. Without constant daily exponential growth it will be relatively stable, though there will still be some variation, just as there is with every currency.
However, as I said before, this is a bit telling. If you wait until bitcoin is stable before becoming involved, it means you are waiting to buy in at the maximum value. If stability is of the greatest importance for you, I guess that is your only choice, but the early adopters who are willing to risk a little instability will pay far less for bitcoin and end up reaping great rewards as the currency spreads in usage and becomes more valuable.
A deflationary spiral is a little piece of fantasy conjured up by capitalist economists who make a living by justifying the status quo. A deflationary spiral has never, not even once, been ever seen to occur in the real world.
In fact, the computer hardware market is eerily similar in practice to what a deflationary spiral is supposed to look like- if you save your money, you can buy more computer hardware tomorrow than you can today, because it is always getting cheaper relative to the USD. Has the computer hardware market ground to a halt? Does everyone always wait to buy hardware later? No. The deflationary spiral myth has already been tested in the real world, and proven to be a lie.
Deflation is good IMO. Deflation in gas prices would spur an economic boom that would cause interest rates to rise, but other input costs to down, meaning cheaper food. Sure housing would get kicked in the butt, but there is more to living than who is buying a house right now.....
Speaking of which housing deflated from its 2005 high point to its late 2012 bottom...by 50%+ in some cases.... and we survived! Record housing deflation did not destroy America! In fact it was the uncontrolled growth in housing prices (inflation) that did us much harm. Excessive speculation is bad for America! We needed higher interest rates to kill the housing bubble in its tracks but the Fed would only go .50% at every meeting, bowing to political pressure. Now the Fed is just a lapdog for politicians. They are nuts! They know nothing.
Deflation is not bad, and should NOT be feared, its just part of the economic cycle. Prices go up, prices go down. In fact, inflation causes bubbles, and bubbles are bad for society as a whole.
Right now we have a stock market that is setting record highs and housing IS ON FIRE! It is time to raise interest rates NOW and kill this inflationary spiral in its tracks!
This is what is funny, you think that stability can only occur at maximum value, yet if the market was truly transparent and as liquid as you say it is then it wouldn't need to reach "maximum" value. Your saying that gold would only be at a stable price if you hit the maximum price of gold. You need faith in a currency that cannot deliver it.
So you deny that the US went through several deflationary spirals in the 1800s?
LOL @ using computers, in a non-deflaitonary environment, to "disprove" a deflationary spiral. Look at goods sales during the Great Depression.
Are you really this ignorant? Gold has been around, literally for as long as life has existed on earth. Bitcoin is barely 4 years old. When I was talking of the maximum value, I was referring to when the currency is done growing, as I made perfect clear multiple times. I'm not sure how you missed that fact.
Gold is done growing, and is a lot more stable than bitcoin. That "instability" you see when you look at the value of gold in USD, is half caused by the instability of the USD. I do not know why you can't understand this. When you measure the value of two things together, you CAN NOT determined which is causing the instability independently.
When bitcoin reaches the point of market saturation that gold has reached, it too will be relatively stable. In fact, it will be more stable, IMO, because while gold mining is unpredictable and something of an unknown value, the rate which bitcoin are produced through mining is both very predictable and absolutely known.
Unfortunately for you the USD will never be stable, because there is no limit to how many dollars can be printed.
Yes I do. The great depression occurred for dozens of reasons, trying to blame it on a deflationary spiral is absurd.
How so? The USD is worth more in computer hardware today than it was yesterday. Same the day before, and the day before that. This *exactly* mimics the so-called deflationary spiral, and yet computer business is doing damn fine.
Based on the deflationary spiral argument, NOBODY would ever been stupid enough to spend $4000 for a computer in 1995 when the same system could be bought for $1000 in 1998. Yet it happened, and companies like Intel and Dell made a killing. Fact is if someone needs something, they will buy it. The possibility that your money will buy more of that thing sometime in the future isn't really relevant if you need that particular thing now.
I see some of you have taken a shine to my $$$nail coins idea, perhaps I should pursue it.
I worked it out that a $$$nail coin shall henceforth be worth 100% the value of the USD, anytime, all the time. No fluctuation, degradation, deflation, inflation, flatulation, etc... to fuss about. I guaruntee it!
You do have to pay administrative fees, however. It's about 10% of the transaction, the fees help me forget about the transaction...
Nope. Therein lies the ingenuity of the bitcoin protocol. Every node keeps the universal ledger you're talking about.
Each node is communicating with each other, verifying and recording new transactions for one universal ledger, all the while avoiding fake/malicious attacks.
The proof-of-work chain, called the blockchain, is the elegant innovation in bitcoin that allows this decentralization. It's worth a read.
The blockchain database is starting to get really big, though. It's going to become impractical to keep a local wallet on your PC soon.
According to some gold is not done growing, mr. smarty pants. This is what is utterly laughable about people like you. You blame the USD for *everything* yet fail to even compensate for the slightest variable outside of your myopic tunnel vision buffoonery. Do you *really* think that the runup in gold is 100% of the USD's issue, or even 80%? Do you even stop to consider gold hoarding, derivative gold, or the input cost to gold? Nope, none of those have affected the volatility of gold, just the USD. What a fool.
The USD will never be stable? How do you measure "stable". Most rational people measure "stable" by standard deviation. What is the standard deviation of the USD as measured by a basket of goods over the last 10, 20, 30, 40 and 50 years? It is a lot lower than gold! I am sure you would come to a different conclusion, but that would not be one based upon data, but one of your own myopic tunnel vision, as you cannot even fathom regression, multi-variate statistics or actual comprehension and analysis of data. Instead, you want to grasp to your preconceived notions.
Yet more foolishness. You don't blame one on another as if they are the only causes, you analyze is one feeding into another? Does a depression cause deflation? What is the trigger point? How was it caused? Did the deflation get set off by the depression which caused a deflationary spiral which was exacerbated by the depression?
What about all of the other periods of deflationary spirals in just our own country's experience? You ignore those data points also.
Yet more failure to acknowledge that the "deflation" seen in technology has nothing to do with monetary deflation. You are not incentivized to "save" merely because you will "make" money by holding onto your currency because that commoditized item will become cheaper, as traditional deflation exists.
Using computers is absurd because there is always a more expensive computer released, one that is faster, better equipped with a newer OS. Thus, there is no deflation in the computer industry unless you want to talk about reduction in input costs due to offshoring or something like that.
Eventually, yes. Probably in the next 20 years or so, but I wouldn't call that "soon" (I'm not valve). The blockchain is about 9GB now, after 4 years. Really, it's probably more like 3 years of real usage since the first year bitcoin was still largely unknown and unused, but even if you assume it grows by 4GB per year it will still be awhile before it's too large for an average PC to easily store. And if hard drive capacities continue to increase in the meantime it may be even longer, or never, before it gets to be too large.
On the other hand the blockchain is already too big for most mobile devices, there are clients that use a peer to peer blockchain system and don't need to store the entire chain locally that work as a fine solution for that.
This whole thread is like a Herbalife infomercial meeting where a few of you are so adamant about insisting on how awesome your product is despite it being obvious to the rest of us that you're not the sharpest tool in the shed.
This whole thread is like a Herbalife infomercial meeting where a few of you are so adamant about insisting on how awesome your product is despite it being obvious to the rest of us that you're not the sharpest tool in the shed.
This whole thread is like a Herbalife infomercial meeting where a few of you are so adamant about insisting on how awesome your product is despite it being obvious to the rest of us that you're not the sharpest tool in the shed.
You're not looking at this in the right perspective. There are thousands if not millions of people who think that this Internet funny money that you "mine" with your video card is actually worth something.
Even if YOU think that it's worthless, you can still make a good profit selling it to THEM.
Hey... it worked for the Pet Rock guy, and it could work for you
Gold isn't used as a currency, and really it's impractical to use it as a currency. It can never reach the potential bitcoin can simply because it's very difficult and expensive to safely spend gold over the internet.
There are almost no companies that will keep prices "stable" in the face of inflation, this is why stable inflation is far more preferable. Sure, consumers hate when they pay more but provided long-term wages keep up with long-term price increases the purchasing power of the nominal wages remain the same.As the main currency of the USA, merchants have incentive to keep USD prices fairly stable. When prices increase, customers tend to get irrationally upset at the company that raised such prices, so some companies will keep price stable for a long time, even after USD value has dropped significantly, because it's better to take a small cut in profit rather than raise prices constantly. Another technique many companies use is selling smaller packages at the same price, so they effectively raise price per unit but to a dumb consumer it might just look like the same thing for the same price, not realizing they are getting less.
What do you think the correlation coefficient of oil to the USD is? I can tell, you, it's about .56-.6, a weak to moderate correlation (.5 is weak, .5+ is moderate-strong). About another 30% or so can be explained away by geopolitical events, US GDP (3mo lag negative correlation) and Chinese GDP. I leave to you where to find the actual statistics behind that. It isn't hard.If you want a real example of the instability of the dollar, take a look at gas prices. They change daily in some places, because the margins and controls on gas don't allow for much variance beyond cost, and cost is largely determined by the variance in value of USD and the gasoline sold.
Beyond all that, USD has some stability due to numbers. I've said over and over that bitcoin will be more stable with greater acceptance. This is because with a 1 billion market-cap any millionaire investor can make a significant difference in the world bitcoin market and upset the value. With a 15 trillion market cap, such as USD currently, a million dollar investor can't even make a noticeable dent in the market. As the real value of bitcoin increases it will become more stable, because singular speculators won't be able to move value around so much.
The cause of the great depression didn't have shit to do with deflationary spiral.
Here is some helpful information, from a source vastly more reliable than LegendKiller:
http://en.wikipedia.org/wiki/Great_depression
Huh? So we had a deflationary spiral while using an inflationary currency, really? I guess that puts the nail in the coffin, you can't blame it on the currency, if we had a "deflationary spiral" with USD.
What? You absolutely have incentive to save your money. Computers are going to be faster and cheaper tomorrow, why buy today?
Deflationary spiral: stuff will be cheaper tomorrow, so you don't buy it today
Computer industry: computer will be cheaper tomorrow, so don't buy it today
Please explain the difference, as you have utterly failed to do so thus far.
You are bringing up an irrelevant point.
You can use the same argument against deflationary spiral, to argue that they shouldn't exist.
Deflationary spiral: there is always a more expensive "product" being produced, even if it's not the thing you were actually going to buy, so you shouldn't save your money
The existence of faster and more expensive computers in the future doesn't change the basic fact, that all computers are getting cheaper over time and today is NEVER the best day to buy one, you can always wait a day or week or month or year and get a better deal.
Great so you can sell your funny money to the village idiot in every village in America. Congrats. It's still garbage currency.
Ohhh, so gold is impractical as a currency but bitcoins is perfectly fine, why, because you have to carry those heavy gold coins? It's not expensive to spend gold over the internet, there are, or can be, clearinghouses for it quite easily.
There are almost no companies that will keep prices "stable" in the face of inflation,
What do you think the correlation coefficient of oil to the USD is? I can tell, you, it's about .56-.6, a weak to moderate correlation (.5 is weak, .5+ is moderate-strong). About another 30% or so can be explained away by geopolitical events, US GDP (3mo lag negative correlation) and Chinese GDP. I leave to you where to find the actual statistics behind that. It isn't hard.
A large investor can make a large difference in the USD, just like any other currency. See Soros.
It is not difficult to have a deflationary spiral with an "inflationary" currency. It's very simple actually, just have the velocity of money slow down. Wow, that was hard!
If you cannot tell the difference between investing in a house b/c you think a long-term non-depreciating non-technologically exposed item depreciates, vs a depreciating piece of technology, then you are utterly helpless and cannot even see the situation that is before you. Had housing declined in the manner it was, as severe as it could have been, without the help of the USG and the Fed, we would absolutely been in a deflationary spiral as credit contracted, banks failed, housing declined, no buyers existed, homeowners saw more negative equity, more jobs were lost, more credit declines...ad nausea.
The only people who would deny the existence of that feedback loop are loony tunes Von Mises disciples that utterly ignore panics. Even the "Law of Demand" is not a law because it has "exceptions" to the "law" in that in cases of extremis the "law" is suspended. That's akin to saying the law of gravity is suspended because magnetic force was inefficient and was having a panic attack, which is exactly why the "law" of demand, and thus the theory that there cannot be a deflationary spiral, is utterly bullshit.
Like most Von Mises, Austrian, and other libertopian viewpoints they exist in a vacuum with no credit given to human emotion as the "free market" is efficient and will bring things into equilibrium, no matter what. What bullshit.
This whole thread is like a Herbalife infomercial meeting where a few of you are so adamant about insisting on how awesome your product is despite it being obvious to the rest of us that you're not the sharpest tool in the shed.